iQIYI, Inc. (IQ) Q3 2022 Earnings Call Transcript

iQIYI, Inc. (NASDAQ:IQ) Q3 2022 Earnings Conference Call November 22, 2022 6:30 AM ET

Company Participants

Chang Yu - IR Director

Yu Gong - Founder, CEO & Director

Jun Wang - CFO

Wang Xiaohui - Chief Content Officer

Conference Call Participants

Thomas Chong - Jefferies

Alicia Yap - Citigroup

Lei Zhang - Bank of America Merrill Lynch

Daniel Chen - JPMorgan Chase & Co.

Operator

Thank you for standing by, and welcome to the iQIYI Third Quarter 2022 Earnings Conference Call. [Operator Instructions].

I would now like to hand the conference over to Ms. Chang Yu, Director of the company. Please go ahead.

Chang Yu

Thank you, operator. Hello everyone and thank you for joining iQIYI's Third Quarter 2022 earnings conference call. The Company's results were released today and are available on the Company's Investor Relations website at ir.iqiyi.com. For the call today, our CEO Mr. Yu Gong will give a brief overview of the Company's business operations and highlights, followed by our CFO, Mr. Jun Wang, who will go through the financials. After the prepared remarks, the senior management team will join Mr. Gong and Jun in the Q&A session.

Before we proceed, please note that the discussion today will contain forward-looking statements, made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. iQIYI does not undertake any obligation to update any forward-looking statement except as required under applicable law.

With that, I will now turn the call over to Mr. Gong. Please go ahead.

Yu Gong

Hello, everyone. I'm very pleased to take this opportunity to report on our progress in the third quarter and share our views on the business.

Through efforts in the first 3 quarters this year, iQIYI has completed an iconic turnaround, with business performance far exceeding the targets we set at the beginning of this year. There are 2 parts to this iconic turnaround: First, we have been growing the non-GAAP operating profit for 4 consecutive quarters, starting from Q4 last year. And for the first 3 quarters this year, we achieved nearly RMB 1.2 billion in non-GAAP operating profit, a sharp reversal from the operating loss of RMB 2.5 billion over the same period last year. This non-GAAP operating profit in Q3 alone exceeded RMB 500 million. Meanwhile, we generated positive operating cash flow for 2 consecutive quarters.