iQIYI, Inc. (IQ) Q2 2022 Earnings Call Transcript

iQIYI, Inc. (NASDAQ:IQ)

Q2 2022 Results Conference Call

August 30, 2022 07:00 AM ET

Company Participants

Chang You - Investor Relations Director

Yu Gong - Founder, Director and CEO

Jun Wang – CFO

Conference Call Participants

Alicia Yap - Citigroup

Thomas Chong - Jefferies

Xueqing Zhang - CICC

Lincoln Kong - Goldman Sachs

Presentation

Operator

Thank you for standing by, and welcome to the iQIYI Second Quarter 2022 Earnings Conference Call. All participants are in listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over Ms. Chang You, Investor Relations Director. Ms. You, please proceed.

Chang You

Thank you, operator. Hello everyone and thank you for joining iQIYI’s second 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.

On the call today are Mr. Yu Gong, our Founder, Director and CEO; Mr. Jun Wang, our CFO; Mr. Xiaohui Wang, our CCO, Chief Content Officer; Mr. Wenfeng Liu, our CTO, Chief Technology Officer; Ms. Vivian Wang, our CMO, Chief Marketing Officer; Mr. Youqiao Duan, Senior Vice President of our membership business; and Mr. Xianghua Yang, Senior Vice President of movies and overseas business. Mr. Gong will give a brief overview of the Company’s business operations and highlights, followed by Jun, who will go through the financials. After the prepared remarks, Xiaohui, Wenfeng, Vivian, Youqiao and Xianghua 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 second quarter, but more importantly, share our views on the future.

In the second quarter, the Company made breakthroughs once again. As we all know, the weak macro economy and COVID resurgence in Q2 had great impact on business of most of media companies. Despite an extremely challenging environment, we still made achievements in the following three aspects: one, our membership business continued to grow year-over-year; two, we generated non-GAAP operating profit for two consecutive quarters and achieved sequential growth in Q2; three, our cash flow improved significantly, and we achieved positive operating cash flow for the very first time. These were the results of strong execution of the strategy that centered around cost optimization and efficiency improvements. Such strong results also fully demonstrated the resilience of our business. For two consecutive quarters, we reached our operational targets while drastically improved our financial healthiness, enabling us to face the ever-changing market environment with ease.