iQIYI, Inc. (IQ) Q4 2023 Earnings Call Transcript

For the period ending December 31, 2023

February 28, 2024 6:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day and welcome to the iQIYI Fourth Quarter and Fiscal Year 2023 Earnings Conference Call.

I would now like to turn the conference over to Ms. Chang Yu, IR Director. Ms. Yu, the floor is yours, ma'am.

Chang Yu

Thank you, operator. Hello, everyone, and thank you for joining iQIYI's Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. The company's results were released earlier today and 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; 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, the management team will participate in the Q&A section.

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 statements, except as required under applicable law.

I will now pass the floor to Mr. Gong. Please go ahead.

Tim Gong

Hello, everyone. Thank you for joining us today. After an iconic turnaround in 2022, we continued our success in 2023, delivering the best-performing year in the Company's history by focusing on high-quality growth. Both total revenue and non-GAAP operating profit in 2023 increased double-digit year-over-year and reached historical-high despite macro headwind. More importantly, our growth in profits substantially surpassed that of revenues. This demonstrated the resilience of our businesses and our operational excellence.

Let’s take a closer look at the key metrics in 2023: total revenues reached RMB31.9 billion, up 10% annually. Non-GAAP operating profit reached over RMB3.6 billion, up 68% annually; and non-GAAP net profit exceeded RMB2.8 billion, up 121% annually. We generated a sizable total free cash flow of RMB3.3 billion in 2023, which improved our liquidity position, allowing us to make investment to drive future growth. All four above-mentioned key metrics hit record-setting high. It became very clear that the Company was following the right course, offering sustainable value growth for our stakeholders.