iQIYI Q2 2026 Earnings Call - Strategic Pivot to AI-Driven Decentralization Narrows Losses

Operator: Welcome to the iQIYI second quarter 2026 earnings conference call. All participants are in listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now hand the conference over to Ms. Chang You, IR director of the company. Please go ahead.

Chang You, IR Director, iQIYI: Thank you, operator. Hello, everyone, and thank you for joining iQIYI’s second quarter 2026 earnings conference call. The company’s results were released earlier 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. Ying Tian, our CFO; Mr. Xiaohui Wang, our CCO, Chief Content Officer; Mr. Youqiao Duan, Senior Vice President of our membership business; Mr. Xianghua Yang, Senior Vice President of international and online game business; and Mr. Gang Wu, Senior Vice President of brand advertising business. Mr. Gong will give a brief overview of the company’s business operations and highlights, followed by me, who will go through the financials. After the prepared remarks, the management team will participate 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 statements except as required under applicable law. I will now pass on to Mr. Gong. Please go ahead.

Yu Gong, Founder, Director, and CEO, iQIYI: Hello, everyone. In the second quarter, we continued to reinforce our core business, high quality, diversified content, powered by top industry-leading performance. According to Enlightent Data, we maintained the number 1 market share in each of the long-form drama, film, and the children’s content categories. For short-form dramas, Abrege, we made a major breakthrough, reaching number 1 market share for the first time in June. Financial performance also improved quarter-over-quarter. Total revenues grew sequentially, and our non-GAAP operating loss narrowed substantially, approaching breakeven. We are fully announcing our strategic transformation. First, we are shifting from a centralized media to a decentralized creator and a user-centric social media ecosystem. AI can dramatically lower the cost and the barrier to content creation, turning what was once a niche professional activity into a mass capability, and triggering an unparalleled surge in content supply.

Because traditional centralized models cannot accommodate this scale and diversity, we are upgrading our content acquisition and distribution mechanism to efficiently connect creators and audiences. Second, we are taking an all-in approach on AI to revolutionize both live action production and pure AIGC. Our guiding principle is clear: maximizing cost efficiency without compromising quality. Together, these two pillars reinforce each other like a flywheel. AI drives rapid growth in content supply, which help us move faster toward a decentralized model. As we decentralize, more creators can participate, users get more engaged, and our platform becomes even stronger. In Q2, both strategies moved from plans to measurable results over time. They will structurally improve our content costs, revenue quality, profitability, and cash flow. Let me walk you through the progress. Our decentralization. We are improving our platform and accelerating the creator ecosystem.

In April, we refreshed our core creator hub, the iQIYI Creator Center. Early signs are promising. The number of creators and uploads are all trending higher. Content with short production cycle, lower production scale, and a good fit for AI-driven creation has seen especially strong growth. For various types of content, the daily average number of uploaded works in the second quarter increased by 30% to 500% compared to the first quarter. In June, daily views for micro dramas and micro animations were up by double digits compared with March. Short-form dramas and animation are also gaining traction. Looking ahead, more long-form video categories will join the decentralized content ecosystem as we preserve iQIYI’s premium content advantage. We will broaden our content slate by adopting lighter, more flexible content acquisition models. On content production, AI is substantially optimizing production efficiency and cost structure.

First, in live action, AI is streamlining the entire workshop workflow. For example, we leveraged AI in our original, "Her Prime" Season 2, "Jie Jie Dang Jia," to achieve a tenfold leap in rough cut efficiency compared to traditional methods. Second, for content types well-suited to AIGC production can reduce production costs and timelines by 70% to 90% compared with traditional methods, while pushing past the physical limits of live action shooting. Naturally, AI adoption is faster in AIGC-heavy formats. We have launched multiple AI-generated internet feature films. A major milestone was the July premiere of "Mystic Tale: Qi Tan," the industry’s first AIGC internet feature film to launch with an internet drama and a few distribution methods. This marks the official shift of long-form AIGC from technical testing to standardized large-scale production.

In addition, year-to-date, we have launched 16 AI-generated short-form dramas under our revenue-sharing model, with the thriller, "Handmaiden," as the top-performing title. In the second half of the year, we have launched a diversified slate of AIGC titles, including multiple iQIYI-invested films, with an even broader pipeline across expanded categories next year. Currently, we have multiple AI-generated short-form dramas in development. NadoPro is our studio-grade production platform for creators. It runs on optimized third-party and in-house models, plus iQIYI’s longstanding expertise in professional content. By replacing costly steps with lower compute and tool cost, it lowers barriers and speeds up professional content production. Our strategy is clear. Internally, NadoPro caps development and production costs. Externally, NadoPro explores new revenue streams and gradually converts our professional production capabilities into incremental revenue. NadoPro’s edge isn’t generating AI output.

It turns the key parts of long-form production, script writing, shot design, workflows, digital asset editing, and dubbing into platform features. It delivers an end-to-end workflow, connects talent with content assets, and makes progress repeatable and reusable. Nado Pro is evolving from a tool into a comprehensive creator ecosystem. It links content demand with creators and enables them to realize commercial returns through a flexible business model. This activates a flywheel. Commercial returns encourage more content supply, expanded supply fortifies the ecosystem. A stronger ecosystem scales both creators and works, powering a creation platform for iQIYI’s decentralized content ecosystem. We believe these advantages will improve content production efficiency, lower unit costs, and increase both users and revenue. As we roll them out across all operations and scale, we expect their contributions to profit and cash flow to steadily materialize. Now, let’s move on to the detailed performance in Q2.

Let’s start with content. Our premium content is well-recognized by users and the industry. At the Magnolia Award this June, one of China’s top TV honors, Bai Yulan Jiang, iQIYI titles and their creative teams won 14 of 23 awards, including 10 of 11 in the drama category, well ahead of peers. In Q2, our content performed well across formats. In long-form dramas, we continue to focus on female-centric stories with "Here" ranking among this year’s top two titles by ad revenue. We also reinforced our lead in suspense-thriller innovation. The suspense comedy "Born with Luck" surpassed the 10,000 iQIYI popularity score and drove strong membership sign-ups. While in April, "Zuye Jiangzhi" from our iQIYI Suspense Theater earned strong reviews. Our original title, "Archives: The Nanyang Mystery" exceeded a 9,300 popularity index score, and the non-exclusive "The Epic of Minyu" topped 8,500.

In place-supported short-form dramas, typically 15 to 25 minutes per episode with flexible episode counts, we delivered exciting early results. Per Enlightent Data, our market share doubled from 25% in March to 50% in June, taking number one for the first time. The strong performance was supported by our original, "The Fireman: 10th Anniversary" which reached a peak daily market share above 60%. Short-form titles can offer structural advantages over long-form dramas, potentially reducing average per-minute costs by over 50% and shortening production to approval timelines by 30% to 50%. In micro dramas, we’ve released premier live-action titles like "Everything About Secretary Li", "Falling for You", and "Phoenix Blade," all resonated well with audiences. AIGC scaled quickly under a revenue-sharing model, accounting for over 50% of our micro portfolio and unique visitors in June, while AI-native micro animations expanded with strong sequential growth in views and time spent.

In films, we maintained a diversified slate of different audiences. Originals like "The Counterfeit", "The Twin Train" received positive feedback, while licensed "The Article Heath", "Packers 3", "Blades of the Gods", "Top Care 2" were also well-received on our platform. In variety shows, we launched seven originals in Q2 with our flagship from chess delivering sustained value. "Five Hearts" across our popularity index score of 9,000, reaching a new franchise high. For 10 years, Evergreen IP, "The Rap of China 2026" also stood out, surpassing a popularity index score of 8,800. In animation, we further solidified our original offers. The long-running "Against the Gods" with premiere in April, topped our animation popularity index chart and brought notable of platform users back to iQIYI. Together with, "The Great Ruler," we now have two long-running titles to keep users engaged year-round.

Finally, in children’s content, we reinforced our leadership with the return of our original IP sequel, The Odd Squad and the localized adaption of the BBC classic, Teletubbies. Next, let me show our pipeline for the second half of the year.

Our summer long-form drama features a diversified lineup, which includes multiple female-oriented titles like Road to Success, Key to the Phoenix Heart, OVERDO, Genius Girlfriend, Spring of The Blade, Abyss, and In My Prime. Complemented by the military theme, Windblown Warriors and the major realistic drama, Forging Justice. For the remainder of the year, we will premiere The Great Long March, Take a Nap, Small Town Remedy, and River of No Return. As for short dramas, our upcoming releases include Death of Winter, [Foreign language], The Fifth Group of Fatal Cases, The Sixth Group of Fatal Cases, [Foreign language], and The Great Nobody 2, [Foreign language]. In films, our pipeline features original theatrical films including Winter and the Summer, [Foreign language], No Goal to the Child, [Foreign language], and Prohibition, [Foreign language], in the second half of the year.

On the licensed front, our pipeline includes Vanishing Point, [Foreign language], and The Furious, [Foreign language] this summer, with I Know Who You Are, [Foreign language], A Matter of Qing Shu, and Crossing, [Foreign language], slated for the latter half of the year. For internet feature films, which are limited to a maximum of three chapters, each at least 60 minutes long, our pipeline includes multiple AIGC titles based on the classic IP, The Fireman, [Foreign language]. The first two chapters, A Butterfly Dream, and The Dream of Celestial Maiden, are set to launch this summer. Additionally, audiences can also enjoy a strong lineup of live-action titles including Motor Game, and Speed and Battle, [Foreign language] this summer.

Shifting to variety shows, we are deepening audience engagement with established IPs, including The Rap of China 2026, The King of Stand-up Comedy Season 3, [Foreign language], and HER PRIME 2 this summer, followed by The Blooming Journey, [Foreign language] 3, and Wander Together 2, [Foreign language] in the second half. For animations, this year could be iQIYI’s strongest animation summer to date.

The lineup features A Good Day to Ascend, [Foreign language], Race the Bias, Demands, Pandora, [Foreign language], Golden Cough, [Foreign language], and To Be a Winner, [Foreign language], alongside the AIGC titles The Legend of King Hongwu, [Foreign language], and The Legend of King JiFa, [Foreign language]. For children’s content, our summer slate features a new season of the popular Pleasant Goat and Big Big Wolf, [Foreign language], as well as original AIGC animations like La La Beat.

Looking ahead at the second half of the year, we will roll out the original AIGC animation, Wusheng Armor, and Carmen and the Burst Fruit Truck, and Tasty Travel, [Foreign language]. Now, turning to membership business. Revenue declined sequentially due to seasonality. We are strengthening the business with more refined operations. For example, targeted discounts for students and teachers drove a year-over-year increase of over 60% in quarter-end subscribers within this cohort. We also continue to enhance membership value with our express package. in Q2, we launched express packages across 16 dramas, driving a nearly 80% annual increase in total participants. In addition, we are expanding joint membership with frequently purchased top-tier brands popular among young users to support membership growth and retention. Next, moving on to advertising business. For brand ads, revenue from drama targeted ads delivered double-digit year-over-year growth.

By sector, beauty, personal care, and healthcare recorded double-digit year-over-year growth. We also depend on use of AI in ad operations and now support customized AIGC creative. For performance ads, revenue returned to year-over-year growth. We continue to optimize advertiser mix. Revenue from small and midsize advertisers delivered strong year-over-year growth. Sector-wise, revenue from advertisers in AI applications, instant retail, and e-commerce recorded a strong year-over-year growth. We further strengthened results with AI by upgrading our proprietary large models, improving targeting precision and driving revenue. Moving on to our business performance in regions outside of mainland China. In Q2, this business sustained rapid growth. Membership revenue grew 40% year-over-year. Portuguese and Spanish-speaking regions demonstrated robust growth. Notably, membership revenue from Brazil and Mexico surged by over 215% and 150% year-over-year respectively. Arabic-speaking markets also show strong potential, with membership revenue increasing 85%.

The global influence of C-drama continues to expand. In Q2, membership revenue from C-dramas grew over 40% year-over-year. A standout hit was "Fate Chooses You," or "Jia Ou Tian Cheng." It topped our international platform rankings across 14 regions in its first week, and stayed in the top 10 of the C-dramas chart for 10 consecutive weeks. On the local production front, we are accelerating our pace. Our first original Indonesian drama, "The Other Sister," gained strong traction per Google Trends, as it became the number 1 local Internet drama in Indonesia in the first half of 2026. Micro-dramas were another major highlight. Serving as the second-largest membership revenue contributor, following long-form dramas. In Q2, membership revenue from this category grew over 300% year-over-year. This momentum was partly fueled by stronger original production. Notably, originals rose to 3 of the top 10 contributors to membership revenue.

AIGC was another key driver of our overseas micro-drama expansion. In Q2, we launched AI-generated titles in multiple languages, including English, Thai, and Korean. Our original titles delivered exceptional efficiency, recovering production costs within the same quarter and demonstrating stable profit potential. We are scaling supply through both originals and external partnerships. In May, we released our first original AI-generated micro-drama overseas, which quickly ranked in the top 3 for micro-drama revenue on our international platform. The title was produced by Nadou Pro, which helped us establish full-blown AIGC know-how, laying a strong foundation for scale production. In parallel, we are proactively forging external partnerships to connect overseas script production and tool ecosystem, including Nadou Pro, unlocking capacity, and scaling AIGC supply. Beyond content, we are driving growth with strong memberships.

We have partnered with Vision+ in Indonesia, and we will launch joint membership with Viu in more markets in the second half. We are excited about the future potential of our overseas business. With that, I will hand it over to Yingtian on

Ying Tian, CFO, iQIYI: We had a loan principal of US$636.6 million receivable from PAG, included in prepayment and other assets on the consolidated balance sheet. We remain focused on creating long-term shareholders value. In March 2026, we announced a share repurchase program of up to US$100 million, effective through September 2027. As of June 30th, we had repurchased approximately 21.6 million ADSs for aggregated cost of US$24.1 million. For further details, please refer to today’s earnings on our investor relations website, ir.iQIYI.com. With that, we are ready to take questions. Operator, please proceed.

Operator: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. Please ask questions in Chinese first, and then translate the questions into English. Please ask one question each time and go back into the queue for more questions. Your first question comes from Xueqing Zhang with CICC.

Xueqing Zhang, Analyst, CICC: 谢谢管理层接受我提问，我想问一下，在AI技术和市场快速变化的一个背景下，公司怎么看待爱奇艺未来的商业模式，以及我们的管理目标？谢谢。

Operator: Thanks for taking my question. I would like to ask with AI technology and the market involved rapidly, how management say iQIYI’s business model developing in the future, and what are the company’s key strategic and operational priorities going forward? Thank you.

Yu Gong, Founder, Director, and CEO, iQIYI: 好，谢谢王同学，我来回答这个问题吧。爱奇艺是AI的受益者，从现在到长期都是这样的。所以我们的战略要做一些调整，管理目标也比较清晰，也就是两个要点，第一个是去中心化，变成一个非中心化的社交媒体。另外一个就是全力投资，投入AI，all in AI。然后两者相互之间的强化，共同推动创作者数量、内容数量、用户数量的增加，最终导致收入的增加，形成飞轮效应。

Operator: Thank you. The CEO takes this question. He says, "We see iQIYI as the beneficiary of AI now and also in the long term. To capture this opportunity, we are making some strategic transformation for our business. Mainly focus on two main pillars. Decentralization, which meaning transforming from the media centric platform to a decentralized content ecosystem, and also all in AI. These two pillars, we believe, will mutually reinforce each other and jointly driving a flywheel effect across the number of creators, the volume of content, the user base, and potentially revenue performance.

Yu Gong, Founder, Director, and CEO, iQIYI: 头部优质内容还是核心资产，核心工作。AI会非常显著地降低这些头部优质内容的制造成本，缩短制作周期，然后有可能实现以前非常实拍难实现的效果。

Operator: Okay. Premium content will still remain at the core of our business. We believe AI will significantly lower production cost for premium content, shorten production cycles, and potentially enable production and visual effects that were previously difficult to achieve through live action.

Yu Gong, Founder, Director, and CEO, iQIYI: 去中心化方面，我们努力推IQ号，IQ ID。然后现在的创作者数量，上传的作品数量都显著提升。目前AI的应用在各个核心内容品类全都有推进，已经实现了具体的一些典范突破。可以预期在未来的项目上，明年将会出现更多的项目上线。

Operator: On decentralization, we’re mostly focusing on our IQ ID, which is the iQIYI Creator Center. We have seen some positive initial progress, such as the number of creators, the content upload numbers, all trending well. We’re seeing AI adoption is progressing across our core content categories and with initial breakthroughs achieved. For example, for the projects we built in productions and also launched. In the future, we expect a greater scale of content to be released next year.

Yu Gong, Founder, Director, and CEO, iQIYI: 长期看来，AI的应用和去中心化两个战略的措施将结构性地改善内容成本、收入的质量、盈利水平，还有现金流的表现。

Chang You, IR Director, iQIYI: Over the long term, we believe these two strategies, meaning the decentralization and all in AI. These two will structurally improve our content cost, revenue quality, profitability and cash flow.

Yu Gong, Founder, Director, and CEO, iQIYI: Thank you.

Chang You, IR Director, iQIYI: Thanks.

Operator: Your next question comes from Lincoln Kong with Goldman Sachs.

Lincoln Kong, Analyst, Goldman Sachs: [Foreign language] Thank you very much for taking my question. My question is about iQIYI’s overall AIGC strategy, and how is our plan in terms of each content categories. Thank you.

Chang You, IR Director, iQIYI: Thanks, Lincoln. We will invite our Chief Content Officer, Mr. Xiaohui, to take this question. Please go ahead.

Xiaohui Wang, Chief Content Officer (CCO), iQIYI: 好，谢谢。我来回答这个问题。虽然AI降低了基础的制作和资金的门槛，但是我们认为它并没有降低内容创意和判断的门槛。我们用AI来优化内容制作的经济模型，同时强化公司的核心壁垒，包括内容的叙事和审美判断，情感表达和镜头语言，还是力争在精品和规模化供给两个端同步来提升。在策略上，我们还是要坚持核心长视频优先，兼顾短剧和漫剧，同时也通过分账合作的模式来提升资金的周转效率。

Chang You, IR Director, iQIYI: First of all, we believe AI reduces the basic costs and barriers to production, but it does not lower the bar for creativity and judgment. We leverage AI to optimize the economics of content production, while reinforcing our core moat, which is storytelling and aesthetic judgments, emotional expression, and also visual language. Our goal is to advance on both fronts: premium content quality and scaled content supply. Strategically, we will prioritize core long form video while accommodating micro drama and micro animation. We use a revenue sharing model to improve capital turnover.

Xiaohui Wang, Chief Content Officer (CCO), iQIYI: 从AI的规模化的渗透速度来看，我下面谈一下我们按照各个品类的分层规划的一个策略。首先是短剧，我们是快速渗透的一个策略，AIGC为主要供给。同时也采用了分账为主，算法推荐，形成多元快速更新的规模化供给。

Chang You, IR Director, iQIYI: We will share our thoughts by category based on the pace of AI adoption at scale. First of all, for micro dramas, we are seeing rapid adoption with AIGC as the primary source of supply. We primarily use a revenue sharing model and leverage algorithm recommendations and a decentralized operation to deliver a diversified, rapidly refreshed and a scaled content supply.

Xiaohui Wang, Chief Content Officer (CCO), iQIYI: 其次是漫剧，更适合AI的原生内容。所以说我们主要以AIGC为主要的供给。

Chang You, IR Director, iQIYI: For micro animation, we believe these are AI native content, so AIGC will serve as the primary supply.

Xiaohui Wang, Chief Content Officer (CCO), iQIYI: 动漫与儿童的内容，由于它的特点是CG的工业化成熟，适配度比较高，适合渗透得快速。所以说我们主要用AI来显著提升效率，同时把项目的数量的增长提高。明年我们预计将上线更多的AIGC作品，以满足细分人群，并扩大它的稳定供给。

Chang You, IR Director, iQIYI: For animations and children’s content, these have mature CG industrialization, are a good fit in our view, and we’re seeing rapid AI adoption. AI significantly boosts efficiency and our pipeline is expanding. For next year, we will release more AIGC titles to serve niche audiences and broaden our stable supply.

Xiaohui Wang, Chief Content Officer (CCO), iQIYI: 对于中剧和网络故事片，相对长片的这些内容，它的复杂度比以上的这些内容品类要高一点，同时它的体量比长剧和电影长片稍微短一些，所以说它的策略是我们要积极拥抱AI，重点是探索奇幻、志怪、冒险等适配的一些风格化题材，拓展类型的多样性。现在部分项目已经上线了，后续我们将加速规模化的播出，兼顾成本优化和内容多元化。截至目前，我们已经上线了16部分账的AIGC中剧，以及多部的网络故事片。

Chang You, IR Director, iQIYI: For short-form dramas and internet feature films, these are medium in production complexity and volume, and compared to long-form content, these are lighter in complexity and also in volume. We’re actively adopting AI, focusing on genres like fantasy, supernatural, and adventures to widen our genre mix. Some titles have already launched, and we will speed up at-scale releases, balancing cost efficiency and content diversity. So far, we have released 16 AIGC short-form dramas under a revenue sharing model, along with several internet feature films.

Xiaohui Wang, Chief Content Officer (CCO), iQIYI: 对于情感与艺术高度最高、价值最大的长剧集和电影长片而言，它的AI渗透的速度应该是最慢的一个。所以说我们还是坚持实拍主导，AI来辅助，保证它的品质。通过AI主要是来降低成本，提高效率。

Chang You, IR Director, iQIYI: For long-form dramas and theatrical films, we believe carry the highest emotional and artistic value. These are relatively slower to adopt AI at scale. For these content, we will focus on live action, put quality first, use AI to support our production, and use AI to reduce costs.

Yu Gong, Founder, Director, and CEO, iQIYI: 谢谢。

Thank you.

Operator: Your next question comes from Vicky Wei with Citi.

Vicky Wei, Analyst, Citi: [Foreign language] In the context of the AI era and the ongoing shift towards decentralization, how do you view iQIYI’s core competitiveness, and what kind of value does iQIYI offer to content creators? Thank you.

Chang You, IR Director, iQIYI: Thank you. We will invite our CEO to take this question.

Yu Gong, Founder, Director, and CEO, iQIYI: 在AI时代，影视行业的竞争是从内容创意开始，一直到最后的商业化的全链路的能力。然后关键的能力在于很多点，包括专业人才的聚合，创意能力，工业化的制作，对内容审查的理解，内容分发能力和多元的变现能力。这些都是爱奇艺过去十几年积累的核心的壁垒。

Chang You, IR Director, iQIYI: We believe in the AI era, video industry competition centers to end-to-end capabilities, which is from concept to commercialization. There are quite a few essentials that are required for this. For example, the ability to bring together professional talent, generate compelling ideas, run industrialized production, have a comprehensive understanding of content review and compliance, deliver effective content distribution, and drive diversified monetization. These are the core moats iQIYI have built over the past decade.

Yu Gong, Founder, Director, and CEO, iQIYI: 我们对创作者的价值，我们定的口号是叫"被看见，有钱赚，有荣誉"。意思是爱奇艺积累了主要的观众，创作者的作品被更多的观众能看到。然后爱奇艺深耕多年的影视长片的创作，所以已经建立了成熟的工业化体系。你可以翻译。

Chang You, IR Director, iQIYI: Our values to creators, there are three areas that we are targeting and also a slogan. Help them to be seen, generate income, and gain recognition. First of all, iQIYI has a major share of the video entertainment audiences, so the creators have greater capabilities or possibilities to be seen on iQIYI platform. iQIYI has deep expertise in long-form video production, and we have established a very mature industrialized content production mechanism.

Yu Gong, Founder, Director, and CEO, iQIYI: 其次，爱奇艺还有海量的观影数据，丰富的版权资源，还有其他的强大的生态链资源支持。

Chang You, IR Director, iQIYI: In addition, iQIYI also has massive viewership data, a very rich IP, and also licensing resources. Also, a very strong ecosystem support.

Yu Gong, Founder, Director, and CEO, iQIYI: 然后对于创作者，已经建立了七大的服务体系，包括爱奇艺号、专业的制作平台Nado Pro、就是物理存在的办公空间的创意中心，还有培训、创投大会，给创作者融资的，还有标杆作品创作的爆笑喜剧场，还有创作者的客服。这个七大支持服务体系。

Chang You, IR Director, iQIYI: We have built a seven-pillar creator support system. The IQ ID, which is the iQIYI Creator Center, Nado Pro, our professional production platform, physical creative centers offline, training programs, and iQIYI Nado and AIGC Venture Summit helping the creators with the fund support. The Peter Pau × iQIYI AI Theater for benchmark productions. Last but not least, a dedicated creators customer service.

Xianghua Yang, Senior Vice President of International and Online Game Business, iQIYI: 8月2号，我们将在北京举办爱奇艺的创作者大会，围绕着内容生态建设、AI前沿的机遇与创作者成长等等主题，和创作者进行深入的探讨。

Chang You, IR Director, iQIYI: On August 20th in Beijing, which is in two days, we will host the iQIYI World Conference, featuring in-depth discussions on content ecosystem development, frontier on AI opportunities, and creator empowerment.

Xianghua Yang, Senior Vice President of International and Online Game Business, iQIYI: Thank you.

Chang You, IR Director, iQIYI: Thank you.

Operator: Your next question comes from Zai Xu with Guangfa Securities.

Zai Xu, Analyst, Guangfa Securities: [Foreign language] And thanks for taking my question. I want to know about the latest development in overseas business and how the operational experience from more mature markets like Thailand can be replicated in other markets. Thank you.

Chang You, IR Director, iQIYI: Thank you, Gigi. We will invite Mr. Xianghua Yang to take this question.

Xianghua Yang, Senior Vice President of International and Online Game Business, iQIYI: 好的，大家好。海外业务继续保持着较快的增长。Q2整体的会员收入同比增长40%，并且按照我们内部管理报告的口径继续保持盈利。泰国是我们进入较早、经营模式相对成熟的市场。Q2的会员收入和利润都在增长，盈利能力持续改善。与此同时，我们一些新市场像巴西、墨西哥等会员收入的同比增长215%和150%。

Chang You, IR Director, iQIYI: Our overseas business maintained rapid growth in Q2, with overall membership revenue grew 40% year-over-year, and we remain profitable on a managerial accounting basis. Thailand is the market where we entered earliest and where our operating model is relatively mature. It still delivered solid growth year-over-year in Q2, with steady top-line growth and continued profitability improvement in the quarter as well. In new markets such as Brazil and Mexico, we see membership revenue increased 215% and 150% year-over-year respectively.

Xianghua Yang, Senior Vice President of International and Online Game Business, iQIYI: 我们将不同的市场分为成熟市场、增长市场和潜力市场。成熟的市场以稳定盈利为目标。增长的市场在管理好投资前提下，以取得最快的收入增长速度。

Chang You, IR Director, iQIYI: We categorize our overseas markets into mature, growth, and potential markets, where mature markets we aim for stable profitability, growth markets focus on accelerating revenue with disciplined investments.

Xianghua Yang, Senior Vice President of International and Online Game Business, iQIYI: 泰国是我们的先行的试验田，它验证了一套可以复用的经营能力。首先以华语内容是我们的基本盘，我们通过持续的营销增强华语内容的影响力，让更多的观众观看华语内容并订阅会员，本质上就是如何把华语内容更好地销售给当地的观众。

Chang You, IR Director, iQIYI: Thailand serves as our proving ground. What we have validated is a set of reusable operating capabilities. Using C-drama as the foundation and a sustained marketing to amplify influence of Chinese content and extending a local content supply, and tailoring the content that is adapted to the local audiences.

Xianghua Yang, Senior Vice President of International and Online Game Business, iQIYI: 同时增加本地内容的供给，围绕当地用户的喜好开展产品和内容的运营，以当地的运营商平台和支付渠道合作，扩大会员的规模，并且利用AI提升翻译、分发和制作效率。

Chang You, IR Director, iQIYI: We are also partnering with our local carriers, platforms, and payment channels to scale the membership base. We are also leveraging AI to improve the translation and distribution, and also production efficiency.

Xianghua Yang, Senior Vice President of International and Online Game Business, iQIYI: 不同市场的内容偏好和渠道结构并不相同，因此我们复制的是一些底层的能力，同时由本地团队进行针对性的调整，将泰国的经营能力复制到其他市场。

Chang You, IR Director, iQIYI: Because the content preferences and collaboration channel structures differ by markets, what we replicate are these underlying capabilities, while the local teams do make targeted adaptations. For example, applying Thailand’s operating capabilities to other markets.

Xianghua Yang, Senior Vice President of International and Online Game Business, iQIYI: 我们的策略不是简单地追求进入更多的国家，而是以单位经济和经营贡献为约束，在验证收入质量和盈利能力后，再逐步扩大到更多的区域。

Chang You, IR Director, iQIYI: Our strategy is not to chase country counts. We are guided by unit economics and operating contribution. We will expand into new markets after validating revenue quality and profit-generating capabilities. Thank you.

Operator: There are no further phone questions at this time. I will now hand back to the company for closing remarks.

Chang You, IR Director, iQIYI: Thank you everyone for joining the call today. If you have further questions, do not hesitate to contact us. Thank you, and see you next quarter.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.