iQIYI Inc. Q1 2023 Earnings Call
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Welcome to the IKEA first quarter 2023 earnings conference call.
All participants are in the 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 like to hand the conference over to Chang Yu.
Please go ahead.
Thank you, operator. Hello, everyone, and thank you for joining IT's first quarter of the 2023 earnings conference call. The company's results were released today and available on the company's investor relations website at IR.ITP.com.
On the call today are Mr. Li Fung, our founder, director, and CEO . Mr. Ken Wang, our CFO . Mr. Xiaofei Wang, our CTO, chief content officer. Mr. Wenfeng Liu, our CTO, chief technology officer. And Mr. Ye
Mr. Gong will give a brief overview of the company's business operations and highlights, followed by two, who will go through the financials. After the prepared remarks,bubblebleiro tool goes to the99th Perhaps two seamen we liked or maybe
Before we proceed, please note that the discussion today will contain overlooking statements made under the safe-profit provisions of the U.S. Private Security Litigation Reform Act of 1995. Overlooking statements are subject to risks and uncertainties that may cause the actual results to differ materially from our current expectations.
I will now turn the call over to Mr. Bum. Good wireless.
Hello everyone. This study, resulting in a community with an exceptional knowledge of the 12 plus corner entering a new category of high organic growth.
Our content's live view once again demonstrates its power.
the exceptional IT original global dimensional performance and measurement on the gaussian modeling machine as well. In praise to all three Clover
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ITU by TAD is a dominant leading position in pharma.
reaching new heights in the market shelves. Our long-standing original company strategy of both foods went against. The more carbs become the best performing drama in our history. In Q1, original content.
continuing to be the new driver of new relationships and a brand new performance.
and further enforce the brand protection that IT is block-based and powerful.
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both total yang-myung and membership voices, yang-myung, peace, conflict, old time's high.
For new venues, the current double-digit goes both annually and sequentially. In particular, the whole membership process around you reaches a new high of 24% annually and 17% sequentially.
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might help us to keep this finding real useful, such as with excitement and unemployment. We would like to know what your experience've been, and if you have an inscription you require
In Q1, the average daily number of total subscribing numbers approach 129 units, a quarterly math addition of over 17 units. This math was taken in constructive order with COBRAI.
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As of March 25, the number of positive numbers was behind the understanding limit, which reflects the usual personality of following the...
Chinese media and it's all back to our path of Q1 performance.
Non-stop operating cost is limited and is 1 billion in full-time.
as president for the sixth consecutive quarter.
More importantly, Flash dashboard also exceeded RMP1-B with color, a critical milestone as it gradually became more self-displacing. That's the attention. That's call for action.
We believe these recent solving results are just the result of high quality growth. To be continued,ebate in the Lavender Series meters.
were part of printing one point video and it's strong appeal to users.
Our ability to produce and deliver high-quality, popular or remote content is our core component, which is difficult to the path in the shortcut.
It will continue to evolve and fulfill our industry-building position in the long run.
Currently, our business can be classified into three stages.
call, growth, and early stage. Our call sequences include membership spaces16
content distribution by key accessing.
more powerful, accessible or gross silicon is improved.
to TechnologicalAlexatory.org and find own research.
Now, let's go through the performance of our business segment in detail, starting with membership survey.
Both membership status, the number of subscribers, which is black or white in T1. Membership status, the number of subscribers, which is black or white in T1.
24% annually and 17% differentially.
The average daily number of subscribing numbers reached 178.9 million into one, a sequential? Foods.
marking the second consecutive quarter with a meta-leash of over 10 meetings. And the answer is 14.3 into 1. That's one person's signature.
I would like to address each one.
that the goal of membership in this is maximizing user experience and in return, adapting and optimizing of network performance.
The economics of a membership business are driven by three factors.
So, this is a?
We take the dynamic of hosts to our membership in it.
Based on many factors including company supply, user demand and their market environment.
This allows us to drive continuous improvement in both membership value and user experience.
A part of the management strategy has helped us to be stronger, younger, and a broader relationship with our users. We saw a form of optimization of our membership structure and stronger user engagement into one.
The function of annual subscribers increases significantly year over year, while the lifetime error and the long-term retention rate also improve.
In addition, our membership process, which even though we used our callouts in Q1, we saw strong growth from both subscribers with live-screen privilege and IT life. The problem is the subscription package, which targets the potential entities, users and more widely.
So, what sounds like a quantum machine for a while?
So what's one of those ones that we've seen so far? Thank you.
Once we find premium content, we list new subscribers and improve user retention.
Among the 12 companies offering the most cost, there were a number of records and a faster performing drama which generated the highest membership revenue during the new year's window. In addition, drummers, that have changed the world.
Video pumpkin equation
I have some things that I need now. I have some things that I need now.
How can we partnered technical government and archaeology program Putab chloride in the
Second, we continue to refine our membership business operations, increasing numbers, narrow presentations with enhanced advantages.
For example, we improved subscribers' convention and monetization efficiency during the fifth decade user summit last year. A common scenario is marketing initiatives have not in fact reported improved mutual wealth projects.
In addition, we upgraded our membership vendor, introducing various high-quality benefits, which dropped a significant increase in membership reduction in human life.
Working forward to solving M23, we will continue to focus on driving high-quality growth and to pursue further growth in revenue subscribers and on. Moving on to content.
During the closure, our cognitive methodology remained highly effective on off-ground images.
and as a diversified and high quality premium content alcohol with a new high
not only on market share of gamma rich but more high, we remain number one in terms of effective re-reviews for both overall gamma and exclusive gamma countries for the fifth consecutive quarter. 2019.
for the majority of the drama supply under Gradywom. Our original content accounted for 70% of the key dramas which relate to Q1, the highest in our history. The long-term content deals in ratio of
original company also reached a new high and to affect the performing genre in IT districts. I do it today only to be able to see the changes that tur frustrations were usually
one isifically identical two, not if we benchmark it coached with verticalASH over it
Meanwhile, IT oracles have become a major source of company for the life of the next of the five
including C2PD and the following show, the channel with whom we have built long-term partnerships. We are the player industrial leader in this area, in QL. This is a test we used from took over the University of suicidal
The Nohar also becomes the highest-rated show of the past two years under major domestic climate fundamental.
As an online media and human service provider, our goal is to systematically increase the fifth piece visual of our premium content. Our long term commitment to our remote content enables us to increase the number of users
with structural advantage in the industry. So yes, we have successfully built three trunk pillars that support operating content offerings. Mainly, optimize the content production mechanism of trunk operation and trainable capability.
under soft parents. These probabilities will empower us to definitely grow the world of high quality content.
to further enrich our premium content offering. For content production, we have actually improved our inter-silent-like visual content production capability to a sophisticated content management mechanism for content production tools.
We believe these three effective comparative barriers that are difficult for others to repeat. For content management mechanisms, we have accomplished an efficient and comprehensive Sean
for one product's innovation or assessment, production, promotion.
operations, and distribution. For content production tools, we at U-Haul developed a system to develop industrialized visual production based on AI, big data, and cloud computing. So with this method, we can further improve our content production.
operation noise, efficiency, and a new standard for the Chinese legal industry.
This is tied to ESD talent. We have a compelling creator, culture, and talent whosweat before a successful acquisition mechanism With High risk Valuably Expai and foundational value
and I would say I think it by in-house service and in-house content.
Our approach is reflected in two aspects.
First, in addition to providing competitive economies in the next...
We give creators some sense of freedom, and we take initiative and unlock their creativity based on our explain to work.
But we have always been committed.
who encourage young talent in addition to work with young people and experience creators. We also nurture young and emerging talent and help them develop their potential.
In 2009-26, we will continue to launch diversified content across all eras.
for dramas in Q2, Eiffel, Weizhao, directed by the Chinese director of Hong Kong. According here, we are going to run back under our new delta.
And the generous one, in Jiangdua, have generated some work of Nao, also starting from Q2. And I will ask you to come and join us while we release.
including the story of Queen in Paris in 1991.
You are long est a casebook. They are followed.
Thank you.
or diverse line-ups of genres in other categories will also be released. A number of original variety shots will also be launched in Q2, including both the training feature of DeepShorts and the debut of new titles, which are already out.
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supports higher confidence.
Please also participate in the launch of BlackSheet
The GINA has a plan to increase our investment in the short-term impact with the gradual recovery of advertising markets.
For Q2, please also anticipate to be more related in other countries including original animation.
the diamond legend and the IOK. Moving on to advertising.
We are pleased to see that our typing language RMP 104 feeling into one at 5% year-over-year. For performance at RMP crew, 75% annually, and its annual contribution which had sir or not at field time.
of Xbox to effectively improve monetization.
In addition, we optimized our algorithm to grant our targeting and input and effecting it. Our brand and format was solved.
I think to keep alive this season.
The year-over-year denial was built through their relative hybrids in Q1 last year.
And the other market expansion was not intended by the pandemic lockdown in Shanghai, which is a new hub for the next data advertising market.
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We are on the same page here.
It was given by a premium drummer when he showed an emergency sign and correct.
And the launch of a number of ride shows in the U2 was likely to drive the recovery of the brand and the business.
We are casually optimistic towards the overall brand advertising market this year. Consumption is still recurring in the first half of the year.
and the past will see further recovery in the second half. Overall, we are positive about the long-term development of the brand market in the IT brand influence and use of it highly now that I want answers.
In terms of air factors, we are optimistic about the MCT factor, which includes hope and that barrier.
travel domestic cosmetic breaths as mom's home appliance under house care.
Moving on to technology and the product, technical innovation is one of our core values, which is critical in driving visual inverse visualization and improve company production efficiency. For workflow production, the technology has been applied.
in two of our key audio dramas.
Still, that adopted this technology for efficiency improvement by over 30%.
and may be used as a general crowd to remember 5-1-4.
The IT input production management system is data driven and high decision making system that capture a repeatable moment in the Intel Company Perfection.
In general, the system can complete ARP value projection in just a few minutes.
It can also generate estimated content-related cost-researchers, a key measure that we use in our original content decision-making under efficient monetary products.
Management can utilize these tools to monitor production process, ROI, and use of funds and manage the overall production in real time.
and can utilize these tools to monitor production process, ROI, and use of funds, and manage the overall production in real time. We continue our work.
Optimize or perfect with the aim of bringing the ultimate entertainment experience to every user. IT App was opened by the Ministry of Industry and Information Technology for providing user-friendly assistance.
People will outlive it.
and disabled. We are upgrading IT's semantic search capability to better understand users' search intentions. The pushback character feature function Q1 helps users quickly find videos on character.
providing a highly efficient way to search for videos. We also anticipate describing how generated AI applications.
providing a highlight efficiency to search for videos. We also untable it, deploying how generated AI applications built upon large-language models.
can improve content production and promotion efficiency in the long-form video industry.
internal assessment indicates that.
and generate AI technology and be implemented in multi-business scenarios including streaming.
AI technology can be an important message in mobile businesses newer in hoops including Firedni's electrolytes that can be used to treat Paras
script, bring songs for Asian and rebuild processes. We have initiated the integration of the regenerating AI technology into our intelligent production system. And we impact that.
While resulting, light-lung removal in part intelligent pro-affection systems will achieve higher performance and better incomes.
by combining large-number model applications with computer vision and audio models.
we can gain deeper insight into video content, resulting in significantly improved quality and production efficiency of promotional images and videos for use in advertising and content marketing.
text-to-image and text-to-video applications are also viable for generating pre-visualization during production preparation for use in comic and animation production processes.
I'd like to discuss your program of ITLite and our overstitch business.
In Q1, as you can see, high quality growth and that's again the current operating project.
For Man Photography's basic subscription package, the number of subscribers goes by b
Seven, eight.
present because of that. And that will go by over 80% present.
For the overseas business, driven by the outstanding performance of four recruitment functions, the membership revenue achieved a solid growth in the corner. The membership revenue growth rate exceeded 90% annually in January .
individuals, including the US, Hong Kong, Japan, and the network, that includes the input of original Chinese drama coming into growth with that approach of 54% annually Americans'aj explanation
working in multiple markets in North America and Asia.
generating outstanding war of masks and a huge social bias.
Having installed Q2, we have a solid pipeline of creating content, including key traffic cameras and original Chinese cameras, which would drive the growth in both subscribers' network and on the Phillips tumor consensus.
to model the approach that represents a solid process step into the usage of high-quality growth. After 13 years of development, our industry leading plan is deeply embedded in the mindset of the user.
the camera that has the support of stakeholders. And there, we all keep pushing ourselves to unleash more potential energy, high-quality growth over long term.
Now, let me try to tune the goal of the natural performance.
Thank you, Michelle. And hello, everyone.
Q1 was another record-setting quarter for us in the circle mission. We achieved historical highs across all key aspects.
Not only will achieve an all-time high in total revenue and membership services revenue, but it will also further improve our profitability, cash flow, and balance sheet.
The exceptional Q1 result was once again driven by the success of our original content strategy.
To be more specific, we don't arm the 8.3 billion in total revenue, getting quarterly all-time high, up to 15% annually, and 10% sequentially.
Membership Services revenue continues to serve as the biggest growth driver with revenue exceeding RMB $5.5 billion, up 24% annually and 17% sequentially.
Meanwhile, I will add a 5-D revenue and a counting distribution revenue of 5% and 16% respectively on any basis.
Moving on to the constant expenses.
Our possible revenue increased by 10% sequentially, along which the talent cost increased by 7% sequentially.
We launched a more diversified premium content in the fourth quarter as Q1 is a hip or high season with 22 year holidays.
Then total operating expenses increase both annually and sequentially, mainly due to the increase in FP&A expenses.
We have already more resources in marketing as we believe this will amplify our content influence, increase user penetration, and enhance the strong momentum generated by the state of our original content.
For Q1, we continue to strengthen our profit and cash flow generating capability. NUNDAP offering income exceeded RMB 1 billion.
extending for the sixth convective form.
More importantly, three pairs will also exceed it on B1 delay. In Q1, we erased approximately $1.1 billion through 4 long-income portable notes offerings. We also repurchased approximately
the minimum principal amount of the convertible model due to 2026. At the end of Q1, the company had cash, cash equivalent, restricted cash, short-term investment, and the long-term research cash included in the prepayment and audit asset.
as R&D $6.3 billion in total. This $6.3 billion decash balance does not include the payment of around $1.2 billion to the paid agent to meet the company's repurchase obligation on April 4, 2023 for the convertible milk deal, 2025.
which was classified as prepayment and other assets on the balance sheet.
The repurchase has been completed in April 2003.
To conclude, the first quarter results demonstrated the success of a high quality work strategy.
We will continue to focus on this future and are confident in our ability to generate more value for our stakeholders in the long run. For detailed financial data for the first quarter, please refer to our press release on our website.
Now we will open up the floor for Q&A.
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 press star 2.
Please pick up the handset to ask your question. The first question comes from Zhuizing Tang.
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Thanks for taking my question and congratulations to Riele. My question is related to content and content cost. What's the trend of content investment for this year and the longer term, and what's the level of this year's production compared to previous years? All for regarding content costs under…
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and over the mid-term, the overall content costs will remain stable with marginal increase. And in the long run, we will maintain a reasonable content launch schedule and also a relatively stable content-op level.
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Secondly, we'll continue to invest in high quality original content, with a number and portion of high quality original content will increase in the future.
And third, compared with last year, the number of titles going into the year will also increase.
in order to meet the demand of a pet premium content inventory, and the launch schedule.
Thank you for your attention.
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For dramas, starting from Q2, we'll start to launch this year's key costume dramas including for example, Stories of a Cleaning Plate, Palace, Death Time, Demotives, Cakebooks, Love You Seven Times, and etc.
We will also want modern traumas including violence, right eyes in the dark, as husband, as wife, we are criminals and except us.
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andto your deal. How many a all that become? You, trin continate.
For variety shows, two will mark a strong return of our original variety show, including both returning pieces of his show and the take-boots of new titles. offences.
investors may refer to the detailed content pipeline list we just released last week during our IT work conference for more details. Thank you. Thank you. Rigor regarding talk.
That's it. All right. Thank you. And we'll continue to respond to thoseHow exercising Thank you.
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I will add on to what Jaffray just mentioned and explain the finance perspective. He mentioned that content investment costs from the financial perspective and then that we believe for this.
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Over the past year and also including the Q&A in 2003, we can see that the portion of our original content has been increasing steadily. It is in the main driver of high-quality growth over the past period.
And right now, because of the original content, the proportion is relatively at a high percentage. So we anticipate going forward that the percentage of this will beiscopal.
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For our original content, especially now it's entering into a very high quality stage, and then we have defined a very systematic content launch schedule. So because of this, we can launch the content.
more at ease, and more on our own pace. And for now, we have a full system from producing the original content to broadcasting. And this is a very systematic, programmatic approach to our rotation and managing our original content.
So our funding is relatively stable and our need for capital is relatively stable as well. And from the financial aspect...
we anticipate to see a continuous performance of the above-mentioned two-point code.
Thank you. Thank you. Your next question comes from Lincoln Kong from Goldman Sachs. Please go ahead.
Thank you Manjwan for taking my question. The question is about the competition. How do we see the competition landscape has changed or evolved in the current market? And over the next two to three years, will we expect any of the other peers will increase their investment in order to...
Grab more market share in the team space and how do IQ maintain the competitive edge in the overall industry. Thank you.
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for the past period. And right now we think the entire long-term video industry has gone through a pretty structured change over the past period. The irrational investment style and the provider growth is no longer applicable. and although in
to pursue profitability and the high-quality growth. This is also the consensus of the entire industry, and we all think it's a very key indicator.
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In our 13 years of history, we have never been the most deep pocket player in the market. So we actually put more focus into original content and we have seen very promising results and have seen excellent results as we have maintained a market that is more focused on content.
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We also utilize technology to improve our overall content production process. For example, from the screen product to the installation.
to production, to actually function launch. And the entire cycle of original production can be covered through our technology driven tools. And using these tools we can largely manage, also forecast.
our original content. So in order to secure very stable supply of our original content and also to increase the likelihood of blockbuster content going forward. And also in the meantime, we will also utilize AI-GC to improve our production efficiency and improve our overall original content.
This question comes from Daniel Chen with JP Morgan. Please go ahead.
This is is a right time. Go the rule and you go to work out way you go. Frankly, have been quite a win.
Q & A My question is related to the membership experience. Can management provide some color on the outlook of the subscriber number?
Thank you the latter
Q&A with the President of the United States. Our Senior Vice President of Membership Business, Yuzhou Dan, is answering this question. So for Q1, you can find strong original content.
Q1 membership services revenue and subscribers' rates will be recharged.
When may you see the people we saw in the easi I area on that? Well, may you seem in the Gi of this some way. I think is town who I saw. hopewe will happy here table.
It is expected that the Q2 membership services revenue and subscriber base will still have a year-on-year growth, and we estimate that for Q2, the sub-base and the revenue will be the best performance at the quarter in our history.
From the quarter-on-quarter perspective, it is expected that the sub-phase and revenue needs to too have some sequential dip, mainly reflecting the seasonal pattern after the 10-year holiday.
The overall work remains optimistic about the subscriber base and revenue outlook for this year, mainly because of the tool factors I'll be mentioning.
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The first reason is how we are still very confident about the confidence like one as the confidence loss schedule for this year, especially during basic wind-dilts that have summer vacation. The first reason is how we are still very confident about the confidence that have summer vacation.
Our highly efficient content production mechanisms show operating and technical capability, and also the top talent will empower us to steadily grow the number of high quality content compared to last year.
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The second factor is we are seeing the proportion of any subscribers increase significantly year on year. Although it might not have the short term uplift effect on arms, but the long term benefit is significant as it represents longer and closer relationships with our subscribers.
And this will drive the annual revenue performance and also improve the cash flow.
And also the second point is the lifetime value and the long term retention rate of our various membership packages have also increased.
And also that we saw strong growth from both subscribers with large screen privileges and also like app supported basic subscriber packages.
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The main strategy for our membership business this year is to reach high quality goals which means maximizing user experience and in return strengthening our subscriber base, LTV and Alsh farm. Thank you.
Thank you. The next question comes from Alicia Yap with Citigroup. Please go ahead.
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Can management share with us what is your view of brand advertising outlook this year and what is the active demand for each major sub vertical industry look like?
In addition, wondering if you have seen any meaningful difference in terms of demand sentiment between brand action and performance app. Thank you.
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It's very closely correlated with economic development. And we are seeing the overall market will recover with gradual recovery of China's economy, especially the post-COVID period. But the reflection in the advertising market will lack by one or two quarters.
And in the first half of the year, the consumption is still gradually recovering. So we expect to see more evidence of recovery in the second half of this year.
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All choing up and China until you create where for how to end up your knowge jure.
So overall, we are very confident, still very confident in the long-term development of the brand advertising market. As IT is one of the platforms with the highest user quality, the strongest willingness and ability to pay in the China Internet industry.
which can effectively help advertisers to intend the brand influence and also sales conversion.
Looking at the sub-sectors, the FMCG, retail, travel, entertainment, and also health details, they covered the faculty so far.
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No, we can't do that. We can't. Q2 is the peak season for SMCG, with food and beverages, and toiletries in the trees. So we expect you to have positive growth both annually and crucially.
At the same time, Q2 also has key marketing campaigns such as June 18. So the ad budget of some e-commerce platforms is $2.99.
Platforms should also expect to see some increase to some extent.
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in particular because we have optimized our algorithm and also to increase ourselves efforts. So our Q1 performance, our quarter performance were actually above the market industry and also going into the future quarters we expect to see strong growth in Q3 as well.
Overall, the performance ad market is currently showing some success.
pretty big budget growth in areas such as online services, game launches, e-commerce, travel, and local life stuff. Thank you. Back to you.
I'll now hand the conference back to Ms. Yu for closing remarks. Over to you, Ms. Thank you. And please note that the previous discussion on Q2 is over looking and only represents our current view based on current data points. And I would like to thank again for everyone's participation on the call today.
please do not hesitate to contact us if you have further questions. Thank you everyone and we'll see you next quarter.
Thank you. Thank you. Thank you. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
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Thank you for standing by and welcome to the IKE first quarter 2023 earnings conference call.
All participants are in the listen-on-the-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 one on your telephone keypad.
I would now like to hand the conference over to Chang Yu. Please go ahead. Thank you, operator. Hello, everyone. And thank you for joining IT first quarter, 2023, Ernie conference call. The company's results were released today and available on the company's investor relations with plus light at IR.
Of the call today are Mr. Nguyen Phuong, co-founder, director, and CEO . Mr. Kim Wong, varsity echo, Mr. Siao-Cui Wong, RCCO, Chief Compton Officer. Mr. Lentong Liu, RCCO, Chief Technology Officer, and Mr. Yuziao-Cui. Senior Vice President of our membership business. Mr. Goal will give a brief overview of the company business operations and highlights. Follow by team.
goal of those who are financial. After the prepared remarks, Southway, Minnesota and New South were shown in circle and June , in the 2019 session.
Before we proceed, please note that the discussion today will continue forward with the statement. Made under the same proper provisions of the U.S. private security litigation reform act of 1995. Overlooking statements are subject to risks and uncertainties from the cost that actually results to defer materially from recurrent expectations. The potential risks and uncertainties include.
But are not going to choose those outlines in our public filings with the SEC. ICE does not undertake any obligation to update any political statement, except as required under applicable law. With that, I will now turn the call over to Mr. Bohn. Please go ahead.
Hello everyone. This package, developing under-community, is an exceptional knowledge, a strong plus corner entering a new chapter of high-quality growth. Our common flybue once again, then it's pretty, it's all.
You have a reflection of it. You have a reflection of actually original growth of the medical performance and the next shell. I'm a marketing shell reaching more high.
It could be worth a penny. I'd give my ten if on Sunday night, leaving position in January .
which in your high in the next shelf are long-standing original components, well, both foot and again, the more complex becomes the better performing drama in our history in human original content.
continuue to give the main driver of new related and the graming performance and the progress which import the priand production that we, I see a C? ptern househalf.
and the music in the hall, in full, the flagra singing, both total language and the membership of the city, language, peak, call of the old and high. For the more than years, your college, double digits, both annually and the digital age. In particular, in particular, the hall membership of the city, language, the city, language, peak, call of the old and high.
and each new high after 24 person annually under 17 percent of the big pretty short age, high, and high, grade orumeok and joss roll back your growth in discrete and personal slver schemes, in Q1, that outage saving number of total desk writing, lifeline approach.
100 and 29 missed, completelyalued.
9th edition of Over 10th New Year. As of March, so he got the number of participating members with 100 under-sunni-new year, which will flag your New Year, with the memory of following your Chinese New Year.
And it's all about the average of Q1 performance. Number half, mailing, if be done in one big one, building into one. And it's all about the average of Q1 performance.
As time went for the sixth consecutive color, more importantly, wash cash flow also is fitted on an empty one-billionth color. Critical melting as it is dilated become more self-sufficiency. As you mentioned, that color is seen.
We believe these reasons follow the ground, conscious to the time of the high-quality growth. In 21, we need to meet.
the part of creating that point video and from appeal to users. Our ability to produce and deliver time, the quality of popular or remote company is our call, coming in which it is difficult to apply in the short time. These will continue to involve with the field of industry implementation.
in the long run. Currently, our business can be translated by into three states called growth and early states. Our call is made to include membership spaces. Unlike our title in the state, confidence, distribution, actually existing.
Accessual all gross Overall of gross-media
I think delivery include all of the city there, and the global city market thing.
Now, let's go through the performance of all these experiments in V2, starting with numbers of spaces. And both numbers of spaces are in the number of the squares of each black hole pattern in V1. Number of spaces are in the past RIP.
5.5 billion, up 24 persons annually, under 17 persons, and potentially, the average number, bill a number of participating members reached 100 and 28.9.
maing in into one sequion the sequentrolit that addition of over seteen, deing marking the second constctive colner with minadition of over 10, meaning was onb for two home seat pro one
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Well, it's the culmination of membership unit. I try to drive them by three factors. Naming the striker base, the striker base by time and the arm.
We paid the money, the money, and the payment of hope to our membership in May.
Based on many factors, including continuous life, use of the month and the market environment, with a lot of to try continuous improvement in both mentorship, manual, and use of the strategy. You're a five-mission of strategy.
Has helped us to stronger, younger, and broader relationship with our leaders. We saw a program of coming by the decision of our membership structure and the stronger leader engagement in 31, the function of any of the fibers.
In which the next decade or year, we are the last time there, under a long time retention rate, also in court. In addition, our membership project, which even brought the user call house into one, results from those subscribers is the last thing.
dely Prem counted. We released the new subcribers and improved reserve pension among with tr company offering the more cal for a number of blackmarks and the answer of one drama.
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I had the membership schedule during the new days in the organization. From Mars, that's how I changed the lab for the public without any doubt. I would say I'm nice, I'm the real good.
Under on macroscooft and generating janetani and the goals of we will are all well listis by users. secondgment, we comeue to fly our membership busment operations, increasing numbers, thato representation with hanced abenit.
My question is, the journey in Canada and the goals of the community we are all well-witted by users. Second, the community will be five of membership, treatment, or creation, increasing numbers, medical, presentation with intent, identity, so it's done well.
it will include cinematic dimensions? in the P K survey and that depression coming under the narrow aircraft, marking in terms of endlessly Minecraft into your fault?
In addition, the upgraded of membership funders introducing various high-quality benefits which drop of the need and increase in one organic production into one.
Looking for work to solving the uncertainty, we will continue to focus on driving high quality clothes and to pursue a further growth in granular subscribers and on. Moving on to comments, during the call, our company methodology was named highly.
decided, like me, how to make colorful noise in morning as would people play an important role. And recognizing that the coincidently pops up a new mission by processing
Not L on Mar ket shelf of D not ris the Ho more high number they might in terms of effective. These reveals or both overall downa and that decreas govermer counflates for the fif active coner original company. The company will to part.
for the majority of the farmers of life and the growing one. Always more counted, or counted for 70% of the key farmers really in Q1, the highest in our history. The growing one can be built and racial, or open to more companies, also reached as more high.
So this is a process of about helps to master buttons, and especially for performing like images with high-pitched paralleism. It becomes difficult to buy for two Broadway performances. This is a rather final project I am majoring in isn't there,
Meanwhile, I do already know how to become a major source of continent of life, where the message to yours includes me, to TV, and the following show, the Man of the Channel, we've home, we have built long-term partnerships.
They are not very accurate in the area, in Q&A. The tribunates are currently pre-meant dramas to specifically, I'm not calling short, and quite serious patients, including the Macau. Everyday I'm not, and I'm not supposed to. Also, you are in the venue of the tribunates content which is the warehouse type.
The knockoff also becomes the highest living show of the past few years under nature, domestic crime or channel, this is the 8th. As an online media, I'm not humanist or either, or go through the mathematics in question that is the issue of our criminal conduct. Our long term,
commitment to original content in able to have this structural one-page in the industry. So years, we have successfully built three from pillars that are supposed to offer in content offering. In the end, open by the content production in Canada, the strong operating and the technical capabilities and the top parents.
With particular things, we'll empower to to that level and growth the work of high quality content to further enrich our premium content of rent.
For accounting production, they naturally improve all indirect supply life, legal accounting production capability. So all of this is complicated. Concentration management, the kind of accounting production, please. We believe these things, effectively competitive barriers.
not hard difficult for our GDP. For a constant management mechanism, we have accomplished an efficient and a complicated mechanism when you are in some of your food for that. For one product, incubation, food, assessment, production, promotion.
operation and its revulsion. For conventional production tools, with the U-Haul developed a system to support industrial life, the legal production based on API, big data, and cloud computing. So these methods, they can further improve our company production and our operation law, the efficiency.
This is hedge to ??tration pilot. We have ourissen dearly important culturalittelins compositioniles that I appreciate it.
by in-house talent and industry company partners. All approach is really like it in two aspects. First, in addition to providing competitive economy in the next week in creators, so many things within, like in the next week take initiative and unlock their.
creativity based on our physical and human work. Second, we have always been committed to encouraging fresh young parents in addition to work with young, well-experienced creators. We also nurture young and emerging.
correnct and that help them developed. They are controble. In 2000 and the 23 we will continue to launch divers byire company, our past, all terrifors for dramers' cre, Tal iho, which are directed by the much Chinese Director of wecome, fing years and fction and that and not AR needet the Delta.
And the Injaro's one, Injian Duan. In Injian Duan, how to generate it from the work of not also adding from Q2, the number of Q company drivers, well, to relate.
including the story of Queen in Paris and Minh-Anh-Gui-Mong. The longest casebook may follow by King Chang-Wu-Doo and W.S.S. Hsien-Chi-Dee-Chang. Rialto
our characteristics. Now, it will be revealed. A number of already shown, the variety shows will also be launched in future, including both the training season of digital and the superhero of new titles. The rendition to the already held, the Lady in Land, ha ha ha ha ha, sit, yes, I do before.
that be active at lecture three. Please also participate in the launch of flagship panels by the act of 10th, 11th, 22th. Looking at how this plan will increase our investment in our initial impact with the value of the color real of our head emerging.
For Q2, please also anticipate to be more related in other countries including original children cartoons, poop panthers, mice, birds, and the rovers and original animations, the garden legends.
and the IOK. Moving on to advertising. There are places to see that advertising when reached RMP 100-4-3-1 means you want to ask five persons year-over-year for performance at RMP 4.
75% annually and each year, annual contribution is the new high, totally high. This successfully occurs a higher scale of advertising prices from key industry.
including internet development, e-commerce, and making full report choreography to effectively improve moneyization.
My exclusiveBACK works in Esper kisses.
We optimize the agrosan to guarantee or are targeting underd influencer and the planning, for brand to analyze loved ones ????ment.
I think it will be more difficult with the system. The year-over-year time was built with the relative high rate in Q1 last year.
And the ad market expansion was not impeded by the pandemic lockdown in Shanghai, which is a new hub for the domestic advertising market.
This project will observe growing pressure among advertisers driven by our premium drama variety shows and diversity-spied ad products, and the launch of a number of variety shows in YouTube on one plane to drive the recovery of the brand and business.
all positive, among, the long-term development of the coronavirus in everything. The age research is clearly understood by the other hidden cases, in terms of coronavirus, we are ...
optimistic about the MCT sector, which includes food and beverage, travel, domestic cosmetic brands.
a smart home, a client, and a health care. Moving on to technology and product, technical innovation is one of our core values, which is critical in driving visual industrialization and improve company production efficiently.
For water production, the technology has been applied in two of our key original dramas. Filmstats then adopted this technology for efficiency improvement by over 30% and reduced the required crew number by one third. The IT enabled production by the immense capacity.
content-related cost ratio, a key measure that we use in our original content decision-making and efficient monetary process. Management can utilize these tools to monitor production process, ROI, and use of funds.
and manage the overall production in real time. We continually optimize our products with the aim of bringing the ultimate entertainment experience to every user. IT app was owned by the Ministry of Industry and Information Technology.
providing useful and eminent assets, pillars or algorithm and disabled.
We have upgraded iTunes' thematic search capability to better understand users' search intentions. The Search by Character feature launches in Q1 helps users quickly find videos based on characters, providing a highly efficient way to search for videos.
We also activate, requiring home-generated AI applications.
build upon large language model, can improve content production and promotion efficiently in the long-for video industry, or internal investment in the case that.
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the integration of the generating AI technology into our intelligence production system. And we expect that relatively solid, a large number of models impart intelligence production system with our actual higher performance and better income. By combining large number of model applications with computer vision and all your models.
We can gain e-core insights into video content, resulting in significant input quality and the production efficiency of promotional image and videos for use in advertising and content marketing. Thanks to image and the title, a video application.
are often valuable for example, in pre-re?al migration during production, the pre-re?al use in calming, and the animation production perfect it.
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For the overseas business, given by the outstanding performance of the three-man company, the number of sheep growing or actually falling for all of them, the number of sheep growing or falling to it, it is needed, 90% annually in charge, in regions.
including the U.S. Comcom, Japan and Mexico. They pushed the people of original Chinese drama continued to close, which had been closed of 54% anyway. When people were taught to build ships, they were not in the political market, in the political issue, and not America.
This is something, especially since it was been in its sport class There are over 1000 participant members of nursing supplies LGTXR
which will drive the growth in both sub-spinals and around the world. Too much. You have heard, yeah, too much, that we've done, also in the first and second, into the new page of high quality growth. After searching years of development, our industry is leading to life, into a situation that is embedded in my time of building up the industry.
To unthe unleash more potential amerve high-housy growth over long term.
Now, let me talk to you. We'll go through an awful natural performance. Thank you, Michelle. And hello, Ms. Agam. Here we are with another record setting for a civil mission. We are chief historical highs across all key aspects. Not only were chief all time high, including revenues in the membership services around here.
We also want to include our profitability, cash flow, and abandoning sheep. The exceptional Q1 result, where they want again, driven by the success of our original confidence strategy.
To be more specific, we both are in the 8.3 billion in total round use, getting quarterly all-time high, up to 15% annually, and 10% potentially.
Members of services around Newt come to serve and the tickets to BLOVE driver will be around Newt's ceiling on the $5.5 billion, up 24% annually and 17% eventually. Meanwhile, our advertising revenue in counting distribution ran up by 5% and 16% of the speculating rates on annual basis. Thank you.
Moving on to the constant expenses, our policy schedule is increased by 10% sequentially, along which the count and cost increased by 7% sequentially. We allow to work diversified approval in count and original count in the fourth quarter as Q1 is a typical high seed in with Chinese field year holidays.
When total operating census increased both annually and sequentially, mainly due to the increase in FDNA expenses, we devoted more resources in marketing as we believe this will amplify our common influence, increase the penetration and intense strong momentum, generally, by Australian, among our general accounts.
For Q1, we continue to strengthen our profit and cash flow generating capability. None that offering income is fee that R&B 1 billion, extending for the six consecutive points.
More importantly, three pairs will also be there on the one-delegate. In Q1, we raise approximately, we have 1.1 billion dollars to follow up income, vulnerable notes, often. We also re-purchase approximately 2,000,000,000 with orders, maybe a principle amount of the comparable notes due to 2026.
As the annual Q-1, the company has cash, cash equivalent, the through-the-cash short-term investment, and the long-term reserve cash including included in the pre-payment and audit asset of R&D 6.3 billion in total. This 6.3 billion on the cash balance does not include
the payment of around 1.2 billion US dollars to the payment agent to meet the company to re-perchage obligation on April 1, 2023 for the convertible-nose due to 2025, which was classified as pre-payment and other assets on the balance sheet. The re-perchage has been completed in April , 2023.
To conclude, the first quarter of the day demonstrated the success of our high quality work strategy. We will continue to focus on this future and are confident in our ability to generate more values for our stakeholders in the long run.
So these are the financial picket that for the first quarter pleased to refer to our personally from our website. Now we will open up more of Q&A.
So these are the financial picket that for the first quarter pleased to refer to our current release on our web, I have graphite. Now we will open up more of Q&A. 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 want to speak of phone, please pick up the handset to ask your question. Your first question comes from Zheezing Singh.
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to level off this year's production compared to previous years. Also, regarding to the cost and the income statement, how does management think about the growth rate of this year and in the future? I ask the commitment shared with us highlights of the pipeline this year. Thank you.
From a patient to a patient, make sure there are no noise that comes up on the phone some time ago and put in very close contact with every patient. In the next program, it will remain clear why you have stopped.
I will like to invite RCTO to answer the question. I will answer the question.
So this year and over the next time, overall pumpkin cost will remain able with marginal interest. And in the bottom line, we will maintain a reasonable company-run schedule and also a relatively stable content cost level.
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The number...and the portion of high quality over known possible inputs... ... instrument that is fromacakitara. From the last year all the testing the price value showed and again, pepper flow has pushed out the future
I'm sorry, compared with last year, a number of titles going into the description of this year will also increase. In order to meet the demand of a head premium content inventory and the launch schedule.
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For example, storage of cleaning plates, pallets, desk time, the most cheap book, less than seven times, and et cetera. We were also most modern traumas, including finally, right eyes in the park. As far as the supplies, we are criminal and et cetera. So we have all of you.
What are variety shows? Q2, what are some returns of our original variety show? Including those returns to the shows in the debut of the new title. Q2, what are the returns of our original variety show? Including those returns to the debut of the new title.
We will now turn it over to the investors to refer to the detailed content pipeline list that was released last week during our ITE work conference. Thank you. Akeyler holds's one-t businessmen,
to be able to meet with you. The investors may refer to the details on the content package list because we released last week during our IT work conference for Martin Jiang. Thank you. Thank you. Thank you. The?mer Tortha Huo just wounded her me.
I will add on to what Jeff, which is mentioned, may explain the finance perspective. You mentioned that content investment for a content investment and content cost from the financial perspective. And then we believe for this aspect, it will remain stable with marketing. The joint management plan is transparent. The joint management plan is transparent.
Over the past year and also in the coming years, the series in 2003, we can see the potential of our original content of the increasing battery. It is the main driver of a high-quality road over the past period. And right now, because of the original content, the portion is relatively at a high...
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Okay, for our original content especially now it's entering into a very high quality stage. And then we have defined a very systematic content launch schedule. So because of this we can launch the content more at ease and more on our own pace.
And for now, we have a pool of some from producing the original content to broadcasting. And this is a very dramatic, problematic approach to our rotation and managing our original content. So our funding is relatively stable and our need for capital is relatively stable as well.
Please go ahead.
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I think that's a really important thing to know. Now what I find is, thank you management for taking my question. The question is about the competition. So how do we see the competition landscape has changed or evolved in the current market? And over the next two or three years, will we expect any of the other peers will increase their investment in order to grab more market share in the team space? And how do IQ maintain the competitive edge in the overall industry?
We have been maintaining our market leadership for the past period.
And right now we think the entire long-term video industry has gone through a pretty structured page over the past period. The irrational investment style and the variety of growth is no longer applicable. And our goal is to pursue profitability and high-quality growth. This is also the consensus of the entire industry and we all think it's a very key indicator.
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In our 13 years of history, we have never been the most deep pocket player in the market. So we actually put more focus into original content and we have been in very promising results and have been in excellent results.
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Thank you. So we also utilize technology to improve our overall content production process.
Using these tools, we can largely manage also for tasks, our original contents within order to secure various tables, as a part of our original content and also to increase the likelihood of blockbuster content fully forward. And also, in the meantime, we will also use utilize AIDB to improve our production efficiency
question comes from Daniel Chen with JP Morgan. Please go ahead.
and the whole area of the government. And then we can talk about the whole area of the government to be asked to be asked. So my question is related to the membership of the government. So we need to provide some color on the outlook of the subscriber number in the second quarter and also on the third.
Also, how do we think about the overall growth for the membership service in DC and Loughton, and also what's our major strategy for membership in the 2020 street? Thank you.
Our Senior Vice President of Membership Business is for doing this and turning this question. So for Q1, for them by strong original content, Q1 membership services revenue and its spread space, both have recognized. Library ofilateral training.
It is expected that the Q2 memion seven revenue and the swaggered date will still have the year on year year ago and we estimate that for Q2 the secondate and the revenue will be the best performance compquarter in our centtory yearvers from the year get we maybe to hour year on Gi. So user what we all from the quarter on quarter practice. It is expected that the subate and revenue two what have some sequential de.
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The first reason is that we are still very confident about the company's pipeline, as the company wants to get over this year, especially during the day-to-win deal.
summer vacation, or highly efficient counseling production mechanism show operating and technical ability. And I'm also going to talk to them, what I'm proud of to steadily grow the number of high quality content compared to that here.
And with all of our internal economy, the top of our industry opportunities have blev???? although all of us are the big classorteam, it seems to be their biggest overall environment. Experts may not have cigar whatsoever that they can enforce with this to a permanent place as progress.
The second factor is we are seeing the proportion of annual subscribers increase significantly year-round here. Although it might not have the short-term uplift effect on arms, but the long-term benefit is significant. It represents longer and closer relationships with our subscribers. And this would drive the annual revenue performance and also increase cash flow.
and long-term retention rate are increasing. Third, our large-scale members, namely, QiYi Group, VIP members, and QiYi Group members in the Chinese version have been doing well recently.
And also that we saw strong growth from both subscribers with large screen privileges and also IT-like as supported basic subscriber packages. The main strategy for our membership business this year is to reach high quality growth.
The next question comes from Alicia Yap with City Group. Please go ahead. Hi. Thank you. Guanyin City Online Shop?, particularly for my T1 and Gong Qi, this is Changjing's Yeji. this this Jeju Light Area homepage heats up. Let's do our best.
and also, just to say, I'm going to talk about the platform, and the effect of the platform. The difference between the two are the differences between the two. Let me think about it. Can management share with us what is your view of brand advertising outlook this year? And what is the ad demand for each major subvertical industry look like? In addition, wondering if you have seen any meeting with different income soft demand sentiment between brand action and performance ads. Thank you.
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I'll talk about brand advertising for performance ads separately. So for brand advertising, I'll talk about brand advertising for performance ads separately.
The performance of that is very closely correlated with economic development. And we are seeing the overall market will recover with gradual recovery of China's economy, especially the post-COVID period. But the reflection in the advertising market will lack by one or two quarters. Actually, after April , we are seeing gradual recovery of grand advertising. And we are still very cautiously optimistic about the overall grand advertising market for this year. And in the first half of the year, the consumption is still gradually recovering.
there are companies in the long term development of the grant advertising market. As IT is one of the problems with the highest user quality, the strongest willingness and ability to pay in the China Internet industry, which can effectively help advertisers to intend the grant including and also self-conversion.
Looking at the sub-sectors of the FMCG retail couple.
entertainment and also healthy to take a coverage of that.
We expect that Q2 should have a positive growth both annually and crucially.
And at the same time, Q2 also has to be marketing in sync such as June 18th. So the app budget of some e-commerce platforms should also expect to see some increase to some extent. So do not you come all the over-sue-money-end Q2, I have a question for you.
We are optimistic about the long-term process of the new energy vehicle sector and also the home furnishing sector.
Performance admiring that was gradually recovered in 2023 with moderating the coverage of the domestic market.
And especially for IDE in particular, because we have optimized our algorithm and also to integrate ourselves efforts. So our Q1 performance, our quarter performance were actually above the market industry. And also going within the future quarters we expect to see strong growth in Q3 as well. And so, we have our card.
Overall, the performance at market is fairly showing pretty big budget growth in the area such as online services, in launches, e-commerce, travel, and the local lifestyle.
Overall, the performance ad market is currently showing a pretty big budget growth in the areas such as online services, game launches, e-commerce, travel, and local lifestyle. Thank you.
Thank you. I'll now hand the conference back to Ms. Yoo for closing remarks. Over to you, Ms. Yoo. Thank you. And please note that the previous discussion on Q2 is over looking and only represents our current view based on current data points. And I would like to thank again for everyone's participation on the call today. And please do not hesitate to contact us if you have further questions.
Thank you everyone and we'll see you next quarter.