Q2 2O26 iQIYI Inc Earnings Call

August 18, 2026

Speaker #1: Thank you for standing by, and welcome to the iQIYI Q2 2026 earnings conference call. All participants are in listen-only mode. There will be a presentation followed by a question-and-answer session.

Operator: Thank you for standing by, and 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 Yu, IR Director of the company. Please go ahead.

Operator: Thank you for standing by, and welcome to the iQIYI Q2 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 one on your telephone keypad. I would now hand the conference over to Ms. Chang Yu, IR Director of the company. Please go ahead.

Speaker #1: 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 Ms. Chang Yu, IR Director of the company.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Operator. Hello, everyone, and thank you for joining iQIYI's Q2 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.

Chang Yu: 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. Xiang Yang, Senior Vice President of international and online game business, and Mr. Gao Yu, Senior Vice President of brand advertising business. Mr. Gong will give a brief overview of the company's 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.

Chang Yu: Thank you, operator. Hello everyone, and thank you for joining iQIYI's Q2 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. Gao Yu, Senior Vice President of brand advertising business. Mr. Gong will give a brief overview of the company's 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.

Speaker #2: 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. You Chaoduan, Senior Vice President of our Membership Business; Mr. Xiang Haiyang, Senior Vice President of International and Online Game Business; and Mr. Gang Wu, Senior Vice President of Brand Advertising Business.

Speaker #2: 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.

Speaker #2: 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.

Chang Yu: Before we proceed, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the US 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.

Speaker #2: 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.

Speaker #2: iQIYI does not undertake any obligations to update any forward-looking statement except as required under applicable law. I will now pass on to Mr. Gong.

Speaker #2: Please go ahead.

Speaker #3: Hello, everyone. In the second quarter, we continued to reinforce our core business: high-quality, diversified content powered by industry-leading performance. According to Enlighten Data, we maintained the number one market share in each of the long-form genres, film, and children's content categories.

Gong Yu: Hello, everyone. In the second quarter, we continued to reinforce our core business. High quality, diversified content powered by powerful industry-leading performance. According to Enlightent Data, we maintained the number 1 market share in each of the long-form drama, film, and children's content categories. For short-form dramas, "Duanju," we made a major breakthrough, reaching number 1 market share for the first time in Q2. 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 user-centric social media ecosystem. AI can dramatically lower the cost and the barriers of content creation, turning what was once a niche professional activity into a mass capability, and triggering an unparalleled surge in content supply.

Yu Gong: Hello, everyone. In the Q2, we continued to reinforce our core business. High quality, diversified content powered by powerful industry-leading performance. According to Enlightent Data, we maintained the number 1 market share in each of the long-form drama, film, and children's content categories. For short-form dramas, "Duanju," we made a major breakthrough, reaching number 1 market share for the first time in Q2. 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 user-centric social media ecosystem. AI can dramatically lower the cost and the barriers of content creation, turning what was once a niche professional activity into a mass capability, and triggering an unparalleled surge in content supply.

Speaker #3: And for short-form genres, zhōng jù, we made a major breakthrough, reaching number one market share for the first time in two months. Financial performance also improved quarter over quarter.

Speaker #3: Total revenues, the total revenues, the total revenues grew sequentially and on a year-long gap. Operating loss narrowed substantially. Approaching break-even, we are fully advancing our strategic transformation.

Speaker #3: First, we are shifting from centralized media to a decentralized, creator- and user-centric social media ecosystem. AI can dramatically lower the cost and barrier to content creation.

Speaker #3: 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.

Gong Yu: 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 the 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 helps 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, our strategy 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.

Yu Gong: 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 the 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 helps 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, our strategy 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.

Speaker #3: Second, we are taking an all-in approach on AI to revolutionize both live-action production and pure AI-generated content. Our guiding principle is clear: maximizing cost efficiency without compromising quality.

Speaker #3: Together, these two pillars reinforce each other like a flywheel. AI drives rapid growth in content supply, which helps us move faster toward a decentralized model.

Speaker #3: And as we decentralize, more creators can participate, users can get more engaged, and our platform becomes even stronger. In Q2, both strategies moved from plans to measurable results.

Speaker #3: Over time, we will structurally improve our content cost, 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.

Gong Yu: 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 a 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.

Yu Gong: 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 Q2 increased by 30% to 500% compared to the Q1. 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 a 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.

Speaker #3: We refreshed our core Creator Hub, the iQIYI Creator Center, in early Q2. Our promising numbers, including the number of creators and uploads, are all trending higher.

Speaker #3: Content with short production cycles, 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.

Speaker #3: In June, daily views for microgenres and micro animations were up by double digits compared with March. Short-form genres and animation are also gaining traction.

Speaker #3: Looking ahead, more long-form video categories will join the decentralized content ecosystem as we preserve iQIYI's premium content and advantages. We will broaden our content slate by adopting lighter, more flexible content acquisition models.

Speaker #3: On content production, AI is a AI is substantially optimizing production efficiency and cost structure. First, in live action, AI is is streaming line lining.

Gong Yu: First, in live action, AI is streamlining the entire 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 Android CG-heavy formats. We have launched multiple AI-generated internet feature films. A major milestone was the July prime world premiere of Mystic Tale: Qitan, 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 generalized large-scale production.

Yu Gong: First, in live action, AI is streamlining the entire 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 Android CG-heavy formats. We have launched multiple AI-generated internet feature films. A major milestone was the July prime world premiere of Mystic Tale: Qitan, 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 generalized large-scale production.

Speaker #3: The until workshop workflow. For example, we leverage AI in our variety show to prime Season 2 姐姐当家 to achieve a tenfold leap in rough cut efficiency compared to traditional methods.

Speaker #3: Second, for content tests well-suited to AIGC, AIGC production can reduce production costs and timelines by 70% to 90% compared with traditional methods. We are pushing past the physical limits of live-action shooting.

Speaker #3: Naturally, AI adoption is faster in Andrew CG. Having formats, we have launched multiple AI-generated internet features field. A major milestone was the July prime work premiere of Mystic Tale Titan, the industry's first AIGC internet feature film to launch with an internet genre and a few distribution methods.

Speaker #3: 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 genres and a revenue-sharing model.

Gong Yu: In addition, year-to-date, we have launched 16 AI-generated short-form dramas under our revenue sharing model, with the trio, The 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-invented films with an even broader pipeline across expanded categories next year. Currently, we have multiple AI-generated short-form dramas in development. Nado Pro is our studio-grade production platform for creators. It runs on optimized third-party and in-house models, plus iQIYI's long-standing 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, Nado Pro caps development and production costs. Externally, Nado Pro explores new revenue streams and gradually converts our professional production capabilities into incremental revenue.

Yu Gong: In addition, year-to-date, we have launched 16 AI-generated short-form dramas under our revenue sharing model, with the trio, The 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-invented films with an even broader pipeline across expanded categories next year. Currently, we have multiple AI-generated short-form dramas in development. Nado Pro is our studio-grade production platform for creators. It runs on optimized third-party and in-house models, plus iQIYI's long-standing 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, Nado Pro caps development and production costs. Externally, Nado Pro explores new revenue streams and gradually converts our professional production capabilities into incremental revenue.

Speaker #3: With "The Trail" handmade as a top-performing title, in the second half of the year, we have launched a diversified slate of AIGC titles.

Speaker #3: Including multiple iQIYI-invested films, with an even broader pipeline across expanded categories next year. Currently, we have multiple AI-generated short-form genres in development. Another highlight is our pseudo-great production platform for creators.

Speaker #3: It rests on optimized third-party and in-house models, plus iQIYI's long-standing expertise in professional content. By replacing costly stacks with lower compute and tool costs, it lowers barriers and speeds up professional content production.

Speaker #3: Our strategy is clear: internally, another prompt can help development and production cost. Externally, another prompt explores new revenue streams and gradually converts our professional production capabilities into incremental revenue.

Speaker #3: Another prompt age isn't just generating AI output. It changes the key parts of long-form production: script writing, shot design, workflows, digital asset editing, and dubbing.

Gong Yu: Although Prophet Edge is not a generative AI output, it transforms 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. Prophet is evolving from a tool into a comprehensive creator ecosystem. It links content demand with creators and enables them to realize commercial returns through flexible business models. This activates a flywheel. Commercial returns encourage more content supply. Expanded supply fortifies the ecosystem. A stronger ecosystem scales both creators and works, powering our creation platform for iQIYI's decentralized content ecosystem. We believe these advances 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.

Yu Gong: Although Prophet Edge is not a generative AI output, it transforms 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. Prophet is evolving from a tool into a comprehensive creator ecosystem. It links content demand with creators and enables them to realize commercial returns through flexible business models. This activates a flywheel. Commercial returns encourage more content supply. Expanded supply fortifies the ecosystem. A stronger ecosystem scales both creators and works, powering our creation platform for iQIYI's decentralized content ecosystem. We believe these advances 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.

Speaker #3: Into platform features. It delivers an end-to-end workflow in Next Talent with content assets and makes progress repeatable and reusable. Another prompt is evolving from our tool into a comprehensive creator ecosystem.

Speaker #3: 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.

Speaker #3: 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 advances will improve content production efficiency, lower unit costs, and increase both users and revenue.

Speaker #3: 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.

Gong Yu: 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 Awards 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 continued to focus on female-centric stories, with "Here We Meet Again," ranking among this year's top 2 titles by ad revenue. We also reinforced our lead in suspense-driven genre innovation. The suspense comedy, "Form Is Lack," "Jie Jie Dang Jia," surpassed the 10,000 iQIYI popularity score and drove strong membership sign-ups. While in April, "Zuo ye jiang shi," from our iQIYI Suspense Theater, earned strong reviews.

Yu Gong: 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 Awards 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 continued to focus on female-centric stories, with "Here We Meet Again," ranking among this year's top 2 titles by ad revenue. We also reinforced our lead in suspense-driven genre innovation. The suspense comedy, "Form Is Lack," "Jie Jie Dang Jia," surpassed the 10,000 iQIYI popularity score and drove strong membership sign-ups. While in April, "Zuo ye jiang shi," from our iQIYI Suspense Theater, earned strong reviews.

Speaker #3: Let's start with content. Our premium content is well recognized by users and the industry. At the Magnolia Awards this June, one of China's top TV honors—Bai Yulanjia—iQIYI titles and their creative teams won 14 out of 23 awards, including 10 out of 11 in the genre category.

Speaker #3: Well ahead of peers. In Q2, our content performed well across formats in long-form genres. We continue to focus on female-centric stories, with 'Hai Jiayi' ranking among this year's top two titles by ad revenue. We also reinforce our lead in suspense film genre innovation.

Speaker #3: The suspense comedy form with Lag Biji Shang Fanzi surpassed the ten thousand iQIYI popularity score and draws strong membership sign-ups. Well, well, in separate — in separate, 昨夜将至 from our iQIYI suspense theater earned strong reviews. All original title archives the Nanyang Mystery.

Gong Yu: Our original title, "Archive: The Nanyang Mystery," "Nan bu dang an," exceeded a 9,300 popularity index score, and the non-exclusive "The Legend of Mi Yue," "Mi Yue Zhuan," topped 8,500. In fully 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 1 for the first time. The strong performance was supported by our original, "The Fireman: 10th Anniversary," "Ying hong baiduo shi nian," 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%.

Yu Gong: Our original title, "Archive: The Nanyang Mystery," "Nan bu dang an," exceeded a 9,300 popularity index score, and the non-exclusive "The Legend of Mi Yue," "Mi Yue Zhuan," topped 8,500. In fully 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 1 for the first time. The strong performance was supported by our original, "The Fireman: 10th Anniversary," "Ying hong baiduo shi nian," 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%.

Speaker #3: Nambu Archives exceeded a 9,300 popularity index score, and the non-inclusive The Epoch of Miyu Miyu Qi topped 8,500. In platform-supported short-form genres, typically 15 to 25 minutes per episode with flexible episode counts, we delivered exciting early results.

Speaker #3: Per Enlightened 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 all original, the ferment-tensed anniversary 灵魂百度十年, which reached a peak daily market share above 60%.

Speaker #3: Short-form titles can offer structural advantages over long-form genres, potentially reducing average per-minute costs by over 50% and shortening production-to-approval timelines by 30% to 50%.

Speaker #3: In micro genres, we released premium live-action titles like All Above, Separate Career, Lead Falling for You, and The Phoenix Blade. All responded well with audiences.

Gong Yu: In micro dramas, we released premium live-action titles like "All About Secret Career," "Li," "Falling for You," and "The Phoenix Blade," all resonated well with audiences. AIGC scaled quickly under a revenue-sharing model, accounting for over 50% of all micro-per-sell 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," "Wei chou zong a," "The Twin," "Jiu luo," received positive feedback. We are licensed "The Article," "He zi," "Petal Storm 3," "Pi shi ren sheng," "Blades of the Garden," "Liu ren," "Zootopia 2," were also well-received on our platform. In variety shows, we launched 7 originals in Q2, with our flagship from Chess delivering sustained value.

Yu Gong: In micro dramas, we released premium live-action titles like "All About Secret Career," "Li," "Falling for You," and "The Phoenix Blade," all resonated well with audiences. AIGC scaled quickly under a revenue-sharing model, accounting for over 50% of all micro-per-sell 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," "Wei chou zong a," "The Twin," "Jiu luo," received positive feedback. We are licensed "The Article," "He zi," "Petal Storm 3," "Pi shi ren sheng," "Blades of the Garden," "Liu ren," "Zootopia 2," were also well-received on our platform. In variety shows, we launched 7 originals in Q2, with our flagship from Chess delivering sustained value.

Speaker #3: AIDC scales quickly under a revenue sharing model. We accounted for over 50% of all micro cost value and unique visitors in June. Meanwhile, AI-native micro animations expanded with strong sequential growth in views and timestamps.

Speaker #3: In films, we maintained a diversified slate for different audiences. Originals like The Counterfeit with 超动漫 and The Thin Twin Duo received positive feedback. We also licensed the article hits Pegasus 3, 必胜人生, Blade of the Garden, 妖人, and Zoom Top Gear 2.

Speaker #3: Well, also well received on our platform. In variety shows, we launched seven originals in Q2, with our flagship from "Chang Yu Chassis" delivering sustained value.

Gong Yu: Five Hearts," "Wu Xi," crossed a popularity index score of 9,000, reaching a new franchise high. For 10 years, our original 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 God," "Yi Tian Xie Shen," which premiered in April, topped our animation popularity index chart and brought notable off-platform users back to iQIYI. Together with "Ghost Ruler," "Gu Gan," we now have two long-running titles to keep users engaged year-round. Finally, in children's content, we enforced our leadership with the return of our original IP sequel, "The Owl Squad," and the localized adaption of the BBC classic, "Bluey." Next, let me show our pipeline for the H2 of the year.

Yu Gong: Five Hearts," "Wu Xi," crossed a popularity index score of 9,000, reaching a new franchise high. For 10 years, our original 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 God," "Yi Tian Xie Shen," which premiered in April, topped our animation popularity index chart and brought notable off-platform users back to iQIYI. Together with "Ghost Ruler," "Gu Gan," we now have two long-running titles to keep users engaged year-round. Finally, in children's content, we enforced our leadership with the return of our original IP sequel, "The Owl Squad," and the localized adaption of the BBC classic, "Bluey." Next, let me show our pipeline for the H2 of the year.

Speaker #3: Five Hearts Wuhan reached a popularity index score of 9,000, hitting a new franchise high. For 10 years, evergreen IP Rep of China 2026 also stood out, surpassing a popularity index score of 8,800.

Speaker #3: In animation, we further solidified our original offers. The long-running Against the God 倚天邪神, with its premiere in April, topped all animation popularity index charts and brought notable off-platform users back to iQIYI, together with The Golden Ruler 大主宰.

Speaker #3: 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.

Speaker #3: DEAL Squad and the localized adaptation of the BBC classic Teletubbies. Next, let me show our pipeline for the second half of the year.

Speaker #3: Our summer long-form genre features a diversified lineup, which includes multiple female-oriented titles like Road to Success, 踏入繁星, Key to the Phoenix Heart, 却谷, and Overdue 这秒过火.

Gong Yu: Our summer long-form drama features a diversified lineup, which includes multiple female-oriented titles like "Road to Success," "Can Ru Fan Xing," "Key to the Phoenix Heart," "Que Gu," "OVERDO," "Zui Niao Guo Huo," "Genius Girlfriend," "Tian Cai Nu You," "Spring of The Blade," "Liu Chun," "Abyss," "Shen Yuan Wu Jian," and "In My Prime," "Sheng Feng Qi Shi," complemented by the military theme, "Windblown Warriors," "Feng Le," and the major realistic drama, "Forging Justice," "Zhong Qi." For the remainder of the year, we will premiere "The Great Long March," "Chang Zheng," aka "Hai Dao Chu Ri Zhi," "Small Town Remedy," "Xiao Cheng Liang Fang," and "The River of No Return," "Liang Jing Shi Wu Ri." As for short dramas, our upcoming releases include "Dance of Winter," "Dong Xia De Zui Wo," "Yue Yi Zui Ai," "The Five Groups of Fatal Cases," "The Sixth Group of Fatal Cases," "Zhuang Liu Zu," and "The Great Nobody 2," "Da Wang Bie Huang Zhuang." In films, our pipeline features original theatrical films including "Winter and Summer," "Yi Lu Chao Ping An," "None Shall Escape," "Si Wang Qing Qu Shi Lu," and "Fu Hu Ji," "Fu Mi Cuo." In the H2 of the year, on the licensed front, our pipeline includes "One Nation," "Jiu Shu Ren," and "The Furious," "Huo Zhuan Ye" this summer, with "I Know Who You Are," "Wo Zhou Da Yu," "Dear You" and "Crossing Sidu" slated for the latter H2 of the year.

Yu Gong: Our summer long-form drama features a diversified lineup, which includes multiple female-oriented titles like "Road to Success," "Can Ru Fan Xing," "Key to the Phoenix Heart," "Que Gu," "OVERDO," "Zui Niao Guo Huo," "Genius Girlfriend," "Tian Cai Nu You," "Spring of The Blade," "Liu Chun," "Abyss," "Shen Yuan Wu Jian," and "In My Prime," "Sheng Feng Qi Shi," complemented by the military theme, "Windblown Warriors," "Feng Le," and the major realistic drama, "Forging Justice," "Zhong Qi." For the remainder of the year, we will premiere "The Great Long March," "Chang Zheng," aka "Hai Dao Chu Ri Zhi," "Small Town Remedy," "Xiao Cheng Liang Fang," and "The River of No Return," "Liang Jing Shi Wu Ri."

Speaker #3: Genius, Go Friends, 天才女友, Spring of the Blade, 游春, A Beast, 深渊无限, and In My Prime, 升空骑士, Complete Mantis by the military theme, Windblow Warriors, 冰从风中来.

Speaker #3: And the major realistic drama Forging Justice, 宋琦, for the remainder of the year, we will premiere premiere the great long march 长征 taken that 海岛书日志, Small Town Remedy, 小城明峰, and the River of No Return 两定数日.

Speaker #3: As for short genres, our upcoming releases include Death of Winter in 冬夏的罪恶, Yaris最爱, The Five Girls of Fatal Case, The Six Girls of Fatal Case, 转六族, and The Great Nobody 2.

Yu Gong: As for short dramas, our upcoming releases include "Dance of Winter," "Dong Xia De Zui Wo," "Yue Yi Zui Ai," "The Five Groups of Fatal Cases," "The Sixth Group of Fatal Cases," "Zhuang Liu Zu," and "The Great Nobody 2," "Da Wang Bie Huang Zhuang." In films, our pipeline features original theatrical films including "Winter and Summer," "Yi Lu Chao Ping An," "None Shall Escape," "Si Wang Qing Qu Shi Lu," and "Fu Hu Ji," "Fu Mi Cuo." In the H2 of the year, on the licensed front, our pipeline includes "One Nation," "Jiu Shu Ren," and "The Furious," "Huo Zhuan Ye" this summer, with "I Know Who You Are," "Wo Zhou Da Yu," "Dear You" and "Crossing Sidu" slated for the latter H2 of the year.

Speaker #3: In films, our pipeline features original self-produced films including Winter and Summer, 一路朝平安, No Goal to the Child, 死亡进趋实路, and Prohibition 我没错. In the second half of the year, on the licensed front, our pipeline includes One Nation Prompt 消失的人 and The Furious 火专业 this summer.

Speaker #3: With "I Know Who You Are," "大头," "There You," "给阿妈的情书," and "A Crossing 四度" 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 AIDC titles based on the classic IP "The Fireman 灵魂百度," the first two chapters "A Butterfly Dream," and "The Dream of Celestial Madam."

Gong Yu: 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," "Ying Hong Bai Tu." 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," "Su Zhan Su Jue," 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," "Xi Ju Zhi Wang Dan Kou Ji," and "HER PRIME 2" this summer, followed by "The Blooming Journey," "Yi Lu Fan Hua 3," and "Wander Together Season 2," "Yu Zhou Shan Shuo Qing Zhu Yi," in the H2.

Yu Gong: 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," "Ying Hong Bai Tu." 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," "Su Zhan Su Jue," 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," "Xi Ju Zhi Wang Dan Kou Ji," and "HER PRIME 2" this summer, followed by "The Blooming Journey," "Yi Lu Fan Hua 3," and "Wander Together Season 2," "Yu Zhou Shan Shuo Qing Zhu Yi," in the H2.

Speaker #3: Ascend is set to launch this summer. Additionally, audiences can also enjoy a strong lineup of live-action titles, including Modern Game and Speed and Battle (速战速决) this summer.

Speaker #3: Shifting to variety shows, we are deepening audience engagement with established IPs, including The Rep of China 2026, The King of Stand Up Comedy Season 3, 喜剧之王张口记, and Her Prime 2 this summer, followed by The Blooming Journey 一路繁花 3.

Speaker #3: And when they're together too, 宇宙闪烁, 请注意. 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, 昨日飞升, Raised by Demons, 叛逆与熊猫, Golden Horse, 海神斗战龙, and To Be a Winner, 成也萧何, alongside the AIDC titles The Legend of King, 红武, 天子传奇红武大帝, and The Legend of King 激发, 天子传奇激发, 激发点.

Gong Yu: For animations, this year could be iQIYI's strongest animation summer to date.

Yu Gong: For animations, this year could be iQIYI's strongest animation summer to date.

Gong Yu: The lineup features "A Good Day to Ascend," "Ze Ri Fei Sheng," "Raise the Bias," "Yi Meng Pan Nv," "Yu Yi Xiong Mao," "A Golden Cough," "Hai Shen Dao Gan Long," and "To Be a Winner," "Cheng Ye Xiao He," alongside the AIGC titles, "The Legend of King Hongwu," "Xian Zi Zhuan Qi Hong Wu Da Di," and "The Legend of King Ji Fa," "Xian Zi Zhuan Qi Ji Fa Tian." For children's content, our summer slate features a new season of the popular "Pleasant Goat and Big Big Wolf," "Xǐ Yáng Yáng yǔ Huī Tài Láng," as well as original AIGC animations like "Lala Beat." Looking ahead at the H2 of the year, we will roll out the original AIGC animation, "Wu Sheng Armor," and "Kamen and Birth Fruits Truck," and "Tasty Travel," "Xiao Chu Miao Chan Che Qu Yu Xing." Now, turning to membership business.

Yu Gong: The lineup features "A Good Day to Ascend," "Ze Ri Fei Sheng," "Raise the Bias," "Yi Meng Pan Nv," "Yu Yi Xiong Mao," "A Golden Cough," "Hai Shen Dao Gan Long," and "To Be a Winner," "Cheng Ye Xiao He," alongside the AIGC titles, "The Legend of King Hongwu," "Xian Zi Zhuan Qi Hong Wu Da Di," and "The Legend of King Ji Fa," "Xian Zi Zhuan Qi Ji Fa Tian." For children's content, our summer slate features a new season of the popular "Pleasant Goat and Big Big Wolf," "Xǐ Yáng Yáng yǔ Huī Tài Láng," as well as original AIGC animations like "Lala Beat." Looking ahead at the H2 of the year, we will roll out the original AIGC animation, "Wu Sheng Armor," and "Kamen and Birth Fruits Truck," and "Tasty Travel," "Xiao Chu Miao Chan Che Qu Yu Xing." Now, turning to membership business.

Speaker #3: For children's content, our summer slate features a new season of the popular "Pleasant Goat and Big Big Wolf" (喜羊羊与灰太狼), as well as original AIDC animations like "La La Bit." We are also looking ahead to the second half of the year.

Speaker #3: We will roll out the original AIDC animation 武圣阿莫, as well as a common and Birthroots track. A tasty travel show, 小厨喵餐车去旅行. Now, turning to membership business, revenue declined sequentially due to seasonality.

Gong Yu: 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, and subscribers within this cohort. We also continued to enhance membership value with our express package. In Q2, we launched the 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 creation. For performance ADS, revenue returned to year-over-year growth. We continue to optimize advertiser mix.

Yu Gong: 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, and subscribers within this cohort. We also continued to enhance membership value with our express package. In Q2, we launched the 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 creation. For performance ADS, revenue returned to year-over-year growth. We continue to optimize advertiser mix.

Speaker #3: We are stressing the business with more refined operations, for example, package discounts for students and teachers, which drove a year-over-year increase of over 60% in quarter-end subscribers within this cohort.

Speaker #3: We also continue to enhance membership value with our express package. In Q2, we launched express packages across 16 genres, driving a nearly 80% annual increase in total participants.

Speaker #3: 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 the advertising business.

Speaker #3: For brand ads, revenue from genre targeted ads delivered double-digit year over year growth by factor building personnel count and healthcare recorded double-digit year over year growth.

Speaker #3: We also expanded our use of AI in ad operations and now support customized AI-driven creative for performance ads, with revenue returning to year-over-year growth.

Speaker #3: We continue to optimize advertiser needs revenue from small and midsize advertisers delivered strong year over year growth. A sector-wise, revenue from advertisers in AI applications instant return and e-commerce recorded a strong year over year growth.

Gong Yu: 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 showed 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.

Yu Gong: 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 showed 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.

Speaker #3: 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.

Speaker #3: 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 200% and 150% year over year.

Speaker #3: Respectively, our Arabic-speaking markets also showed strong potential, with membership revenue increasing 85%. The global influence of C-genre continues to expand. In Q2, membership revenue from C-genres grew over 40% year over year.

Gong Yu: A standout hit was "Faith to See You," "Jiang Hu Tian Teng." 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 from Google Trends as it became the number 1 local internet drama in Indonesia in the H1 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.

Yu Gong: A standout hit was "Faith to See You," "Jiang Hu Tian Teng." 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 from Google Trends as it became the number 1 local internet drama in Indonesia in the H1 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.

Speaker #3: Throughout, our hit was fit to suit general plan. It topped our international platform rankings across 14 regions in its first week and stayed in the top 10 of the C genres chart for 10 consecutive weeks.

Speaker #3: On the local production front, we are accelerating our pace. Our first original Indonesian drama, The Other Sister, gained strong traction on Google Trends. It became the number one local internet drama in Indonesia in the first half of 2026.

Speaker #3: Micro dramas were another major area on the rise. In highlights, 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.

Speaker #3: This momentum was partly fueled by stronger original production. Notably, originals rose to three of the top 10 contributors to membership revenue. AIDC was another key driver of our overseas micro-drama expansion.

Gong Yu: 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 three for micro-drama revenue on our international platform. The title was produced by Nado Pro, which helped us establish full-blown AIGC knowhow, laying a strong foundation for scale production. In parallel, we are proactively forging external partnerships to connect overseas script production and tool ecosystem, including Nado Pro, unlocking capacity, and scaling AIGC supply. Beyond content, we are driving growth with joint memberships.

Yu Gong: 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 three for micro-drama revenue on our international platform. The title was produced by Nado Pro, which helped us establish full-blown AIGC knowhow, laying a strong foundation for scale production. In parallel, we are proactively forging external partnerships to connect overseas script production and tool ecosystem, including Nado Pro, unlocking capacity, and scaling AIGC supply. Beyond content, we are driving growth with joint memberships.

Speaker #3: In Q2, we launched the AI-generated titles in multiple languages, including English, Thai, and Ukrainian. Our original titles delivered exceptional efficiency, recovering production costs within the same quarter and demonstrating stable profit potential.

Speaker #3: We are scaling supply soon, both originals and external partnerships. In May, we released our first original AI-generated micro drama overseas, which quickly ranked in the top three for micro drama revenue on our international platform.

Speaker #3: The title was produced by Nado Pro, which helped us establish full-blown AIDC know-how, laying a strong foundation for scaled production. In parallel, we are proactively affording external partnerships to connect overseas script production and two ecosystems, including Nado Pro.

Speaker #3: Unlocking capacity and scaling AIDC supply. We are content we are driving growth with strong memberships. We have partnered with Vision Plus in Indonesia and will launch joint membership with VIU in more markets in the second half.

Gong Yu: We have partnered with Vision+ in Indonesia, and will launch joint membership with Viu in more markets in the H2. We are excited about the future potential of our overseas business. With that, I will hand it over to Ying Tian, our new CFO, to walk you through the financials.

Yu Gong: We have partnered with Vision+ in Indonesia, and will launch joint membership with Viu in more markets in the H2. We are excited about the future potential of our overseas business. With that, I will hand it over to Ying Tian, our new CFO, to walk you through the financials.

Speaker #3: We are excited about the future potential of our overseas business. With that, I will hand it over to Yingtian, our new CFO, to walk you through the financials.

Speaker #1: Okay, thank you, Mr. Gong, and hello everyone. Let me walk you through our key financial results for Q2. Total revenues were RMB 6.3 billion, up one percent sequentially. Membership services revenue was RMB 4.0 billion, down four percent sequentially, primarily due to seasonality.

Ying Tian: Okay. Thank you, Mr. Gong, and hello, everyone. Let me walk you through our key financial results for Q2. Total revenues were RMB 6.3 billion, up 1% sequentially. Membership services revenue was RMB 4.0 billion, down 4% sequentially, primarily due to seasonality. Online advertising revenue was RMB 1.2 billion, flat sequentially. Content distribution revenue was RMB 681.5 million, up 19% sequentially, driven by the increase in content distribution revenue related to drama series. Other revenues were RMB 344.9 million, down 19% sequentially. Moving on to cost and operating expenses. Content cost was RMB 3.8 billion, up 2% sequentially. Total operating expenses were RMB 1.1 billion, down 6% sequentially, reflecting disciplined marketing spending. Non-GAAP operating loss narrowed by 80% sequentially from RMB 148.6 million in Q1 to RMB 30.3 million, bringing us close to breakeven. Turning to cash flow. Net cash provided by operating activities increased to RMB 339.6 million from RMB 186.4 million in Q1.

Speaker #1: Online advertising revenue was RMB 1.2 billion, flat sequentially. Content distribution revenue was RMB 681.5 million, up 90% sequentially, driven by the increase in content distribution revenue related to the drama series.

Speaker #1: Other revenues were RMB 344.9 million, down 19% sequentially. Moving on to cost and operating expenses, content cost was RMB 3.8 billion, up 2% sequentially. Total operating expenses were RMB 1.1 billion, down 6% sequentially, reflecting disciplined marketing spending.

Ying Tian: Content cost was RMB 3.8 billion, up 2% sequentially. Total operating expenses were RMB 1.1 billion, down 6% sequentially, reflecting disciplined marketing spending. Non-GAAP operating loss narrowed by 80% sequentially from RMB 148.6 million in Q1 to RMB 30.3 million, bringing us close to breakeven. Turning to cash flow. Net cash provided by operating activities increased to RMB 339.6 million from RMB 186.4 million in Q1.

Speaker #1: Non-gap operating loss narrowed by 80% sequentially from RMB 148.6 million in Q1 to RMB 30.3 million. Bring us close to the break even. 22 cash flow net cash provided by operating activities increased to RMB 339.6 million from RMB 186.4 million in Q1.

Ying Tian: As of the end of Q2, we had cash equivalents, restricted cash, and short-term investments of RMB 4.1 billion. Separately, as of the quarter end, we had a loan principal of $636.6 million receivable from PAG, included in prepayments and other assets on the consolidated balance sheet. We remain focused on creating long-term shareholder value. In March 2023, we announced a share repurchase program of up to $100 million, effective through September 2027. As of 30 June, we had repurchased approximately 21.6 million ADSs for an aggregated cost of $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.

Speaker #1: As of the end of Q2, we had cash, cash equivalents, restricted cash, and short-term investments of RMB 4.1 billion. Separately, as of the quarter end, we had a long-term principal of $636.6 million receivable from PAG included in prepayment and other assets on the June 30 dated balance sheet.

Speaker #1: We remain focused on creating long-term shareholder value. In March 2026, we announced the share repurchase program of up to $100 million, effective through September 2027.

Speaker #1: As of June 30, we had repurchased approximately 21.6 million ADSs for an aggregate cost of $24.1 million. For further details, please refer to today's earnings on our investor relations website. With that, we are ready to take questions. Operator, please proceed.

Speaker #2: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two.

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 1 question each time and go back into the queue for more questions. Your first question comes from Zhiqing Zhang with CICC.

Speaker #2: If you're 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.

Speaker #2: Please ask one question each time and go back into the queue for more questions. Your first question comes from Ziqing Zhang with CICC.我来回答这个问题吧。这个IT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些调整。管理目标也比较清晰。也就是也就是这个两条两个要点。第一个是去中心化变成一个非中心化的社交媒体。另外一个就是权力投资投入AI owning 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。

Zhiqing Zhang: Thank you. Thanks for taking my question. I would like to ask with AI knowledge and the market involved rapidly, how can iQIYI's business model develop in the future, and what are the company's key strategic and operational priorities going forward? Thank you.

Ziqi Zhang: Thank you. Thanks for taking my question. I would like to ask with AI knowledge and the market involved rapidly, how can iQIYI's business model develop in the future, and what are the company's key strategic and operational priorities going forward? Thank you.

Speaker #3: Thank you. The CEO takes this question. He says, "We see iQIYI as the beneficiary of AI now and also in the long term."

Ying Tian: Thank you. The CEO takes this question. He says, we see iQIYI as the beneficiary of AI now and also in long term. To capture this opportunity, we are making some strategic transformations for our business. Mainly focused on 2 main pillars, decentralization, which means transforming from the media-centric platform to a decentralized content ecosystem, and also all-in-AI. These 2 pillars, we believe, will mutually reinforce each other and jointly drive a flywheel effect across the number of creators, the volume of content, the user base, and potentially revenue performance.

Yu Gong: Thank you. The CEO takes this question. He says, we see iQIYI as the beneficiary of AI now and also in long term. To capture this opportunity, we are making some strategic transformations for our business. Mainly focused on 2 main pillars, decentralization, which means transforming from the media-centric platform to a decentralized content ecosystem, and also all-in-AI. These 2 pillars, we believe, will mutually reinforce each other and jointly drive a flywheel effect across the number of creators, the volume of content, the user base, and potentially revenue performance.

Speaker #3: So to capture this opportunity, we are making some strategic transformations for our business, mainly focused on two main pillars: decentralization, which means transforming from a media-centric platform to a decentralized content ecosystem, and also all-in AI.

Speaker #3: So, these two pillars we believe will mutually reinforce each other and jointly drive a flywheel effect across the number of creators, the volume of content, the user base, and potentially revenue performance.

Speaker #1: 投入的优质内容还是核心核心资产核心工作。AI会非常显著的降低这些投入优质内容的制作成本缩短了制作周期。然后有可能实现以前非常实拍难实现的效果。

Gong Yu: 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作成本，缩短了制作周期，然后有可能实现以前非常实拍难实现的效果。

Speaker #3: Premium content still remains at the core of our business. We believe AI will significantly lower production costs for premium content, shorten production cycles, and potentially enable production and visual effects that were previously difficult to achieve through live action.

Chang Yu: 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 then potentially enable production and visual effects that were previously difficult to achieve through live action.

Yu Gong: 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 then potentially enable production and visual effects that were previously difficult to achieve through live action.

Speaker #1: 去中心化方面我们努力推这个就是IT1号IQID。然后现在的这个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有推进已经实现了具体的一些点状突破。那可以预期在未来的项目上这个明年将会出现更多的这个项目上线。

Gong Yu: 去中心化方面，我们努力推iQIYI IQID。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有推进，已经实现了具体的一些点状突破。可以预期在未来的项目上，明年将会出现更多的项目上线。

Chang Yu: On decentralization, we are mostly focusing on our IQID, 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 are seeing AI adoption is progressing across our core content categories with initial breakthroughs achieved. For example, for the projects we both in productions and also launched. In the future, we expect a greater scale of content to be released next year.

Yu Gong: On decentralization, we are mostly focusing on our IQID, 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 are seeing AI adoption is progressing across our core content categories with initial breakthroughs achieved. For example, for the projects we both in productions and also launched. In the future, we expect a greater scale of content to be released next year.

Speaker #3: On decentralization, we're mostly focusing on our IQID, which is the ITE Creator Center, and we have seen some positive initial progress, such as the number of creators and the content upload numbers are trending well.

Speaker #3: And we're seeing AI adoption is progressing across our core content categories and with initial breakthroughs achieved. For example for the projects we both in productions and also launched and in the future we expect a greater scale of content to be released next year.

Speaker #1: 长期看来AI的应用和去中心化两个战略的措施将结构性的改善内容成本收入的质量盈利水平还有现金流的表现。

Gong Yu: 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。

Speaker #3: 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.

Chang Yu: 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: 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.

Speaker #1: Thank ank you.

Gong Yu: Thank you.

Yu Gong: Thank you.

Speaker #3: Thank you.

Chang Yu: Thank you.

Speaker #2: Your next question comes from Link Kong with Goldman Sachs.

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

Speaker #4: 谢谢管理层接受我的提问啊。那我其实也是想问一下整体的这个IT圈的 AIGC 的一些战略规划，以及包括呢，就是对各个内容品类的一些未来的一个规划。 Thank you, management, for taking my question. So my question is about iQIYI's overall AIGC strategy, and how is our plan in terms of each content category.

Lincoln Kong: 谢谢 Gong Yi Sen 接受我的提问。我之前是想问一下整体的 iQIYI 集团的 AIGC 的一些战略规划，以及包括对各个内容品类的一些未来的规划。Thank you, Manjun, for taking my question. My question is about iQIYI's overall AIGC strategy and how our plan is in terms of each content categories. Thank you.

Lincoln Kong: Thank you, Manjun, for taking my question. My question is about iQIYI's overall AIGC strategy and how our plan is in terms of each content categories. Thank you.

Speaker #4: Thank you.

Speaker #3: Thanks, Linkin. We'll invite our Chief Content Officer, Mr. Xiaohui, to take this question. Please go ahead.

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

Speaker #1: 好谢谢。我来回答这个问题。虽然AI降低了技术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这个门槛。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。在策略上呢我们还是要坚持核心长视频优先兼顾短剧和慢剧同时呢也通过分账合作的这个模式呢来提升资金的周转效率。

Wang Xiaohui: 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，兼顾短剧和慢剧，同时也通过分账合作的模式来提升资金的周转效率。

Speaker #3: First of all, we believe AI reduces the basic cost and barriers to production, but it doesn't 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, aesthetic judgment, emotional expression, and also visual language.

Wang Xiaohui: 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 re-enforcing 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. Now we use a revenue sharing model to improve capital turnover.

Speaker #3: 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.

Speaker #3: Now, we used a revenue-sharing model to improve capital turnover.

Speaker #1: 从AI的规模化的渗透速度来看我下面谈一下谈一下呢就是我们按照各个品类的分层规划的一个策略。首先呢是短剧我们是快速渗透的一个策略。AIGC为主要供给。同时呢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。

Gong Yu: 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。

Speaker #3: I will share our thoughts by category, based on the pace of AI adoption at scale. First of all, for micro-dramas, we're seeing rapid adoption, with AIGC as the primary source of supply.

Wang Xiaohui: 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.

Speaker #3: We primarily use a revenue sharing model and leverage algorithmic recommendations and decentralized operations to deliver a diversified, rapidly refreshed, and skilled content supply.

Speaker #1: 其次的慢剧更适合AI的原生内容。所以说我们主要以AIGC为主要的供给。

Wang Xiaohui: 其次是慢剧，更适合AI的原生内容，所以我们主要以AIGC为主要的供给。

Speaker #3: For animation and micro-animation, we believe these are AI-native content, so AIGC will serve as the primary supply.

Wang Xiaohui: For animation, we believe these are AI-native content. AIGC will serve as the primary supply.

Speaker #1: 动漫与儿童的内容由于它的特点呢是CG的工业化成熟适配度都比较高适合渗透的快速。所以说我们主要用AI来显著提升效率同时把项目的数量呢增长提高。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。

Wang Xiaohui: 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，适合渗透的快速。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。

Wang Xiaohui: For animations and children's content, these have a mature CG industrialization, are a good fit in our view, and we are 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 stable supply.

Speaker #3: And children's content—these, along with mature CG industrialization, are a good fit in our view. We're seeing rapid AI adoption. AI significantly boosts efficiency, and our pipeline is expanding.

Speaker #3: For next year, we will release more AIGC titles to serve niche audiences and broaden stable supply.

Speaker #1: 对于中剧和网络故事片相对长片的这些内容呢它的复杂度呢比以上的这些内容品类要高一点。同时呢它的体量呢比长剧和电影长片呢稍微短一些。所以说它的策略是我们要积极拥抱AI重点呢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。现在呢部分项目呢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。截止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。

Wang Xiaohui: 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质要高一点，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。

Wang Xiaohui: For short-form dramas and internet feature films, these are medium in production complexity and volume. Compared to long-form content, these are lighter in complexity and also in volume. We are actively adopting AI, focusing on genres like fantasy, supernatural, and adventures to widen our genre range. Some titles have already launched, and we will speed up the 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.

Speaker #3: And internet feature films—these are medium in production complexity and volume, and compared to long-form content, these are lighter in both complexity and volume as well.

Speaker #3: And we're actively adopting AI, focusing on genres like fantasy, supernatural, and adventure to widen our genre range. Some titles have already launched, and we will speed up the skill releases while balancing cost efficiency and content diversity.

Speaker #3: So far, we have released 16 AIGC short-form dramas under a revenue-sharing model, along with several internet feature films.

Speaker #1: 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来辅助品质还是保证它的品质。通过AI主要是来降低成本提高效率。

Wang Xiaohui: 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。

Wang Xiaohui: For long-form dramas and theatrical films, we believe carry the highest emotional and artistic value, but 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.

Speaker #3: For long-term dramas and theatrical films, we believe they carry the highest emotional and artistic value, but these are relatively slower to adopt AI at scale. For these types of content, we will focus on live-action quality first, use AI to support our production, and use AI to reduce cost.

Wang Xiaohui: 谢谢。

Speaker #3: Thank you.

Wang Xiaohui: Thank you.

Speaker #2: Your next question comes from Vicky Wei with Citi.

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

Speaker #4: 管理层，晚上好，谢谢接受我的提问。想请教管理层如何看待在 AI 时代和去中心化转型下，爱奇艺的核心竞争优势，以及对于创作者的独特价值。我自己翻译一下：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.

Vicky Wei: 管理层晚上好, 谢谢接受我的提问。想请教管理层如何看待在AI时代和去中心化转型下, 爱奇艺的核心竞争优势, 以及对于创作者的独特价值？我翻译一下. 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.

Vicky Wei: 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.

Speaker #3: Thank you. We'll invite our CEO to take this question.

Chang Yu: Thank you. We will invite our CEO to take this question.

Speaker #1: 在AI时代呢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啊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。

Gong Yu: 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。

Speaker #3: I believe in the AI era, video industry competition centers on end-to-end capabilities, which is from concept to commercialization, and there are quite a few essentials that are required for this.

Chang Yu: We believe in the AI era, video industry competition centers to end-to-end capability, 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 moat iQIYI has built over the past decade.

Yu Gong: We believe in the AI era, video industry competition centers to end-to-end capability, 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 moat iQIYI has built over the past decade.

Speaker #3: 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.

Speaker #3: And these are the core modes IT has built over the past decade.

Speaker #1: 我们对创作者的价值我们这个定义的口号是叫被看见有钱赚有荣誉。意思是那个爱奇艺积累了主要的观众然后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这个创作所以已经建立了成熟的工业化体系。

Gong Yu: 我们对创作者的价值，我们定义的口号是叫被看见，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。

Speaker #3: So 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.

Chang Yu: 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. The creators have greater capabilities or possibilities to be seen on iQIYI platform. Also, iQIYI has deep expertise in long-form video production, and we have established a very mature, industrialized content production mechanism.

Yu Gong: 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. The creators have greater capabilities or possibilities to be seen on iQIYI platform. Also, iQIYI has deep expertise in long-form video production, and we have established a very mature, industrialized content production mechanism.

Speaker #3: First of all, IT has a major share of the video entertainment audience, so the creators have greater capabilities or possibilities to be seen on the IT platform.

Speaker #3: And also, it has deep expertise in long-form video production, and we have established a very mature, industrialized content production mechanism.

Speaker #1: 其次呢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一个生态链支持。生态链的资源支持。

Gong Yu: 其次，iQIYI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。

Speaker #3: In addition, it also has massive viewership data, a very rich IP portfolio, and licensing resources, as well as very strong ecosystem support.

Gong Yu: In addition, iQIYI also has a map of viewership data, a very rich IP, and also licensing resources and also a very strong ecosystem support.

Yu Gong: In addition, iQIYI also has a map of viewership data, a very rich IP, and also licensing resources and also a very strong ecosystem support.

Speaker #1: 然后对于爱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纳多Pro就是物理存在的这个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报导喜剧场还有创作者的客服这个七大支持服务体系。

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

Gong Yu: We have built a seven-pillar creator support system. The IQID, which is the iQIYI Creator Center. Nado Pro, our professional production platform. Physical creative centers offline. Training programs. iQIYI Nadou and iQIYI Venture Summit, helping the creators with the fund support. The Peter Pau and iQIYI AI Theater for benchmark productions. Last but not least, a dedicated creator customer service.

Yu Gong: We have built a seven-pillar creator support system. The IQID, which is the iQIYI Creator Center. Nado Pro, our professional production platform. Physical creative centers offline. Training programs. iQIYI Nadou and iQIYI Venture Summit, helping the creators with the fund support. The Peter Pau and iQIYI AI Theater for benchmark productions. Last but not least, a dedicated creator customer service.

Speaker #3: We have built a seven pillar creator support system the iQIYI which is the IT creator center 纳多Pro our professional production platform a physical creative creative centers offline training programs and IT 纳多 and AIGC venture summit helping the creators with the fund support.

Speaker #3: And the Peter Pau and IT AI Theater for benchmark productions, and last but not least, a dedicated creators' customer service.

Gong Yu: 8月20号，我们将在北京举办iQIYI的创作者大会，围绕着内容生态建设、AI前沿的机遇、创作者成长等等主题，和创作者进行深入的探讨。

Speaker #1: 8月20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。那个主题今和创作者进行深入的探讨。

Gong Yu: On 20 August in Beijing, which is in 2 days, we will host the iQIYI Creator Conference, featuring in-depth discussions on content ecosystem development, frontier AI opportunities, and creator empowerment.

Yu Gong: On 20 August in Beijing, which is in 2 days, we will host the iQIYI Creator Conference, featuring in-depth discussions on content ecosystem development, frontier AI opportunities, and creator empowerment.

Speaker #3: On August 20th in Beijing, which is in two days, we will host the IT Creator Conference featuring in-depth discussions on content ecosystem development, frontier AI opportunities, and creator empowerment. Thank you.

Gong Yu: Thank you.

Yu Gong: Thank you.

Chang Yu: Thank you.

Speaker #2: Your next question comes from Zaizu with Guanghua Securities.

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

Speaker #4: 谢谢。然后别人的问题主要是想问一下海外业务的一个最新发展的进展，以及我们怎么借鉴泰国等比较成熟市场的经验，在其他的国家和区域去布局。And thanks for taking my question. I will translate my question in English. I want to know about the latest development in overseas business and how the operational experience from more major markets like Thailand can be replicated in other markets. Thank you.

Zai Xu: 谢谢，感谢陈总我的提问。我第二个问题主要是想问一下海外业务的一个最新的发展进展，以及我们怎么借鉴泰国等比较成熟市场的经验，向其他的国家和区域去复制。 Thanks for taking my question. I will translate my question in English. I want to know about the latest development in overseas business and how the operational experience for more mature markets like Thailand can be replicated in other markets. Thank you.

Yun Xu: Thanks for taking my question. I will translate my question in English. I want to know about the latest development in overseas business and how the operational experience for more mature markets like Thailand can be replicated in other markets. Thank you.

Speaker #3: Thank you, Gigi. We'll invite Mr. Chang to take this question.

Chang Yu: Thank you. We will invite Mr. Jiang Haiyang to take this question.

Speaker #1: 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表的口径继续保持盈利。泰国呢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。与此同时呢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%。

Jiang Haiyang: 好的，大家好。海外业务继续保持了较快的增长，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，这里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，会员收入同比增长215%和150%。

Speaker #3: Our overseas business maintained rapid growth in Q2, with overall membership revenue growing 40% year over year, and we remain profitable on a managerial accounting basis.

Chang Yu: 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, and 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: 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, and 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.

Speaker #3: And 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.

Speaker #3: And with steady topline growth and continued profitability improvement in the quarter as well. And in new markets such as Brazil and Mexico, we saw membership revenue increase 215% and 150% year over year, respectively.

Speaker #1: 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。增长的市场在管理和投资潜力下与取得最快的收入增长速度。

Jiang Haiyang: 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。

Speaker #3: We categorize our overseas markets into mature, growth, and potential markets. For mature markets, we aim for stable profitability; growth markets focus on accelerated breakeven and revenue with disciplined investments.

Chang Yu: 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 investment.

Xianghua Yang: 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 investment.

Speaker #1: 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的销售给当地的观众。

Jiang Haiyang: 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 Yu: 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, expanding a local content supply, and tailoring the content that is adapted to the local audiences.

Xianghua Yang: 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, expanding a local content supply, and tailoring the content that is adapted to the local audiences.

Speaker #3: Thailand serves as our proving ground. What we have validated is a set of reusable operating capabilities. Yeah. So using Chinese drama as the foundation and sustained marketing to amplify the influence of Chinese content.

Speaker #3: And expanding our local content supply, entirely tailoring the content to be adapted to local audiences.

Speaker #1: 同时呢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。

Jiang Haiyang: 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，与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 Yu: 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: 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.

Speaker #3: We are also partnering with our local carriers, platforms, and payment channels to scale the membership base, and we are also leveraging AI to improve translation, distribution, and production efficiency.

Speaker #1: 不同的市场的内容偏好和渠道结构并不相同。因此我们复制的这些底层的能力。同时有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。

Jiang Haiyang: 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。

Speaker #3: Because the content preferences and collaboration channel structures differ by market, 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.

Chang Yu: Because the content preferences and collaboration channel structures differ by market, 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: Because the content preferences and collaboration channel structures differ by market, 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.

Speaker #1: 我们的策略不是简单的追求进入更多的国家而是以单位经济和经营贡献为约束再验证收入质量和盈利能力后再逐步扩大到更多的区域。

Jiang Haiyang: 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 Yu: Our strategy is not to chase country count. We are guided by unit economics and operating contribution, and we will expand into new markets after validating revenue quality and profit-generating capabilities.

Xianghua Yang: Our strategy is not to chase country count. We are guided by unit economics and operating contribution, and we will expand into new markets after validating revenue quality and profit-generating capabilities.

Speaker #3: Our strategy is not to chase contract counts. We are guided by unit economics and operating contribution, and we will extend into new markets after validating revenue quality and profit-generating capabilities.

Speaker #1: 谢谢大家。

Jiang Haiyang: 谢谢大家。

Speaker #3: Thank you.

Chang Yu: Thank you.

Xianghua Yang: Thank you.

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

Speaker #2: There are no further phone questions at this time. I'll now hand back to the company for closing remarks.

Speaker #3: 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.

Chang Yu: 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.

Speaker #2: That does conclude our conference for today. Thank you for participating. You may now disconnect.

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

Chang Yu: Thank you.