IQIYI Inc (NASDAQ:IQ) Q3 2019 Earnings Conference Call Transcript

Nov 06, 2019 • 07:00 pm ET

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IQIYI Inc (NASDAQ:IQ) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by and welcome to the iQIYI Third Quarter 2019 Earnings Conference Call. [Operator Instructions]

I'd now like to hand the conference over to your first speaker today, Investor Relations Director of iQIYI, Dahlia Wei. Thank you. Please go ahead.

Executive
Dahlia Wei

Thank you, operator. Hello, everyone and thank you all for joining iQIYI's third quarter 2019 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 Dr. Yu Gong, our Founder, Director and CEO; and Mr. Xiaodong Wang, our CFO. Dr. Gong will give a brief overview of the company's business operations and highlights, followed by Xiaodong, who will go through the financials and guidance. After their prepared remarks, we will hold a Q&A session.

Before we proceed, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigations Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from 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.

With that, I will now turn the call over to Dr. Gong. Please go ahead.

Executive
Yu Gong

Hello, everyone. Thank you for joining us for our third quarter 2019 earnings call. Despite a challenging environment, we delivered another quarter of growth with total revenues increasing 7% year-over-year to RMB7.4 billion. We continued to strengthen our platform, expand our user base and improve user engagement by offering high quality content and super [Phonetic] entertainment experience. We solidify our leading industrial position with mobile app and AU, DAU and user time spent ranked first in most of the models throughout the year according to various third-party data service.

Let me start our membership business. At September 30th, 2019, total subscribers reached 105.8 million, a 31% increase year-over-year and corporate net addition of 5.3 million. Subscription revenue growth 30% year-over-year and contributing more than half of our total quarterly revenues for the first time. We continued to make strides in delivering premium content, upgrading membership experiences and penetrating further into low tier clients, which have collectively contributed to subscribers growth. High quality content remains the primary motivation for users to pay for the subscription. We released multiple premium titles during the quarter that were immensely popular among our subscribers, including original drama series Arsenal Military Academy, Love and Destiny, lessons titled Go Go Squid!, A Little Reunion, inclusive drama My Mowgli Boy and new episodes for our inclusive animation serials, one piece among others.

In the third quarter, we started to adapt privileged releasing strategy for some of our self-produced variety shows. Subscribers were granted early access to Mr. Housework, a reality show, featured men doing housework, which quickly become one of the top contributors for