IQIYI Inc (NASDAQ:IQ) Q2 2020 Earnings Conference Call - Final Transcript

Aug 13, 2020 • 08:00 pm ET

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IQIYI Inc (NASDAQ:IQ) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the iQIYI Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Investor Relations Director of iQIYI, Lei Zhang. Thank you. Please go ahead.

Executive
Lei Zhang

Thank you, operator. Hello, everyone, and thank you for joining iQIYI's second quarter 2020 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. Xiaodong Wang, our CFO; Mr. Xiaohui Wang, our Chief Content Officer, and Mr. Xianghua Yang, Senior Vice President of our Membership business. Mr. Gong will give a brief overview of company's business operations and highlights, followed by Xiaodong, who will go through the financials and guidance. After their prepared remarks, Xiaohui and Xianghua will join Mr. Gong and Xiaodong in the Q&A session.

Before we proceed, please note that the discussion today will contain forward-looking statements made under the Safe Harbor Provision 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 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 Mr. Gong. Please go ahead.

Executive
Yu Gong

Hi, everyone. Thank you for joining us today. It's obvious that much has changed around the world since our last earnings call. Like many other companies and industries, we have experienced unusual user behavior, fluctuating numbers and great challenges.

Clearly, the pandemic is the most influential factor to us and other business in the first half of this year. Our subscribers, MAU and user time spent all peaked during the first quarter because of home confinement. With pandemic gradually being controlled in Q2 earlier than most of other countries, people went back to work, and students in China started to study online and prepare for critical exams, such as the national entrance examination for college and high school, and the final term exams, all of which took place in June and July. As a result, we saw a decline in both people's video-viewing time and frequency in Q2. The pandemic also influenced our content supply. Movies especially theatrical movies, have served as one of our most important content categories in user acquisition and membership attraction. Due to the shutdown of cinemas, no new movies were released offline.

Online video platforms, which act as the second window for theatrical movies under SVOD model, are also facing supply shortage and adverse effect to subscriber retention and