Last Updated -
August 5, 2026
Explore the business model, global strategy, and market performance including insights into its position in China.
iQIYI, Inc. is a Beijing-based online entertainment company founded in 2010. It operates one of China’s major long-form video platforms, offering professionally produced dramas, variety shows, films, animation, and other video formats. The company earns revenue mainly from paid memberships, online advertising, content distribution, and adjacent entertainment businesses such as online games, talent agency, and location-based experiences.
iQIYI has developed from a streaming-video platform into a content-led entertainment business that produces, aggregates, and distributes programming at scale. Its strategy centers on premium original content, subscriber retention, and technology that supports content selection, personalization, and production efficiency, including AI and big-data analytics. China remains the company’s core market, while its overseas business is growing, with management reporting record overseas membership revenue in Q1 2026.
In Q1 2026, iQIYI generated RMB6.23 billion in revenue, down 13% year over year, with membership services contributing RMB4.20 billion, or roughly two-thirds of total revenue. Online advertising revenue was RMB1.24 billion, while content distribution revenue was RMB358.7 million. The quarter showed pressure from a lighter content slate and macro-related advertising weakness, with an operating loss of RMB228.4 million and a net loss attributable to iQIYI of RMB294.6 million. As of March 31, 2026, the company held RMB3.99 billion in cash, cash equivalents, restricted cash, short-term investments, and long-term restricted cash included in prepayments and other assets.
iQIYI is a Beijing-based online entertainment company built around long-form video in China. It makes money by monetizing professionally produced dramas, variety shows, films, animation, and other video content through subscriptions, advertising, licensing, and adjacent entertainment businesses.
The company’s model is content-led. Hit original and licensed titles drive viewing time, subscriber retention, advertising inventory, and distribution value. This makes content quality, release timing, and production efficiency central to the investment case. In Q1 2026, content costs were RMB3.74 billion, the largest component of cost of revenue, compared with total revenue of RMB6.23 billion.
iQIYI’s key operating advantage is its position as one of China’s major long-form video platforms. Its scale is supported by a broad content library, recognized brand, recurring subscriber base, and in-house capabilities across content production, aggregation, and distribution. The company also uses AI, big-data analytics, and proprietary platform tools to personalize content, improve operations, and support production workflows. Management has highlighted AI as a way to reduce content production costs and accelerate production, with Nadou Pro proprietary AI agents entering open commercial testing in March 2026.
The company competes mainly with Tencent Video, Youku, Mango TV, and Bilibili in long-form and professionally produced video. It also competes with short-video and social-video platforms for user time and advertising budgets. Competition is based on content slate quality, hit rate, pricing, subscriber retention, ad monetization, technology, and cost control.
Compared with Tencent Video, iQIYI is a more focused pure-play online video and entertainment company. Tencent Video benefits from the broader Tencent ecosystem, while iQIYI offers investors more direct exposure to China’s subscription video and long-form content cycle. That focus increases sensitivity to content release timing, subscriber trends, advertising demand, and media regulation.
China is the core market for iQIYI and central to its business model. Most investor-relevant demand, regulation, advertising cyclicality, and content approval risk are tied to mainland China’s internet and media ecosystem. The company also operates overseas, and management said overseas membership revenue reached a record in Q1 2026, but China remains the main driver of scale and market position.
As of Q1 2026, iQIYI remained one of China’s leading long-form video platforms, with management citing hit dramas as support for leadership in domestic viewership market share. The market position is meaningful, but recent results show pressure from weaker revenue, high content costs, and a return to losses. Q1 2026 total revenue fell 13% year over year to RMB6.23 billion, and the company reported an operating loss of RMB228.4 million and a net loss attributable to iQIYI of RMB294.6 million. For investors, the business model depends on converting content investment into recurring membership revenue, resilient advertising demand, and improved production efficiency.
China is iQIYI’s core market, not a peripheral exposure. The company is headquartered in Beijing and generates its investor-relevant demand from China’s long-form online video market, where regulation, advertising cycles, content approvals, and subscriber trends drive results. In Q1 2026, total revenue was RMB6.23 billion, down 13% year over year. Membership services remained the largest revenue source at RMB4.20 billion, about two-thirds of revenue, while online advertising revenue fell 7% to RMB1.24 billion. Management said hit dramas supported sequential membership revenue growth and domestic viewership leadership, although the year-over-year membership decline reflected a lighter content slate. iQIYI’s local strategy centers on premium original content, paid subscriptions, advertising monetization, content distribution, and AI-supported production efficiency. Main competitors include Tencent Video, Youku, Mango TV, Bilibili, and short-video platforms competing for viewing time and ad budgets.
iQIYI entered 2026 with a weaker financial profile after several quarters of focus on profitability and content discipline. In Q1 2026, revenue fell 13% year over year to RMB6.23 billion, and the company moved to an operating loss of RMB228.4 million from operating income of RMB341.9 million a year earlier. Net loss attributable to iQIYI was RMB294.6 million. The main turning point was a lighter content slate versus Q1 2025, which weighed on membership revenue, while advertising also softened as brands adjusted spending under macro pressure. Free cash flow remained positive at RMB109.8 million, and liquidity stood at RMB3.99 billion at quarter end, giving the company some flexibility despite the earnings decline.
The future outlook depends on whether iQIYI turns content spending into recurring membership growth while keeping production and marketing costs under control. AI tools, overseas membership growth, and a deeper capital-market presence through a possible Hong Kong listing are constructive initiatives. Still, the Q1 2026 decline shows that profitability is fragile when the content slate weakens or advertising demand softens.
Next Earnings Planned for:
August 18, 2026
This Company Profile was written by Dominik Diemer
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