Last Updated -
October 26, 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 video company founded in 2010. The company operates one of China’s leading digital video platforms, focused on long-form dramas, films, variety shows, children’s programming, micro dramas, and other online video formats. Its core business is built around paid memberships and advertising, with additional revenue from content distribution, online games, talent agency services, and experience-related businesses.
iQIYI has developed from a streaming platform into a content and technology company that produces, licenses, and distributes entertainment across multiple formats. It invests heavily in original and premium programming, supported by AI, big-data analytics, and proprietary production tools that help with recommendation, content creation, production efficiency, and monetization. In 2026, the company expanded commercial testing of NadouPro, its studio-grade AI production platform for professional long-form video generation, and continued building related creator marketplaces for scripts, digital assets, voice assets, and intellectual property.
For the quarter ended June 30, 2026, iQIYI reported revenue of RMB6.29 billion, down 5% year over year but up from RMB6.23 billion in Q1 2026. Membership services revenue was RMB4.01 billion and online advertising revenue was RMB1.25 billion, while content distribution revenue rose 56% year over year to RMB681.5 million. The company reported a net loss attributable to iQIYI of RMB287.5 million, operating cash flow of RMB339.6 million, and free cash flow of RMB319.6 million. Management cited third-party data showing iQIYI held the No. 1 domestic market share in Q2 2026 across long-form dramas, films, and children’s content, underscoring its relevance in China’s competitive online entertainment market.
iQIYI is a China-focused online entertainment video platform that makes money mainly from paid memberships and advertising. The company produces, aggregates, and distributes long-form dramas, films, variety shows, children’s programming, micro dramas, and other video formats. Its business model depends on using premium content to attract viewers, convert them into paying members, sell advertising inventory, and monetize content assets through licensing and distribution.
In Q2 2026, iQIYI generated total revenue of RMB6.29 billion, down 5% year over year and up from RMB6.23 billion in Q1 2026. The two core revenue streams remained membership services and online advertising, which together represented most of the company’s revenue base. Membership services revenue was RMB4.01 billion, down 2% year over year, while online advertising services revenue was RMB1.25 billion, also down 2%.
iQIYI’s operating model is content-heavy. Content cost was RMB3.82 billion in Q2 2026, up 1% year over year, making content investment the central cost item and a key determinant of margins. Hit dramas, films, children’s programming, and short-form or micro dramas support membership retention and advertising demand, while weaker content performance pressures engagement and profitability.
Technology is also central to the model. iQIYI uses AI, big-data analytics, and proprietary production tools to support content recommendation, creation, production efficiency, and monetization. NadouPro is its proprietary studio-grade AI production platform for professional long-form video generation and creator monetization infrastructure. The platform has expanded into a broader creator ecosystem that includes Talent Hub, Commissions Marketplace, Digital Asset Marketplace, and Script Marketplace.
iQIYI describes itself as a leading provider of online entertainment video services in China. Management cited Enlightent data indicating that iQIYI held the No. 1 domestic market share in Q2 2026 across long-form dramas, films, and children’s content. Management also said its short-form dramas ranked No. 1 domestically for the first time in June 2026.
Direct competitors include Tencent Video, Youku, Bilibili, Douyin and TikTok-related ecosystems, Kuaishou, and other digital entertainment platforms competing for viewing time, content rights, advertising budgets, and subscription spending. Tencent Video is the closest China-based long-form video peer. Netflix is the most relevant global comparison, but iQIYI’s investor profile is more China-centric, with heavier exposure to mainland China regulation, content review, domestic advertising demand, and local membership trends.
Market position remains strong in Chinese long-form online video, but the financial profile is under pressure. Q2 2026 revenue declined year over year, membership and advertising both fell 2%, and the company reported an operating loss of RMB104.8 million and a net loss attributable to iQIYI of RMB287.5 million. At the same time, operating cash flow of RMB339.6 million and free cash flow of RMB319.6 million improved versus the prior year, showing that cost control and working-capital discipline are important parts of the investment case.
iQIYI’s market standing depends on maintaining a high content hit rate, retaining paying members, defending advertiser demand, and controlling content costs. Its proposed Hong Kong listing and US$100 million share repurchase authorization add capital-market relevance, but the core business remains driven by the performance of its China entertainment platform.
China is iQIYI’s core market. The company is headquartered in Beijing and generates its primary revenue from paid video subscriptions, advertising, and content distribution tied to mainland China’s online entertainment market. In Q2 2026, total revenue was RMB6.29 billion, down 5% year over year but up from RMB6.23 billion in Q1. Membership services revenue was RMB4.01 billion and online advertising revenue was RMB1.25 billion, both down 2% year over year. iQIYI’s local strategy centers on original dramas, films, children’s content, micro dramas, and AI-assisted production through NadouPro. Management cited Enlightent data showing No. 1 domestic market share in Q2 across long-form dramas, films, and children’s content, with short-form dramas reaching No. 1 domestically in June. Main competitors include Tencent Video, Youku, Bilibili, Douyin-linked platforms, and Kuaishou.
iQIYI’s growth outlook is tied to whether it stabilizes its core subscription and advertising businesses while extracting more value from original content, content distribution, and AI-assisted production. The latest quarter showed a mixed but slightly improving operating picture. Q2 2026 revenue was RMB6.29 billion, down 5% year over year but up from RMB6.23 billion in Q1 2026. Membership services revenue fell 2% year over year to RMB4.01 billion, and online advertising revenue also fell 2% to RMB1.25 billion. The company remained loss-making, with an operating loss of RMB104.8 million and a net loss attributable to iQIYI of RMB287.5 million. Cash generation was stronger, with operating cash flow of RMB339.6 million and free cash flow of RMB319.6 million, compared with negative free cash flow in the prior-year quarter.
The future direction is likely to focus on disciplined content spending, higher monetization of iQIYI’s IP library, AI-supported production workflows, and selective capital-market actions. The near-term outlook is realistic rather than aggressive: iQIYI has market leadership in important content categories and improving cash flow, but revenue contraction and negative profitability show that the recovery still needs proof through stronger membership trends, steadier advertising demand, and better returns on content investment.
Next Earnings Planned for:
August 18, 2026
This Company Profile was written by Dominik Diemer
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