iQiyi (IQ US) 4Q25 Review Summary
Core Content Overview
iQiyi released its 4Q25 financial results, showing a total revenue growth of 3% year-over-year (YoY) to RMB6.79 billion, aligning with the Bloomberg consensus estimate. The company also reported a non-GAAP net income of RMB110 million, a significant improvement from the RMB59 million net loss in 4Q24, attributed to operating leverage. Despite this recovery, the outlook for 1Q26E remains challenging, with a forecasted total revenue decline of 13% YoY and 8% quarter-over-quarter (QoQ) to RMB6.28 billion. This decline is expected due to strategic adjustments in content distribution and reduced revenue from online advertising.
Key Financial Performance
- Total Revenue (4Q25): RMB6.79bn (up 3% YoY)
- Non-GAAP Net Income (4Q25): RMB110mn (up from RMB59mn net loss in 4Q24)
- Membership Services Revenue (4Q25): RMB4.1bn (flat YoY, after 7 consecutive quarters of decline)
- Online Advertising Revenue (4Q25): RMB1.4bn (down 6% YoY due to macroeconomic challenges)
- Content Distribution Revenue (4Q25): RMB788mn (up 94% YoY due to increased cash transactions with TV and other channels)
- Others Revenue (4Q25): RMB548mn (down 18% YoY)
Revenue Forecast
| Quarter |
Revenue (RMB bn) |
YoY Growth (%) |
QoQ Growth (%) |
| 1Q26E |
26.9 |
-13.0 |
-8.0 |
| 2026E |
26.9 |
-3.7 |
-1.7 |
| 2027E |
27.9 |
-1.7 |
3.7 |
| 2028E |
29.0 |
NA |
3.9 |
Profitability Metrics
- Gross Margin (4Q25): 20.9% (up 2.7ppts QoQ)
- Non-GAAP Operating Margin (4Q25): 2.1% (up 2.4ppts YoY)
- Non-GAAP Operating Margin (1Q26E): Expected to decline by 2.9ppts QoQ to -0.8%
Emerging Businesses
- Overseas Membership Revenue: Grew over 40% YoY in 2H25, reaching record subscriber numbers
- IP Experience Business: Achieved new milestones, with the opening of the first iQiyi Land in February 2026
- Micro-Drama Titles: Over 20,000 titles available, with over 70% free
- AI Initiatives: Launched NaDou AI agent platform to streamline content production
Valuation
- Target Price (US$): $2.00 (down from previous $2.75)
- Valuation Multiple: Based on 18x 2026E non-GAAP EPS
- Sector Comparison: Target PE is at a discount to the sector average (22x)
Stock Performance
- Market Cap (US$ mn): 1,648.0
- Average 3-Month Trading Value (US$ mn): 19.6
- 52-Week High/Low (US$): 2.79 / 1.53
- Total Issued Shares (mn): 963.8
Shareholding Structure
Analyst Ratings
- CMBIGM Rating: BUY
- Target Price: US$2.00
- Current Price: US$1.71
- Up/Downside: 17.0%
Key Financial Metrics (2023A–2028E)
Revenue Growth
| Year |
YoY Growth (%) |
| 2023A |
10.4% |
| 2024A |
-8.7% |
| 2025A |
-6.6% |
| 2026E |
-1.4% |
| 2027E |
3.7% |
| 2028E |
3.9% |
Profitability Metrics
| Metric |
2023A |
2024A |
2025A |
2026E |
2027E |
2028E |
| Gross Profit Margin (%) |
27.8% |
24.9% |
21.1% |
22.1% |
24.1% |
25.0% |
| Operating Margin (%) |
9.8% |
6.2% |
0.8% |
2.9% |
5.3% |
6.6% |
| Non-GAAP Net Profit Margin (%) |
9.3% |
5.2% |
1.0% |
2.8% |
4.8% |
6.0% |
| Return on Equity (ROE) (%) |
22.6% |
6.0% |
-1.5% |
1.9% |
4.4% |
5.9% |
Valuation Ratios
| Metric |
2023A |
2024A |
2025A |
2026E |
2027E |
2028E |
| P/E (x) |
5.4 |
14.7 |
ns |
35.9 |
12.8 |
8.9 |
| P/B (x) |
0.9 |
0.8 |
0.8 |
0.6 |
0.5 |
0.5 |
Summary of Main Points
- Revenue Recovery: iQiyi's total revenue recovered in 4Q25, driven by improved content performance, but faces a revenue decline in 1Q26E.
- Content Strategy: Adjustments in content strategy and reduced distribution to other channels are expected to impact future revenue.
- Growth in Emerging Businesses: The overseas membership and IP experience business are showing positive growth, with the launch of iQiyi Land.
- Profitability: Gross margin improved, but operating margin is expected to face pressure in the next quarter.
- Valuation: The target price is reduced to US$2.00, based on a 18x non-GAAP EPS multiple, which is lower than the sector average.
- Analyst Outlook: The analyst maintains a BUY rating, despite the challenges ahead.
