Shares of Chinese video streaming platform iQIYI (NASDAQ: IQ) plummeted 5.26% in pre-market trading on Wednesday following the release of disappointing second-quarter financial results. The company reported a significant revenue decline and swung to a net loss, missing analyst expectations.

For the quarter ended June 30, 2025, iQIYI posted total revenues of RMB6.63 billion (US$925.3 million), representing an 11% decrease year-over-year. The company swung to a net loss of RMB133.7 million (US$18.7 million), compared to a net income of RMB68.7 million in the same period last year. On a non-GAAP basis, diluted earnings per ADS came in at RMB0.02, beating the FactSet consensus estimate of a RMB0.04 loss, but still down significantly from RMB0.25 in Q2 2024.

The poor performance was attributed to several factors. Membership services revenue fell 9% year-over-year due to a lighter content slate. Online advertising services revenue decreased 13% as advertisers adjusted their strategies amid macroeconomic pressures. Content distribution revenue plummeted 37%, primarily due to a decrease in barter and cash transactions. iQIYI's CEO, Yu Gong, commented on the results, stating, "During the second quarter and into the summer season, we delivered a series of blockbusters and secured the top market share in total drama viewership. Meanwhile, we are focusing on innovation and investing in key growth areas such as AI applications, micro dramas, experience business, and global expansion, all with the goal of driving sustainable, long-term success."