On November 18, iQiyi Inc. (IQ.US) released its Q3 2025 financial results, reporting total revenue of RMB 6.68 billion. Membership service revenue reached RMB 4.21 billion, up 3% quarter-over-quarter, while online advertising revenue stood at RMB 1.24 billion, content distribution revenue at RMB 640 million, and other revenue at RMB 590 million. The market responded positively, with iQiyi's U.S.-listed shares surging over 6% in after-hours trading, peaking at an 8% gain before closing at $2.18. This performance underscores the company's solid fundamentals and tangible progress in AI-driven innovation, overseas expansion, and user experience optimization.

**Three-Pronged Global Strategy: Chinese Content + Local Production + Mini-Dramas** iQiyi’s overseas business delivered standout results in Q3, achieving double-digit year-over-year and quarter-over-quarter revenue growth—the highest in nearly two years. International daily active members hit a record high, with membership revenue growing over 40% YoY. In emerging markets like Brazil, Mexico, and Indonesia, membership revenue surged by more than 100%, signaling the maturity of iQiyi’s "second growth curve."

The company has transitioned from content exports to an ecosystem-driven approach, combining Chinese content, localized productions, and mini-dramas. Chinese content remains foundational, exemplified by the success of *The Snow Chronicles* in Thailand, Malaysia, and South Korea, where its dubbed version set new viewership and revenue records. Localized productions, such as the Thai series *Soul Reborn*, have also gained traction, outperforming domestic revenue and demonstrating cross-cultural appeal.

Mini-dramas have emerged as a key growth driver, with membership revenue jumping 140% YoY in the first eight months of 2025. By expanding multilingual mini-drama projects (English, Thai, Korean, Indonesian), iQiyi is diversifying its content portfolio to cater to regional preferences.

**AI Strategy Takes Shape: Three Core Initiatives** CEO Yu Gong outlined iQiyi’s focus on generative AI (AIGC) across three key areas: 1. **Tool Openness**: The company will share its AI-powered production tools (e.g., *Script Workshop*, *Visual Workshop*) with partners, transitioning from internal efficiency gains to ecosystem collaboration. 2. **Talent Cultivation**: Initiatives like AI creation contests aim to nurture next-gen creators, ensuring a pipeline of innovative content. 3. **AI-Led Content**: Partnerships will explore AI-driven productions in genres like animation, documentaries, and web films, laying groundwork for future long-form content.

**Ecosystem Synergy Fuels Growth** Despite market challenges, iQiyi’s membership revenue growth reflects the resilience of premium long-form content, complemented by mini-dramas for fragmented consumption. The company’s integrated "content-technology-user" flywheel reinforces its domestic leadership and global scalability.

As competition shifts toward ecosystem-driven models, iQiyi’s strategic focus on AI, overseas expansion, and user-centric innovation positions it for sustained growth and potential market revaluation.