[Management View]
iQIYI management emphasized their strategic focus on expanding market share in both long-form and micro drama formats, leveraging AI features to enhance user experiences and support revenue diversification. They highlighted the importance of premium content and user engagement as key drivers for sustainable growth.

[Outlook]
Management provided performance guidance indicating a focus on premium content with strong commercial value, aiming to enhance production mechanisms for competitive storytelling. Future plans include expanding micro drama offerings and international content distribution, with a commitment to long-term value creation despite potential short-term costs.

[Financial Performance]
Total revenues for Q1 2025 were RMB 7.2 billion, up 9% sequentially. Membership services revenue increased by 7% to RMB 4.4 billion, driven by key drama releases. Online advertising revenue declined by 7% to RMB 1.3 billion due to macroeconomic impacts. Content distribution revenue rose by 55% to RMB 628.7 million, and other revenues grew by 24% to RMB 830.9 million. Non-GAAP operating income was RMB 458.5 million, up 13% sequentially.

[Q&A Highlights]
Question 1: Shi Quingshan from CICC asked about the latest developments in micro dramas and future focus points.
Answer: CEO Yu Gong explained that iQIYI has over 15,000 micro drama titles, with distinct app strategies driving user engagement. The focus is on enhancing content quality and monetizing traffic through advertising and e-commerce.

Question 2: Vicky Way from Citi inquired about changes in long video content strategy.
Answer: Chief Content Officer Xiaohui Wang stated the strategy will focus on high-quality shorter episodes and more diverse drama titles to improve scheduling flexibility and reduce reliance on individual titles.

Question 3: Maggie Ye from CLSA asked about the overseas business's financial situation and future expectations.
Answer: CEO Yu Gong noted rapid post-COVID growth but highlighted financial resource limitations. The overseas business is profitable, with plans to reinvest profits for greater growth opportunities.

[Sentiment Analysis]
Analysts showed interest in strategic content expansion and monetization efforts, while management maintained a confident tone regarding long-term growth potential despite short-term challenges.

[Quarterly Comparison]
| Metric | Q1 2025 | Q4 2024 | Change (%) |
|-------------------------------|---------|---------|------------|
| Total Revenues | 7.2B | 6.6B | +9% |
| Membership Services Revenue | 4.4B | 4.1B | +7% |
| Online Advertising Revenue | 1.3B | 1.4B | -7% |
| Content Distribution Revenue | 628.7M | 405.3M | +55% |
| Other Revenues | 830.9M | 669.3M | +24% |
| Non-GAAP Operating Income | 458.5M | 405.5M | +13% |

[Risks and Concerns]
Management acknowledged rising content costs and sequential declines in advertising revenue due to macroeconomic factors. Overseas business growth is limited by financial resource allocation.

[Final Takeaway]
iQIYI's Q1 2025 earnings call highlighted strategic initiatives in content expansion and AI integration, aiming to enhance user engagement and diversify revenue streams. Despite challenges such as rising content costs and macroeconomic impacts on advertising revenue, management remains focused on long-term growth through premium content and international expansion. Investors should monitor the company's ability to balance short-term costs with sustainable value creation.