[Management View]
Total revenue for Q2 2025 was RMB6.6 billion. Key metrics include a 9% YoY decrease in membership services revenue to RMB4.1 billion, a 13% YoY decrease in online advertising revenue, and a 37% YoY decrease in accounts and distribution revenue. Other revenues increased by 6% YoY to RMB829.3 million. Strategic priorities include cost savings, content innovation, and global expansion.

[Outlook]
Management provided performance guidance with a focus on premium content production, AI-driven features, and expanding the experience business. Future plans include leveraging IP for consumer products and offline experiences, and enhancing global market presence.

[Financial Performance]
YoY trends show declines in membership services and online advertising revenues, offset by increases in other revenue sources. Content costs decreased by 8% YoY, and total operating expenses decreased by 3% YoY. Non-GAAP operating income was RMB58.7 million with a margin of 1%. Cash holdings were RMB5.1 billion, and net interest expense decreased by 33% YoY.

[Q&A Highlights]
Question 1: Regarding the recent change of policy in China's long-form video industry, could management share with us your thoughts on the potential impact to the company? (Line breaks here)
Answer: The introduction of new policies is a significant positive development for the long-form video industry. It shortens the time cycle from content production to broadcast, enhances scheduling stability, and improves capital utilization efficiency. The policies also provide greater creative freedom, strengthen synergy between online platforms and traditional TV networks, and attract more talent and capital into content production.

Question 2: Could the management provide an overview of the content performance this summer? Additionally, considering the impact of the new regulations, what's your future content strategy? (Line breaks here)
Answer: During the summer season, original dramas like Field, Coroner's Diary, and Describing Lines achieved high popularity index scores. Micro drama How Dare You also performed well. Future content strategy includes focusing on premium productions with high commercial value, leveraging major drama theaters for key genres, and exploring innovative formats for both long-form and short dramas. Monetization strategies will include content distribution, branded content integration, and IP merchandising.

Question 3: Could you share about the strategies for offline theme parks and related iQIYI products? How do you think of this market size? (Line breaks here)
Answer: iQIYI's experience business focuses on IP-based consumer products and offline experiences. The strategy includes transitioning to self-operation for consumer products and adopting an asset-light approach for immersive theaters and IT land. Currently, over 50 immersive shelters operate in 30 cities, with more locations in development. This approach creates synergy for the overall experience business.

Question 4: Can management share more color about the debt management plan? (Line breaks here)
Answer: The company has sufficient cash to meet debt obligations. The outstanding balance for the 2028 convertible notes is $208 million. The capital structure is healthy, with a balanced mix of long-term and short-term loans, supporting daily operations and long-term growth.

[Sentiment Analysis]
The tone of the management was optimistic, focusing on strategic growth initiatives and cost management. Analysts' questions reflected interest in content performance, policy impacts, and financial health.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|-------------------------------|---------------|---------------|--------------|
| Total Revenue | RMB6.6 billion| RMB7.2 billion| -8.3% |
| Membership Services Revenue | RMB4.1 billion| RMB4.5 billion| -9% |
| Online Advertising Revenue | RMB300 million| RMB345 million| -13% |
| Accounts and Distribution Rev.| RMB436.6 million| RMB693 million| -37% |
| Other Revenues | RMB829.3 million| RMB782 million| +6% |
| Content Cost | RMB3.8 billion| RMB4.1 billion| -8% |
| Total Operating Expenses | RMB1.4 billion| RMB1.44 billion| -3% |
| Non-GAAP Operating Income | RMB58.7 million| RMB63.5 million| -7.5% |
| Cash Holdings | RMB5.1 billion| RMB4.8 billion| +6.25% |
| Net Interest Expense | -33% | - | - |

[Risks and Concerns]
Risks include potential further declines in membership and advertising revenues due to macroeconomic pressures. The success of new content and strategic initiatives is critical for future growth. Debt management remains a focus, with the need to maintain a healthy capital structure.

[Final Takeaway]
iQIYI's Q2 2025 performance reflects challenges in membership and advertising revenues, but management's strategic focus on content innovation, cost savings, and global expansion shows promise. The introduction of new policies in China's long-form video industry is expected to positively impact content production and distribution. Investors should monitor the company's ability to execute its strategic initiatives and manage financial health amidst macroeconomic pressures.