In other words, the days of long video websites seem to be a little difficult, well, anyway, in the impression of the eighth sister, since last year, it is a wave of singing decline. As the only independent listing among the leaders of long-form video websites, iQiyi has attracted the most doubts. Just now, iQiyi announced the fourth quarter and the full year of last year's financial report, the eighth sister also looked around, not surprisingly, it is indeed a little difficult, but its operating loss rate narrowed from 15% in the same period last year to 10%, reaching the lowest point in the past three years, more notably, iQiyi announced the breakeven target for the first time.
Gong Yu said in the earnings report: "Our goal is to achieve break-even at the operational level of non-GAAP for the whole year of 2022 while maintaining the leading position in the industry, and to achieve the break-even of the operational level of quarterly non-GAAP as soon as possible." ”
Love horses, burned so many years of money, finally have hope to stop the loss, this is big news. As a result, iQiyi's stock price rose before the market.
Of course, some children's shoes said, ahem, less investment of course to reduce losses ah, iQiyi so engaged, will the market be gone? However, the eighth sister carefully looked at the financial report, feeling that iQIYI's revenue and users do not seem to have much growth, but from another point of view, it is also stable, there is no cliff-like decline, which shows that iQIYI's brand is valuable and has user viscosity, on the other hand, this also shows that iQIYI's management still has a hand in improving operational efficiency.
Well, let's talk in detail about the points worth paying attention to in iQiyi's financial report.
1, iQiyi's losses fell sharply.
The contraction of operating losses is definitely the biggest highlight of iQIYI's financial report. Under GAAP and non-GAAP, Aiyi's operating losses have shrunk significantly.
In the fourth quarter of 2021, iQIYI's operating loss was 980 million yuan, compared with 1.3 billion yuan in the same period of 2020, with operating losses down 25% year-on-year and 29% sequentially. The annual operating loss in 2021 was 4.5 billion yuan, compared with 6 billion yuan in 2020, and the annual operating loss ratio narrowed to 15% compared with 20% in 2020.
Under non-GAAP (non-U.S. Generally Accepted Accounting Standards), iQIYI disclosed a non-GAAP operating loss of 520 million yuan in the fourth quarter, compared with 940 million yuan in the same period last year, and non-GAAP operating loss decreased by 45% year-on-year and 52% sequentially. The annual non-GAAP operating loss was 3 billion yuan, compared with 4.5 billion yuan in 2020, the non-GAAP operating loss ratio narrowed to 10% from 15% in the previous year, and the non-GAAP operating loss decreased by 32% year-on-year.
Of course, some children's shoes have to say, from the perspective of net loss, iQiyi's loss has increased slightly year-on-year. Eight sisters checked, indeed, in the fourth quarter, iQIYI's net loss was 1.776 billion yuan, slightly higher than the same period last year; however, under non-GAAP, iQIYI's net loss was 1 billion yuan, down from 1.2 billion yuan in the same period last year. I think that the net loss is more affected by interest, exchange rate, investment, valuation, from the perspective of the company's operation, the operating loss is more worthy of attention. The reduction in operating losses does indicate that iQiyi's main business is gradually saying goodbye to burning money.
2, why does iQIYI reduce losses? Reduce costs and increase efficiency and optimize organizational structure.
So, how did iQiyi achieve a significant reduction in operating losses in one quarter? Gong Yu also explained in the financial report: "Since the fourth quarter of 2021, we have taken a series of measures to reduce costs and increase efficiency and optimize the organizational structure, and the results are very encouraging. ”
This is also very intuitive in the financial report. For example, in the financial report, iQiyi's operating costs and expenses fell from 8.766 billion yuan in the same period last year to 8.363 billion, a decrease of 4.6%.
Among them, iQIYI's revenue cost in the fourth quarter was 6.5 billion yuan, down 4% from the same period in 2020, and the decline in revenue cost was mainly due to the decline in content costs in the quarter. Content costs were $4.9 billion, down 5% year-on-year. iQiyi explained that the decline in content costs is mainly due to its efforts to control costs and improve operational efficiency. Selling, general and administrative expenses were RMB1.1 billion, down 17% from the same period in 2020, primarily due to lower marketing expenses and equity incentive expenses. This is also related to the optimization of the organizational structure mentioned by Gong Yu above.
In addition, at the analyst conference call, Gong Yu also mentioned when answering how to effectively reduce losses: "In addition to optimizing the organizational structure and improving efficiency, content production also does refined operations from all aspects of content production, procurement and operation, improves the operation of the subdivision circle theater model, improves the efficiency of content investment, and enriches the construction of the content ecosystem." ”
3, iQIYI's business market is still solid.
While reducing content costs and optimizing organizational structure, iQIYI will inevitably face the pain of business growth, which is also criticized by market public opinion. However, it seems that iQIYI's business is basically stable, and in the case of such a sharp reduction in investment, iQIYI's revenue has remained stable, and users have not fallen sharply.
In terms of revenue, iQiyi's revenue in the fourth quarter was 7.4 billion yuan, similar to the same period last year. Total revenue in fiscal 2021 was RMB30.6 billion, up 3% year-on-year. Among them, the fourth quarter of membership revenue of 4.1 billion yuan, an increase of 7% year-on-year; the fourth quarter of the average monthly single member income (ARM) of 14.16 yuan, an increase of 14%.
At the same time, from the perspective of the number of members, iQiyi has not seen a sharp decline. In the fourth quarter of 2021, iQIYI's total daily subscription membership was 97 million, down slightly from the same period last year. This kind of rise and fall is actually normal, the general video site business has seasonality, if there is no good content in this quarter, or good content delayed playback, this will affect the number of members.
It is worth noting that iQIYI switched to "average daily subscription membership" as an indicator this time, which was previously calculated according to the number of members on the last day of the quarter. Eighth sister feels that this is also a signal, everyone has gone through the stage of grabbing members, iQiyi is now beginning to concentrate on cultivating self-reserved land. Of course, as for whether iQIYI can continue to attract members under the premise of reducing costs, this has to be observed for a long time.
All in all, the eighth sister feels that iQIYI's financial report is still worth studying, which shows that the long video website represented by iQIYI is no longer blindly burning money in the inner volume, and the focus of operation has changed from market share to operational efficiency. The reduction of iQiyi's losses and even shouting out the slogan of breakeven also shows that as long as the long video website does not roll in, from focusing on competition to paying more attention to internal operations, it is actually promising to make a profit!