(Yicai) Feb. 27 -- IQiyi's shares fell after the Chinese video platform said its revenue rose 3 percent last quarter from a year earlier, driven by a surge in content distribution and record overseas subscribers, but swung into the red last year due to a drop in memberships and advertising income.

IQiyi [Nasdaq: IQ] closed 3.4 percent at USD1.71 in New York yesterday. The stock has dropped 11 percent since the end of last year.

Revenue was CNY6.8 billion (USD971.6 million) in the three months ended Dec. 31, while net loss shrank 97 percent to CNY5.8 million (USD847,790), the Beijing-based company said in a financial report released yesterday. Based on non-generally accepted accounting principles, the net profit stood at CNY109.7 million (USD16 million), compared with a loss of CNY58.8 million (USD8.6 million) a year ago.

For the full 2025, iQiyi reported a net loss of CNY206.3 million, versus a net profit of CNY764.1 million the previous year, the company said. Its revenue dropped 7 percent to CNY27.3 billion due to its lighter content slate weighing on membership services income, while "some advertisers adjusted their advertising and promotion strategies in response to macro pressures," it added.

"Our overseas business has evolved into a sustainable and scalable second growth engine," Gong Yu, founder and chief executive of iQiyi, said at an earnings conference call. Membership revenue outside the Chinese mainland surged 40 percent in the fourth quarter, with that from Brazil, Mexico, and Indonesia each soaring over 80 percent, while global subscriber numbers reached an all-time high, he added.

In addition, iQiyi posted a non-GAAP operating income for the fourth consecutive year, with the figure reaching CNY638.9 million last year.

Revenue from content distribution soared 94 percent to CNY787.7 million last quarter from a year earlier. That from brand advertising grew year on year and quarter on quarter, with income from variety shows and dramas each seeing double-digit jumps. 

IQiyi's long-form dramas topped China's viewership rankings last year, boosted by the Strange Tales of Tang Dynasty franchise, according to data from Enlighten. Its micro drama portfolio boasted over 150 originals, fueling record revenue from memberships and distribution.

AI Plans

IQiyi has also begun beta testing Nadou Pro, a proprietary AI agent platform for professional content production, with Gong telling analysts that "the AI-led commercial film probably will emerge within the next two to three years," a shift the company believes will benefit established platforms like iQiyi. 

"Heading into 2026, we will fortify our domestic core by advancing content excellence and strengthening our membership and advertising businesses, accelerate breakthroughs across our overseas and experience businesses, and harness AI to cultivate a thriving content ecosystem enriched by AIGC," Gong noted.

IQiyi is expected to release detailed AI-generated content plans at its World Conference in April.

Immersive Theme Parks

Earlier this month, iQiyi opened its first iQiyi Land immersive indoor theme park in Yangzhou, a Chinese city in eastern Jiangsu province neighboring Nanjing, which has received high ratings on Chinese travel platforms. A second park is under construction in Kaifeng, with a third in Beijing also expected to open later this year.

"As demand for offline entertainment surges, we see iQiyi Land as a new driver for our long-term growth," Gong said previously.

Editor: Martin Kadiev