iQIYI needs to continue telling the AI story.
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Author | Huang Yu
For iQIYI, 2026 is destined to be unsettled.
On May 18, iQIYI released its financial report for the first quarter of 2026, with total revenue of only 6.23 billion yuan, a year-on-year decrease of about 13.35%; meanwhile, it has still not escaped the dilemma of losses in the first quarter, with a Non-GAAP operating loss reaching 150 million yuan, while in the same period in 2025 the operating profit was 460 million yuan.
Under the chill in the film and television industry and the impact of short dramas, iQIYI has had tough days for nearly two years, with revenue declining for 2 consecutive years, a 7% year-on-year decrease in 2025, and its profitability cycle has ended.
This quarter's report further confirms why iQIYI is actively advancing its Hong Kong IPO and AI strategies in 2026.
iQIYI's switch from profit to loss has torn open the brutal reality long video platforms face in the era of stock competition.
From the performance of specific businesses, even iQIYI's pillar membership business can hardly cover up its downward trend.
In the first quarter of 2026, iQIYI's membership service revenue was 4.2 billion yuan, achieving a slight 2% quarter-on-quarter increase, but down 200 million yuan from the first quarter of 2025.
In addition, iQIYI's online advertising service revenue fell 6.8% year-on-year to 1.24 billion yuan.
More noteworthy, in the first quarter, iQIYI's content distribution revenue was only 360 million yuan, a year-on-year drop of nearly 43%. In recent years, content distribution revenue for iQIYI has obviously declined, with a 32% year-on-year drop in 2025 as well.
Other revenue even halved from 830 million yuan in the first quarter of 2025 to 430 million yuan in the first quarter of 2026.
The decline in iQIYI's main business comes mainly from intensifying industry competition, the plateauing of long video user scale, and the severe siphoning of users' fragmented time and attention by short videos and AI short dramas, as the winter for film and television continues to spread.
Moonfox Data points out that the core challenge facing iQIYI at present is the emergence of the membership growth ceiling, and the intensifying contradiction between membership price increases and user attrition.
According to Moonfox Data, from January to March 2026, iQIYI MAU remained at a low level, with a 16% year-on-year decline in MAU in March. But average online time per person clearly increased, with January reaching the highest at 128 minutes per day (year-on-year +31%).
Despite iQIYI maintaining a market share advantage in the first quarter of 2026, it has not successfully translated this into real profits.
According to Yunhe data, iQIYI held the top share for effective plays of long series in the season, and had blockbusters such as "Punishment 2" and "Chasing Jade" with popularity scores over ten thousand.
Against the backdrop of traditional growth engines collectively stalling, iQIYI has chosen to bet on AI technology.
iQIYI founder and CEO Gong Yu made it clear in the first quarter 2026 financial report that in the future, AI will be used to reduce content production costs and speed up production processes.
iQIYI is moving quickly in AI application.
In the first quarter of 2026, the "Bao Dexi · iQIYI AI Theater" launched 16 works at once, covering science fiction, horror, martial arts, and more.
It is reported that in the creation of these works, iQIYI comprehensively used its self-developed professional production platform "Nadou Pro" based on its own intelligent video production agent.
On April 20, at the 2026 iQIYI World · Conference, iQIYI officially released Nadou Pro to the public, and founder and CEO Gong Yu threw out the radical statement that “live-action filming may become intangible cultural heritage,” and boldly announced that over one hundred artists have signed up for the AI artist library on the Nadou Pro platform.
As soon as this was said, the topic “#iQIYI has gone mad#” instantly exploded to the top of online trending searches. Despite iQIYI officially responding that the aim of building the artist library is to facilitate AIGC content creators in selection and efficient communication, the rather radical posture has left it under much controversy.
Even so, the "cash-strapped" iQIYI still needs this new story.
In the first quarter 2026 bill with a total cost of 5.23 billion yuan, content costs still took the lion's share at 3.74 billion yuan.
In addition, iQIYI's free cash flow has declined for two consecutive years, from over 3.3 billion yuan in 2023 to about 2 billion in 2024, and in 2025 dropped to less than 10 million yuan. It recovered somewhat in the first quarter of 2026, rising back to 110 million yuan.
iQIYI is at a crucial crossroads in its corporate development history.
Whether it’s launching “Nadou Pro” to construct a story of reducing costs through AI, or accelerating its secondary listing in Hong Kong for capital raising, essentially these are iQIYI’s moves to break the impasse under pressure in its main business.
How to truly balance between AI strategy, tight funding chains, and live-action artistic creation—which is the lifeblood of long video—will determine whether this long video giant can truly see the dawn of its next stage.
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