iQIYI, Inc. (NASDAQ: IQ) Reports Mixed Q2 2026 Results as Revenue Declines Year Over Year

• iQIYI, Inc. (NASDAQ: IQ) reported second-quarter revenue of RMB6.29 billion, or $926.6 million, representing a 5% year-over-year decline but a 1% sequential increase.
• Content distribution revenue increased by 56%, partially offsetting declines in membership services, online advertising, and other revenue.
• Although the company has a low current ratio and remains unprofitable, it generated positive operating cash flow and free cash flow during the quarter.

iQIYI, Inc. (NASDAQ: IQ) is a major online entertainment platform based in China. The company provides professionally produced and other video content through its streaming service. Its principal competitors include Tencent Video and Alibaba Group’s Youku.

On August 18, 2026, iQIYI announced its unaudited financial results for the second quarter ended June 30, 2026. The company reported a GAAP diluted net loss of RMB0.30, or $0.04, per American depositary share. Its non-GAAP diluted net loss was RMB0.22, or $0.03, per ADS.

Total revenue was RMB6.29 billion, or approximately $926.6 million. Revenue decreased by 5% from the same quarter of 2025 but increased by approximately 1% from the first quarter of 2026. Content distribution was the quarter’s strongest revenue category, increasing by 56% year over year to RMB681.5 million, primarily because of increased cash transactions. However, membership services revenue decreased by 2% to RMB4.01 billion, online advertising revenue declined by 2% to RMB1.25 billion, and other revenue fell by 58% to RMB344.9 million.

The company’s net loss attributable to iQIYI widened to RMB287.5 million from RMB133.7 million in the same period of 2025. Management said the larger loss was primarily caused by higher income-tax expense, including RMB193.6 million related to adjustments at a mainland Chinese subsidiary.

Regarding financial health, iQIYI’s negative P/E ratio is not meaningful as a conventional valuation multiple because the company has negative trailing earnings. A current ratio of approximately 0.45 indicates that current liabilities exceed current assets, which warrants attention but does not by itself establish an immediate liquidity problem.

The company generated RMB339.6 million in operating cash flow and RMB319.6 million in free cash flow during the quarter, compared with negative free cash flow a year earlier. At June 30, 2026, iQIYI held RMB4.12 billion, or approximately $607.8 million, in cash, restricted cash, and short-term investments.