iQIYI reports increased losses and pivots to AI-generated content

iQIYI reported a net loss for the second quarter of 2026, with losses more than doubling to approximately 36.8 million euros compared to 17.1 million euros in the previous year. Revenue for the quarter fell by 5 percent to 805 million euros. Membership revenues, the company's primary income source, decreased to 513 million euros, while advertising revenue reached 160 million euros.

To combat rising costs, CEO Gong Yu is pivoting toward AI-generated content. The company claims that fully AI-generated films can reduce production costs and time by 70 to 90 percent by replacing traditional filming locations, camera crews, and post-production processes. China's first AI-generated feature film with a regular broadcast license premiered on July 23, 2026, and sixteen other AI-generated mid-length dramas are currently in the program.

Despite the net loss, iQIYI showed improvements in non-GAAP operating results, reporting an operating loss of 30.3 million RMB in Q2 compared to 150 million RMB in Q1. The company also generated an operating net cash flow of 340 million RMB and conducted a share buyback of 21.8 million American Depositary Shares (ADS) for approximately 24.1 million US dollars.