iQIYI Inc (IQ) 2025 Q4 法說會逐字稿

Thank you for standing by and welcome to the iQIYI fourth quarter and fiscal year 2025 earnings conference call. (Operator Instructions) I would now like to hand the conference over to Ms. Chang Yu, IR director of the company. Please go ahead.

Hello everyone and thank you for joining iQIYI's fourth quarter and fiscal year 2025 earnings conference call. The company's results were released earlier today and are available on the company's Investor Relations website at IR.I.com. On the call today are Mr. Yu Gong, our Founder, Director and CEO; Ms. Ying Zeng, our Interim CFO; Mr. Xiaohui Wang, our, Chief Content Officer.

Mr. Youqiao Duan, Senior Vice President of our Membership business; Mr. Xianghua Yang, Senior Vice President of [international and online game] business and Mr. Gang Wu, Senior Vice President of Brand Advertising business.

Mr. Gong will give a brief overview of the company's business operations and highlights, followed by Ying, who will go through the financials. After the prepared remarks, the management team will participate in the Q&A session.

Before we proceed, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to those outlined in our public filings with the SEC.

iQIYI does not undertake any obligation to update any forward-looking statement except as required under applicable law. I will now pass on to Mr. Gong. Please go ahead.

Hello, everyone, and thank you for joining us today. In 2025, we focused on strengthening our core business to renewed growth while achieving advancements in emerging businesses. These efforts drove a solid year-end performance with total revenues in Q4 returned to growth both annually and sequentially.

Notably, our long-form dramas secured number one in viewership market share on Enlightent data’s annual rankings with five titles exceeding 10,000 for the iQIYI Popularity score.

More importantly, we made remarkable breakthroughs in IP franchise development, moving beyond making individual hit titles to building evergreen IPs that drive growth across diverse formats.

Strange Tales of Tang Dynasty stands as a stellar example. As a flagship IP with four consecutive blockbuster seasons, its influence has expanded from long to short and micro dramas as well as offline experience.

Our emerging businesses continue to demonstrate strong growth potential. Our overseas business has evolved into a sustainable and scalable second growth engine powered by accelerated organic momentum.

In 2025, membership services revenue increased by over 30% year over year, with growth accelerating to 40% in the second half of the year. The subscriber base reached an all-time high.

At the same time, our experience business has entered a critical stage of development. For IP-based consumer products, we have built a dedicated in-house team and upgraded from a licensing-only approach to a dual-track model combining self-operated merchandise with licensing. This strategic shift strengthens our control over IP operation and amplifies monetization efficiencies. On the offline experience front, we launched our first iQIYI LAND in Yangzhou on February 8, 2026, receiving positive initial reception.

Two additional parks scheduled to open later this year. 2026, marks a key step towards scaled development as we build the experience business into a new engine for long-term value creation.

Now, let's dive into the details of our business performance in Q4. Starting with content, the cornerstone of our business. For long-form dramas, we secured the number one viewership market share per Enlightent data driven by a robust slate of premium content and a breakthrough in serialized IP that boost engagement and commercial results.

Strange Tales of Tang Dynasty 3: To Chang’an marked our first title with two seasons exceeding a popularity score of 10,000. Among 2025 new releases, it ranked number one in ad revenue and number two in membership revenue.

Following this momentum, the crime drama, The Punishment 2 became the first title of 2026, to surpass 10,000 for the popularity score. It is also our second franchise with two seasons achieving this milestone.

Shifting to movies, we maintained a diverse lineup with broad demographic appeal. For iQIYI originals, the summer theatrical hit, The Shadow’s Edge extended its offline success to the online domain. It not only topped all Q4 film releases by peak iQIYI Popularity Index score, but also became the highest rated, domestic action crime film of the past decade on Douban.

Additionally, our original online film, The Sixth Robber set a new all-time high for the popularity score within its category. For movies broadcasted on our platform, we retained the number one viewership market share for 16 consecutive quarters. In Q4, we rolled out diversified titles including the war-themed Dead To Rights, the animated feature Nobody, the fantasy comedy, The Adventure, and the female-oriented Fish Flew Away.

Furthermore, our innovative revenue sharing model designed to optimize returns for films with limited theatrical box office performance gained further traction. The Return of The Lame Hero generated RMB36 million in shared revenues, ranking first among all titles under this model. Turning to variety shows, our dual focus on long running franchises and fresh, innovative IPs drove market leading performance in 2025. According to Enlightent data, three of our multi-season titles ranked in the top 10 most watched multi-season variety shows, and two new releases ranked in the top 3 most watched, new shows.

Our originals continued to set benchmarks. The Rap of China wrapped its ninth season this year, cementing its position as China's longest running online variety IP.

Additionally, Hi! Young Farmers 3, a spinoff of the beloved Become a Farmer franchise featuring the boy group Shi Ge Qin Tian reached an all-time high in its popularity score this season. Among brand new originals Wander Together exceeded. 8,300 for popularity score.

We also expanded IP value through merchandise partnerships with brands for Hi! Young Farmers 3, The Blooming Journey 2, and Wander Together,unlocking new revenue potential. Turning to micro dramas. We have expanded free content to over 70% of our 20,000-title library to broaden engagement. Our original portfolio is scaling to over 150 titles to date, fueling record high membership and distribution revenues in Q4 from these offerings. Spin offs from Strange Tales of Tang Dynasty - The Chang’an Detective and The Nine-Tiled Labyrinthboth hit new highs for popularity score. Notably over 70% of their debut-week viewers also watched the long-form series, helping to extend the IP's lifespan. These releases not only boosted membership viewers but also attracted top-tier brand partnerships, moving well beyond the conventional performance ad model. Building on the momentum of our premium micro dramas, we are venturing into micro animations under a business model centered around free content. With a pipeline of over 10,000 titles in place, micro animation viewership and time spent are growing rapidly.

Beyond content, we further amplified our IP value through flagship marketing events. In December 2025, we hosted the annual iQIYI Scream Night alongside a two-day iQIYI Scream Carnival in Macao to honor the year’s standout productions and the talents. The event drew over 200 million on site attendees and live stream viewers and brought together around 300 celebrities and industry partners. Next, let's dive into our 2026, content strategy and the exciting Q1 lineup.

Starting with dramas, our Q1 slate includes Love Between Lines, Swords into Plowshares, Born to be Alive, How Dare You!?, The Devil Between Us, Our Dazzling Days, Pursuit of Jade, and Live Up to Your Youth. For movies, we will meet audience demand with a diverse slate spanning top theatrical releases and online movies.

Q1 lineup features original online movies such as Northeastern Bro Season 3 and The Sin City, alongside licensed titles such as Gezhi Town. For variety shows, we are enhancing the long-term operation of multi-season IPs while exploring fresh and innovative new IPs.

Key Q1 releases include Five HAs Season six, and Hit Song Season two as well as new IPs such as Wander Together and Tonight Comedy Show.

For micro dramas, we will focus on creating original content with quality and innovation, while enhancing operations, commercialization, and deepening integration of AI. Q1 key titles include Return to a Better Tomorrow The Rise of a False Noblewoman, and The Amber hour. For animations, we will meaningfully expand our lineup of original Chinese animation compared with previous years. In Q1, our slate features original long-running series such as The Great Ruler and Against the Gods, as well as popular IPs including How Dare You!? Season 2 and Way of Choices.

For children's content, we will secure top tier licensed IPs, scale our original productions and expand our AI driven portfolio. In Q1, key offerings include a brand new original title, Detective BABU!, alongside licensed shows such as PAW Patrol Season 11 and the latest season of Pleasant Goat and Big Big Wolf.

Moving on to membership services. Over the past few quarters, our membership services revenue has shown consistent year over year recovery driven by diverse premium offerings. In Q4,members enjoyed the popular titles such as Strange Tales of Tang Dynasty 3: To Chang’an, Silent Honor, Fated Hearts, Legend of the Magnate, and Sword and Beloved.

We revitalized our membership business through a range of operational initiatives. For example, we boosted new subscriptions and upgrades to the S-Diamond Plan by offering exclusive perks such as free Express Packages, which provided early access to finales at no extra cost.

In 2025, Express Packages were available for over 40 dramas. Additionally, we strengthened member retention by emphasizing annual memberships during holiday promotions, e-commerce festivals, and bundled partnership offers. To further increase the value of memberships, we introduced additional exclusive benefits, including five VIP events in the fourth quarter featuring, participation in offline show recordings, advance screenings and the exciting iQIYI Scream Night. In particular, iQIYI Scream Night event was highly praised for exclusive perks like red carpet viewing privilege and live feeds featuring their favorite celebrities.

Moving on to advertising business. In Q4, brand advertising revenue grew both annually and sequentially. Ad revenues from variety shows and dramas both delivered double-digit annual growth, while core ad verticals such as food and beverage, internet services, and e-commerce, and telecom services all recorded double-digit annual growth.

Beyond long form videos, our micro dramas and micro variety shows are gaining considerable attention from brand advertisers. For micro dramas, we have successfully engaged several renowned brands in 2025 through tailored content, bundled sales that integrate product placements with theater branding and spin-off collaborations. Likewise, our micro variety shows have received a strong market recognition, fostering long-term partnerships with multiple clients and driving impressive revenue growth.

For performance ads, we regained sequential revenue growth in Q4 driven by a healthier and more balanced advertiser portfolio. Revenue from small and mid-sized advertisers grew both annually and sequentially, By vertical, internet services, e-commerce, and financial services led growth. Additionally, we have deployed a proprietary large AI model for scaled ad delivery, leveraging deep semantic understanding that has boosted conversion rates. Moving on to technology, we introduced Nadou Pro, our proprietary AI Agent platform designed to revolutionize professional content creation. By integrating leading global large models with iQIYI’s deep expertise in professional content productions, Nadou Pro effectively streamlines the production pipeline from script evaluation to final generation. Currently in its closed beta phase, Nadou Pro is empowering our internal teams and select partners in a wide variety of professional content such as feature films, dramas, animation.

In addition, Taodou World, our pioneering AI agent-based NPC platform continues to redefine entertainment experience. Users can now engage with over 1,700 NPC agents from our popular titles through dialogue, fan fiction, and virtual social interactions. The platform creates powerful synergies with hit content, delivers immersive emotional connections with fans and entends the long-tail value of our IPs. Strong user adoption is translating into commercial success with revenue from Taodou World rising sharply year over year in 2025.

In addition to pushing the boundaries of AI applications, we are leading the industry with cutting edge virtual production technologies. Our in-house developed IQStage system has meaningfully enhanced the efficiency of vehicle scene shoots for the theatrical hit PEGASUS 3, this achievement delivered unparalleled results with zero frame drops and zero aliasing, representing the highest standard for virtual production in car scenes in China. At iQIYI innovation is at the core of everything we do. With a portfolio of over 12,000 patent applications, we are proud to rank number 72 among the top 100 Chinese Enterprises for valid invention patents.

In 2025 alone, we filed nearly 1,000 new patent applications, most of them driving advancements in AI across content development, production, broadcasting, and offline experiences.

Moving on to our business performance in regions outside of mainland China. In Q4, we continued to deliver robust growth with membership revenue increasing by 40% annually.

Markets such as Brazil, Mexico, and Indonesia showed exceptional performance with membership revenue surging by over 80% annually. Our strong performance is driven by the growing popularity of our C-dramas, which have shown the substantial annual revenue growth, notably Speed and Love was a standout hit in 2025, emerging as the best-performing C-drama during the peak viewing period and topping popularity charts in 14 markets on our international platform. It performed exceptionally well in key regions like Thailand, Malaysia, and Singapore, where it led its category on Google Trends.

Its success extended further with the spin-off variety show Thai Sweet, which became one of the most popular Chinese variety shows on our overseas platform this year. We are also ramping up production of local original content with strong user reception. The original OOPS! I'M IN JAIL stood out as the top Taiwanese drama on our platform in 2025. Moreover, our Thai original variety show Running Man Thailand launched in February 2026, has secured exceptional brand advertising partnerships.

Apart from long form content, micro dramas, captivated increased engagement among overseas audiences. In Q4, membership revenue from micro drama hit a new high, driven by originals such as Spring In the Palace and Wild Thing, and licensed hits from China like Midsummer's Vendela.

Our efforts in creating local original micro dramas have also started to show results with five titles premiered in December 2025, featuring local content for South Korea, Thailand, the UK, and Indonesia. Among these, the Korean micro drama Darling, Is It All Coincidence and the Thai micro drama, Catch Me If You Love Me, have outperformed gaining notable popularity across and beyond our platform. In addition to content in Q4, we held four major offline marketing events in Thailand, Indonesia, Malaysia, and Singapore featuring Chinese celebrities.

These events amplified the influence of our content and the commercial value of our platform, forged stronger partnerships and propelled the global reach of Chinese content.

Moving on to Experience Business where we are focusing on two core areas, IP-based consumer products and iQIYI LAND.

By leveraging our extensive IP assets, we aim to build a new engine for sustainable long-term growth. For IP-based consumer products, our self-operated merchandise demonstrated a solid progress, highlighted by top-selling, collectible cards from premium dramas like The Journey of Legend.

For IP licensing, Strange Tales of Tang Dynasty 3: To Chang’an secured strong partnerships across food and beverage, beauty and art toys, while Sword and Beloved set new sales records during its broadcast period.

Looking ahead to 2026, we plan to grow our IP licensing business and expand our self-operated merchandise beyond collectible cards to more categories. For iQIYI LAND we adopt a light-asset model. By combining AI and XR technologies with IPs, we create immersive experiences that are more efficient, flexible, and require less space and investment than traditional theme parks.

Our first iQIYI LAND was successfully opened in Yangzhou on February 8, our Kaifeng and Beijing locations are set to open later this year. Each incorporating unique local elements to deliver tailored experiences. Revenue will primarily come from ticket sales and on-site spending.

Looking ahead, we aim to position iQIYI LAND as a key sales channel for IP-based consumer products and a vital platform for maximizing the long-term value of our IP portfolio.

In summary, in 2026, we will focus on three key strategic goals. First, we will strengthen our domestic core by enhancing the quality of original content, strengthening membership and advertising businesses.

Second, we will aim to sustain strong growth in our overseas and experience businesses, building more robust engines for long-term expansion. Third, over the past several months, rapid advancements in AI large models worldwide have revealed a clear insight: the content production industry will be revolutionized within the next one to three years. This transformation will significantly cut production costs, lower barriers to professional content creationand boost both the quality and quantity of content. These exciting changes will greatly benefit media platforms, especially iQIYI.

To seize this opportunity, we are dedicated to building a dynamic AIGC ecosystem and transitioning our platform from a centralized to a decentralized model. We look forward to sharing detailed initiatives at our upcoming iQIYI World Conference in April. No, let me hand it over to Ying for the financials.

Hello everyone. Let me walk you through the key numbers for Q4. Total revenues for Q4 were RMB6.8 billion, up 2% sequentially. Membership services revenue reached RMB4.1 billion, down 3% sequentially due to seasonality. Online advertising revenue was RMB1.4 billion, up 9% sequentially, primarily driven by premium content and e-commerce double eleven campaigns.

Content distribution revenue reached RMB787.7 million, up 22% sequentially, primarily driven by the increase in cash transactions. Other revenues were RMB547.9 million, down 6% sequentially. Moving on to costs and expenses. Content cost was RMB3.8 billion, down 5% sequentially, as we adopted a more curated content acquisition strategy centered on quality.

Total operating expenses were RMB1.4 billion, up 2% sequentially. Turning to profits and the cash balance. Non-GAAP operating income was RMB143.5 million.

Non-GAAP operating income margin was 2%. As of the end of Q4, we had cash, cash equivalents, restricted cash, short-term investments, and long-term restricted cash included in prepayments and other assets at a total of RMB4.7 billion.

At quarter end, the company had a loan of USD636.6 million to PAG recorded under the line item of prepayments and other assets. For detailed financial data, please refer to our press release on our IR website. Now I'll open the floor for Q&A.

(Operator Instructions)

Xueqing Zhang, CICC.

In my question, with recent upgrades in AI video generation models like Seedance, which are approaching production level quality. Could management share your view on how this advance, advancements may impact iQIYI's business, particularly in content production and the cost, structure. What's your plan on leveraging AI video generation models? Thank you.

(spoken in foreign language)

Thank you, Yu Gong, our CEO. Taking this question. Video generation models will substantially reduce the cost of producing long form videos, shorten production time and lower the barrier to creation.

And this potentially will attract more new creators to this business and then ultimately lead to more creations for the long form video production, and this is very much beneficial to long-form video platforms like iQIYI, which means, this will lead to increase in both the quantity and quality of long-form video content.

(spoken in foreign language)

Let me discuss the impact of AI generation content for each content genres.

For example, the micro animation is actually an AI native content created entirely by AI. And for children's animation and also micro dramas, it has been demonstrated that large models can produce these contents and reducing the production cost to [1/10] or less compared to traditional methods.

For online films, animations, and documentaries, et cetera. These are rapidly permeated by AI-led production approaches as well. Among all these long form video content, the most difficult ones to be produced are the live action content, for example, the theatrical films, drama series, and variety shows.

And in fact, these contents have in part adopted AI in their production process and the results have proven that these have significantly, reduced the content production cost. And, based on our projections and estimations that, we think the AI-led commercial film probably will emerge within the next two to three years.

(spoken in foreign language)

For iQIYI, we are actually placing our focuses on two areas to embrace these AI initiatives. On one hand, we have developed a Nadou Pro, an industry-specific AI agent for video content production. And on the other hand, we are working to build a new AIGC content ecosystem through various, operation methods. Hopefully that we can attract more creative talent under this new AI era.

Maggie Ye, CLSA.

(spoken in foreign language) Can management walk us through company's content strategy for 2026, in more details. For example, how are we thinking about the key priorities across different genres, including drama, variety shows, film, and micro drama, et cetera. And how are you thinking about the mix of self-produced content versus licensed one thank you.

Thank you, Maggie. We'll invite our Chief Content Officer, Mr. Xiaohui Wang, to take this question.

(spoken in foreign language)

Given the current volume of new production dramas, we will slightly reduce the number of dramas to be produced in 2026, and place greater emphasis on top tier titles in terms of their, quality.

(spoken in foreign language)

In terms of the realistic and suspense and crime genres, and these content categories have been iQIYI's strength, in fact, and in these areas we'll continue to maintain our innovation, to create new content and more creative, content, and then maintain our advantage in these areas.

(spoken in foreign language)

Starting in 2025, we have increased the supply of female-oriented content. For example, starting from the end of 2025, we started to roll out a new variety show called Wander Together. This is targeting for the new female users and also that beginning of 2026, we also launched a young female-oriented, drama called How Dare You?

(spoken in foreign language)

And for young male users, we have released multiple original animations this year, including the long-running series The Great Ruler, How Dare You!? Season two, and Way of Choices.

(spoken in foreign language)

With the support of new regulatory policies, we will step up exploration of innovative content, for example, the short form drama series.

Xiaohui Wang (spoken in foreign language)

We recently introduced a unified revenue sharing policy across eight major content categories, including dramas and films. And under this new framework, production partners’ return actually will be more directly linked to each title's revenue contribution and allowing outstanding works to earn higher returns.

(spoken in foreign language)

Okay, apart from, the content category, for example, like theatrical films and drama series like Mr. Gong mentioned earlier, we are actually gradually adopting and actually very, proactively adopting AI led production for categories such as micro animation, animation, and micro dramas., while we're applying AI across other content categories to cut cost and also accelerate timeline. Thank you.

Lincoln Kong, Goldman Sachs.

(spoken in foreign language) Hey, how are you? Thank you for taking my questions. My question is about overseas business. How's our plan and strategy for 2026.

Thank you.

Oh thank you Lin Tian. We'll invite our senior Vice President of International Business. Mr. Xianghua Yang to take this question. Please go ahead.

(spoken in foreign language) Don't be what she got on the back so that I know and being in show would be regarding.

In 2025, membership revenue grew by over 30%, with annual growth rate actually accelerating to 40% in the second half of the year. 2025 marked our highest growth rate, year since the overseas business entered a stable operating phase.

(spoken in foreign language)

For 2026, our strategy is to sustain high revenue growth rate or even accelerate our growth rate.

(spoken in foreign language)

Then people in China and to name on the tango. In terms of the content strategy, our market tailored content mixes actually have proven effective and continue to attract users.

For C dramas, they continue to expand their influence overseas, and the C dramas will remain at the core of our overseas content portfolio. Especially genres with strong cross-cultural appeal, such as ancient costume romance and contemporary romance.

(spoken in foreign language)

For content, we actually ramp up original production and local content licensing in Thailand, Malaysia, and Indonesia. And in terms of operations, AI powered translation and dubbing actually have significantly improved efficiency, reduced costs, and accelerated, the content release schedule.

Going forward, we will fully leverage social media channels and use AI to generate promotional efforts, enabling low costs, high efficiency content distribution and user reach. Meanwhile, we will continue to online and offline advertising to further amplifying the influence of C-drama. And last but not least, we will continue to promote content and strengthen our brand presence in international markets through initiatives such as celebrity fan meet ups and also, offline events.

Thank you.

Rebecca Xu, Morgan Stanley.

(spoken in foreign language) Thank you for taking my question. My question is about iQIYI LAND. Could management share the operating performance of iQIYI and Yangzhou since its opening? Also, can you please share the 2026 plan for this business? Thank you.

Thank you, Rebecca. We'll invite our CEO, Mr. Gong to take this question. .

(spoken in foreign language)

Our very first iQIYI LAND actually opened in Yangzhou on February 8, and offers seven core immersive experiences including stage performances, multi-sensory theaters, interactive lights, and shadow spaces.

(spoken in foreign language)

The first iQIYI LAND opened about 20 days since its opening, and during which we experienced the Chinese New Year holidays. And actually, the performance and the feedback actually are meeting expectations, which can be, reflected in the ratings on major OTA platforms, and the average points are 4.8 out of 5 and actually recently, the latest ratings, exceeded reached 4.9 for certain platform.

(spoken in foreign language)

And from the opening until now, the visitor numbers have continued to grow, and based on the actual operations we observed that, this experience really offered fun for all ages. We see participants, ranging from children as young as 4 four to five years old to seniors in their 60s and 70s.

(spoken in foreign language)

We are looking at the potential for a 1 times to 2 times increase in peak single day revenue during the following peak period. For Yangzhou location it actually has its special period for the spring season, especially March and April is a peak, travel season for Yangzhou and also, upcoming.

We have the labor holiday in May, the summer months of July and August, and also the National Day holiday in October, and all these key holidays and periods could potentially boost the revenue performance compared to the first 20 days.

(spoken in foreign language)

And the expected growth will come probably from two major areas from a deeper operations to a more finer detailed operations for the entire iQIYI LANDand also the increased efficiency for iQIYI LAND as well.

(spoken in foreign language)

Currently, the average transaction value for consumer products at iQIYI LAND is about RMB100. We think there's potential for growth in the future. We will try to load more products in the future and also to extend to other content categories as we, do a more refined, consumer product team operation.

(spoken in foreign language)

And for this year, we will focus more on the self-operated IP consumer products and the operations will be strengthened this year and this will lead to a revenue potential growth of 100% this year.

Thank you.

Gigi Zhou, Guangfa.

(spoken in foreign language)

Thank you. We'll invite our international business leader to take this question.

(spoken in foreign language)

Okay, in terms of our content, our brand and slogan is beloved Asian content, so we focus on not only Chinese content but also the Asian content as well, of course. Chinese content, which we call C pop or C drama is our foundation, because all the content has been already produced for our domestic business, so we only have to incur some of the dubbing and also translation, which is, the cost with AI is much more efficient and controllable.

But in addition to C drama and also Chinese content, we also have, for example, Japanese animation, also Korean dramas, and also the local content, for example, for the Thai region, Malaysia, and also Indonesia. So this is how we set apart from, many of the Western players in overseas. And for example, Netflix and other houses, they host a lot of the Western content. Whereas for us, we are a home of the beloved Asian content.

(spoken in foreign language)

Okay. Also, I want to add really quickly in terms of, another content genre called micro drama. We actually, this is, something we rolled out end of last year. And in terms of the content viewing time contribution, micro drama already ranks number two content categories of the overseas platform has been growing quickly and also very recently for the Chinese New Year, we have experienced rapid growth as well and reached a new high. So this is something else also that set us apart from the Western players in overseas market.

(spoken in foreign language)

And in terms of a question regarding ARPU and also membership performance, for ARPU, actually for each region it's actually different. Overall speaking, we would think we're at the mid-range of the price tier, for each different region we execute a different price plans. For areas more developed and similar to the Western spending powers, the ARPU is a bit higher than the China domestic region and for the developing regions, for example, like Southeast Asia, the average ARPU is a bit lower than the China domestic regions, but overall speaking, I will say that overseas ARPU will be greater or more than the China domestic ARPU.

(spoken in foreign language)

In terms of the membership retention in overseas business, we adopt the freemium model, which is the free plus paid content model. And in areas such as more developed regions, I would say this is very much similar to their spending habit and viewing habit, the retention is actually a bit better than Domestic areas, but in some of the areas such as developing regions, the retention performance is a bit lower. But overall speaking, overall membership retention is similar to domestic level.

Thank you.

(spoken in foreign language)

In terms of, we're adding the performance for the financial aspect, overall speaking, the free cash flow now is positive, but in terms of the P&L performance for operating income, because there's some financial accounting treatment that we still have to sort out. Now we haven't disclosed the exact numbers but we will share more insights as we have more clarity.

Thank you.

Thank you. There are no further questions at this time. I'll now head back to management for closing remarks.

Thank you everyone for joining the call today and if you have any further questions, please do not hesitate.

Thank you.

Thank you. That does conclude our conference for today.

Thank you for participating. You may now disconnect.