iQIYI, Inc. (IQ): History, Ownership, Mission, How It Works & Makes Money

As a seasoned investor, are you defintely tracking the shift in China's streaming wars, where iQIYI, Inc. (IQ) continues to dominate the content landscape despite recent financial headwinds? The company, majority-owned by Baidu, Inc., reported RMB 6.68 billion (US$938.7 million) in total revenue for the third quarter of 2025, even as it posted a net loss of RMB 248.9 million (US$35.0 million), underscoring the high-stakes cost of premium original content. But with overseas membership revenue growing over 40% annually in key markets like Brazil and Indonesia, you have to ask: is their IP-centric strategy finally paying off globally, and how exactly does their ad-supported and subscription model generate the cash to fuel this expansion? Let's break down the history, ownership, mission, and mechanics of the platform that remains the top player in China's drama viewership market.

iQIYI, Inc. (IQ) History

You need to understand the bedrock of iQIYI's current strategy, and it starts with its unique birth. This company wasn't a garage startup; it was an ambitious project born from a Chinese tech giant, which explains its scale and early focus on legitimacy and high-quality content. Their journey is a clear map of the Chinese streaming market's evolution, moving from licensed content to a powerhouse of original, profitable blockbusters.

Given Company's Founding Timeline

Year established

The company was formally established on April 22, 2010, launching initially as Qiyi.com.

Original location

iQIYI was founded and remains headquartered in Beijing, China.

Founding team members

The platform was launched by internet entrepreneur Gong Yu, who serves as the Founder and Chief Executive Officer. Crucially, it began as an incubation project backed by Baidu, Inc., the Chinese multinational technology company, providing immediate, massive resources.

Initial capital/funding

iQIYI started as an incubation project, leveraging Baidu's considerable resources and funding, plus initial support from US private equity firm Providence Equity Partners. This deep-pocketed start allowed them to immediately focus on legitimate, licensed content in a market rife with piracy.

Given Company's Evolution Milestones

Given Company's Transformative Moments

The biggest pivot for iQIYI, and what you should focus on, was the deliberate shift from being a licensed content distributor to a dominant producer of original content (Original Productions, or OP). This was a costly but necessary move to control their destiny and content costs.

• The Shift to Original Content: After the 2018 IPO, the company aggressively invested in its own IP, moving away from expensive licensed content. This strategy paid off, leading to its first full year of operating profit in 2023.
• The Profitability Mandate: Following years of heavy spending, management focused on operational efficiency and content quality over sheer volume. This led to a non-GAAP operating loss of only RMB 21.9 million in Q3 2025, a sign of tight cost control despite a lighter content slate.
• Embracing AI and 'Short' Content: In 2025, the company cemented a dual-pronged innovation strategy. First, the 'long + short' content model, which is a direct response to changing user habits. Second, the deep integration of AI, which saw AI-powered virtual production technology usage increase by 125% year-over-year in the first half of 2025, cutting costs in areas like marketing and overseas translation.
• International Expansion: Overseas membership revenue saw substantial growth, rising by over 40% annually in Q3 2025, with revenue more than doubling in key markets like Brazil and Indonesia. This shows the IP is defintely traveling beyond China.

In Q1 2025, total revenues were RMB 7.19 billion (US$990.3 million), but this fell to RMB 6.63 billion (US$925.3 million) in Q2 2025 and RMB 6.68 billion in Q3 2025, primarily due to a lighter content slate, showing how sensitive the business is to blockbuster releases. For a deeper look at their strategic compass, you should review their forward-looking statements on Mission Statement, Vision, & Core Values of iQIYI, Inc. (IQ).

iQIYI, Inc. (IQ) Ownership Structure

iQIYI, Inc.'s ownership structure is dominated by its strategic parent company, Baidu, Inc., but a significant portion is held by a diverse group of global institutional investors and the public float.

This dual-class structure gives Baidu, Inc. considerable voting power, even as the company operates as a publicly-traded entity on the NASDAQ Global Select Market under the ticker IQ. Understanding who holds the shares is key to grasping the decision-making dynamics, especially the influence of the largest stakeholder on long-term strategy and capital allocation.

iQIYI, Inc.'s Current Status

iQIYI, Inc. operates as a publicly-traded company, having conducted its initial public offering (IPO) in 2018. It is listed on the NASDAQ Global Select Market. The company's financial reporting confirms its public status, with a market capitalization of approximately $2.1 billion as of November 2025.

The core of its governance involves a dual-class share structure, which means not all shares have equal voting rights. This setup allows the original founders and strategic investors, primarily Baidu, Inc., to maintain control over the company's direction even with a lower equity percentage than might be typical in a single-class structure. This is defintely a key point for any investor to consider.

For a deeper dive into the market players, you can review Exploring iQIYI, Inc. (IQ) Investor Profile: Who's Buying and Why?

iQIYI, Inc.'s Ownership Breakdown

The ownership breakdown as of the 2025 fiscal year shows a clear majority holder alongside substantial institutional backing, which is common for a major technology company in a capital-intensive industry like streaming.

Here's the quick math: Baidu, Inc. holds the dominant stake, giving it control over strategic decisions. Institutional ownership, which includes firms like T. Rowe Price Group, Inc. at 6.44% and Krane Funds Advisors, LLC at 2.86% as of late 2025, represents a powerful block of professional money managers focused on financial returns. What this estimate hides is the varying voting power due to the dual-class structure, where Baidu's Class B shares carry more weight.

iQIYI, Inc.'s Leadership

The leadership team steering iQIYI, Inc. is a mix of long-tenured veterans and financial experts, reflecting the company's dual focus on content and fiscal discipline. Their collective experience averages around 9.8 years, suggesting a stable, seasoned management group.

The executive team, which recently participated in the Q3 2025 earnings call, is responsible for translating the company's strategy-heavy on AI integration and overseas expansion-into operational results.

• Yu Gong: Founder and Chief Executive Officer (CEO). He has been with the company since its founding in 2009, providing consistent strategic vision.
• Jun Wang: Chief Financial Officer (CFO). He oversees the company's financial health, crucial for managing content costs, which were approximately RMB 4 billion in Q3 2025.
• Xiaohui Wang: Chief Content Officer (CCO). He manages content procurement and production, a vital role given the focus on premium original dramas driving membership revenue, which hit RMB 4.2 billion in Q3 2025.
• Xianghua Yang: Senior Vice President, Overseas Business. He is instrumental in the international growth strategy, which saw overseas membership revenue exceed 40% annual growth in key markets.

These leaders are directly accountable for the company's performance and its push into areas like Artificial Intelligence Generated Content (AIGC) to drive efficiency and innovation.

iQIYI, Inc. (IQ) Mission and Values

iQIYI, Inc.'s core purpose extends beyond streaming revenue; it is built on a foundation of technology-driven content innovation and a commitment to high-quality, diverse entertainment for a global audience. This cultural DNA, focused on user-centricity and integrity, guides their RMB 6.68 billion (US$938.7 million) revenue strategy reported in the third quarter of 2025.

You're looking for the 'why' behind the numbers, and for iQIYI, Inc., that's a clear mandate to connect people through engaging, innovative content. They defintely prioritize content quality over sheer volume.

iQIYI, Inc.'s Core Purpose

The company's operational philosophy is centered on blending creative talent with advanced technology, particularly Artificial Intelligence (AI), to redefine the entertainment experience and amplify Intellectual Property (IP) value.

Official Mission Statement

The mission is fundamentally about providing a comprehensive, high-quality entertainment ecosystem, integrating technological innovation to enhance content delivery and user experience. This is reflected in their strategic focus on the 'long + short' content transformation cycle that officially began in 2025.

• Provide high-quality and diverse entertainment options for a global audience.
• Emphasize innovative digital entertainment and content streaming services.
• Connect people globally through engaging and innovative content.
• Amplify IP value through high-quality storytelling and advanced production technology.

Vision Statement

iQIYI, Inc.'s long-term vision is to be a globally recognized leader, not just a regional player, by leveraging technology to maintain market dominance and expand its reach. They aim to be the go-to destination for inspiring, entertaining, and educating content.

• Become a comprehensive global digital entertainment platform.
• Maintain market leadership in the Chinese streaming market.
• Drive strategic technological innovation, especially AI, to enhance services.
• Target international markets with localized content strategies.

Here's the quick math: the commitment to a 2025-2026 slate of over 400 titles across various formats shows their dedication to this diverse content vision. For a deeper dive into who is buying into this vision, check out Exploring iQIYI, Inc. (IQ) Investor Profile: Who's Buying and Why?

iQIYI, Inc. Slogan/Tagline

While the company's official corporate tagline is not frequently updated in public releases, the mission of its international arm clearly captures the spirit of its user-centric culture and tech-driven aspirations.

• Make Dreams Inspired and Joy at Your Fingertips.

Their core values-Innovation, Quality, User-Centricity, and Integrity-are the operating principles that make this slogan a reality, guiding their heavy investment in AI as a core engine of content creation in 2025.

iQIYI, Inc. (IQ) How It Works

iQIYI, Inc. operates as China's leading online entertainment video service, primarily serving as a platform that aggregates, produces, and distributes a massive library of video content, leveraging advanced Artificial Intelligence (AI) and a subscription-plus-advertising model to generate revenue.

In simple terms, the company creates a content flywheel: produce a hit show, attract subscribers and advertisers, and then reinvest that cash into more content and technology to keep the cycle spinning. You can see the financial health of this model in Breaking Down iQIYI, Inc. (IQ) Financial Health: Key Insights for Investors.

iQIYI, Inc.'s Product/Service Portfolio

The company's core business is video streaming, but it's defintely expanding into a broader IP (Intellectual Property) ecosystem to diversify its revenue streams, moving beyond just membership fees and ads.

iQIYI, Inc.'s Operational Framework

The operational framework focuses on content efficiency and technological innovation to manage the high costs of content production and acquisition. Here's the quick math: Content costs were still a hefty RMB4 billion in Q3 2025, so managing that spend is critical.

• Content Production & Acquisition: The company maintains a dual strategy, aggressively producing high-quality original content (like blockbuster dramas) while also licensing popular third-party content. This is a capital-intensive game.
• AI-Driven Efficiency: AI is integrated across the value chain. It's used in content creation to boost the efficiency of digital asset generation by over 10-fold, shortening production time. It also powers marketing and content localization for overseas markets.
• Diversified Content Formats: A strategic pivot involves investing heavily in cost-effective, high-engagement formats like micro-dramas, which saw significant growth in viewership and engagement in 2025.
• Monetization Mix: Revenue is primarily driven by Membership Services, which accounted for approximately RMB4.21 billion (US$591.7 million) of the total RMB6.68 billion revenue in Q3 2025. The rest comes from advertising, content distribution, and the growing IP ecosystem.

The goal is simple: get content costs down and push more revenue through the IP-centric side.

iQIYI, Inc.'s Strategic Advantages

The company's success in a fiercely competitive market, especially against short-form video rivals, hinges on a few core, durable advantages that are hard to replicate quickly.

• Long-Form Content Leadership: iQIYI, Inc. consistently holds the top market share in total viewership for long-form dramas in China, a category that commands premium subscription revenue. This is a strong anchor.
• Proprietary AI and Big Data Platform: The use of advanced AI for everything from content selection and production to personalized recommendations and targeted advertising creates a moat. AI-powered ads, for example, have shown a 20% higher click-through rate than traditional ads.
• Established IP Ecosystem: By focusing on an IP-centric model, they can monetize a single hit drama across multiple channels-streaming, games, merchandise, and even offline 'immersive shelters' in about 30 cities. This turns a content cost into a long-term asset.
• Accelerated Global Expansion: The company is successfully scaling its operations internationally, with overseas membership revenue growth exceeding 40% annually, and key markets like Brazil and Indonesia more than doubling year-over-year. This provides a crucial hedge against domestic market pressures.

The biggest risk, still, is the macroeconomic pressure on online advertising, which saw Q3 2025 revenue decline to RMB1.24 billion (US$174.3 million), down 7% year-over-year.

iQIYI, Inc. (IQ) How It Makes Money

iQIYI, Inc. primarily earns revenue through a dual-engine model: subscription fees from its massive member base and online advertising sales. This is essentially a hybrid video-on-demand (VOD) strategy, where premium content drives membership, and a vast free-user base is monetized through advertisements.

iQIYI's Revenue Breakdown

As of the third quarter of 2025, iQIYI's total revenues were RMB 6.68 billion (approximately $938.7 million), showing an 8% year-over-year decline but a 1% sequential increase from Q2 2025. Membership services remain the dominant and most stable revenue stream.

Business Economics

The core economic engine for iQIYI is its Intellectual Property (IP)-centric ecosystem, which aims to maximize the value of its original content across multiple platforms and revenue streams. The strategy is simple: invest in blockbuster content, acquire subscribers, and then monetize the IP through advertising, distribution, and merchandise.

Here's the quick math: Membership Services revenue hit RMB 4.21 billion in Q3 2025. This stream is less volatile than advertising, providing a critical base for the business, but a lighter content slate caused a 4% year-over-year dip. Still, the sequential growth of 3% shows that a strong content line-up, like the theatrical hit Nezha 2, can quickly move the needle.

• Content Cost Leverage: Content costs were RMB 4.0 billion in Q3 2025, a significant 7% sequential increase as the company launched more premium content. The goal is for this content investment to generate a higher multiple of revenue across all four streams, not just subscriptions.
• Advertising Nuance: While Online Advertising revenue fell 7% year-over-year to RMB 1.24 billion, the brand advertising business actually saw solid growth, which was offset by a decline in performance-based advertising. This suggests brands are defintely still willing to pay a premium for association with high-quality content.
• IP Monetization: The 'Other Revenues' category, despite a 20% year-over-year drop to RMB 585.0 million, is a key growth vector. It includes revenue from IP-based consumer products, which management is actively scaling from online to offline, and from domestic to overseas markets.

The company is also making strategic bets on international expansion, with overseas membership revenue increasing by over 40% annually in Q3 2025, showing strong traction in markets like Brazil and Mexico.

iQIYI's Financial Performance

The third quarter of 2025 highlighted a company prioritizing operational efficiency over top-line growth, which is a common but risky move in the streaming wars. The shift from a net income to a net loss is the main concern you should focus on. Breaking Down iQIYI, Inc. (IQ) Financial Health: Key Insights for Investors

• Net Loss: The company reported a Net Loss attributable to iQIYI of RMB 248.9 million (US$35.0 million) in Q3 2025, a stark reversal from a net income in the same period last year.
• Operating Loss: The Operating Loss for the quarter was RMB 121.8 million (US$17.1 million). This loss reflects the higher content costs incurred during the peak summer season, which management is trying to contain through disciplined expense management.
• Cash Position: Liquidity remains solid with cash, cash equivalents, and short-term investments totaling RMB 4.88 billion (approximately $686.0 million) as of September 30, 2025. However, free cash flow was negative RMB 290.3 million ($40.8 million) for the quarter, a reversal from positive cash flow in Q3 2024.
• Efficiency Metric: The Non-GAAP Operating Loss was a narrow RMB 21.9 million, with a Non-GAAP Operating Loss Margin of just 0.3%. This metric shows that, excluding certain non-cash items, the company is very close to operational breakeven, indicating good cost control.

iQIYI, Inc. (IQ) Market Position & Future Outlook

iQIYI is in a critical transition, leveraging its long-standing dominance in premium long-form content to offset recent financial volatility, while aggressively expanding its ecosystem through AI and international growth. In Q3 2025, the company reported total revenues of RMB 6.68 billion (US$938.7 million), an 8% year-over-year decline, which underscores the urgency of its strategic pivot away from a singular reliance on domestic subscriptions and advertising.

Competitive Landscape

The Chinese online video market is a cutthroat race defined by three major long-form players-iQIYI, Tencent Video, and Youku-plus the immense gravity of short-form platforms like ByteDance's Douyin. iQIYI maintains a leadership position in its core competency, securing the top viewership market share for long-form dramas and online movies for 15 consecutive quarters through Q3 2025.

Opportunities & Challenges

The core challenge is balancing high content costs-which hit RMB 4 billion in Q3 2025-with revenue growth that has recently stalled. This is why the strategic initiatives are focused on efficiency and diversification. Honestly, the next two years are defintely about execution.

Industry Position

iQIYI is positioned as the premium content leader in the long-form video segment, a crucial distinction from the short-video platforms. Its position is fundamentally an 'IP-first' model, aiming to maximize the value of its original intellectual property (IP) across multiple verticals.

Here's the quick math: The company's Q3 2025 membership services revenue of RMB 4.21 billion (US$591.7 million) shows that a large, paying subscriber base still values its original content slate, like the blockbuster drama The Thriving Land. The focus on mini-dramas and the rebranding of the iQIYI Express app to iQIYI Micro-Drama is a direct, necessary response to the short-form trend, aiming to capture that attention without abandoning the core long-form business. You can dive deeper into the financial mechanics of this pivot by reading Breaking Down iQIYI, Inc. (IQ) Financial Health: Key Insights for Investors.

• Maintain content leadership: The goal is to keep the top-tier long-form drama and movie market share, which is the anchor for subscription revenue.
• Diversify revenue mix: Shift from a heavy reliance on membership and advertising to a balanced model that includes IP-based e-commerce and offline experiences.
• Mitigate cost pressure: Use AI to industrialize content production and localization, reducing the cost of content creation over time.