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What changed in iQIYI, Inc.'s 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of iQIYI, Inc.'s 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+869 added−888 removedSource: 20-F (2025-03-27) vs 20-F (2024-03-14)

Top changes in iQIYI, Inc.'s 2024 20-F

869 paragraphs added · 888 removed · 757 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

315 edited+56 added−59 removed649 unchanged
Biggest changeVariable interest entities and their subsidiaries WFOEs Subsidiaries (other than the WFOEs) Eliminating adjustments Consolidated totals RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB (in thousands) ASSETS Current assets: Cash and cash equivalents 4,334,968 1,882,877 56,953 823,140 — 7,097,938 401,002 2,832,913 606,915 593,695 — 4,434,525 Short-term investments — 529,411 265,106 23,748 — 818,265 — 333,191 608,547 — — 941,738 Accounts receivable, net — 2,316,961 1,460 84,254 — 2,402,675 — 2,061,497 798 106,747 — 2,169,042 Licensed copyrights, net — 527,792 125,488 92,778 — 746,058 — 361,225 108,181 113,115 — 582,521 Prepayments and other assets 20,751 2,366,445 121,448 212,055 — 2,720,699 4,725 2,603,639 55,701 1,843,338 — 4,507,403 Total current assets 4,355,719 7,623,486 570,455 1,235,975 — 13,785,635 405,727 8,192,465 1,380,142 2,656,895 — 12,635,229 Non-current assets: Fixed assets, net — 649,690 429,553 25,478 — 1,104,721 — 600,586 228,678 34,549 — 863,813 Long-term investments — 1,941,014 — 512,630 2,453,644 — 1,712,915 — 547,870 — 2,260,785 Investment in subsidiaries and contractual interests in VIEs — — — 34,685 (34,685) — — — — 35,486 (35,486) — Licensed copyrights, net — 1,952,497 2,872,467 2,015,665 — 6,840,629 — 1,951,329 2,758,685 2,256,494 — 6,966,508 Produced content, net — 12,534,227 20,755 446,922 — 13,001,904 — 12,349,284 487,767 539,934 — 13,376,985 Operating lease assets — 578,937 — 95,034 — 673,971 — 545,894 1,400 136,603 — 683,897 Goodwill — 2,350,790 1,475,357 — — 3,826,147 — 2,345,466 1,475,357 — — 3,820,823 Others — 712,697 382,457 3,266,544 — 4,361,698 — 745,107 334,591 2,906,636 — 3,986,334 Total non-current assets — 20,719,852 5,180,589 6,396,958 (34,685) 32,262,714 — 20,250,581 5,286,478 6,457,572 (35,486) 31,959,145 Amounts due from the entities within our company (1) 19,925,446 — 71,515 — (19,996,961) — 22,653,118 — 1,118,471 — (23,771,589) — Total assets 24,281,165 28,343,338 5,822,559 7,632,933 (20,031,646) 46,048,349 23,058,845 28,443,046 7,785,091 9,114,467 (23,807,075) 44,594,374 LIABILITIES Third-party liabilities Current liabilities: Accounts and notes payable — 3,315,976 1,282,258 1,395,182 — 5,993,416 — 3,197,634 1,110,027 1,363,413 — 5,671,074 Customer advances and deferred revenue — 4,125,789 5,009 101,312 — 4,232,110 — 4,234,384 2,848 135,976 — 4,373,208 Short-term loans — 2,381,846 391,670 574,122 — 3,347,638 — 2,292,845 460,267 818,525 — 3,571,637 Convertible senior notes, current portion 8,305,447 — — — — 8,305,447 2,802,442 — — — — 2,802,442 Operating lease liabilities, current portion — 95,603 — 7,914 — 103,517 — 83,575 666 16,642 — 100,883 Accrued expenses and other liabilities 156,807 2,315,572 2,758,269 917,242 — 6,147,890 25,891 2,641,951 2,296,146 858,302 — 5,822,290 Total current liabilities 8,462,254 12,234,786 4,437,206 2,995,772 — 28,130,018 2,828,333 12,450,389 3,869,954 3,192,858 — 22,341,534 Non-current liabilities: Long-term loans — — — — — — — — 97,990 — — 97,990 Convertible senior notes 9,568,279 — — — — 9,568,279 8,143,994 — — — — 8,143,994 Operating lease liabilities — 502,687 — 5,884 — 508,571 — 485,139 533 38,075 — 523,747 Other non-current liabilities — 1,247,571 239,618 10,853 — 1,498,042 — 1,037,634 251,357 13,203 — 1,302,194 Total non-current liabilities 9,568,279 1,750,258 239,618 16,737 — 11,574,892 8,143,994 1,522,773 349,880 51,278 — 10,067,925 Amounts due to the entities within our company (1) — 22,808,971 — 12,034,989 (34,843,960) — — 21,712,172 — 14,197,364 (35,909,536) — Total liabilities 18,030,533 36,794,015 4,676,824 15,047,498 (34,843,960) 39,704,910 10,972,327 35,685,334 4,219,834 17,441,500 (35,909,536) 32,409,459 Shareholders’ equity/(deficit): Noncontrolling interests — 125,135 — (32,328) — 92,807 — 63,497 — 34,900 — 98,397 Total iQIYI shareholders’ equity/(deficit) (2) 6,250,632 (8,575,812) 1,145,735 (7,382,237) 14,812,314 6,250,632 12,086,518 (7,305,785) 3,565,257 (8,361,933) 12,102,461 12,086,518 Total equity/(deficit) 6,250,632 (8,450,677) 1,145,735 (7,414,565) 14,812,314 6,343,439 12,086,518 (7,242,288) 3,565,257 (8,327,033) 12,102,461 12,184,915 Total liabilities and equity/(deficit) 24,281,165 28,343,338 5,822,559 7,632,933 (20,031,646) 46,048,349 23,058,845 28,443,046 7,785,091 9,114,467 (23,807,075) 44,594,374 18 Selected Condensed Consolidating Cash Flows Information For the year ended December 31, 2021 2022 2023 iQIYI, Inc.
Biggest changeVariable interest entities and their subsidiaries WFOEs Subsidiaries (other than the WFOEs) Eliminating adjustments Consolidated totals RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB ASSETS Current assets: Cash and cash equivalents 401,002 2,832,913 606,915 593,695 — 4,434,525 887,386 803,720 1,239,956 598,617 — 3,529,679 Short-term investments — 333,191 608,547 — — 941,738 — 738,561 203,049 — — 941,610 Accounts receivable, net — 2,061,497 798 106,747 — 2,169,042 — 2,117,491 3,189 70,498 — 2,191,178 Licensed copyrights, net — 361,225 108,181 113,115 — 582,521 — 193,365 112,455 82,898 — 388,718 Prepayments and other assets 4,725 2,603,639 55,701 1,843,338 — 4,507,403 2,543 2,138,706 34,917 299,885 — 2,476,051 Total current assets 405,727 8,192,465 1,380,142 2,656,895 — 12,635,229 889,929 5,991,843 1,593,566 1,051,898 — 9,527,236 Non-current assets: Fixed assets, net — 600,586 228,678 34,549 — 863,813 — 607,502 150,191 120,289 — 877,982 Long-term investments — 1,712,915 — 547,870 — 2,260,785 — 1,577,992 — 530,485 — 2,108,477 Investment in subsidiaries and contractual interests in VIEs — — — 35,486 (35,486 ) — — — — 36,497 (36,497 ) — Licensed copyrights, net — 1,951,329 2,758,685 2,256,494 — 6,966,508 — 1,656,880 3,141,940 2,131,233 — 6,930,053 Produced content, net — 12,349,284 487,767 539,934 — 13,376,985 — 13,418,428 810,581 478,860 — 14,707,869 Operating lease assets — 545,894 1,400 136,603 — 683,897 — 486,719 795 122,318 — 609,832 Goodwill — 2,345,466 1,475,357 — — 3,820,823 — 2,345,466 1,475,357 — — 3,820,823 Others — 745,107 334,591 2,906,636 — 3,986,334 — 1,156,455 992,676 5,029,122 — 7,178,253 Total non-current assets — 20,250,581 5,286,478 6,457,572 (35,486 ) 31,959,145 — 21,249,442 6,571,540 8,448,804 (36,497 ) 36,233,289 Amounts due from the entities within our company (1) 22,653,118 — 1,118,471 — (23,771,589 ) — 21,082,424 — 2,938,540 — (24,020,964 ) — Total assets 23,058,845 28,443,046 7,785,091 9,114,467 (23,807,075 ) 44,594,374 21,972,353 27,241,285 11,103,646 9,500,702 (24,057,461 ) 45,760,525 LIABILITIES Third-party liabilities Current liabilities: Accounts and notes payable — 3,197,634 1,110,027 1,363,413 — 5,671,074 — 3,422,348 2,059,613 1,000,248 — 6,482,209 Customer advances and deferred revenue — 4,234,384 2,848 135,976 — 4,373,208 — 4,212,168 681 190,837 — 4,403,686 Short-term loans — 2,292,845 460,267 818,525 — 3,571,637 — 1,433,031 1,671,149 682,721 — 3,786,901 Convertible senior notes, current portion 2,802,442 — — — — 2,802,442 242,460 — — — — 242,460 Long-term loans, current portion — — — — — — — 63,997 97,990 6,000 — 167,987 Operating lease liabilities, current portion — 83,575 666 16,642 — 100,883 — 78,079 557 18,039 — 96,675 Accrued expenses and other liabilities 25,891 2,641,951 2,296,146 858,302 — 5,822,290 13,897 3,226,119 2,379,155 678,244 — 6,297,415 Total current liabilities 2,828,333 12,450,389 3,869,954 3,192,858 — 22,341,534 256,357 12,435,742 6,209,145 2,576,089 — 21,477,333 Non-current liabilities: — Long-term loans — — 97,990 — — 97,990 — 935,455 — 101,380 — 1,036,835 Convertible senior notes 8,143,994 — — — — 8,143,994 8,350,570 — — — — 8,350,570 Operating lease liabilities — 485,139 533 38,075 — 523,747 — 433,549 — 28,425 — 461,974 Other non-current liabilities — 1,037,634 251,357 13,203 — 1,302,194 — 980,001 64,883 15,165 — 1,060,049 Total non-current liabilities 8,143,994 1,522,773 349,880 51,278 — 10,067,925 8,350,570 2,349,005 64,883 144,970 — 10,909,428 Amounts due to the entities within our company (1) — 21,712,172 — 14,197,364 (35,909,536 ) — — 19,093,453 — 15,329,046 (34,422,499 ) — Total liabilities 10,972,327 35,685,334 4,219,834 17,441,500 (35,909,536 ) 32,409,459 8,606,927 33,878,200 6,274,028 18,050,105 (34,422,499 ) 32,386,761 Shareholders’ equity/(deficit): Noncontrolling interests — 63,497 — 34,900 — 98,397 — (21,519 ) — 29,857 — 8,338 Total iQIYI shareholders’ equity/(deficit) (2) 12,086,518 (7,305,785 ) 3,565,257 (8,361,933 ) 12,102,461 12,086,518 13,365,426 (6,615,396 ) 4,829,618 (8,579,260 ) 10,365,038 13,365,426 Total equity/(deficit) 12,086,518 (7,242,288 ) 3,565,257 (8,327,033 ) 12,102,461 12,184,915 13,365,426 (6,636,915 ) 4,829,618 (8,549,403 ) 10,365,038 13,373,764 Total liabilities and equity/(deficit) 23,058,845 28,443,046 7,785,091 9,114,467 (23,807,075 ) 44,594,374 21,972,353 27,241,285 11,103,646 9,500,702 (24,057,461 ) 45,760,525 15 Selected Condensed Consolidating Cash Flows Information For the year ended December 31, 2022 2023 2024 iQIYI, Inc.
Variable interest entities and their subsidiaries WFOEs Subsidiaries (other than the WFOEs) Eliminating adjustments Consolidated totals iQIYI, Inc.
Variable interest entities and their subsidiaries WFOEs Subsidiaries (other than the WFOEs) Eliminating adjustments Consolidated totals iQIYI, Inc.
Risks Related to Our Relationship with Baidu • We have limited experience operating as a stand-alone public company; • We may have conflicts of interest with Baidu and, because of Baidu’s controlling ownership interest in our company, we may not be able to resolve such conflicts on terms favorable to us; and • Our agreements with Baidu may be less favorable to us than similar agreements negotiated with unaffiliated third parties.
Risks Related to Our Relationship with Baidu • We have limited experience operating as a stand-alone public company. • We may have conflicts of interest with Baidu and, because of Baidu’s controlling ownership interest in our company, we may not be able to resolve such conflicts on terms favorable to us. • Our agreements with Baidu may be less favorable to us than similar agreements negotiated with unaffiliated third parties.
Risks Related to our ADSs • The trading price of our ADSs has been and is likely to continue to be volatile regardless of our operating performance; • If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ADSs and trading volume could decline; and • Techniques employed by short sellers may drive down the market price of our ADSs.
Risks Related to Our ADSs • The trading price of our ADSs has been and is likely to continue to be volatile regardless of our operating performance. • If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ADSs and trading volume could decline. • Techniques employed by short sellers may drive down the market price of our ADSs.
In the event we are unable to enforce these contractual arrangements, or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to direct activities that most significantly affect the economic performance of the variable interest entities, and our ability to conduct our business may be materially adversely affected.
In the event we are unable to enforce these contractual arrangements, or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to direct activities that most significantly affect the economic performance of the variable interest entities, and our ability to conduct our business may be materially adversely affected.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in the ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.
However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we and investors in the ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in our ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.
Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions.
However, such issuers will be required to comply with the filing requirements under Overseas Listing Measures if and when they pursue any future securities offerings and listings outside of mainland China, including but not limited to follow-on offerings, secondary listings and going private transactions.
However, such issuers will be required to comply with the filing requirements under Overseas Listing Measures if and when they pursue any future securities offerings and listings outside of mainland China, including but not limited to follow-on offerings, secondary listings and going private transactions.
If we fail to obtain required approval or complete other review or filing procedures, under the Overseas Listing Measures or otherwise, for any future securities offerings and listings outside of mainland China, including but not limited to follow-on offerings, secondary listings and going private transactions, we may face sanctions by the CSRC or other PRC regulatory authorities, which may include fines and penalties on our operations in mainland China, limitations on our operating privileges in mainland China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in mainland China, restrictions on or delays to our future financing transactions offshore, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
If we fail to obtain required approval or complete other review or filing procedures, under the Overseas Listing Measures or otherwise, for any future securities offerings and listings outside of mainland China, including but not limited to follow-on offerings, secondary listings and going private transactions, we may face sanctions by the CSRC or other PRC regulatory authorities, which may include fines and penalties on our operations in mainland China, limitations on our operating privileges in mainland China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in mainland China, restrictions on or delays to our future financing transactions offshore, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
There is no assurance that the mainland China government will not intervene in or impose restrictions on the ability of iQIYI, Inc., its subsidiaries, and the variable interest entities to transfer cash or assets.
There is no assurance that the mainland China government will not intervene in or impose restrictions on the ability of iQIYI, Inc., its subsidiaries, and the variable interest entities to transfer cash or assets.
As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash or assets transfers in, or out of, our Hong Kong entities.
As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash or assets transfers in, or out of, our Hong Kong entities.
Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which took effect in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of mainland China and without the consent by the Chinese securities regulatory authorities and the other competent governmental agencies, no entity or individual may provide documents or materials related to securities business overseas.
Furthermore, according to Article 177 of the PRC Securities Law, which took effect in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of mainland China and without the consent by the Chinese securities regulatory authorities and the other competent governmental agencies, no entity or individual may provide documents or materials related to securities business overseas.
The indentures for the 2025 Notes, 2026 Notes, and 2028 Notes define a “fundamental change” to include, among other things: (i) any person or group becoming a beneficial owner of our company through gaining more than 50% voting power of our ordinary share capital or more than 50% of our outstanding Class A ordinary shares; (ii) any recapitalization, reclassification or change of our ordinary shares or ADSs as a result of which these securities would be converted into, or exchanged for, stock, other securities, other property or assets or any share exchange, consolidation or merger or similar transaction pursuant to which our ordinary shares or ADSs will be converted into cash, securities or other property or any sale, lease or other transfer in one transaction or series of transaction of all or substantially all our consolidated assets, to any person other than one of our subsidiaries or variable interest entities; (iii) the adoption of any plan or proposal relating to the liquidation or dissolution of our company; (iv) our ADSs ceasing to be listed or quoted on any of The Nasdaq Global Select Market, The Nasdaq Global Market, The New York Stock Exchange (or any of their respective successors) and none of the ADSs, Class A ordinary shares, other common equity and ADSs in respect of reference property is listed or quoted on one of The Nasdaq Global Select Market, The Nasdaq Global Market, The New York Stock Exchange (or any of their respective successors) within one trading day of such cessation; or (v) any change in or amendment to the laws, regulations and rules in mainland China that prohibits us from operating substantially all of our business operations and prevents us from continuing to derive substantially all of the economic benefits from our business operations.
The indentures for the 2025 Notes, 2026 Notes, 2028 Notes and 2030 Notes define a “fundamental change” to include, among other things: (i) any person or group becoming a beneficial owner of our company through gaining more than 50% voting power of our ordinary share capital or more than 50% of our outstanding Class A ordinary shares; (ii) any recapitalization, reclassification or change of our ordinary shares or ADSs as a result of which these securities would be converted into, or exchanged for, stock, other securities, other property or assets or any share exchange, consolidation or merger or similar transaction pursuant to which our ordinary shares or ADSs will be converted into cash, securities or other property or any sale, lease or other transfer in one transaction or series of transaction of all or substantially all our consolidated assets, to any person other than one of our subsidiaries or variable interest entities; (iii) the adoption of any plan or proposal relating to the liquidation or dissolution of our company; (iv) our ADSs ceasing to be listed or quoted on any of The Nasdaq Global Select Market, The Nasdaq Global Market, The New York Stock Exchange (or any of their respective successors) and none of the ADSs, Class A ordinary shares, other common equity and ADSs in respect of reference property is listed or quoted on one of The Nasdaq Global Select Market, The Nasdaq Global Market, The New York Stock Exchange (or any of their respective successors) within one trading day of such cessation; or (v) any change in or amendment to the laws, regulations and rules in mainland China that prohibits us from operating substantially all of our business operations and prevents us from continuing to derive substantially all of the economic benefits from our business operations.
The PRC Anti-monopoly Law and the implementing rules (i) require that where concentration of undertakings reaches the filing threshold stipulated by the State Council, a filing must be made with the anti-monopoly authority before the parties implement the concentration, (ii) prohibit a business operator with a dominant market position from abusing such position, such as by selling commodities at unfairly high prices or buying commodities at unfairly low prices, selling products at prices below cost without any justifiable cause, or refusing to trade with a trading party without any justifiable cause, and (iii) prohibit business operators from entering into monopoly agreements, which refer to agreements that eliminate or restrict competition with competing business operators or transaction counterparties, such as by boycotting transactions, fixing or changing the price of commodities, limiting the output of commodities or fixing the price of commodities for resale to third parties, unless the agreements satisfy certain exemptions under the PRC Anti-monopoly Law.
The PRC Anti-monopoly Law and the implementing rules (i) require that where concentration of undertakings reaches the filing threshold stipulated by the State Council, a filing must be made with the anti-monopoly authority before the parties implement the concentration, (ii) prohibit a business operator with a dominant market position from abusing such position, such as by selling commodities at unfairly high prices or buying commodities at unfairly low prices, selling products at prices below cost without any justifiable cause, or refusing to trade with a trading party without any justifiable 56 cause, and (iii) prohibit business operators from entering into monopoly agreements, which refer to agreements that eliminate or restrict competition with competing business operators or transaction counterparties, such as by boycotting transactions, fixing or changing the price of commodities, limiting the output of commodities or fixing the price of commodities for resale to third parties, unless the agreements satisfy certain exemptions under the PRC Anti-monopoly Law.
The market price for our ADSs may continue to be volatile and subject to wide fluctuations in response to factors including, but not limited to, the following: • actual or anticipated fluctuations in our quarterly results of operations; • changes in financial estimates by securities research analysts; • conditions in online entertainment markets; • announcements of new investments, acquisitions by our company or our competitors, strategic partnerships, joint ventures or capital commitments; • addition or departure of key personnel; • fluctuations of exchange rates between RMB and the U.S. dollar; • litigation, government investigation or other legal or regulatory proceeding; and general economic or political conditions in mainland China or elsewhere in the world.
The market price for our ADSs may continue to be volatile and subject to wide fluctuations in response to factors including, but not limited to, the following: • actual or anticipated fluctuations in our quarterly results of operations; • changes in financial estimates by securities research analysts; • conditions in online entertainment markets; • announcements of new investments, acquisitions by our company or our competitors, strategic partnerships, joint ventures or capital commitments; 58 • addition or departure of key personnel; • fluctuations of exchange rates between RMB and the U.S. dollar; • litigation, government investigation or other legal or regulatory proceeding; and general economic or political conditions in mainland China or elsewhere in the world.
If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the SEC, we would be identified as a 6 Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year.
We may also face sanctions by the CSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in mainland China, limitations on our operating privileges in mainland China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in mainland China, or 58 other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price and listing status of our ADSs.
We may also face sanctions by the CSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in mainland China, limitations on our operating privileges in mainland China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in mainland China, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price and listing status of our ADSs.
Undistributed profits earned by foreign-invested enterprises prior to January 1, 2008 are exempted from any withholding tax. The Cayman Islands, where iQIYI, Inc., the direct parent company of our mainland China subsidiaries Beijing QIYI Century and Chongqing QIYI Tianxia Science & Technology Co., Ltd., is incorporated, 60 does not have such a tax treaty with China.
Undistributed profits earned by foreign-invested enterprises prior to January 1, 2008 are exempted from any withholding tax. The Cayman Islands, where iQIYI, Inc., the direct parent company of our mainland China subsidiaries Beijing QIYI Century and Chongqing QIYI Tianxia Science & Technology Co., Ltd., is incorporated, does not have such a tax treaty with China.
Moreover, failure to comply with SAFE registration described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions. 64 We have notified all PRC residents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents to complete the foreign exchange registrations.
Moreover, failure to comply with SAFE registration described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions. We have notified all PRC residents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents to complete the foreign exchange registrations.
Any such tax may reduce the returns on your investment in the ADSs. 66 Any failure or perceived failure to comply with the anti-monopoly, anti-unfair competition, and consumer rights protection laws and regulations may result in governmental investigations or enforcement actions, litigation or claims against us and could have an adverse effect on our business, financial condition and results of operations.
Any such tax may reduce the returns on your investment in the ADSs. Any failure or perceived failure to comply with the anti-monopoly, anti-unfair competition, and consumer rights protection laws and regulations may result in governmental investigations or enforcement actions, litigation or claims against us and could have an adverse effect on our business, financial condition and results of operations.
Members may cancel or decide not to renew our service for many reasons, including a perception that they do not use the service sufficiently, dissatisfaction with payment options, the need to cut household expenses, dissatisfaction with the content that is available on our platform, a perception that competitive services provide a better value or experience, and customer service issues that are not satisfactorily resolved.
Members may cancel or decide not to renew our service for many reasons, including a perception that they do not use the service sufficiently, dissatisfaction with payment options, the need to cut household expenses, dissatisfaction with the content that is available on our platform, a perception that competitive services provide a better value or experience, and customer service issues that are not 20 satisfactorily resolved.
We have completed filing with the competent SAFE branch for our equity incentive plans and are required to update our filing periodically or in the event of any material changes. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law. See “Item 4.
We have completed filing with the competent SAFE branch for our equity incentive plans and are required to update our filing periodically or in the event of any material changes. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our 55 directors, executive officers and employees under PRC law. See “Item 4.
As the interpretation and implementation of the Personal Information Protection Law shall be determined in accordance with the laws and regulations in force at the time, we cannot assure you that we will be able to comply with the Personal Information Protection Law in all respects, or that regulatory authorities will not order us to rectify or terminate our current practice of collecting and processing sensitive personal information.
As the interpretation and implementation of the PRC Personal Information Protection Law shall be determined in accordance with the laws and regulations in force at the time, we cannot assure you that we will be able to comply with the PRC Personal Information Protection Law in all respects, or that regulatory authorities will not order us to rectify or terminate our current practice of collecting and processing sensitive personal information.
The costs relating to any data breach could be material, and we currently do not carry insurance against the risk of a data breach. For these reasons, should an unauthorized intrusion into our users’ data occur, our business could be adversely affected. 40 Our security measures may also be breached due to employee error, malfeasance or otherwise.
The costs relating to any data breach could be material, and we currently do not carry insurance against the risk of a data breach. For these reasons, should an unauthorized intrusion into our users’ data occur, our business could be adversely affected. Our security measures may also be breached due to employee error, malfeasance or otherwise.
Share Ownership—Enforceability of Civil Liabilities.” 71 You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited (depending on the remedies you are seeking), because we are incorporated under Cayman Islands law. We are an exempted company incorporated under the laws of the Cayman Islands with limited liability.
Share Ownership—Enforceability of Civil Liabilities.” You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited (depending on the remedies you are seeking), because we are incorporated under Cayman Islands law. We are an exempted company incorporated under the laws of the Cayman Islands with limited liability.
However, since it is relatively new, its interpretation and implementation shall be determined in accordance with the laws and regulations in force at the time. For instance, under the Foreign Investment Law, “foreign investment” refers to the investment activities directly or indirectly 55 conducted by foreign individuals, enterprises or other entities in mainland China.
However, since it is relatively new, its interpretation and implementation shall be determined in accordance with the laws and regulations in force at the time. For instance, under the Foreign Investment Law, “foreign investment” refers to the investment activities directly or indirectly conducted by foreign individuals, enterprises or other entities in mainland China.
The PRC government has significant oversight and discretion over the conduct of our business, and it may influence our operations as the government deems appropriate to advance regulatory and 59 societal goals and policy positions, which could result in a material adverse change in our operation, and our ordinary shares and ADSs may decline in value or become worthless.
The PRC government has significant oversight and discretion over the conduct of our business, and it may influence our operations as the government deems appropriate to advance regulatory and societal goals and policy positions, which could result in a material adverse change in our operation, and our ordinary shares and ADSs may decline in value or become worthless.
Also, the PRC government has recently promulgated certain regulations and rules to exert more oversight and control over offerings that are conducted overseas and foreign investment in mainland China-based issuers. Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
Also, the PRC government has recently promulgated certain regulations and rules to exert more oversight and control over offerings that are 50 conducted overseas and foreign investment in mainland China-based issuers. Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price of or trading volume for our ADSs to decline. 69 Techniques employed by short sellers may drive down the market price of our ADSs.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price of or trading volume for our ADSs to decline. Techniques employed by short sellers may drive down the market price of our ADSs.
In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions.
In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose 54 vehicle undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions.
Risk Factors—Risks Related to Doing Business in Mainland China—Uncertainties with respect to the legal systems in the jurisdictions where we operate could adversely affect us.” 9 Cash Flows through Our Organization iQIYI, Inc. is a holding company with no material operations of its own.
Risk Factors—Risks Related to Doing Business in Mainland China—Uncertainties with respect to the legal systems in the jurisdictions where we operate could adversely affect us.” Cash Flows through Our Organization iQIYI, Inc. is a holding company with no material operations of its own.
Operating and Financial Review and Prospects—B. Liquidity and Capital Resources — Holding Company Structure.” Our subsidiaries’ ability to distribute dividends is based upon their distributable earnings. We have in place a centralized cash management policy and established stringent controls and procedures for cash flows within our organization.
Operating and Financial Review and Prospects—B. Liquidity and Capital Resources — Holding Company Structure.” Our subsidiaries’ ability to distribute dividends is based upon their distributable earnings. 7 We have in place a centralized cash management policy and established stringent controls and procedures for cash flows within our organization.
To the extent cash in our business is in mainland China or an entity in mainland China, such cash may not be available to fund operations or for other use outside of mainland China due to restrictions and limitations imposed by the governmental authorities on the ability of us, our subsidiaries, or the variable interest entities to transfer cash outside of the PRC.
To the extent cash in our business is in mainland China or an entity in mainland China, such cash may not be available to fund operations or for other use outside of mainland China due 52 to restrictions and limitations imposed by the governmental authorities on the ability of us, our subsidiaries, or the variable interest entities to transfer cash outside of the PRC.
As of the date of this annual report, we have not been subject to any cybersecurity review made by the CAC. On February 17, 2023, the CSRC published the Interim Administrative Measures on Overseas Securities Offering and Listing by the Domestic Enterprises, or the Overseas Listing Measures , which took effect on March 31, 2023.
As of the date of this annual report, we have not been subject to any cybersecurity review made by the CAC. 9 On February 17, 2023, the CSRC published the Interim Administrative Measures on Overseas Securities Offering and Listing by the Domestic Enterprises, or the Overseas Listing Measures , which took effect on March 31, 2023.
Our historical results for any period are not necessarily indicative of results to be expected for any future period. 13 The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” below.
Our historical results for any period are not necessarily indicative of results to be expected for any future period. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” below.
We shall strictly supervise content we generate ourselves and the reprogramed videos uploaded by our users and shall not facilitate the dissemination of defective audio-video programs. New laws and regulations may be adopted from time to time to prohibit or restrict internet platforms from distribution of certain types of videos and information.
We shall strictly supervise content we generate ourselves and the reprogramed videos uploaded by our users and shall not facilitate the dissemination of defective audio-video programs. 30 New laws and regulations may be adopted from time to time to prohibit or restrict internet platforms from distribution of certain types of videos and information.
In particular, the PRC regulators have been increasingly focused on inspection and regulation on potential noncompliance with anti-unfair competition and anti-monopoly 67 related laws recently. For example, in April 2021, the SAMR, the CAC and the State Administration of Taxation, held an administrative guidance meeting for internet platform enterprises.
In particular, the PRC regulators have been increasingly focused on inspection and regulation on potential noncompliance with anti-unfair competition and anti-monopoly related laws recently. For example, in April 2021, the SAMR, the CAC and the State Administration of Taxation, held an administrative guidance meeting for internet platform enterprises.
Various tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years, or announced their plans to enact such legislation in future years. We will continue to evaluate the impact of such legislative initiatives in the tax jurisdictions in which we operate.
Various tax jurisdictions have either enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years, or announced their plans to enact such legislation in future years. We will continue to evaluate the impact of such legislative initiatives in the tax jurisdictions in which we operate.
We cannot assure you that we will be successful in minimizing the frequency or duration of service interruptions. As the number of our users increases and our users generate more content on our platform, we may be required to expand and adapt our technology and infrastructure to continue to reliably store and analyze this content.
We cannot assure you that we will be successful in minimizing the frequency or duration of service interruptions. 36 As the number of our users increases and our users generate more content on our platform, we may be required to expand and adapt our technology and infrastructure to continue to reliably store and analyze this content.
Also, any harm to our users’ electronic devices caused by software used in our operations could have an adverse effect on our business, results of operations and financial condition. 43 Any lack of requisite permits for any of our internet video and other content or any of our business may expose us to regulatory sanctions.
Also, any harm to our users’ electronic devices caused by software used in our operations could have an adverse effect on our business, results of operations and financial condition. Any lack of requisite permits for any of our internet video and other content or any of our business may expose us to regulatory sanctions.
With respect to loans to the mainland China subsidiaries by our company, (i) if the mainland China subsidiaries adopt the traditional foreign exchange administration mechanism, or the Current Foreign Debt mechanism, the outstanding amount of the loans shall not exceed the difference between the total investment and the registered capital of the mainland China subsidiaries and there is, in effect, no statutory limit on the amount of loans that we can make to our mainland China subsidiaries under this circumstance because we can increase the registered capital of our mainland China subsidiaries by making capital contributions to them, subject to the completion of the required registrations, and the difference between the total investment and the registered capital will increase accordingly; and (ii) if the mainland China subsidiaries adopt the foreign exchange administration mechanism as provided in PBOC Notice No. 9, or the Notice No. 9 Foreign Debt mechanism, the risk-weighted outstanding amount of the loans, which shall be calculated based on the formula provided in PBOC Notice No. 9, shall not exceed 200% of the net asset of the mainland China subsidiary (the “ Risk-Weighted Approach and the Net Asset Limits ”).
With respect to loans to the mainland China subsidiaries by our company, (i) if the mainland China subsidiaries adopt the traditional foreign exchange administration mechanism, or the Current Foreign Debt Mechanism, the outstanding amount of the loans shall not exceed the difference between the total investment and the registered capital of the mainland China subsidiaries and there is, in effect, no statutory limit on the amount of loans that we can make to our mainland China subsidiaries under this circumstance because we can increase the registered capital of our mainland China subsidiaries by making capital contributions to them, subject to the completion of the required registrations, and the difference between the total investment and the registered capital will increase accordingly; and (ii) if the mainland China subsidiaries adopt the foreign exchange administration mechanism as provided in PBOC Notice No. 9, or the Notice No. 9 Foreign Debt Mechanism, the risk-weighted outstanding amount of the loans, which shall be calculated based on the formula provided in PBOC Notice No. 9, shall not exceed 200% of the net asset of the mainland China subsidiary, known as the Risk-Weighted Approach and the Net Asset Limits .
Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.
Many of these laws and regulations are subject to change and uncertain 21 interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.
We may be involved with legal or other disputes with third-party platforms that may affect our relationship with such platforms or have an adverse effect on our business. 35 We face risks, such as unforeseen costs and potential liability in connection with content we produce, license or distribute through our platform.
We may be involved with legal or other disputes with third-party platforms that may affect our relationship with such platforms or have an adverse effect on our business. We face risks, such as unforeseen costs and potential liability in connection with content we produce, license or distribute through our platform.
If any of these assumptions does not materialize, or if the performance of our business is not consistent with such assumptions, the carrying amount of the assets may exceed our recoverable amount, and our assets may be impaired. As a result, we may be required to significantly write-off our assets and record a significant impairment loss.
If any of these assumptions does not materialize, or if the performance of our business is not consistent with such assumptions, the carrying amount of the assets may 38 exceed our recoverable amount, and our assets may be impaired. As a result, we may be required to significantly write-off our assets and record a significant impairment loss.
In order to comply with existing laws and regulations and new laws and regulations that may be enacted in the future, we may need to devote significant resources and efforts, including restructuring affected businesses, adjusting investment activities and adjusting our business strategy, which may adversely affect our business operation, growth prospects and reputation.
In order to comply with existing laws and 57 regulations and new laws and regulations that may be enacted in the future, we may need to devote significant resources and efforts, including restructuring affected businesses, adjusting investment activities and adjusting our business strategy, which may adversely affect our business operation, growth prospects and reputation.
Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” Selected Consolidated Financial Data The following selected consolidated statements of comprehensive (loss)/income data for the years ended December 31, 2021, 2022 and 2023, selected consolidated balance sheet data as of December 31, 2022 and 2023 and selected consolidated cash flows data for the years ended December 31, 2021, 2022 and 2023 have been derived from our audited consolidated financial statements included in this annual report beginning on page F-2.
Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” Selected Consolidated Financial Data The following selected consolidated statements of comprehensive (loss)/income data for the years ended December 31, 2022, 2023 and 2024, selected consolidated balance sheet data as of December 31, 2023 and 2024 and selected consolidated cash flows data for the years ended December 31, 2022, 2023 and 2024 have been derived from our audited consolidated financial statements included in this annual report beginning on page F-2.
If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures and our reputation and relationships with users could be harmed, we may lose users and customers and we may be exposed to significant legal and financial risks, including legal claims and regulatory fines and penalties.
If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures and our reputation and relationships with users could be harmed, we may lose users and customers and we may be exposed to significant legal and financial 34 risks, including legal claims and regulatory fines and penalties.
Further, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract, with certain exceptions, must have an unlimited term, subject to certain exceptions. With certain exceptions, an employer must pay severance to an employee where a labor contract is terminated or expires.
Further, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered 53 into twice consecutively, the resulting contract, with certain exceptions, must have an unlimited term, subject to certain exceptions. With certain exceptions, an employer must pay severance to an employee where a labor contract is terminated or expires.
GAAP. We rely on contractual arrangements with the variable interest entities and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control. We have relied and expect to continue to rely on contractual arrangements with variable interest entities and their shareholders to operate our business in mainland China.
We rely on contractual arrangements with the variable interest entities and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control. We have relied and expect to continue to rely on contractual arrangements with variable interest entities and their shareholders to operate our business in mainland China.
Shortages in the availability of foreign currency may temporarily delay the ability of our mainland China subsidiaries and the variable interest entities to remit sufficient foreign currency to pay dividends or make distributions to shareholder of our securities, or other payments to us, or otherwise satisfy their foreign currency denominated obligations.
Shortages in the availability of foreign currency may temporarily delay the ability of our mainland China subsidiaries and the 8 variable interest entities to remit sufficient foreign currency to pay dividends or make distributions to shareholder of our securities, or other payments to us, or otherwise satisfy their foreign currency denominated obligations.
According to the Notice on Overseas Listing Measures, issuers that have already been listed in an overseas market by March 31, 2023, the date on which the Overseas Listing Measures took effect, such as our company, are not required to make any immediate filing.
According to this notice, issuers that have already been listed in an overseas market by March 31, 2023, the date on which the Overseas Listing Measures took effect, such as our company, are not required to make any immediate filing.
Risk Factors—Risks Related to Doing Business in Mainland China—Uncertainties with respect to the legal systems in the jurisdictions where we operate could adversely affect us” on page 57; • Due to the nature of our industry, the PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could result in a material adverse change in our operations and the value of our ADSs, or significantly limit or completely hinder our ability to offer or continue to offer securities to investors, and cause the value of such securities to significantly decline or become worthless.
Risk Factors—Risks Related to Doing Business in Mainland China—Uncertainties with respect to the legal systems in the jurisdictions where we operate could adversely affect us” on page 50. • Due to the nature of our industry, the PRC government’s significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could result in a material adverse change in our operations and the value of our ADSs, or significantly limit or completely hinder our ability to offer or continue to offer securities to investors, and cause the value of such securities to significantly decline or become worthless.
These interruptions were caused by (i) overload of our 42 servers; (ii) unexpected overflow of user traffic; (iii) service malfunction of payment gateway; and (iv) service malfunction of the telecommunications operators, such as power outage of internet data centers or network transmission congestion.
These interruptions were caused by (i) overload of our servers; (ii) unexpected overflow of user traffic; (iii) service malfunction of payment gateway; and (iv) service malfunction of the telecommunications operators, such as power outage of internet data centers or network transmission congestion.
If our shares and ADSs are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the United States.
If our shares and ADSs are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares 48 will develop outside of the United States.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” on page 50; • We rely on contractual arrangements with the variable interest entities and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” on page 44. • We rely on contractual arrangements with the variable interest entities and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control.
Furthermore, as a technology-based entertainment company, we frequently introduce innovative products 34 and services to our users and advertising customers in order to capture new market opportunities. However, we cannot assure you that our products and services will be well received by our users and advertising customers.
Furthermore, as a technology-based entertainment company, we frequently introduce innovative products and services to our users and advertising customers in order to capture new market opportunities. However, we cannot assure you that our products and services will be well received by our users and advertising customers.
Protection of intellectual property rights in mainland China may not be as effective as in the United States or other jurisdictions, and as a result, we may not be able to adequately protect our intellectual property rights, which could adversely affect our revenues and competitive position.
Protection of intellectual 33 property rights in mainland China may not be as effective as in the United States or other jurisdictions, and as a result, we may not be able to adequately protect our intellectual property rights, which could adversely affect our revenues and competitive position.
A person who commits any such offence under the ordinance is subject to a fine of up to HK$500,000 and imprisonment of up to five years. 41 A majority of the advertisements shown on our platform are provided to us by third parties.
A person who commits any such offence under the ordinance is subject to a fine of up to HK$500,000 and imprisonment of up to five years. A majority of the advertisements shown on our platform are provided to us by third parties.
To the 50 extent we cannot maintain our cooperative relationships with Baidu at reasonable prices or at all, we will need to source other business partners to provide services, which could result in material and adverse effects to our business and results of operations.
To the extent we cannot maintain our cooperative relationships with Baidu at reasonable prices or at all, we will need to source other business partners to provide services, which could result in material and adverse effects to our business and results of operations.
Due to the improving monetization prospects, internet video streaming platforms are generating more revenues and are competing aggressively to license popular content titles, which have in turn led to 33 increases in licensing fees of professionally produced content in general.
Due to the improving monetization prospects, internet video streaming platforms are generating more revenues and are competing aggressively to license popular content titles, which have in turn led to increases in licensing fees of professionally produced content in general.
Risks Related to Our Business and Industry • We had historically incurred net losses, and may incur losses again in the future; • If we fail to anticipate user preferences and provide high-quality content, especially popular original content, in a cost-effective manner, we may not be able to attract and retain users to remain competitive; • If we fail to procure content from content providers upon terms acceptable to us, our business may be materially and adversely affected; • If our efforts to retain members and attract new members are not successful, our business and results of operations will be materially and adversely affected; • If we fail to retain existing or attract new advertising customers to advertise on our platform, maintain and increase their wallet share of advertising budget or if we are unable to collect accounts receivable in a timely manner, our financial condition and results of operations may be materially and adversely affected; • Our business is subject to complex and evolving Chinese and international laws and regulations regarding cybersecurity, information security, privacy and data protection.
Risk Factors.” Risks Related to Our Business and Industry • We had historically incurred net losses, and may incur losses again in the future. • If we fail to anticipate user preferences and provide high-quality content, especially popular original content, in a cost-effective manner, we may not be able to attract and retain users to remain competitive. • If we fail to procure content from content providers upon terms acceptable to us, our business may be materially and adversely affected. • If our efforts to retain members and attract new members are not successful, our business and results of operations will be materially and adversely affected. • If we fail to retain existing or attract new advertising customers to advertise on our platform, or fail to maintain and increase their wallet share of advertising budget or if we are unable to collect accounts receivable in a timely manner, our financial condition and results of operations may be materially and adversely affected. • Our business is subject to complex and evolving Chinese and international laws and regulations regarding cybersecurity, information security, privacy and data protection.
Though it does not explicitly classify contractual arrangements as a form of foreign investment, there is no assurance that foreign investment via contractual arrangement would not be interpreted as a type of indirect foreign investment activities under the definition in the future.
Though it does not explicitly classify contractual arrangements as a form of foreign investment, there is no 47 assurance that foreign investment via contractual arrangement would not be interpreted as a type of indirect foreign investment activities under the definition in the future.
In addition, the circumstances in which a shareholder of a Cayman Islands company may sue the company derivatively, and the procedures and defenses that may be available to the company, may result in the rights of shareholders of a Cayman Islands company being more limited than those of shareholders of a company organized in the United States.
In addition, the circumstances in which a shareholder of a Cayman Islands company may sue the company derivatively, and the procedures and 61 defenses that may be available to the company, may result in the rights of shareholders of a Cayman Islands company being more limited than those of shareholders of a company organized in the United States.
In addition, we use various marketing and sales strategies to enroll members, including but not limited to discounts and bundled sales, we may not be able 24 to retain those members if our promotion strategy fails or discontinue.
In addition, we use various marketing and sales strategies to enroll members, including but not limited to discounts and bundled sales, we may not be able to retain those members if our promotion strategy fails or discontinue.
We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ADSs. 75
We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ADSs.
In addition, we may not have obtained licenses for all content we offer and the scope, type and term of the licenses we obtained for certain content may not be broad enough to cover all fashions we currently employ or may employ in the future.
In addition, we may not have obtained 32 licenses for all content we offer and the scope, type and term of the licenses we obtained for certain content may not be broad enough to cover all fashions we currently employ or may employ in the future.
Deterioration of our cash flow position could materially and adversely affect our ability to service our indebtedness and continue our operations; 20 • We have significant working capital requirements and have in the past experienced working capital deficits.
Deterioration of our cash flow position could materially and adversely affect our ability to service our indebtedness and continue our operations. • We have significant working capital requirements and have in the past experienced working capital deficits.
In addition, certain internet video streaming platforms may continue to derive their revenues from providing content that infringes third-party copyright and may not monitor their platforms for any such infringing content.
In addition, certain internet video streaming platforms may continue to derive their revenues from providing content that infringes third-party copyright and may not monitor their platforms for any such infringing 28 content.
Risk Factors—Risks Related to Doing Business in Mainland China—The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs” on page 58; • Our mainland China subsidiaries and the variable interest entities are subject to certain restrictions with respect to paying dividends or make distributions to shareholders of our securities, or otherwise transferring any of their net assets to us.
Risk Factors—Risks Related to Doing Business in Mainland China—The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs” on page 50. • Our mainland China subsidiaries and the variable interest entities are subject to certain restrictions with respect to paying dividends or make distributions to shareholders of our securities, or otherwise transferring any of their net assets to us.
Risk Factors—Risks Related to Doing Business in Mainland China—We are subject to PRC laws and regulations governing loans to and direct investment in mainland China entities by offshore holding companies and currency conversion, which may delay or prevent us to make loans to or make additional capital contributions to our mainland China subsidiaries and the variable interest entities, which could materially and adversely affect our liquidity and our ability to fund and expand our business” on page 59.
Risk Factors—Risks Related to Doing Business in Mainland China—We are subject to PRC laws and regulations governing loans to and direct investment in mainland China entities by offshore holding companies and currency conversion, which may delay or prevent us to make loans to or make additional capital contributions to our mainland China subsidiaries and the variable interest entities, which could materially and adversely affect our liquidity and our ability to fund and expand our business” on page 52.
Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the variable interest entities and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control” on page 52; and • Any failure by the variable interest entities or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.
Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with the variable interest entities and their shareholders for our business operations, which may not be as effective as direct ownership in providing operational control” on page 46. • Any failure by the variable interest entities or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business.
SAFE Circulars 19 and 16 launched a nationwide reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises and allows foreign-invested enterprises to settle their foreign exchange capital at their discretion, but continues to prohibit foreign-invested enterprises from using the Renminbi fund converted from their foreign exchange capitals for expenditure beyond their business scopes, and also prohibit foreign-invested enterprises from using such Renminbi fund to provide loans to persons other than affiliates unless otherwise permitted under its business scope.
SAFE Circular 16 and SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises and allows foreign-invested enterprises to settle their foreign exchange capital at their discretion, but continues to prohibit foreign-invested enterprises from using the Renminbi fund converted from their foreign exchange capitals for expenditure beyond their business scopes, and also prohibit foreign-invested enterprises from using such Renminbi fund to provide loans to persons other than affiliates unless otherwise permitted under its business scope.
See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Mainland China—Changes in mainland China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations” on page 57; • Uncertainties with respect to the legal systems in the jurisdictions where we operate could adversely affect us.
See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Mainland China—Changes in mainland China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations” on page 50. • Uncertainties with respect to the legal systems in the jurisdictions where we operate could adversely affect us.
The National People’s Congress approved the Foreign Investment Law on March 15, 2019 and the State Council approved the Regulation on Implementing the Foreign Investment Law on December 12, 2019, effective from January 1, 2020, to replace the trio of existing laws regulating foreign investment in mainland China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations.
The National People’s Congress approved the Foreign Investment Law on March 15, 2019 and the State Council approved the Regulation on Implementing the Foreign Investment Law on December 12, 2019, effective from January 1, 2020, to replace the trio of laws previously regulating foreign investment in mainland China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations.
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC persons or entities to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, adopted by six PRC regulatory agencies in 2006 and amended in 2009, require an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC persons or entities to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
Accordingly, we treat the variable interest entities as our consolidated entities under U.S. GAAP and we consolidate the financial results of the variable interest entities in our consolidated financial statements in accordance with U.S. GAAP.
Accordingly, we treat the 10 variable interest entities as our consolidated entities under U.S. GAAP and we consolidate the financial results of the variable interest entities in our consolidated financial statements in accordance with U.S. GAAP.
Risk Factors—Risks Related to Doing Business in Mainland China—The approval of or the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore listings and capital raising activities under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or filing” on page 56; • Our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic, social conditions and government policies in mainland China generally.
Risk Factors—Risks Related to Doing Business in Mainland China—The approval of or the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore listings and capital raising activities under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or filing” on page 49. 18 • Our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic, social conditions and government policies in mainland China generally.
See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Any failure by the variable interest entities or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business” on page 52.
See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Any failure by the variable interest entities or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business” on page 46.
The risks associated with any such negative publicity or incorrect information cannot be completely eliminated or mitigated and may materially harm our reputation, business, financial condition and results of operations. 46 A severe or prolonged downturn in mainland China or global economy could materially and adversely affect our business and financial condition.
The risks associated with any such negative publicity or incorrect information cannot be completely eliminated or mitigated and may materially harm our reputation, business, financial condition and results of operations. 39 A severe or prolonged downturn in mainland China or global economy could materially and adversely affect our business and financial condition.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeWe have a diversified portfolio that includes: • original dramas, such as The Knockout (狂飙) , Destined (长风渡) , and Story of Kunning Palace (宁安如梦) , which were launched in 2023 and broke our internal 10,000 iQIYI popularity index score; • variety shows, such as The Big Band ( 乐队的夏天) , The Detectives’ Adventures (萌探探探案) , The Rap of China (中国说唱巅峰对决) , Super Sketch Show ( 一年一度喜剧大赛) and innovative new IP Become A Farmer (种地吧) ; • movies, such as Tough Out (棒！少年) , Break Through the Darkness (扫黑·决战) , Northeastern Bro (东北恋哥) , The Comeback (零号追杀) and Wolf Hiding (怒潮) ; and • cartoons and animations, such as Deer Squad (无敌鹿战队) , Princess Doremi (音乐公主爱美莉), The World of Fantasy (灵域) , Love Between Fairy and Devil (苍兰决) , and The Great Ruler (大主宰年番) . iQIYI obtains the IP through production, adaptation or purchase from third parties, while the partners, typically established entertainment production companies, are responsible for content development and production. iQIYI maintains a high degree of control during the content development and production process.
Biggest changeWe have a diversified portfolio that includes: • Original dramas, such as War of Faith ( 追风者 ) , Strange Tales of Tang Dynasty II To the West ( 唐朝诡事录之西行 ) , and Drifting Away ( 漂白 ) which broke our internal 10,000 iQIYI popularity index score; • Variety shows, such as the multi-season The Rap of China ( 新说唱 ), Become A Farmer ( 种地吧 ) , and new IP The King of Stand-up Comedy ( 喜剧之王单口季 ) ; • Movies, such as The Comeback ( 零号追杀 ), Rob & Roll ( 临时劫案 ), and Wolf Hiding ( 怒潮 ) ; and • Cartoons and animations, such as the multi-season Deer Squad ( 无敌鹿战队 ) and Princess Doremi ( 音乐公主爱美莉 ), the long-running The Great Ruler ( 大主宰年番 ), and new IP How Dare You ( 成何体统 ) . iQIYI obtains the IP through production, adaptation or purchase from third parties, while the partners, typically established entertainment production companies, are responsible for content development and production. iQIYI maintains a high degree of control during the content development and production process.
Subsequently, we established iQIYI Film Group HK Limited in June 2017, and Beijing iQIYI New Media Science and Technology Co., Ltd., or iQIYI New Media, in July 2017. iQIYI Film Group Limited holds 100% of the equity of iQIYI Film Group HK Limited, which in turn holds 100% of equity in iQIYI New Media. iQIYI Pictures (Beijing) Co., Ltd., or iQIYI Pictures, was established in December 2014, and Beijing iQIYI Intelligent Entertainment Technology Co., Ltd., or Intelligent Entertainment (previously known as Beijing iQIYI Cinema Management Co., Ltd., or Beijing iQIYI Cinema), was established in June 2017.
Subsequently, we established iQIYI Film Group HK Limited in June 2017, and Beijing iQIYI New Media Science and Technology Co., Ltd. in July 2017. iQIYI Film Group Limited holds 100% of the equity of iQIYI Film Group HK Limited, which in turn holds 100% of equity in iQIYI New Media. iQIYI Pictures (Beijing) Co., Ltd., or iQIYI Pictures, was established in December 2014, and Beijing iQIYI Intelligent Entertainment Technology Co., Ltd., or Intelligent Entertainment (previously known as Beijing iQIYI Cinema Management Co., Ltd., or Beijing iQIYI Cinema), was established in June 2017.
With respect to the board of directors and the board of supervisors, the Amended PRC Company Law eliminates the upper limit on the number of the directors of a limited liability company, and stipulates that the board of directors of a limited liability company without a board of supervisors including an employee representative among its members, but with more than 300 employees shall have an employee representative acting as a director, who shall be democratically elected by the company’s employees through a general assembly of employees or other democratic forms.
With respect to the board of directors and the board of supervisors, the amended PRC Company Law eliminates the upper limit on the number of directors of a limited liability company and stipulates that the board of directors of a limited liability company without a board of supervisors, including an employee representative among its members, but with more than 300 employees, shall have an employee representative acting as a director, who shall be democratically elected by the company’s employees through a general assembly of employees or other democratic forms.
In addition, in accordance with the Decisions of the State Council on the Entry of the Non-state-owned Capital into the Cultural Industry, promulgated by the State Council on April 13, 2005, and the Opinions on Introducing Foreign Investments to the Cultural Sector, jointly adopted by five PRC regulatory agencies and the Negative List, foreign-invested enterprises are not allowed to engage in the above-mentioned services.
In addition, in accordance with the Decisions of the State Council on the Entry of Non-state-owned Capital into the Cultural Industry, promulgated by the State Council on April 13, 2005, and the Opinions on Introducing Foreign Investments to the Cultural Sector, jointly adopted by five PRC regulatory agencies and the Negative List, foreign-invested enterprises are not allowed to engage in the above-mentioned services.
In addition, foreign-invested enterprises are not allowed to engage in the above-mentioned services. Both Beijing iQIYI and Shanghai Zhong Yuan have obtained the Radio and Television Program Production and Operation Permit for their respective businesses.
In addition, foreign-invested enterprises are not allowed to engage in the services mentioned above. Both Beijing iQIYI and Shanghai Zhong Yuan have obtained the Radio and Television Program Production and Operation Permit for their respective businesses.
Copyright owners enjoy certain legal rights, including right of publication, right of authorship and right of reproduction. The PRC Copyright Law as revised in 2001 extends copyright protection to internet activities and products disseminated over the internet. In addition, the PRC Copyright Law provides for a voluntary registration system administered by the China Copyright Protection Center.
Copyright owners enjoy certain legal rights, including the right of publication, the right of authorship, and the right of reproduction. The PRC Copyright Law, as revised in 2001, extends copyright protection to internet activities and products disseminated over the internet. In addition, the PRC Copyright Law provides for a voluntary registration system administered by the China Copyright Protection Center.
If an ICP operator knowingly transmits infringing content or fails to take remedial actions after receipt of a notice of infringement that harms public interest, the ICP operator could be subject to administrative penalties, including an order to cease infringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.
If an ICP operator knowingly transmits infringing content or fails to take remedial actions after receipt of a notice of infringement that harms the public interest, the ICP operator could be subject to administrative penalties, including an order to cease infringing activities, confiscation by the authorities of all income derived from the infringement activities, or payment of fines.
On October 23, 2019, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or SAFE Notice 28, which permits non-investment foreign-invested enterprises to use their capital funds to make equity investments in mainland China, with genuine investment projects and in compliance with effective foreign investment restrictions and other applicable laws.
On October 23, 2019, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or SAFE Notice 28, which permits non-investment foreign-invested enterprises to use their capital funds to make equity investments in mainland China, with genuine investment projects, in compliance with effective foreign investment restrictions, and other applicable laws.
Based on SAFE Circular 13 and other laws and regulations relating to foreign exchange, when setting up a new foreign-invested enterprise, the foreign invested enterprise shall register with the bank located at its registered place after obtaining the business license, and if there is any change in capital or other changes relating to the basic information of the foreign-invested enterprise, including, without limitation any increase in its registered capital or total investment, the foreign invested enterprise shall register such changes with the bank located at its registered place after obtaining the approval from or completing the filing with competent authorities.
Based on SAFE Circular 13 and other laws and regulations relating to foreign exchange, when setting up a new foreign-invested enterprise, the foreign-invested enterprise shall register with the bank located at its registered place after obtaining the business license, and if there is any change in capital or other changes relating to the basic information of the foreign-invested enterprise, including, without limitation, any increase in its registered capital or total investment, the foreign-invested enterprise shall register such changes with the bank located at its registered place after obtaining approval from, or completing the filing with, competent authorities.
Based on the foregoing, if we intend to provide funding to our wholly foreign owned subsidiaries through capital injection at or after their establishment, we shall register the establishment of and any follow-on capital increase in our wholly foreign owned subsidiaries with the SAMR or its local counterparts, file such via the foreign investment comprehensive management information system and register such with the local banks for the foreign exchange related matters.
Based on the foregoing, if we intend to provide funding to our wholly foreign-owned subsidiaries through capital injection at or after their establishment, we shall register the establishment of, and any follow-on capital increase in, our wholly foreign-owned subsidiaries with the SAMR or its local counterparts, file such via the foreign investment comprehensive management information system, and register such with the local banks for foreign exchange-related matters.
However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or SAT Circular 81, issued on February 20, 2009 by the State Administration of Taxation, if the PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.
However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, or SAT Circular 81, issued on February 20, 2009 by the State Administration of Taxation, if the PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, the PRC tax authorities may adjust the preferential tax treatment.
Regulations on Employment and Social Welfare Labor Contract Law The PRC Labor Contract Law which took effect on January 1, 2008 and was amended on December 28, 2012, is primarily aimed at regulating rights and obligations of employer and employee relationships, including the establishment, performance and termination of labor contracts.
Regulations on Employment and Social Welfare Labor Contract Law The PRC Labor Contract Law, which took effect on January 1, 2008, and was amended on December 28, 2012, is primarily aimed at regulating the rights and obligations of employer-employee relationships, including the establishment, performance, and termination of labor contracts.
In addition, the State Administration of Taxation has issued certain circulars concerning employee stock options and restricted shares. Under these circulars, employees working in mainland China who exercise stock options or are granted restricted shares will be subject to mainland China individual income tax.
In addition, the State Administration of Taxation has issued certain circulars concerning employee stock options and restricted shares. Under these circulars, employees working in mainland China who exercise stock options or are granted restricted shares will be subject to individual income tax in mainland China.
Pursuant to SAFE Circular 19, for the time being, foreign-invested enterprises are allowed to settle 100% of their foreign exchange capitals on a discretionary basis; a foreign-invested enterprise shall truthfully use its capital for its own operational purposes within the scope of business; where an ordinary foreign-invested enterprise makes domestic equity investment with the amount of foreign exchanges settled, the invested enterprise shall first go through domestic re-investment registration and open a corresponding account for foreign exchange settlement pending payment with the foreign exchange administration or the bank at the place where it is registered.
Pursuant to SAFE Circular 19, for the time being, foreign-invested enterprises are allowed to settle 100% of their foreign exchange capitals on a discretionary basis; a foreign-invested enterprise shall truthfully use its capital for its own operational purposes within the scope of business; where an ordinary foreign-invested enterprise makes domestic equity investment with the amount of foreign exchange settled, the invested enterprise shall first go through domestic re-investment registration and open a corresponding account for foreign exchange settlement pending payment with the foreign exchange administration or the bank at the place where it is registered.
Offshore Investment Under the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, issued by SAFE and effective on July 4, 2014, mainland China residents are required to register with the local SAFE branch prior to the establishment or control of an offshore special purpose vehicle, or SPV, which is defined as offshore enterprises directly established or indirectly controlled by mainland China residents for offshore equity financing of the enterprise assets or interests they hold in mainland China.
Offshore Investment Under the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange Administration over Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, issued by SAFE and effective on July 4, 2014, mainland China residents are required to register with the local SAFE branch prior to the establishment or control of an offshore special purpose vehicle, which is defined as offshore enterprises directly established or indirectly controlled by mainland China residents for offshore equity financing of the enterprise assets or interests they hold in mainland China.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” Pursuant to the Notice on Issuing the Provisions on the Main Functions, Internal Bodies and Staffing of the General Administration of Press and Publication (National Copyright Administration) promulgated by the General Office of the State Council on July 11, 2008, the Notice of the State Commission Office for Public Sector Reform on Interpretation of the State Commission Office for Public Sector Reform on Several Provisions relating to 91 Animation, Online Game and Comprehensive Law Enforcement in Culture Market in the Three Provisions jointly promulgated by the Ministry of Culture, the State Administration of Radio, Film, and Television and the General Administration of Press and Publication on September 7, 2009, the Notice on Issuing the Provisions on the Main Functions, Internal Bodies and Staffing of the State Administration of Press, Publication, Radio, Film and Television promulgated by the General Office of the State Council on July 11, 2013, and the Rules for the Administration for Internet Publishing Services, the General Administration of Press and Publication was responsible for the examination and approval process of online games prior to online publication, the SAPPRFT was responsible for the approval of game registration and issuance of game publication numbers, and after the online games uploaded on the internet, online games would be administered by the Ministry of Culture.
Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” Pursuant to the Notice on Issuing the Provisions on the Main Functions, Internal Bodies and Staffing of the General Administration of Press and Publication (National Copyright Administration) promulgated by the General Office of the State Council on July 11, 2008, the Notice of the State Commission Office for Public Sector Reform on Interpretation of the State Commission Office for Public Sector Reform on Several Provisions relating to Animation, Online Game and Comprehensive Law Enforcement in Culture Market in the Three Provisions jointly promulgated by the Ministry of Culture, the State Administration of Radio, Film and Television and the General Administration of Press and Publication on September 7, 2009, the Notice on Issuing the Provisions on the Main Functions, Internal Bodies and Staffing of the State Administration of Press, Publication, Radio, Film and Television promulgated by the General Office of the State Council on July 11, 2013, and the Rules for the Administration for Internet Publishing Services, the General Administration of Press and Publication was responsible for the examination and approval process of online games prior to online publication, the State Administration of Press Publication, Radio, Film and Television was responsible for the approval of game registration and issuance of game publication numbers, and after the online games uploaded on the internet, online games would be administered by the Ministry of Culture.
Risk Factors—Risks Related to Our Business and Industry—Videos and other content displayed on our platform may be found objectionable by PRC regulatory authorities and may subject us to penalties and other administrative actions.” 82 Competition We face competition for content sourcing, user traffic and advertising customers from other providers of online entertainment video services in mainland China, primarily including Tencent Video, Youku, Mango TV and Bilibili.
Risk Factors—Risks Related to Our Business and Industry—Videos and other content displayed on our platform may be found objectionable by PRC regulatory authorities and may subject us to penalties and other administrative actions.” Competition We face competition for content sourcing, user traffic and advertising customers from other providers of online entertainment video services in mainland China, primarily including Tencent Video, Youku, Mango TV and Bilibili.
Risk Factor—Risks Related to Our Business and Industry—Our quarterly operating results may fluctuate, which makes our results of operations difficult to predict and may cause our quarterly results of operations to fall short of expectations.” Insurance As required by laws and regulations in mainland China, we participate in various employee social benefits plans that are organized by municipal and provincial governments, including medical insurance, job-related injury insurance, maternity insurance and unemployment insurance.
Risk Factor—Risks Related to Our Business and Industry—Our quarterly operating results may fluctuate, which makes our results of operations difficult to predict and may cause our quarterly results of operations to fall short of expectations.” 70 Insurance As required by laws and regulations in mainland China, we participate in various employee social benefits plans that are organized by municipal and provincial governments, including medical insurance, job-related injury insurance, maternity insurance and unemployment insurance.
Loans by the Foreign Companies to their mainland China subsidiaries A loan made by foreign investors as shareholders in a foreign invested enterprise is considered to be foreign debt in mainland China and is regulated by various laws and regulations, including the PRC Foreign Currency Exchange Administration Rules, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions, the Detailed Rules for the Implementation on Statistical Monitoring of Foreign Debt, and the Administrative Measures for Registration of Foreign Debts.
Loans Made by Foreign Companies to Their Mainland China Subsidiaries A loan made by foreign investors as shareholders in a foreign-invested enterprise is considered foreign debt in mainland China and is regulated by various laws and regulations, including the PRC Foreign Currency Exchange Administration Rules, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions, the Detailed Rules for the Implementation of Statistical Monitoring of Foreign Debt, and the Administrative Measures for Registration of Foreign Debts.
Regulations on Foreign Exchange General Administration of Foreign Exchange Under the PRC Foreign Exchange Administration Rules promulgated on January 29, 1996 and most recently amended on August 5, 2008 and various regulations issued by SAFE and other PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-related receipts and payments and payment of interest and dividends.
Regulations on Foreign Exchange General Administration of Foreign Exchange Under the PRC Foreign Exchange Administration Rules promulgated on January 29, 1996 and most recently amended on August 5, 2008, as well as various regulations issued by SAFE and other PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-related receipts and payments, as well as the payment of interest and dividends.
Among other things, the notice requires that online 87 audio-video platforms shall not produce or disseminate programs that distort, parody or vilify classic literary works; shall not re-edit, re-dub, or re-caption the subtitles of classic literary works, radio and television programs, network-based original audio-video programs or intercept certain program segments and splice them into new programs; and shall not disseminate edited pieces of works that distort the originals.
Among other things, the notice requires that online audio-video platforms shall not produce or disseminate programs that distort, parody or vilify classic literary works; shall not re-edit, re-dub, or re-caption the subtitles of classic literary works, radio and television programs, network-based original audio-video programs or intercept certain program segments and splice them into new programs; and shall not disseminate edited pieces of works that distort the originals.
Under these rules and regulations, a shareholder loan in the form of foreign debt made to a mainland China entity does not require the prior approval of SAFE. However, such foreign debt must be registered with and recorded by SAFE or its local branches within 15 business days after entering into the foreign debt contract.
Under these rules and regulations, a shareholder loan made to a mainland China entity in the form of foreign debt does not require prior approval from SAFE. However, such foreign debt must be registered with and recorded by SAFE or its local branches within 15 business days after entering into the foreign debt contract.
The content providers range from ordinary registered users, amateurs, and semiprofessional partners to internet influencers, multi-channel networks, and production studios, which collectively contribute to growing our creative user community. Content providers upload their videos onto their iQIYI partner accounts, an open platform we 78 provide, to share, distribute and monetize their video content.
The content providers range from ordinary registered users, amateurs, and semiprofessional partners to internet influencers, multi-channel networks, and production studios, which collectively contribute to growing our creative user community. Content providers upload their videos onto their iQIYI partner accounts, an open platform we provide, to share, distribute and monetize their video content.
Furthermore, the law provides that personal information processors who use personal information to make automated decisions should ensure the transparency of decision-making and the fairness and impartiality of the results, and must not impose unreasonable differential treatment on individuals in terms of transaction prices and other transaction conditions. 96 In addition, the law provides rules for cross-border provision of personal information.
Furthermore, the law provides that personal information processors who use personal information to make automated decisions should ensure the transparency of decision-making and the fairness and impartiality of the results, and must not impose unreasonable differential treatment on individuals in terms of transaction prices and other transaction conditions. In addition, the law provides rules for cross-border provision of personal information.
If any shareholder fails to make capital contributions on schedule and in full as provided in the articles of association, the company shall send a written notice requesting such shareholder to pay up all overdue registered capital within a 83 grace period no less than sixty days from the issuance date of such notice.
If any shareholder fails to make capital contributions on schedule and in full as provided in the articles of association, the company shall send a written notice requesting such shareholder to pay up all overdue registered capital within a grace period of no less than sixty days from the issuance date of such notice.
SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov. You can also find information on our website http://ir.iqiyi.com. The information contained on our website is not a part of this annual report. 76 B.
SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov . You can also find information on our website http://ir.iqiyi.com . The information contained on our website is not a part of this annual report. B.
However, such issuers will be required to comply with the filing requirements under Overseas Listing Measures if and when they pursue any future securities offerings and listings outside of mainland China, including but not limited to follow-on offerings, secondary listings and going private transactions. 106 C.
However, such issuers will be required to comply with the filing requirements under Overseas Listing Measures if and when they pursue any future securities offerings and listings outside of mainland China, including but not limited to follow-on offerings, secondary listings and going private transactions. C.
For example, marketplace platform providers are 92 obligated to examine the legal status of each third-party merchant selling products or services on their platforms and display on a prominent location on a merchant’s web page the information stated in the merchant’s business license or a link to its business license.
For example, marketplace platform providers are obligated to examine the legal status of each third-party merchant selling products or services on their platforms and display on a prominent location on a merchant’s web page the information stated in the merchant’s business license or a link to its business license.
Pursuant to the irrevocable power of attorney, iQIYI, Inc. may exercise all shareholder rights during the term of the amended and restated shareholder voting rights trust agreement and may transfer such rights to a designated third-party without written notice to Beijing QIYI Century. 110 Spousal Consent Letter The spouse of the shareholder of Beijing iQIYI signed a spousal consent letter.
Pursuant to the irrevocable power of attorney, iQIYI, Inc. may exercise all shareholder rights during the term of the amended and restated shareholder voting rights trust agreement and may transfer such rights to a designated third-party without written notice to Beijing QIYI Century. Spousal Consent Letter The spouse of the shareholder of Beijing iQIYI signed a spousal consent letter.
SAFE Circular 16 also provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on self-discretionary basis, which applies to all enterprises registered in mainland China.
SAFE Circular 16 also provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis, which applies to all enterprises registered in mainland China.
The maturity risk conversion factor shall be 1 for medium- and long-term cross-border financing with a term of more than one year and 1.5 for short-term cross-border financing with a term of less than one year. The type risk conversion factor shall be 1 for on-balance-sheet financing and 1 for off-balance-sheet financing (contingent liabilities) for the time being.
The 85 maturity risk conversion factor shall be 1 for medium- and long-term cross-border financing with a term of more than one year and 1.5 for short-term cross-border financing with a term of less than one year. The type risk conversion factor shall be 1 for on-balance-sheet financing and 1 for off-balance-sheet financing (contingent liabilities) for the time being.
According to the circular, where the payor fails to withhold any or sufficient 103 tax, the transferor shall declare and pay such tax to the tax authority by itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default interest.
According to the circular, where the payor fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the tax authority by itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default interest.
An e-commerce operator shall obtain a license for value-added telecommunications services with the specification of online data processing and transaction processing business from appropriate telecommunications authorities, pursuant to the Telecommunications Regulations and the Catalog of Telecommunications Business.
An e-commerce operator shall obtain a license for value-added telecommunications services with the specification of online data processing and transaction processing business from appropriate telecommunications authorities, pursuant to the PRC Telecommunications Regulations and the Catalog of Telecommunications Business.
Under the current regulatory regime in mainland China, foreign-invested enterprises in mainland China may pay dividends only out of their retained earnings, if any, determined in accordance with PRC accounting standards and regulations.
Under the current regulatory regime in mainland China, foreign-invested enterprises may pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations.
When determining whether there is a “reasonable commercial purpose” of the transaction arrangement, features to be taken into consideration include, inter alia, whether the main value of the equity interest of the offshore enterprise derives directly or indirectly from mainland China taxable assets; whether the assets of the offshore enterprise mainly consist of direct or indirect investments in mainland China, or whether its income is mainly derived from China; and whether the offshore enterprise and its subsidiaries that directly or indirectly hold mainland China taxable assets have a real commercial nature which is evidenced by their actual function and risk exposure.
When determining whether there is a “reasonable commercial purpose” for the transaction arrangement, features to be taken into consideration include, inter alia, whether the main value of the equity interest of the offshore enterprise derives directly or indirectly from mainland China taxable assets; whether the assets of the offshore enterprise mainly consist of direct or indirect investments in mainland China, or whether its income is mainly derived from China; and whether the offshore enterprise and its subsidiaries that directly or indirectly hold mainland China taxable assets have a real commercial nature that is evidenced by their actual function and risk exposure.
On January 6, 2017, the SAMR issued the Interim Measures for No Reason Return of Online Purchased Commodities within Seven Days, which took effect on March 15, 2017 and was amended on October 23, 2020, further clarifying the scope of consumers’ rights to make returns without a reason, including exceptions, return procedures and online marketplace platform providers’ responsibility to formulate seven-day no-reason return rules and related consumer protection systems, and supervise the merchants for compliance with these rules.
On January 6, 2017, the SAMR issued the Interim Measures for No Reason Return of Online Purchased Commodities within Seven Days, which took effect on March 15, 2017 and was amended on October 23, 2020, further clarify the scope of consumers’ rights to make returns without a reason, including exceptions, return procedures and online marketplace platform providers’ responsibility to formulate seven-day no-reason return rules and related consumer protection systems, and supervise the merchants for compliance with these rules.
On November 27, 2017, the MIIT promulgated the Notice of the 98 Ministry of Industry and Information Technology on Regulating the Use of Domain Names in Providing Internet-based Information Services, which took effect on January 1, 2018.
On November 27, 2017, the MIIT promulgated the Notice of the Ministry of Industry and Information Technology on Regulating the Use of Domain Names in Providing Internet-based Information Services, which took effect on January 1, 2018.
Our other video content expands our library and allows us to capture a broader user base, drive user engagement and enhance user stickiness. Our other video content is created and uploaded to our platform by a wide array of content providers.
Our other video content expands our library and allows us to capture a broader user base, drive user engagement and enhance user stickiness. 66 Our other video content is created and uploaded to our platform by a wide array of content providers.
Pursuant to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Incomes and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the conditions and requirements under such arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a mainland China resident enterprise may be reduced to 5%.
Pursuant to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the conditions and requirements under such arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a mainland China resident enterprise may be reduced to 5%.
In addition, foreign investments in the internet cultural business (except for music), the internet audio-video program business, the radio and television program production and operation business, the production of audio-video products and/or electronic publications and film production and distribution business are prohibited.
In addition, foreign investments in internet cultural business (except for music), internet audio-video program business, radio and television program production and operation business, production of audio-video products and/or electronic publications and film production and distribution business are prohibited.
The Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, which was promulgated by SAFE and took effect on June 9, 2016, provides that enterprises registered in mainland China may also convert their foreign debts from foreign currency into 99 Renminbi on self-discretionary basis.
The Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, which was promulgated by SAFE and took effect on June 9, 2016, provides that enterprises registered in mainland China may also convert their foreign debts from foreign currency into Renminbi on a self-discretionary basis.
The conversion of Renminbi into other currencies and remittance of the converted foreign currency outside mainland China for of capital account items, such as direct equity investments, loans and repatriation of investment, requires the prior approval from SAFE or its local office. Payments for transactions that take place within mainland China must be made in Renminbi.
The conversion of Renminbi into other currencies and the remittance of the converted foreign currency outside mainland China for capital account items, such as direct equity investments, loans, and repatriation of investment, require prior approval from SAFE or its local office. Payments for transactions that take place within mainland China must be made in Renminbi.
Regulations on Online Live Streaming Services On November 4, 2016, the State Internet Content Office issued the Administrative Regulations on Online Live- Streaming Services that took effect on December 1 , 2016, according to the which, when providing internet news information services, both online live-streaming service providers and online live-streaming publishers must obtain licenses for providing internet news information service and may only carry out internet news information services within the scope of their licenses.
Regulations on Online Live Streaming Services On November 4, 2016, the State Internet Content Office issued the Administrative Regulations on Online Live-Streaming Services that took effect on December 1, 2016, according to which, when providing internet news information services, both online live-streaming service providers and online live-streaming publishers must obtain licenses to provide internet news information services and may only carry out internet news information services within the scope of their licenses.
M&A Rules and Overseas Listing On August 8, 2006, six PRC governmental and regulatory agencies, including the Ministry of Commerce and the China Securities Regulatory Commission, or the CSRC, promulgated the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, governing the mergers and acquisitions of domestic enterprises by foreign investors that took effect on September 8, 2006 and was revised on June 22, 2009.
M&A Rules and Overseas Listing On August 8, 2006, six PRC governmental and regulatory agencies, including the Ministry of Commerce and the China Securities Regulatory Commission, or the CSRC, promulgated the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, governing the mergers and acquisitions of domestic enterprises by foreign investors that took effect on September 8, 2006 and were revised on June 22, 2009.
In accordance with such measures, data processors will be subject to security assessment conducted by the CAC prior to any cross-border transfer of data if the transfer involves (i) important data; (ii) personal information transferred overseas by operators of critical information infrastructure or a data processor that has processed personal data of more than one million persons; (iii) personal information transferred overseas by a data processor which has already provided personal data of 100,000 persons or sensitive personal data of 10,000 persons overseas since January 1 of the preceding year; or (iv) other circumstances as required by the CAC.
In accordance with such measures, data processors will be subject to a security assessment conducted by the CAC prior to any cross-border transfer of data if the transfer involves (i) important data; (ii) personal information transferred overseas by operators of critical information infrastructure or a data processor that has processed personal data of more than one million individuals; (iii) personal information transferred overseas by a data processor that has already provided personal data of 100,000 individuals or sensitive personal data of 10,000 individuals since January 1 of the preceding year; or (iv) other circumstances as required by the CAC.
Our licensed content library also features movies, animations, documentaries and other content. Our licensed video content is typically procured from third parties at fixed rates for a specified term. The average term of our licenses varies depending on the type of content, with films having an average term of 11 years and drama series an average term of 14 years.
Our licensed content library also features movies, animations, documentaries and other content. Our licensed video content is typically procured from third parties at fixed rates for a specified term. The average term of our licenses varies depending on the type of content, with films having an average term of 14 years and drama series an average term of 15 years.
Under these regulations, an owner of the network dissemination rights with respect to written works, performance or audio or video recordings who believes that information storage, search or link services provided by an internet service provider infringe his or her rights may require that the internet service provider delete, or disconnect the links to, such works or recordings.
Under these regulations, an owner of the network dissemination rights with respect to written works, performances, or audio or video recordings who believes that information storage, search, or link services provided by an internet service provider infringe his or her rights may require that the internet service provider delete or disconnect the links to such works or recordings.
An audio-video program that has already been broadcast shall be retained in full for at least 60 days. Movies, television programs and other media content used as internet audio-video programs shall comply with the administrative regulations on programs broadcasts through radio, movie and television channels.
An audio-video program that has already been broadcast must be retained in full for at least 60 days. Movies, television programs and other media content used as internet audio-video programs must comply with the administrative regulations on programs broadcasts through radio, movie and television channels.
The regulations, among other things, requires that if an overseas company established or controlled by mainland China companies or individuals, or mainland China Citizens, intends to acquire equity interests or assets of any other mainland China domestic company affiliated with the mainland China Citizens, such acquisition must be submitted to the Ministry of Commerce for approval.
The regulations, among other things, require that if an overseas company established or controlled by mainland China companies or individuals, or mainland China citizens, intends to acquire equity interests or assets of any other mainland China domestic company affiliated with the mainland China citizens, such acquisition must be submitted to the Ministry of Commerce for approval.
The Overseas Listing Measures state that, any overseas offering of securities, including issuance of shares, convertible notes and other similar securities, by a PRC domestic company, and listing by a PRC domestic company in an overseas market, shall be subject to filing requirement within three business days after the completion of such offering or listing.
The Overseas Listing Measures state that, any overseas offering of securities, including issuance of shares, convertible notes and other similar securities, by a PRC domestic company, and listing by a PRC domestic company in an overseas market, shall be subject to filing requirements within three business days after the completion of such offering or listing.
With respect to the period for payment of the registered capital, pursuant to the Amended PRC Company Law, all shareholders of a PRC limited liability company shall fully pay up the registered capital subscribed for by such shareholders within five years since the date of establishment of such PRC limited liability company, unless otherwise provided by laws and regulations.
With respect to the period for payment of the registered capital, pursuant to the amended PRC Company Law, all shareholders of a PRC limited liability company shall fully pay up the registered capital subscribed for by such shareholders within five years from the date of establishment of such PRC limited liability company, unless otherwise provided by laws and regulations.
If a shareholder transfers the equity interest held by it, it shall notify the company in writing to request the company (i) to change the register of shareholders and (ii) to register the change with the competent enterprise registration authority. If the company refuses or fails to respond, the transferee and transferor may file a lawsuit with the competent court.
If a shareholder transfers the equity interests held by it, it shall notify the company in writing to request the company (i) to change the register of shareholders and (ii) to register the change with the competent enterprise registration authority. If the company refuses or fails to respond, the transferee and transferor may file a lawsuit with the competent court.
Geng have completed all their obligations under the amended and restated exclusive technology consulting and services agreement and the amended and restated loan agreement unless otherwise unilaterally terminated by Beijing QIYI Century. 108 Exclusive Purchase Option Agreement Pursuant to the amended and restated exclusive purchase option agreement dated January 30, 2013 by and among iQIYI, Inc., Beijing QIYI Century, Beijing iQIYI, and Mr.
Geng have completed all their obligations under the amended and restated exclusive technology consulting and services agreement and the amended and restated loan agreement unless otherwise unilaterally terminated by Beijing QIYI Century. 91 Exclusive Purchase Option Agreement Pursuant to the amended and restated exclusive purchase option agreement dated January 30, 2013 by and among iQIYI, Inc., Beijing QIYI Century, Beijing iQIYI, and Mr.
Risk Factors—Risks Related to Doing Business in Mainland China—The enforcement of the labor-related regulations in mainland China and Hong Kong may adversely affect our business and results of operations.” Employee Stock Incentive Plan Pursuant to the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, or SAFE Circular 7, which was issued by SAFE on February 15, 2012, employees, directors, supervisors, and other senior management who participate in any stock incentive plan of a publicly listed overseas company and who are mainland China citizens or non-mainland China citizens residing in mainland China for a continuous period of no less than one year, subject to a few exceptions, are required to register with SAFE through a qualified domestic agent, which may be a mainland China subsidiary of such overseas listed company, and complete certain other procedures.
Risk Factors—Risks Related to Doing Business in Mainland China—The enforcement of the labor-related regulations in mainland China and Hong Kong may adversely affect our business and results of operations.” Employee Stock Incentive Plan Pursuant to the Notice on Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Listed Companies, which was issued by SAFE on February 15, 2012, employees, directors, supervisors, and other senior management who participate in any stock incentive plan of a publicly listed overseas company and who are mainland China citizens or non-mainland China citizens residing in mainland China for a continuous period of no less than one year, subject to a few exceptions, are required to register with SAFE through a qualified domestic agent, which may be a mainland China subsidiary of such an overseas listed company, and complete certain other procedures.
The Amended PRC Company Law has made material amendments on corporate governance and shareholders rights of the PRC companies, including, among others, the statutory period for payment of registered capital, the setting of the board of directors and the board of supervisors, and transfer of equity interests in a company.
The amended PRC Company Law has made material amendments on corporate governance and shareholders’ rights of PRC companies, including, among others, the statutory period for payment of registered capital, the setting of the board of directors and the board of supervisors, and the transfer of equity interests in a company.
In addition, foreign-invested enterprises are not allowed to engage in the above-mentioned services except online music.
In addition, foreign-invested enterprises are not allowed to engage in the above-mentioned services, except for online music.
Dividend Withholding Tax The Enterprise Income Tax Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-mainland China resident enterprise investors which do not have an establishment or place of business in mainland China, or which have an establishment or place of business that is not effectively connected with the relevant income, to the extent such dividends are derived from sources within mainland China.
Dividend Withholding Tax The Enterprise Income Tax Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-mainland China resident enterprise investors who do not have an establishment or place of business in mainland China, or whose establishment or place of business is not effectively connected with the relevant income, to the extent such dividends are derived from sources within mainland China.
According to the Law of the PRC on the Protection of Minors (2020 Revision), which took effect on June 1, 2021, live streaming service providers are not allowed to provide minors under age 16 with online live streaming publisher account registration service, and must obtain the consent from parents or guardians and verify the identity of the minors before allowing minors aged 16 or above to register live streaming publisher accounts.
According to the Law of the PRC on the Protection of Minors (2020 Revision), which took effect on June 1, 2021, live-streaming service providers are not allowed to provide minors under age 16 with online live-streaming publisher account registration services, and must obtain consent from parents or guardians and verify the identity of minors before allowing minors aged 16 or older to register live-streaming publisher accounts.
The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes on Infringement of the Information Network Dissemination Rights, which was promulgated on December 17, 2012, and further amended on December 29, 2020 and took effect on January 1, 2021, specifies that disseminating works, performances or audio-video products by the internet users or the internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of the copyright owner.
The Provisions of the Supreme People’s Court on Certain Issues Related to the Application of Law in the Trial of Civil Cases Involving Disputes on Infringement of the Information Network Dissemination Rights, which were promulgated on December 17, 2012, and further amended on December 29, 2020, and took effect on January 1, 2021, specify that disseminating works, performances, or audio-video products by the internet users or the internet service providers via the internet without the permission of the copyright owners shall be deemed to have infringed the right of dissemination of the copyright owner.
Overseas Business We expand our business overseas through our multilingual iQIYI app and website, featuring popular Chinese content, commonly known as C-pop, along with a wide range of local video content and others. To cater to a diverse global audience, we currently support interfaces in more than ten languages, ensuring a user-friendly experience for viewers worldwide.
Overseas Business We expand our business overseas through our multilingual iQIYI app and website, featuring popular Chinese content, commonly known as C-pop, along with a wide range of local video content and others. To cater to a diverse global audience, we currently support interfaces in approximately ten languages, ensuring a user-friendly experience for viewers worldwide.
Since the issuance date of the foregoing notice, such shareholder shall forfeit the equity interests for which the capital contribution has not been paid up. The forfeited equity interests shall be transferred or cancelled in accordance with the applicable laws.
Since the issuance date of the foregoing notice, such shareholder shall forfeit the equity interests for which the capital contribution has not been paid up. The forfeited equity interests shall be transferred or canceled in accordance with the applicable laws.
The Categories of the Internet Audio-video Program Services (Trial) promulgated by SAPPRFT on March 17, 2010 and amended on March 10, 2017, classifies internet audio/visual programs into four categories: (I) Category I internet audio/video program service, which is carried out with a form of radio station or television station; (II) Category II internet audio/video program service, including (a) re-broadcasting service of current political news audio/video programs; (b) hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specialized audio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports, education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service of films, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education and other specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or other organization activities; and (III) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) re-broadcasting service of the audio/video programs uploaded by internet users; and (IV) Category IV internet audio/video program service, including (a) re-broadcasting of the radio/television program channels; (b) re-broadcasting of internet audio/video program channels; and (c) re-broadcasting of live internet-based audio/video programs.
The Categories of the Internet Audio-video Program Services (Trial) promulgated by the State Administration of Press Publication, Radio, Film and Television on March 17, 2010 and amended on March 10, 2017, classifies internet audio/visual programs into four categories: (i) Category I internet audio/video program service, which is carried out with a form of radio station or television station; (ii) Category II internet audio/video program service, including (a) re-broadcasting service of current political news audio/video programs; (b) hosting, interviewing, reporting and commenting service of arts, entertainment, technology, finance and economics, sports, education and other specialized audio/video programs; (c) producing (interviewing not included) and broadcasting service of arts, entertainment, technology, finance and economics, sports, education and other specialized audio/video programs; (d) producing and broadcasting service of internet films/dramas; (e) aggregating and broadcasting service of films, television dramas and cartoons; (f) aggregating and broadcasting service of arts, entertainment, technology, finance and economics, sports, education and other specialized audio/video programs; and (g) live audio/video broadcasting service of cultural activities of common social organizations, sport events or other organization activities; (iii) Category III internet audio/video program service, including (a) aggregating service of online audio/video contents, and (b) re-broadcasting service of the audio/video programs uploaded by internet users; and (iv) Category IV internet audio/video program service, including (a) re-broadcasting of the radio/television program channels; (b) re-broadcasting of internet audio/video program channels; and (c) re-broadcasting of live internet-based audio/video programs.
The circular does not apply to sales of shares by investors through a public stock exchange where such shares were acquired on a public stock exchange. On October 17, 2017, the State Administration of Taxation issued the Circular on Issues of Tax Withholding regarding Non-PRC Resident Enterprise Income Tax, or SAT Circular 37, which was amended on June 15, 2018.
The circular does not apply to sales of shares by investors through a public stock exchange where such shares were acquired on a public stock exchange. On October 17, 2017, the State Administration of Taxation issued the Circular on Issues of Tax Withholding Regarding Non-PRC Resident Enterprise Income Tax, which was amended on June 15, 2018.
Entities providing services related to internet audio-video programs shall immediately delete the audio-video programs violating laws and regulations, keep appropriate records, report to the proper authorities and implement other regulatory requirements.
Entities providing services related to internet audio-video programs must immediately delete the audio-video programs violating laws and regulations, keep appropriate records, report to the proper authorities and implement other regulatory requirements.
The Notice 267 also requires platforms to strictly control voting in the talent shows and not to use in programs actors and guests who have violated laws or have conducted unethical behaviors.
This notice also requires platforms to strictly control voting in the talent shows and not to use in programs actors and guests who have violated laws or have conducted unethical behaviors.
Regulations on Online Games Regulatory Authorities, Online Game Publications and Online Game Operations On September 28, 2009, the General Administration of Press and Publication, together with the National Copyright Administration, and the National Office of Combating Pornography and Illegal Publications jointly issued the Notice on Further Strengthening on the Administration of Pre-examination and Approval of Online Game and the Examination and Approval of Imported Online Game, or Circular 13 .
Regulations on Online Games Regulatory Authorities, Online Game Publications and Online Game Operations On September 28, 2009, the General Administration of Press and Publication, together with the National Copyright Administration and the National Office of Combating Pornography and Illegal Publications, jointly issued the Notice on Further Strengthening the Administration of Pre-examination and Approval of Online Games and the Examination and Approval of Imported Online Games, known as Circular 13.
The Measures for Administrative Protection of Copyright Related to Internet, which was jointly promulgated by the National Copyright Administration and the MIIT on April 29, 2005 and took effect on May 30, 2005, provides that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedial actions immediately by removing or disabling access to the infringing content.
The Measures for Administrative Protection of Copyright Related to the Internet, which were jointly promulgated by the National Copyright Administration and the MIIT on April 29, 2005, and took effect on May 30, 2005, provide that upon receipt of an infringement notice from a legitimate copyright holder, an ICP operator must take remedial actions immediately by removing or disabling access to the infringing content.
On February 17, 2023 the CSRC also published the Notice on the Administrative Arrangements for the Filing of Overseas Securities Offering and Listing by the Domestic Enterprises, which provides that issuers who have already been listed in an overseas market by March 31, 2023, the date on which the Overseas Listing Measures took effect, such as our company, are not required to make any immediate filing.
On February 17, 2023, the CSRC also published the Notice on the Administrative Arrangements for the Filing of Overseas Securities Offering and Listing by 89 Domestic Enterprises, which provides that issuers who have already been listed in an overseas market by March 31, 2023, the date on which the Overseas Listing Measures took effect, including our company, are not required to make any immediate filing.
BUSINESS OVERVIEW iQIYI is a leading provider of online entertainment video services in mainland China. Since the beginning, we have always put content and users at the center, orienting each of our business strategies around delivering superior content quality and user-friendliness.
BUSINESS OVERVIEW iQIYI is a leading provider of online entertainment video services in mainland China. Since the beginning, we have always put content and users at the center, orienting each of our business strategies around delivering superior-quality content and user-friendly entertainment experience.
As of the date of this annual report, we have not been involved in any investigations or become subject to a cybersecurity review initiated by the CAC, and we have not received any inquiry, notice, warning, sanctions in such respect or any regulatory objections to our listing status from the CAC.
As of the date of this annual report, we have not been involved in any investigations or been subject to a cybersecurity review initiated by the CAC, and we have not received any inquiry, notice, warning, sanctions, or regulatory objections to our listing status from the CAC.
According to the Circular on Several Questions regarding the “Beneficial Owner” in Tax Treaties, which took effect on April 1, 2018, when determining the applicant’s status as a “beneficial owner” with respect to the tax treatment of dividends, interest or royalties under certain tax treaties, several factors, including whether the applicant is obligated to pay more than 50% of his or her income over a twelve-month period to residents of a third country or region, whether the business operated by the applicant constitutes actual business activities; and whether the counterparty country or region to the tax treaty does not levy any tax, exempts the relevant income from tax or levies tax at an extremely low rate, will be taken into account and be analyzed according to the actual circumstances of specific cases.
According to the Circular on Several Questions Regarding the “Beneficial Owner” in Tax Treaties, which took effect on April 1, 2018, when determining the applicant’s status as a “beneficial owner” with respect to the tax treatment of dividends, interest, or royalties under certain tax treaties, several factors, including whether the applicant is obligated to pay more than 50% of their income over a twelve-month period to residents of a third country or region, whether the business operated by the applicant constitutes actual business activities, and whether the counterparty country or region to the tax treaty does not levy any tax, exempts the relevant income from tax, or levies tax at an extremely low rate, will be taken into account and analyzed in accordance with the specific circumstances of each case.
We also compete with other internet media and entertainment services, such as internet and social platforms and short-form video platforms, as well as major TV stations. For a discussion of risks related to competition, see “Item 3. Key Information—D.
We also compete with other internet media and entertainment services, such as mini-drama platforms, internet and social platforms and short- or mini-form video platforms, as well as major TV stations. For a discussion of risks related to competition, see “Item 3. Key Information—D.
In addition, the number of content reviewers a platform is required to keep must in principle be no less than 1/50 of the number of live streaming rooms.
In addition, the number of content reviewers a platform is required to maintain must, in principle, be no less than 1/50 of the number of live-streaming rooms.
Applicants for such licenses shall be state-owned or state-controlled entities unless an internet audio-video program transmission license has been obtained prior to the effectiveness of the provisions in accordance with the then-in-effect laws and regulations.
Applicants for such licenses shall be state-owned or state-controlled entities unless an internet audio-video program transmission license was obtained prior to the effectiveness of the provisions in accordance with the then-in-effect laws and regulations.
The mainland China subsidiaries of an overseas listed company are required to file documents related to employee stock options and restricted shares with the tax authorities and to withhold individual income taxes of employees who exercise their stock option or purchase restricted shares.
The mainland China subsidiaries of an overseas listed company are required to file documents related to employee stock options and restricted shares with the tax authorities and withhold individual income taxes from 88 employees who exercise their stock options or purchase restricted shares.
In addition, the PRC Data Security Law provides a national security review procedure for those data activities which affect or may affect national security and imposes export restrictions on certain data and information. The PRC government promulgated the Measures for Cybersecurity Review in April 2020, which took effect in June 2020.
In addition, the PRC Data Security Law provides a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data and information. The PRC government promulgated the Measures for Cybersecurity Review in April 2020, which took effect in June 2020.
As of December 31, 2023, our “爱奇艺” and “ ” trademarks have been recognized as well-known trademarks by the SAMR. We employ a three-phase copyright protection scheme consisting of copyright management, network monitoring, and complaint or legal action.
As of December 31, 2024, our “ 爱奇艺 ” and “ ” trademarks have been recognized as well-known trademarks by the SAMR. 69 We employ a three-phase copyright protection scheme consisting of copyright management, network monitoring, and complaint or legal action.
If, upon the expiration of the foregoing grace period, such shareholder still hasn’t fulfilled the obligation of capital contribution with respect to such overdue registered capital, the company may, upon adoption of the resolution of the board of directors, send a notice of forfeiture to such shareholder in writing.
If, upon the expiration of the foregoing grace period, such shareholder still has not fulfilled the obligation of capital contribution with respect to such overdue registered capital, the company may, upon adoption of the resolution of the board of directors, send a notice of forfeiture to such shareholder in writing.
This policy has later been reflected in the Notice on Relevant Issues Concerning Application and Approval of Audio-video Permit, issued by the State Administration of Radio, Film, and Television on May 21, 2008 and amended on August 28, 2015.
This policy was later reflected in the Notice on Relevant Issues Concerning Application and Approval of Audio-video Permit, issued by the State Administration of Radio, Film and Television on May 21, 2008 and amended on August 28, 2015.
According to the VAT Law and these decisions, all 102 enterprises and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory of mainland China are the taxpayers of VAT.
According to these laws and decisions, all enterprises and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory of mainland China are the taxpayers of VAT.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

92 edited+11 added−23 removed131 unchanged
Biggest changeFor the year ended December 31, 2021 2022 2023 RMB % RMB % RMB US$ % (in thousands, except for percentages) Revenues: Membership services 16,713,664 54.7 17,710,830 61.1 20,314,216 2,861,197 63.7 Online advertising services 7,066,751 23.1 5,331,697 18.4 6,223,903 876,618 19.5 Content distribution 3,007,828 9.8 2,562,412 8.8 2,458,610 346,288 7.7 Others 3,766,116 12.4 3,392,609 11.7 2,875,922 405,066 9.1 Total revenues 30,554,359 100.0 28,997,548 100.0 31,872,651 4,489,169 100.0 Operating costs and expenses: Cost of revenues (1) (27,513,497 ) (90.0 ) (22,319,315 ) (77.0 ) (23,102,492 ) (3,253,918 ) (72.5 ) Selling, general and administrative (1) (4,725,142 ) (15.5 ) (3,466,579 ) (12.0 ) (4,014,070 ) (565,370 ) (12.6 ) Research and development (1) (2,794,927 ) (9.1 ) (1,899,233 ) (6.5 ) (1,766,610 ) (248,822 ) (5.5 ) Total operating costs and expenses (35,033,566 ) (114.6 ) (27,685,127 ) (95.5 ) (28,883,172 ) (4,068,110 ) (90.6 ) Operating (loss)/income (4,479,207 ) (14.6 ) 1,312,421 4.5 2,989,479 421,059 9.4 Total other expenses, net (1,532,781 ) (5.0 ) (1,346,197 ) (4.6 ) (956,878 ) (134,773 ) (3.0 ) (Loss)/income before income taxes (6,011,988 ) (19.6 ) (33,776 ) (0.1 ) 2,032,601 286,286 6.4 Income tax expenses (96,545 ) (0.3 ) (84,000 ) (0.3 ) (80,047 ) (11,274 ) (0.3 ) Net (loss)/income (6,108,533 ) (19.9 ) (117,776 ) (0.4 ) 1,952,554 275,012 6.1 Note: (1) Share-based compensation expense was allocated as follows: For the year ended December 31, 2021 2022 2023 RMB RMB RMB US$ Cost of revenues 173,263 147,045 133,160 18,755 Selling, general and administrative 718,377 425,209 314,788 44,337 Research and development 327,523 239,187 188,784 26,590 Total 1,219,163 811,441 636,732 89,682 Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 Our revenues increased by 9.9% from RMB28,997.5 million in 2022 to RMB31,872.7 million (US$4,489.2 million) in 2023.
Biggest changeFor the year ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Revenues: Membership services 17,710,830 61.1 20,314,216 63.7 17,762,814 2,433,496 60.8 Online advertising services 5,331,697 18.4 6,223,903 19.5 5,714,243 782,848 19.6 Content distribution 2,562,412 8.8 2,458,610 7.7 2,846,854 390,017 9.7 Others 3,392,609 11.7 2,875,922 9.1 2,901,327 397,480 9.9 Total revenues 28,997,548 100.0 31,872,651 100.0 29,225,238 4,003,841 100.0 Operating costs and expenses: Cost of revenues (1) (22,319,315 ) (77.0 ) (23,102,492) (72.5 ) (21,953,582) (3,007,628) (75.1) Selling, general and administrative (1) (3,466,579 ) (12.0 ) (4,014,070 ) (12.6 ) (3,682,050) (504,439) (12.6) Research and development (1) (1,899,233 ) (6.5 ) (1,766,610 ) (5.5 ) (1,778,403) (243,640) (6.1) Total operating costs and expenses (27,685,127 ) (95.5 ) (28,883,172 ) (90.6 ) (27,414,035) (3,755,707) (93.8) Operating income 1,312,421 4.5 2,989,479 9.4 1,811,203 248,134 6.2 Total other expenses, net (1,346,197 ) (4.6 ) (956,878 ) (3.0 ) (959,524) (131,455) (3.3) (Loss)/income before income taxes (33,776 ) (0.1 ) 2,032,601 6.4 851,679 116,679 2.9 Income tax expenses (84,000 ) (0.3 ) (80,047 ) (0.3 ) (61,090) (8,369) (0.2) Net (loss)/income (117,776 ) (0.4 ) 1,952,554 6.1 790,589 108,310 2.7 Note: 97 (1) Share-based compensation expense was allocated as follows: For the year ended December 31, 2022 2023 2024 RMB RMB RMB US$ Cost of revenues 147,045 133,160 121,048 16,584 Selling, general and administrative 425,209 314,788 273,330 37,446 Research and development 239,187 188,784 150,017 20,552 Total 811,441 636,732 544,395 74,582 Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Our revenues decreased by 8.3% from RMB31,872.7 million in 2023 to RMB29,225.2 million (US$4,003.8 million) in 2024.
Examples of such events or changes in circumstances include, a significant adverse change in technological, regulatory, legal, economic, or social factors that could affect the fair value of the film group or the public’s perception of a film or the availability of a film for future showings, a significant decrease in the number of subscribers or forecasted subscribers, or the loss of a major distributor, a change in the predominant monetization strategy of a film that is currently monetized on its own, actual costs substantially in excess of budgeted costs, substantial delays in completion or release schedules, or actual performance subsequent to release failing to meet expectations set before release such as a significant decrease in the amount of ultimate revenue expected to be recognized.
Examples of such events or changes in circumstances include, a significant adverse change in technological, regulatory, legal, economic, or social 109 factors that could affect the fair value of the film group or the public’s perception of a film or the availability of a film for future showings, a significant decrease in the number of subscribers or forecasted subscribers, or the loss of a major distributor, a change in the predominant monetization strategy of a film that is currently monetized on its own, actual costs substantially in excess of budgeted costs, substantial delays in completion or release schedules, or actual performance subsequent to release failing to meet expectations set before release such as a significant decrease in the amount of ultimate revenue expected to be recognized.
Risk Factors—Risks Related to Doing Business in Mainland China—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” 115 Results of Operations Despite the lack of equity ownership, our Cayman Island holding company is considered as the primary beneficiary of the variable interest entities and consolidates the financial results of the variable interest entities and their subsidiaries as required by ASC topic 810, Consolidation.
Risk Factors—Risks Related to Doing Business in Mainland China—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders or ADS holders.” Results of Operations Despite the lack of equity ownership, our Cayman Island holding company is considered as the primary beneficiary of the variable interest entities and consolidates the financial results of the variable interest entities and their subsidiaries as required by ASC topic 810, Consolidation.
Consolidated Statements and other Financial Information—Dividend Policy.” 121 A majority of our future revenues are likely to continue to be in the form of Renminbi. Under existing PRC foreign exchange regulations, Renminbi may be converted into foreign exchange for current account items, including profit distributions, interest payments and trade and service related foreign exchange transactions.
Consolidated Statements and other Financial Information—Dividend Policy.” A majority of our future revenues are likely to continue to be in the form of Renminbi. Under existing PRC foreign exchange regulations, Renminbi may be converted into foreign exchange for current account items, including profit distributions, interest payments and trade and service related foreign exchange transactions.
Consolidation of Affiliated Entities In order to comply with PRC laws and regulations limiting foreign ownership of or imposing conditions on value-added telecommunication services, internet, value-added telecommunication-based online advertising, online audio and video services and mobile application distribution businesses, we operate our internet platform and conduct our value-added telecommunication-based online advertising, online audio and video services and mobile application distribution businesses through our affiliated entities in mainland China by means of contractual arrangements.
Consolidation of Affiliated Entities In order to comply with PRC laws and regulations limiting foreign ownership of or imposing conditions on value-added telecommunication services, internet, value-added telecommunication-based online advertising, online audio and video services and mobile application distribution businesses, we operate our internet platform and conduct our value-added telecommunication-based 106 online advertising, online audio and video services and mobile application distribution businesses through our affiliated entities in mainland China by means of contractual arrangements.
Risk Factors—Risks Related to Our Corporate Structure.” 127 Revenue Recognition Our revenues are derived principally from membership services, online advertising services and content distribution. Revenue is recognized when control of promised goods or services is transferred to our customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services.
Risk Factors—Risks Related to Our Corporate Structure.” Revenue Recognition Our revenues are derived principally from membership services, online advertising services and content distribution. Revenue is recognized when control of promised goods or services is transferred to our customers in an amount of consideration to which an entity expects to be entitled to in exchange for those goods or services.
Upon the occurrence of an event of default, the trustee or the holders of at least 25% in aggregate principal amount of our convertible senior notes may declare the whole principal of, and accrued and unpaid interest on, all the notes to be due and payable immediately, subject to certain exceptions and conditions under the respective indenture.
Upon the occurrence of an event of default, the trustee or the holders of at least 25% in aggregate principal amount of our convertible senior notes may declare the whole principal of, and accrued and unpaid interest on, all the notes to be due and payable immediately, subject 99 to certain exceptions and conditions under the respective indenture.
In addition, each of our wholly foreign-owned subsidiaries in mainland China may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion, and the variable interest entities may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion.
In addition, each of our wholly foreign-owned subsidiaries in mainland China may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at its discretion, and the variable interest entities may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus 104 fund at its discretion.
We generate a small portion of our membership services revenue from on-demand content purchase by our users and the sale of the right to membership services through the cooperation with other parties, where we recognize revenue on a net basis when we do not control the specified services before they are transferred to the customer.
We generate a small portion of our membership services revenue from on-demand content purchase by our users and the sale of the right to membership services through the cooperation with other parties, where we recognize revenue on a net basis when we do not control the specified services before they are transferred to 95 the customer.
We also distribute selected content to regions outside of mainland China and/or to TV stations in mainland China, as well as from the release of feature films for exhibition in theaters. 113 Others. We generate revenues from various other channels, such as online games, and talent agency business.
We also distribute selected content to regions outside of mainland China and/or to TV stations in mainland China, as well as from the release of feature films for exhibition in theaters. Others. We generate revenues from various other channels, such as online games, and talent agency business.
We have taken a series of measures to mitigate such risks, including stepping up efforts in accounts receivable collection as well as actively controlling spending through careful budget formulation, stringent budge implementation and payment arrangements with longer payment period.
We 100 have taken a series of measures to mitigate such risks, including stepping up efforts in accounts receivable collection as well as actively controlling spending through careful budget formulation, stringent budge implementation and payment arrangements with longer payment period.
Our cost of revenues may increase in the foreseeable future as we are committed to enhancing and diversifying our original content offerings and to supporting our overseas expansion. Selling, general and administrative expenses. Our selling expenses primarily consist of promotional and marketing expenses and compensation for our sales and marketing personnel.
Our cost of revenues may increase in the foreseeable future as we are committed to enhancing and diversifying our content offerings and to supporting our overseas expansion. Selling, general and administrative expenses. Our selling expenses primarily consist of promotional and marketing expenses and compensation for our sales and marketing personnel.
For cash sub-licensing transactions, we are entitled to receive the sub-license fee under the sub-licensing arrangements and do not have any future obligation once we have provided the 128 underlying content to the sub-licensee (which is provided at or before the beginning of the sub-license period).
For cash sub-licensing transactions, we are entitled to receive the sub-license fee under the sub-licensing arrangements and do not have any future obligation once we have provided the underlying content to the sub-licensee (which is provided at or before the beginning of the sub-license period).
CRITICAL ACCOUNTING ESTIMATES We prepare our financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect our reporting of, among other things, assets and liabilities, contingent assets and liabilities and total revenues and expenses.
E. CRITICAL ACCOUNTING ESTIMATES We prepare our financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect our reporting of, among other things, assets and liabilities, contingent assets and liabilities and total revenues and expenses.
We currently plan to fund these expenditures with our current cash and cash equivalents, short-term investments and anticipated cash flow generated from our operating activities. 123 We intend to fund our existing and future material cash requirements with our cash provided by operating activities, existing cash and cash equivalents, restricted cash, short-term investments and other financing alternatives.
We currently plan to fund these expenditures with our current cash and cash equivalents, short-term investments and anticipated cash flow generated from our operating activities. We intend to fund our existing and future material cash requirements with our cash provided by operating activities, existing cash and cash equivalents, restricted cash, short-term investments and other financing alternatives.
Although we consolidate the results of the variable interest entities and their subsidiaries, we only have access to the assets or earnings of the variable interest entities and their subsidiaries through our contractual arrangements with the variable interest entities and their shareholders. 120 See “Item 4. Information on the Company—C.
Although we consolidate the results of the variable interest entities and their subsidiaries, we only have access to the assets or earnings of the variable interest entities and their subsidiaries through our contractual arrangements with the variable interest entities and their shareholders. See “Item 4. Information on the Company—C.
As of the date hereof, neither the People’s Bank of China nor SAFE has promulgated and made public any further rules, regulations, notices or circulars in this regard.
As of the date hereof, neither the People’s Bank of China nor SAFE has promulgated 101 and made public any further rules, regulations, notices or circulars in this regard.
On December 30, 2027, the maturity date of the PAG Notes, we are obligated to pay a premium at 30% of the principal amount of the PAG Notes, in addition to repaying the principal amount itself. • In January 2023, we completed a registered follow-on public offering of 76,500,000 ADSs at a public offering price of US$5.90 per ADS.
On the maturity date, we are obligated to pay a premium at 30% of the principal amount of the PAG Notes, in addition to repaying the principal amount itself. • In January 2023, we completed a registered follow-on public offering of 76,500,000 ADSs at a public offering price of US$5.90 per ADS.
Material Cash Requirements Our material cash requirements as of December 31, 2023 and any subsequent period primarily include our capital expenditures, long-term debt obligations, capital lease obligations, operating lease obligations, and purchase obligations. Our capital expenditures are incurred primarily in connection with leasehold improvements, computers and servers, and construction in process.
Material Cash Requirements Our material cash requirements as of December 31, 2024 and any subsequent period primarily include our capital expenditures, long-term debt obligations, operating lease obligations, and purchase obligations. Our capital expenditures are incurred primarily in connection with leasehold improvements, computers and servers, and construction in process.
Other than the contractual obligations set forth above, we do not have any contractual obligations that are long-term debt obligations, capital/operating lease obligations, purchase obligations or other long-term liabilities reflected on our balance sheet as of December 31, 2023. Holding Company Structure iQIYI, Inc. is a holding company with no material operations of its own.
Other than the contractual obligations set forth above, we do not have any significant contractual obligations that are long-term debt obligations, capital/operating lease obligations, purchase obligations or other long-term liabilities reflected on our balance sheet as of December 31, 2024. Holding Company Structure iQIYI, Inc. is a holding company with no material operations of its own.
Revisions to the amortization patterns are accounted for as a change in accounting estimate prospectively in accordance with ASC topic 250, Accounting Changes and Error Corrections .
Revisions to the amortization patterns are accounted for as a change in accounting estimate prospectively in accordance with ASC topic 250, Accounting Changes and Error Corrections (“ASC 250”).
In addition, the Cayman Islands does not impose withholding tax on dividend payments. 114 Hong Kong Our subsidiaries in Hong Kong are subject to the uniform tax rate of 16.5%. Under the Hong Kong tax laws, we are exempted from the Hong Kong income tax on our foreign-derived income. Hong Kong does not impose a withholding tax on dividends.
In addition, the Cayman Islands does not impose withholding tax on dividend payments. 96 Hong Kong Our subsidiaries in Hong Kong are subject to the uniform tax rate of 16.5%. Under the Hong Kong tax laws, we are generally exempted from the Hong Kong income tax on our foreign-derived income. Hong Kong does not impose a withholding tax on dividends.
We will continue to make cash commitments, including capital expenditures, to support the growth of our business. The following table sets forth our contractual obligations by specified categories as of December 31, 2023.
We will continue to make cash commitments, including capital expenditures, to support the growth of our business. 103 The following table sets forth our contractual obligations by specified categories as of December 31, 2024.
ITEM 5. O PERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and the related notes included in this annual report. This report contains forward-looking statements.
ITEM 5. OPERATIN G AND FINANCIAL REVIEW AND PROSPECTS The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and the related notes included in this annual report. This report contains forward-looking statements.
Production costs for original content that are predominantly monetized in a film group are capitalized. Production costs for original content that are predominantly monetized on its own are capitalized to the extent that they are recoverable from total revenues expected to be earned (“ultimate revenue”); otherwise, they are expensed as cost of revenues.
Production costs for original content that are predominantly monetized on its own are capitalized to the extent that they are recoverable from total revenues expected to be earned (“ultimate revenue”); otherwise, they are expensed as cost of revenues.
Licensed copyrights, net Licensed copyrights consist of professionally produced content, such as films, drama series, variety shows and other video content acquired from external parties.
Licensed copyrights, net Licensed copyrights consist of professionally produced content, such as films, drama series, mini and short dramas, variety shows and other video content acquired from external parties.
Total assets As of December 31, 2021 2022 2023 iQIYI, Inc. and its wholly-owned subsidiaries 35.7% 38.4% 36.2% Variable interest entities 64.3% 61.6% 63.8% Total 100.0% 100.0% 100.0% C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC. Technology Technology is the bedrock of our products and services. More than 40% of our employees are engineers dedicated to technological innovation and breakthrough.
Total assets As of December 31, 2022 2023 2024 iQIYI, Inc. and its wholly-owned subsidiaries 38.4% 36.2% 40.5% Variable interest entities 61.6% 63.8% 59.5% Total 100.0% 100.0% 100.0% C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC. Technology Technology is the bedrock of our products and services. More than 40% of our employees are engineers dedicated to technological innovation and breakthrough.
The table below sets forth the respective revenue contribution and assets of iQIYI, Inc. and our wholly-owned subsidiaries and the variable interest entities as of the dates and for the periods indicated: Total revenues (1) For the year ended December 31, 2021 2022 2023 iQIYI, Inc. and its wholly-owned subsidiaries 5.9% 7.6% 7.7% Variable interest entities 94.1% 92.4% 92.3% Total 100.0% 100.0% 100.0% Notes: (1) The percentages exclude the inter-company transactions and balances between iQIYI, Inc. and our wholly-owned subsidiaries and the variable interest entities.
The table below sets forth the respective revenue contribution and assets of iQIYI, Inc. and our wholly-owned subsidiaries and the VIEs and VIEs’ subsidiaries as of the dates and for the periods indicated: Total revenues (1) For the year ended December 31, 2022 2023 2024 iQIYI, Inc. and its wholly-owned subsidiaries 7.6% 7.7% 6.9% Variable interest entities and their subsidiaries 92.4% 92.3% 93.1% Total 100.0% 100.0% 100.0% Notes: (1) The percentages exclude the inter-company transactions and balances between iQIYI, Inc. and our wholly-owned subsidiaries and the variable interest entities.
We remain focused on high-quality content and user experience. We provide our users with a variety of products and services encompassing online video, online games, online literature, animations and others.
We remain focused on high-quality content and user experience. We provide our users with a variety of products and services encompassing online videos, online games, online literature, comics, and others.
In February 2023, we issued to PAG an additional US$50 million principal amount of the PAG Notes upon its exercise to subscribe for additional notes in full. The PAG Notes bear an interest rate of 6% per annum and will mature on December 30, 2027.
In February 2023, we issued to PAG an additional US$50 million principal amount of the PAG Notes upon its exercise to subscribe for additional notes in full. The PAG Notes bear an interest rate of 6% per annum and will mature on January 1, 2028.
The convertible senior notes issued on December 21, 2020 and January 8, 2021 (collectively, the “2026 Notes”) are senior, unsecured obligations of us, and interest is payable semi-annually in cash at a rate of 4.00% per annum on June 15 and December 15 of each year, beginning on June 15, 2021.
The convertible senior notes issued on December 21, 2020 and January 8, 2021, which we collectively refer to as the 2026 Notes, are senior, unsecured obligations of us, and interest is payable semi-annually in cash at a rate of 4.00% per annum on June 15 and December 15 of each year, beginning on June 15, 2021.
Net cash (used for)/provided by financing activities Net cash used for financing activities was RMB4,285.1 million (US$603.5 million) in 2023, primarily due to (i) cash outflow used for repayments or redemption of convertible senior notes of RMB11,736.0 million (US$1,653.0 million), (ii) net cash inflow from issuance of convertible senior notes of RMB4,415.4 million (US$621.9 million), and (iii) net cash inflow from follow-up offering of RMB3,391.3 million (US$477.7 million).
Net cash used for financing activities was RMB4,285.1 million in 2023, primarily due to (i) cash outflow used for repayments or redemption of convertible senior notes of RMB11,736.0 million, (ii) net cash inflow from issuance of convertible senior notes of RMB4,415.4 million, and (iii) net cash inflow from follow-up offering of RMB3,391.3 million.
Our capital expenditures were RMB261.5 million, RMB174.3 million and RMB37.0 million (US$5.2 million) in the years ended December 31, 2021, 2022 and 2023, respectively. Our capital expenditures decreased significantly in 2023 because we further enhanced our overall cost control initiative. Our capital expenditures may increase in the future as our business continues to grow.
Our capital expenditures were RMB174.3 million, RMB37.0 million and RMB79.3 million (US$10.9 million) in the years ended December 31, 2022, 2023 and 2024, respectively. Our capital expenditures decreased significantly in 2023 because we enhanced our overall cost control initiative. Our capital expenditures may increase in the future as our business continues to grow.
We expect our research and development expenses as a percentage of total revenues to remain largely stable in the foreseeable future. Taxation We had income tax expense of RMB96.5 million and RMB84.0 million and RMB80.0 million (US$11.3 million) in 2021, 2022 and 2023, respectively. We are subject to various rates of income tax under different jurisdictions.
We expect our research and development expenses as a percentage of total revenues to remain largely stable in the foreseeable future. Taxation We had income tax expense of RMB84.0 million, RMB80.0 million and RMB61.1 million (US$8.4 million) in 2022, 2023 and 2024, respectively. We are subject to various rates of income tax under different jurisdictions.
Our cash and cash equivalents primarily consist of cash on hand and highly liquid investments, which are unrestricted from withdrawal or use, or which have original maturities of three months or less when purchased. Our restricted cash mainly represents restricted deposits. As of December 31, 2023, we had RMB941.7 million (US$132.6 million) in short-term investments.
Our cash and cash equivalents primarily consist of cash on hand and highly liquid investments, which are unrestricted from withdrawal or use, or which have original maturities of three months or less when purchased. As of December 31, 2024, we had RMB941.6 million (US$129.0 million) in short-term investments.
Net cash provided by/(used for) investing activities Net cash used for investing activities was RMB1,739.5 million (US$245.0 million) in 2023, primarily due to (i) cash inflow from maturities of debt securities of RMB1,769.3 million (US$249.2 million), (ii) cash outflow from loans provided to related parties of RMB1,472.6 million (US$207.4 million), (iii) cash outflow from purchasing of debt securities of RMB1,890.5 million (US$266.3 million).
Net cash used for investing activities was RMB1,739.5 million in 2023, primarily due to (i) cash inflow from maturities of debt securities of RMB1,769.3 million, (ii) cash outflow from loans provided to related parties of RMB1,472.6 million, and (iii) cash outflow from purchasing of debt securities of RMB1,890.5 million.
TREND INFORMATION Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2021 to December 31, 2023 that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. 126 E.
TREND INFORMATION Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Holders of the PAG Notes also have the right to require us to repurchase for cash all or part of their notes in the event of certain fundamental changes and events of default.
Holders of the PAG Notes may also have the right to require us to repurchase their notes in the event of certain fundamental changes or events of default.
In the years ended December 31, 2021, 2022 and 2023, our research and development expenditures, including share-based compensation expenses for research and development staff, were RMB2,794.9 million, RMB1,899.2 million and RMB1,766.6 million (US$248.8 million), respectively, representing 9.1%, 6.5% and 5.5% of our total revenues for the years ended December 31, 2021, 2022 and 2023, respectively.
In the years ended December 31, 2022, 2023 and 2024, our research and development expenditures, including share-based compensation expenses for research and development staff, were RMB1,899.2 million, RMB1,766.6 million and RMB1,778.4 million (US$243.6 million), respectively, representing 6.5%, 5.5% and 6.1% of our total revenues for the years ended December 31, 2022, 2023 and 2024, respectively.
The holders may require us to repurchase all or a portion of the 2028 Notes for cash on March 16, 2026, or upon a fundamental change, at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest. (2) Capital lease obligations represent our obligations for the finance leases of fixed assets.
The holders may require us to repurchase all or a portion of the 2028 Notes for cash on March 16, 2026, or upon a fundamental change, at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest.
We utilize AI technology to drive our entire business, including video content creation, purchase, production, tagging, distribution, monetization and customer service, to achieve automation and intelligence in the entire business process. Our advanced technologies facilitate better 125 content production, enhanced operation efficiency and superior user experience.
We utilize AI technology to drive our entire business, including video content creation, purchase, production, tagging, distribution, monetization and customer service, to achieve automation and intelligence in the entire business process. Our advanced technologies facilitate better content production, enhanced operation efficiency and superior user experience. To maintain our industry-leading position, we have established extensive cooperation with many industry-leading research institutes.
Certain of our mainland China subsidiaries and variable interest entities, including Beijing QIYI Century, Shanghai Zhong Yuan and Beijing iQIYI, are qualified as High and New Technology Enterprises. The related tax benefits for our entities will expire in 2024 and 2025.
A High and New Technology Enterprise certificate is normally effective for a period of three years. Certain of our mainland China subsidiaries and variable interest entities, including Beijing QIYI Century, Shanghai Zhong Yuan and Beijing iQIYI, are qualified as High and New Technology Enterprises. The related tax benefits for our entities will expire in 2025 or 2027.
As of December 31, 2023, 88.5% of our cash and cash equivalents, restricted cash and short-term investments were held in mainland China, while 58.9% of our cash and cash equivalents, restricted cash and short-term investments were held by the variable interest entities and their subsidiaries.
As of December 31, 2024, 69.4% of our cash and cash equivalents and short-term investments were held in mainland China, while 34.5% of our cash and cash equivalents and short-term investments were held by the variable interest entities and their subsidiaries.
We were legally obligated to pay the banks or other financial institutions in the amount totaling RMB1,058.6 million, RMB1,497.4 million and RMB1,771.1 million (US$249.5 million) for the year ended December 31, 2021, 2022 and 2023, respectively. As of December 31, 2023, the outstanding borrowings from the factoring arrangements was RMB1,055.8 million (US$148.7 million), which is repayable within one year.
We were legally obligated to pay the banks or other financial institutions in the amount totaling RMB1,497.4 million, RMB1,771.1 million and RMB1,119.2 million (US$153.3 million) for the year ended December 31, 2022, 2023 and 2024, respectively. As of December 31, 2024, the outstanding borrowings from the factoring arrangements was RMB717.9 million (US$98.4 million), which is repayable within one year.
In addition to content recommendations catering to users’ interests, our advanced video, audio and AI technologies provide users with superior viewing experience in a cost-effective manner.
Users are given recommendations based on automatic classification of their tags. 105 In addition to content recommendations catering to users’ interests, our advanced video, audio and AI technologies provide users with superior viewing experience in a cost-effective manner.
Accounts and notes payable amounted to RMB5,993.4 million and RMB5,671.1 million (US$798.8 million) as of December 31, 2022 and 2023, respectively. A substantial majority of our accounts and notes payable are due to content providers. The decrease in accounts and notes payable in 2023 was primarily due to a decrease in content acquisition related payables.
Accounts and notes payable amounted to RMB5,671.1 million and RMB6,482.2 million (US$888.1 million) as of December 31, 2023 and 2024, respectively. A substantial majority of our accounts and notes payable are due to content providers. The increase in accounts and notes payable in 2024 was primarily due to an increase in content acquisition related payables.
Deterioration of our cash flow position could materially and adversely affect our ability to service our indebtedness and continue our operations” and “Item 3. Key Information — D. Risk Factors—Risks Related to Our Business and Industry—We have significant working capital requirements and have in the past experienced working capital deficits.
Deterioration of our cash flow position could materially and adversely affect our ability to service our indebtedness and continue our operations” and “—We have significant working capital requirements and have in the past experienced working capital deficits.
Risk Factors—Risks Related to Doing Business in Mainland China” and “Item 4. Information on the Company—B. Business Overview—Government Regulations.” B. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2023, we had RMB4,434.5 million (US$624.6 million) and RMB6.1 million (US$0.9 million) in cash and cash equivalents and restricted cash, respectively.
Risk Factors—Risks Related to Doing Business in Mainland China” and “Item 4. Information on the Company—B. Business Overview—Government Regulations.” B. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2024, we had RMB3,529.7 million (US$483.6 million) in cash and cash equivalents.
Technologies to Enhance User Experience We apply advanced deep learning technology to areas such as advanced content tagging, user profiling, developing knowledge graph and content recommendation. Users are given recommendations based on automatic classification of their tags.
Technologies to Enhance User Experience We apply advanced deep learning technology to areas such as advanced content tagging, user profiling, developing knowledge graph and content recommendation.
To finance our operations, we have incurred a significant amount of indebtedness and other liabilities in relation to our convertible senior notes and other financing arrangements. We cannot assure you that we will be able to generate sufficient cash flow from our operations or secure additional financing to support the repayment of our indebtedness when our payments become due.
We cannot assure you that we will be able to generate sufficient cash flow from our operations or secure additional financing to support the repayment of our indebtedness when our payments become due. Historically, we have issued convertible senior notes, which are senior, unsecured obligations of our company.
Content distribution We generate revenues from sub-licensing content assets within authorized scope for cash or through nonmonetary exchanges mainly with other online video broadcasting companies, as well as from the release of feature films for exhibition in theaters.
The contract consideration related to these customer options to acquire additional services are deferred and recognized as revenue when future services are transferred or when the options expire. 107 Content distribution We generate revenues from sub-licensing content assets within authorized scope for cash or through nonmonetary exchanges mainly with other online video broadcasting companies, as well as from the release of feature films for exhibition in theaters.
The increase of cash outflow for operating assets and liabilities compared with 2020 was primarily due to increased licensed copyrights and produced content, which was offset by increased accounts payable.
The decrease in non-cash items compared with 2021 was primarily due to decreases of amortization and impairment of licensed copyrights and produced content. The decrease of cash outflow from changes in operating assets and liabilities compared with 2021 was primarily due to decreased licensed copyrights and produced content, which was offset by increased accounts payable.
In 2023, we redeemed US$1,197.6 million aggregate principal amount of the 2025 Notes as requested by the holders. On December 21, 2020, we issued US$800 million convertible senior notes and offered an additional US$100 million principal amount simultaneously, issuable pursuant to the underwriters’ exercise of option to purchase additional notes.
On December 21, 2020, we issued US$800 million convertible senior notes and offered an additional US$100 million principal amount simultaneously, issuable pursuant to the underwriters’ exercise of option to purchase additional notes. On January 8, 2021, the additional US$100 million principal amount was issued pursuant to the underwriters’ exercise of their option.
Income tax expense In 2023, we recognized RMB80.0 million (US$11.3 million) of income tax expense, which resulted from RMB81.0 million (US$11.4 million) current year income tax and RMB1.0 million (US$0.1 million) deferred income tax income.
Income tax expense In 2024, we recognized RMB61.1 million (US$8.4 million) of income tax expense, which resulted from RMB85.5 million (US$11.7 million) current year income tax and RMB24.4 million (US$3.3 million) deferred income tax income.
(3) Operating lease obligations represent our obligations for leasing office premises and internet data center facilities. 124 (4) Purchase obligations represent our future minimum payments under non-cancelable agreements for licensed copyrights, produced content and property management fees.
(3) Purchase obligations represent our future minimum payments under non-cancelable agreements for licensed copyrights, produced content, property management fees and fixed assets.
As of December 31, 2023, we had unused credit lines of RMB2.2 billion (US$0.3 billion) and a working capital deficit of RMB9.7 billion (US$1.4 billion). We generated a net income of RMB1,952.6 million (US$275.0 million) in 2023.
As of December 31, 2024, we had unused credit lines of RMB3.3 billion (US$0.4 billion) and a working capital deficit of RMB12.0 billion (US$1.6 billion). We generated a net income of RMB790.6 million (US$108.3 million) in 2024 and had a net cash generated from operating activities of RMB2,110.1 million (US$289.1 million) in 2024.
For the right to sublicense the content to external parties that generates direct content distribution revenues, the content costs are amortized based on its estimated usage pattern and recorded as cost of revenues. 130 Impairment of licensed copyrights and produced content Our business model is mainly subscription and advertising based, as such the majority of the content assets (licensed copyrights and produced content) are predominantly monetized with other content assets.
For the right to sublicense the content to external parties that generates direct content distribution revenues, the content costs are amortized based on its estimated usage pattern and recorded as cost of revenues.
Holders of the 2028 Notes may require us to repurchase all or a portion of their notes for cash on March 16, 2026 or in the event of certain fundamental changes at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest. 119 We have also conducted the following structured payable arrangements in the last three fiscal years: • Since 2020, we have entered into structured payable arrangements with banks or other financial institutions, pursuant to which the suppliers’ receivables collection process was accelerated through selling their receivables from us to the banks or other financial institutions at a discount.
We have also conducted the following structured payable arrangements in the last three fiscal years: • Since 2020, we have entered into structured payable arrangements with banks or other financial institutions, pursuant to which the suppliers’ receivables collection process was accelerated through selling their receivables from us to the banks or other financial institutions at a discount.
The decrease in non-cash items compared with 2021 was primarily due to decreases of amortization and impairment of licensed copyrights and produced content.
The decrease in non-cash items compared with 2023 was primarily due to a decrease of amortization and impairment of produced content and an increase of barter transaction revenue, partially offset by an increase of amortization of licensed copyright.
An enterprise may benefit from a preferential tax rate of 15% under the Enterprise Income Tax Law if it qualifies as a High and New Technology Enterprise. A High and New Technology Enterprise certificate is normally effective for a period of three years.
The enterprise income tax is calculated based on the entity’s global income as determined under mainland China tax laws and accounting standards. An enterprise may benefit from a preferential tax rate of 15% under the Enterprise Income Tax Law if it qualifies as a High and New Technology Enterprise.
Mainland China Generally, our mainland China subsidiaries, the variable interest entities and their subsidiaries are subject to enterprise income tax on their taxable income in mainland China at a rate of 25%. The enterprise income tax is calculated based on the entity’s global income as determined under mainland China tax laws and accounting standards.
Singapore Generally, entities in Singapore are subject to a unified 17% tax rate. Singapore does not impose a withholding tax on dividends. Mainland China Generally, our mainland China subsidiaries, the variable interest entities and their subsidiaries are subject to enterprise income tax on their taxable income in mainland China at a rate of 25%.
For the year ended December 31, 2021 2022 2023 RMB % RMB % RMB US$ % (in thousands, except for percentages) Revenues: Membership services 16,713,664 54.7 17,710,830 61.1 20,314,216 2,861,197 63.7 Online advertising services 7,066,751 23.1 5,331,697 18.4 6,223,903 876,618 19.5 Content distribution 3,007,828 9.8 2,562,412 8.8 2,458,610 346,288 7.7 Others 3,766,116 12.4 3,392,609 11.7 2,875,922 405,066 9.1 Total revenues 30,554,359 100.0 28,997,548 100.0 31,872,651 4,489,169 100.0 Membership services.
For the year ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Revenues: Membership services 17,710,830 61.1 20,314,216 63.7 17,762,814 2,433,496 60.8 Online advertising services 5,331,697 18.4 6,223,903 19.5 5,714,243 782,848 19.6 Content distribution 2,562,412 8.8 2,458,610 7.7 2,846,854 390,017 9.7 Others 3,392,609 11.7 2,875,922 9.1 2,901,327 397,480 9.9 Total revenues 28,997,548 100.0 31,872,651 100.0 29,225,238 4,003,841 100.0 Membership services.
Our marketing and promotional expenses increased by 45.5% from RMB1,809.1 million in 2022 to RMB2,632.7 million (US$370.8 million) in 2023 due to the higher spending on user acquisition channels and content promotions.
Our marketing and promotional expenses decreased by 7.9% from RMB2,632.7 million in 2023 to RMB2,424.9 million (US$332.2 million) in 2024 due to the less spending on user acquisition and content promotions.
For the year ended December 31, 2021 2022 2023 RMB RMB RMB US$ (in thousands) Summary Consolidated Cash Flows Data: Net cash (used for)/provided by operating activities (5,951,847 ) (70,569 ) 3,351,600 472,063 Net cash provided by/(used for) investing activities 1,262,350 265,980 (1,739,515 ) (245,005 ) Net cash (used for)/provided by financing activities (2,959,455 ) 4,468,863 (4,285,072 ) (603,541 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (216,696 ) 122,418 92,039 12,964 Net (decrease)/increase in cash, cash equivalents and restricted cash (7,865,648 ) 4,786,692 (2,580,948 ) (363,519 ) Cash, cash equivalents and restricted cash at the beginning of the year 10,940,512 3,074,864 7,861,556 1,107,277 Cash, cash equivalents and restricted cash at the end of the year 3,074,864 7,861,556 5,280,608 743,758 Net cash (used for)/provided by operating activities Net cash provided by operating activities was RMB3,351.6 million (US$472.1 million) in 2023, primarily attributable to net income of RMB1,952.6 million (US$275.0 million), adjusted by non-cash items of RMB14,757.5 million (US$2,078.6 million) and cash outflow from changes in operating assets and liabilities of RMB13,358.5 million (US$1,881.5 million).
For the year ended December 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Summary Consolidated Cash Flows Data: Net cash (used for)/provided by operating activities (70,569 ) 3,351,600 2,110,057 289,075 Net cash provided by/(used for) investing activities 265,980 (1,739,515) (2,444,870) (334,945) Net cash provided by/(used for) financing activities 4,468,863 (4,285,072) (1,370,121) (187,705) Effect of exchange rate changes on cash, cash equivalents and restricted cash 122,418 92,039 14,657 2,008 Net increase/(decrease) in cash, cash equivalents and restricted cash 4,786,692 (2,580,948) (1,690,277) (231,567) Cash, cash equivalents and restricted cash at the beginning of the year 3,074,864 7,861,556 5,280,608 723,440 Cash, cash equivalents and restricted cash at the end of the year 7,861,556 5,280,608 3,590,331 491,873 Net Cash (Used for)/Provided by Operating Activities Net cash provided by operating activities was RMB2,110.1 million (US$289.1 million) in 2024, primarily attributable to net income of RMB790.6 million (US$108.3 million), adjusted by non-cash items of RMB13,678.6 million (US$1,874.0 million) and cash outflow from changes in operating assets and liabilities of RMB12,359.1 million (US$1,693.2 million).
In comparison, in 2022, we recognized RMB84.0 million of income tax expense, which resulted from RMB53.9 million current year income tax and RMB30.1 million deferred income tax expense. 117 Net (loss)/income As a result of the foregoing, we had net losses of RMB117.8 million in 2022 and net income of RMB1,952.6 million (US$275.0 million) in 2023.
In comparison, in 2023, we recognized RMB80.0 million of income tax expense, which resulted from RMB81.0 million current year income tax and RMB1.0 million deferred income tax expense. Net income As a result of the foregoing, we recorded a net income of RMB790.6 million (US$108.3 million) in 2024, compared to a net income of RMB1,952.6 million in 2023.
An impairment loss on the equity method investments is recognized in the consolidated statements of comprehensive (loss)/income when the decline in value is determined to be other-than-temporary. 129 Available-for-sale debt securities are convertible debt instruments issued by private companies and investments in equity securities that are redeemable at our option, which are measured at fair value, with interest income recorded in earnings and unrealized gains or losses recorded in accumulated other comprehensive income.
Available-for-sale debt securities are convertible debt instruments issued by private companies and investments in equity securities that are redeemable at our option, which are measured at fair value, with interest income recorded in earnings and unrealized gains or losses recorded in accumulated other comprehensive income. 108 Produced content, net We produce original content in-house and in collaboration with external parties.
Our advertising revenues are recognized net of advertising agency rebates in 2021, 2022 and 2023. Our online advertising services are in the form of brand advertising and performance-based advertising. Content distribution.
We review and evaluate the scope and the price of our membership services periodically, and may adjust based on evolving market needs from time to time. Online advertising services. Our advertising revenues are recognized net of advertising agency rebates in 2022, 2023 and 2024. Our online advertising services are in the form of brand advertising and performance-based advertising. Content distribution.
The holders may require us to repurchase all or a portion of the 2025 Notes for cash on April 1, 2023, which may result in a material cash outlay of our company. The holders of the 2025 Notes may also require us to repurchase all or a portion of the 2025 Notes for cash upon a fundamental change.
In 2023, we redeemed US$1,197.6 million aggregate principal amount of the 2025 Notes as requested by the holders. The holders of the 2025 Notes may also require us to repurchase all or a portion of the 2025 Notes for cash upon a fundamental change.
Our total current liabilities were RMB22.3 billion (US$3.1 billion) as of December 31, 2023, which primarily included RMB2,802.4 million (US$394.7 million) in convertible senior notes, current portion, RMB5,671.1 million (US$798.8 million) in accounts and notes payable, RMB4,373.2 million (US$616.0 million) in customer advances and deferred revenue, and RMB3,571.6 million (US$503.1 million) in short-term loans.
Our total current liabilities were RMB21.5 billion (US$2.9 billion) as of December 31, 2024, which primarily included RMB6,482.2 million (US$888.1 million) in accounts and notes payable, RMB4,403.7 million (US$603.3 million) in customer advances and deferred revenue, and RMB3,786.9 million (US$518.8 million) in short-term loans.
To maintain our industry-leading position, we have established extensive cooperation with many industry-leading research institutes. Technologies to Enhance Content Production and Operation Efficiency We empower content production and monetization cycle by applying various technologies.
Technologies to Enhance Content Production and Operation Efficiency We empower content production and monetization cycle by applying various technologies.
On December 30, 2027, the maturity date of the PAG Notes, we are obligated to pay a premium at 30% of the principal amount of the PAG Notes, in addition to repaying the principal amount itself.
The PAG Notes, secured by certain collateral arrangements, bear an interest rate of 6% per annum and will mature on January 1, 2028. On the maturity date, we are obligated to pay a premium at 30% of the principal amount of the PAG Notes, in addition to repaying the principal amount itself.
Our online advertising services revenue increased by 16.7% from RMB5,331.7 million to RMB6,223.9 million (US$876.6 million) in 2023, primarily driven by the growth of performance-based advertising business and, to a lesser extent, the growth in the brand advertising business.
Our online advertising services revenue decreased by 8.2% from RMB6,223.9 million in 2023 to RMB5,714.2 million (US$782.8 million) in 2024, primarily due to the decrease in the brand advertising business, partially offset by the growth of performance-based advertising business. Content distribution.
Risk Factors—Risks Related to Our Business and Industry—We had historically incurred net losses, and may incur losses again in the future.” Year Ended December 31, 2022 Compared with Year Ended December 31, 2021 For a detailed description of the comparison of our operating results for the year ended December 31, 2022 to the year ended December 31, 2021, see “Item 5.
Year Ended December 31, 2023 Compared with Year Ended December 31, 2022 For a detailed description of the comparison of our operating results for the year ended December 31, 2023 to the year ended December 31, 2022, see “Item 5. Operating and Financial Review and Prospects—A.
Our general and administrative personnel compensation expenses decreased by 14.3% from RMB484.4 million in 2022 to RMB415.1 million (US$58.5 million) in 2023, primarily due to the decrease in share-based compensation expenses.
Selling, general and administrative expenses Selling expenses decreased by 9.3% from RMB3,393.4 million in 2023 to RMB3,079.4 million (US$421.9 million) in 2024, primarily due to the decrease in our marketing and promotional expenses.
For further information, please see “Loans Payable” under Note 13 and “Convertible Senior Notes” under Note 14 to our consolidated financial statements included elsewhere in this annual report. On March 7, 2023, we issued US$600 million convertible senior notes, which we refer to as the 2028 Notes.
For further information, please see “Loans Payable” under Note 13 and “Convertible Senior Notes” under Note 14 to our consolidated financial statements included elsewhere in this annual report. (2) Operating lease obligations represent our obligations for leasing office premises and internet data center facilities.
As of December 31, 2023, we had over 40,000 professionally produced content titles in our comprehensive and diversified video content library, comprised of drama series, variety shows, films and others. 112 We have developed multiple monetization methods to capture entertainment market opportunities in mainland China. Our membership services contribute a significant portion of our revenues.
As of December 31, 2024, our comprehensive and diversified video content library boasted over 40,000 professionally produced long-form content titles, including drama series, variety shows, films, cartoons, animations, and others, along with approximately 10,000 mini-dramas. We have developed diversified monetization models. We generate revenues through membership services, online advertising services and a suite of other monetization methods.
Selected Income Statement Items Total Revenues We derive our revenues from (i) membership services, (ii) online advertising services, (iii) content distribution and (iv) others. The following table presents our revenue lines and as percentages of our total revenues for the periods presented.
The following table presents our revenue lines and as percentages of our total revenues for the periods presented.
Produced content also includes cash expenditures made to acquire a proportionate share of certain rights to films including profit sharing, distribution and/or other rights. Exploitation costs are expensed as incurred. Participation costs are accrued using the individual-film-forecast-computation method, which recognizes the costs in the same ratio as the associated ultimate revenue.
Exploitation costs are expensed as incurred. Participation costs are accrued using the individual-film-forecast-computation method, which recognizes the costs in the same ratio as the associated ultimate revenue. Production costs for original content that are predominantly monetized in a film group are capitalized.
Operating and Financial Review and Prospects—A. Operating Results—Results of Operation—Year Ended December 31, 2022 Compared with Year Ended December 31, 2021” of our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 22, 2023. Inflation To date, inflation in mainland China has not materially impacted our results of operations.
Operating Results—Results of Operation—Year Ended December 31, 2023 Compared with Year Ended December 31, 2022” of our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 14, 2024. Impact of Foreign Currency Fluctuation See “Item 3. Key Information—D.
Produced content, net We produce original content in-house and in collaboration with external parties. Produced content primarily consists of films, episodic series, variety shows and animations. The costs incurred in the physical production of original content include direct production costs, production overhead and acquisition costs.
Produced content primarily consists of films, episodic series, mini and short dramas, variety shows and animations. The costs incurred in the physical production of original content include direct production costs, production overhead and acquisition costs. Produced content also includes cash expenditures made to acquire a proportionate share of certain rights to films including profit sharing, distribution and/or other rights.

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Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeThe business address of Junjie He, Dou Shen, Fei Qi, and Shanshan Cui is Baidu Campus, No. 10 Shangdi 10 th Street, Haidian District, Beijing 100085, China. 140 † For each person and group included in this column, percentage ownership is calculated by dividing the number of Class A ordinary shares beneficially owned by such person or group, including Class A ordinary shares that such person or group has the right to acquire within 60 days of February 29, 2024, by the sum of the total number of Class A ordinary shares outstanding as of February 29, 2024 and the number of Class A ordinary shares underlying the options or other right held by such person or group that are exercisable to acquire Class A ordinary shares within 60 days of February 29, 2024. †† For each person and group included in this column, percentage ownership is calculated by dividing the number of Class B ordinary shares beneficially owned by such person or group, including Class B ordinary shares that such person or group has the right to acquire within 60 days of February 29, 2024, by the sum of the total number of Class B ordinary shares outstanding as of February 29, 2024 and the number of Class B ordinary shares underlying the options or other right held by such person or group that are exercisable to acquire Class B ordinary shares within 60 days of February 29, 2024. ††† For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group, including Class A and Class B ordinary shares that such person or group has the right to acquire within 60 days of February 29, 2024, with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
Biggest changeOrdinary Shares Beneficially Owned Class A Ordinary Shares Beneficially Owned (†) Class B Ordinary Shares Beneficially Owned (††) Voting Power (†††) Number % Number % % Directors and Executive Officers: Junjie He — — — — — Yu Gong (1) 150,831,833 3.9 — — * Dou Shen * * — — * Fei Qi — — — — — Shanshan Cui — — — — — Weijian Shan — — — — — Sam Hanhui Sun — — — — — Conor Chia-hung Yang — — — — — Jun Wang * * — — — Xiaohui Wang * * — — * Youqiao Duan * * — — * Xianghua Yang * * — — * All directors and executive officers as a group 226,400,554 5.8 — — * Principal Shareholders: Baidu (2) 7,933,331 * 3,041,097,278 100.0 89.2 PAG (3) 819,266,931 18.1 — — 2.3 Notes: * Less than 1%. † For each person and group included in this column, percentage ownership is calculated by dividing the number of Class A ordinary shares beneficially owned by such person or group, including Class A ordinary shares that such person or group has the right to acquire within 60 days of February 28, 2025, by the sum of the total number of Class A ordinary shares outstanding as of February 28, 2025 and the number of Class A ordinary shares underlying the options or other right held by such person or group that are exercisable to acquire Class A ordinary shares within 60 days of February 28, 2025. †† For each person and group included in this column, percentage ownership is calculated by dividing the number of Class B ordinary shares beneficially owned by such person or group, including Class B ordinary shares that such person or group has the right to acquire within 60 days of February 28, 2025, by the sum of the total number of Class B ordinary shares outstanding as of February 28, 2025 and the number of Class B ordinary shares underlying the options or other right held by such person or group that are exercisable to acquire Class B ordinary shares within 60 days of February 28, 2025. ††† For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group, including Class A and Class B ordinary shares that such person or group has the right to acquire within 60 days of February 28, 2025, with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, direct or end customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; or (iii) seek directly or indirectly, to solicit the services of, or hire or engage, any person who is known to be employed or engaged by our company; or (iv) otherwise interfere with our business or accounts.
Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, direct or end customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; (iii) seek directly or indirectly, to solicit the services of, or hire or engage, any person who is known to be employed or engaged by our company; or (iv) otherwise interfere with our business or accounts.
Under the 2021 Plan, the maximum aggregate number of ordinary shares which may be issued pursuant to all awards is initially 364,000,000 Class A ordinary shares, which we refer to as the 2021 Plan Award Pool, provided that if restricted share units are granted, each restricted share unit (that entitles the holder to one share) granted shall reduce the number of shares in the 2021 Plan Award Pool available for future grants by 1.3 Class A ordinary shares; any option with nil exercise price shall have the same effect of reducing the number of shares in the 2021 Plan Award Pool as the restricted share units.
Under the 2021 Plan, the maximum aggregate number of ordinary shares which may be issued pursuant to all awards is initially 364,000,000 Class A ordinary shares, which we refer to as the 2021 Plan Award Pool, provided that if restricted share units are granted, each restricted share unit (that entitles the holder to one share) granted shall reduce the number of shares in the 2021 Plan Award Pool available for future grants by 1.3 Class A ordinary shares; any option with nil exercise price shall have the same effect of reducing the number of shares in the 2021 Plan Award Pool as the restricted share 113 units.
Share Incentive Plans 2010 Equity Incentive Plan We adopted the 2010 Equity Incentive Plan, which we refer to as the 2010 Plan, on October 18, 2010, which was subsequently amended and restated on November 3, 2014, August 6, 2016 and September 15, 2020, for the purpose of granting share-based compensation awards either through a proprietary interest in our long-term success, or compensation based on fulfilling certain performance goals to employees, officers, directors and consultants to incentivize their performance and promote the success of our business.
Share Incentive Plans 2010 Equity Incentive Plan We adopted the 2010 Equity Incentive Plan, which we refer to as the 2010 Plan, on October 18, 2010, which was subsequently amended and restated on November 3, 2014, August 6, 2016 and September 15, 2020, for the purpose of granting share-based compensation awards either through a proprietary interest in our long-term success, or compensation based on fulfilling certain performance goals to employees, officers, directors and consultants to incentivize their performance and promote the success of our 112 business.
He oversaw Baidu’s M&A (Mergers & Acquisition), SIM (Strategic Investment Management), SOM (Sales Operation and Management), and FP&A (Financial Planning & Analysis) departments. Prior to joining Baidu, he had rich working experience with investment firms, including China 131 International Capital Corporation (CICC), CITIC Private Equity, Warburg Pincus and Tibet Langrun Capital. Mr.
He oversaw Baidu’s M&A (Mergers & Acquisition), SIM (Strategic Investment Management), SOM (Sales Operation and Management), and FP&A (Financial Planning & Analysis) departments. Prior to joining Baidu, he had rich working experience with investment firms including China International Capital Corporation (CICC), CITIC Private Equity, Warburg Pincus and Tibet Langrun Capital. Mr.
As a result, it may be difficult for a shareholder to effect service of process within the United States upon these individuals, to bring an action against us or these individuals in the United States, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.
As a result, it may be difficult for a shareholder to effect service of process within the United States upon these individuals, to bring an action against us or these individuals in the United States, or to enforce against us or them any judgment obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.
However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and 138 these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association.
However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association.
A Cayman Islands court may impose civil liability on us or our directors or officers in a suit brought in the Grand Court of the Cayman Islands against us or these persons with respect to a violation of U.S. federal securities laws, provided that the facts surrounding any violation constitute or give rise to a cause of action under Cayman Islands law. 142 Our PRC legal counsel, Jingtian & Gongcheng, has advised us that there is uncertainty as to whether the courts of mainland China would: • recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or • entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
A Cayman Islands court may impose civil liability on us or our directors or officers in a suit brought in the Grand Court of the Cayman Islands against us or these persons with respect to a violation of U.S. federal securities laws, provided that the facts surrounding any violation constitute or give rise to a cause of action under Cayman Islands law. 119 Our PRC legal counsel, Jingtian & Gongcheng, has advised us that there is uncertainty as to whether the courts of mainland China would: • recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or • entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
Wang currently serves on the board of directors of Strawbear Entertainment Group (SEHK: 2125). Mr. Wang holds a bachelor’s degree in journalism from Jilin University, a master’s degree in business administration from Cheong Kong Graduate School of Business and a Ph.D. in literature from the Communication University of China.
Wang currently serves on the board of directors of Strawbear Entertainment Group (SEHK: 2125). Mr. Wang holds a bachelor’s degree in journalism from Jilin University, a master’s degree in 111 business administration from Cheong Kong Graduate School of Business and a Ph.D. in literature from the Communication University of China.
Yang served as deputy general manager of wireless business department at Sohu.com, responsible for R&D, marketing and mobile business. Mr. Yang holds both bachelor’s and master’s degrees in hydraulic and hydroelectric engineering from Tsinghua University. 133 B.
Yang served as deputy general manager of wireless business department at Sohu.com, responsible for R&D, marketing and mobile business. Mr. Yang holds both bachelor’s and master’s degrees in hydraulic and hydroelectric engineering from Tsinghua University. B.
PAG Asia Capital GP IV Limited is controlled by PAG Capital Limited which in turn is controlled by Pacific Alliance Group Limited. Pacific Alliance Group Limited is controlled by PAG. Pacific Alliance Asia Opportunity Fund L.P. and Polymer Asia Fund LP are indirectly controlled by PAG. PAGAC IV-1 (Cayman) Limited is an exempted company incorporated in the Cayman Islands.
PAG Asia Capital GP IV Limited is controlled by PAG Capital Limited which in turn is controlled by Pacific Alliance Group Limited. Pacific Alliance Group Limited is controlled by PAG. Pacific Alliance Asia Opportunity Fund L.P. and 118 Polymer Asia Fund LP are indirectly controlled by PAG. PAGAC IV-1 (Cayman) Limited is an exempted company incorporated in the Cayman Islands.
The Plan permits the awards of options, share appreciation rights, share grants and restricted share units. Plan Administration. A committee consisting of at least two individuals determined by our board acts as the plan administrator.
The 2010 Plan permits the awards of options, share appreciation rights, share grants and restricted share units. Plan Administration. A committee consisting of at least two individuals determined by our board acts as the plan administrator.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 137 Committees of the Board of Directors We have established an audit committee and a compensation committee under the board of directors. We have adopted a charter for each of the two committees. Each committee’s members and functions are described below.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 115 Committees of the Board of Directors We have established an audit committee and a compensation committee under the board of directors. We have adopted a charter for each of the two committees. Each committee’s members and functions are described below.
We believe that we maintain a good working relationship with our employees, and we have not experienced any material labor disputes.
We believe that we maintain a good working relationship with our employees and labor unions, and we have not experienced any material labor disputes.
Board Diversity Matrix Board Diversity Matrix Country of Principal Executive Offices Mainland China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No As of February 28, 2023 As of February 29, 2024 Total Number of Directors 8 8 Gender Identity Female Male Non- Binary Did Not Disclose Gender Female Male Non- Binary Did Not Disclose Gender Directors 1 7 0 0 1 7 0 0 Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 0 LGBTQ+ 0 0 Did Not Disclose Demographic Background 0 0 D.
Board Diversity Matrix Board Diversity Matrix Country of Principal Executive Offices Mainland China Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No As of February 28, 2025 Total Number of Directors 8 Gender Identity Female Male Non- Binary Did Not Disclose Gender Directors 1 7 0 0 Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 D.
Our company has the right to seek damages if a duty owed by our directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached. Terms of Directors and Officers Our officers are appointed by and serve at the discretion of the shareholders.
In limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached. 116 Terms of Directors and Officers Our officers are appointed by and serve at the discretion of the shareholders.
As such, as of February 29, 2024, no awards were outstanding under the 2017 Plan. 135 2021 Share Incentive Plan We also adopted the 2021 Share Incentive Plan, which we refer to as the 2021 Plan, on December 2, 2021, as amended and restated on November 2, 2022, for the purpose of promoting the success and enhance the value of iQIYI, Inc., by linking the personal interests of the directors, employees and consultants to those of our shareholders and, by providing an incentive for outstanding performance, to generate superior returns for our shareholders.
Consequently, as of February 28, 2025, no awards were outstanding under the 2017 Plan. 2021 Share Incentive Plan We also adopted the 2021 Share Incentive Plan, which we refer to as the 2021 Plan, on December 2, 2021, as amended and restated on November 2, 2022, for the purpose of promoting the success and enhance the value of iQIYI, Inc., by linking the personal interests of the directors, employees and consultants to those of our shareholders and, by providing an incentive for outstanding performance, to generate superior returns for our shareholders.
Item 6. DIRECTORS, SENIO R MANAGEMENT AND EMPLOYEES A. DIRECTORS AND SENIOR MANAGEMENT The following table sets forth information regarding our executive officers and directors as of the date of this annual report.
ITEM 6. DIRECTORS, SE NIOR MANAGEMENT AND EMPLOYEES A. DIRECTORS AND SENIOR MANAGEMENT The following table sets forth information regarding our executive officers and directors as of the date of this annual report.
Fei Qi has served as our director since December 2022. Mr. Qi joined Baidu (Nasdaq: BIDU; SEHK: 9888) in March 2021, and currently serves as vice president of Baidu, chief of staff to CEO, and head of corporate strategic department. Prior to joining Baidu, Mr.
Currently, he serves as the vice president of SIGKDD China Chapter. 110 Fei Qi has served as our director since December 2022. Mr. Qi joined Baidu (Nasdaq: BIDU; SEHK: 9888) in March 2021, and currently serves as vice president of Baidu, chief of staff to CEO, and head of corporate strategic department. Prior to joining Baidu, Mr.
(1) Representing (i) 140,446,944 Class A ordinary shares that Dr. Gong may purchase upon exercise of options within 60 days of February 29, 2024, and (ii) 8,186,889 Class A ordinary shares held by Cannes Ventures Limited, a company incorporated in the Cayman Islands. Cannes Ventures Limited is wholly-owned by Dr. Gong.
(1) Representing (i) 142,644,944 Class A ordinary shares that Dr. Gong may purchase upon exercise of options within 60 days of February 28, 2025, and (ii) 8,186,889 Class A ordinary shares held by Cannes Ventures Limited, a company incorporated in the Cayman Islands. Cannes Ventures Limited is wholly-owned by Dr. Gong.
Shan was co-managing partner of the private equity firm Newbridge Capital (now known as TPG Asia) and a partner of TPG. Before Newbridge, Mr. Shan was a managing director at J.P. Morgan where he worked for five years. Mr. Shan was an assistant professor at the Wharton School, the University of Pennsylvania for six years. Mr.
Shan was co-managing partner of the private equity firm Newbridge Capital (now known as TPG Asia) and a partner of TPG. Before Newbridge, Mr. Shan was a managing director at J.P. Morgan. Mr. Shan was an assistant professor at the Wharton School, the University of Pennsylvania. Mr.
Shan also worked at the World Bank in 1987. Mr. Shan is a Trustee of the British Museum. Mr. Shan is also member of the International Advisory Council of Hong Kong Exchanges and Clearing Limited, and an independent director of Alibaba Group. Mr. Shan is the author of three books: Out of the Gobi, Money Games and Money Machine. Mr.
Shan is a Trustee of the British Museum, a member of the International Advisory Council of Hong Kong Exchanges and Clearing Limited, and an independent director of Alibaba Group. Mr. Shan is the author of three books: Out of the Gobi , Money Games and Money Machine . Mr.
None of our employees are represented by labor unions. 139 As required by laws and regulations in mainland China, we participate in various employee social benefits plans that are organized by municipal and provincial governments, including housing funds, pension, medical insurance, job-related injury insurance, maternity insurance and unemployment insurance.
As required by laws and regulations in mainland China, we participate in various employee social benefits plans that are organized by municipal and provincial governments, including housing funds, pension, medical insurance, job-related injury insurance, maternity insurance and unemployment insurance.
COMPENSATION For the fiscal year ended December 31, 2023, we paid an aggregate of RMB35.5 million (US$5.0 million) in cash to our executive officers and directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
COMPENSATION For the fiscal year ended December 31, 2024, we paid an aggregate of RMB28.4 million (US$3.9 million) in cash to our executive officers and directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
The address of each of PAGAC IV-1 (Cayman) Limited, Pacific Alliance Asia Opportunity Fund L.P. and Polymer Asia Fund LP is P.O. Box 472, Harbour Place, 2nd Floor, 103 South Church Street, George Town, Grand Cayman KY1-1106 Cayman Islands.
The address of each of PAGAC IV-1 (Cayman) Limited, Pacific Alliance Asia Opportunity Fund L.P. and Polymer Asia Fund LP is P.O. Box 472, Harbour Place, 2nd Floor, 103 South Church Street, George Town, Grand Cayman KY1-1106 Cayman Islands. Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares.
We may also terminate an executive officer’s employment without cause upon 60-day advance written notice. In such case of termination by our company, we will provide severance payments to the executive officer as agreed by our company and the executive officer. The executive officer may resign at any time with a 60-day advance written notice.
In such case of termination by our company, we will provide severance payments to the executive officer as agreed by our company and the executive officer. The executive officer may resign at any time with a 60-day advance written notice.
The following table sets forth the number of our employees by function as of December 31, 2023: Research and development 1,983 Content production and operation 1,531 Sales and marketing 875 General and administrative 399 Total 4,788 Our success depends on our ability to attract, retain and motivate qualified employees. We offer employees competitive salaries, performance-based cash bonuses and other incentives.
The following table sets forth the number of our employees by function as of December 31, 2024: Research and development 1,836 Content production and operation 1,747 Sales and marketing 705 General and administrative 385 Total 4,673 Our success depends on our ability to attract, retain and motivate qualified employees. We offer employees competitive salaries, performance-based cash bonuses and other incentives.
Shen joined Baidu in 2012 and has served various management roles, including web search, display advertising, the financial services group and mobile products. Dr. Shen has published more than 40 papers in international conferences and journals, and held multiple patents on internet search and computational advertising. Currently, he serves as the vice president of SIGKDD China Chapter.
Shen joined Baidu in 2012 and has served various management roles, including web search, display advertising, the financial services group and mobile products. Dr. Shen has published more than 40 papers in international conferences and journals, and held multiple patents on internet search and computational advertising.
Cui received a bachelor’s degree in computer science from Beijing Institute of Technology and a master’s degree in computer science from the University of Chinese Academy of Sciences. Weijian Shan has served as our director since December 2022. Mr. Shan is the executive chairman and co-founder of PAG—one of Asia’s leading investment management groups. Between 1998 and 2010, Mr.
Cui received a bachelor’s degree in computer science from Beijing Institute of Technology and a master’s degree in computer science from the University of Chinese Academy of Sciences. Weijian Shan has served as our director since December 2022. Mr. Shan is the executive chairman and co-founder of PAG. Before PAG, Mr.
Under the 2010 Plan, the maximum aggregate number of shares which may be issued pursuant to all awards is 589,729,714 shares. As of February 29, 2024, options to purchase a total of 338,225,582 Class A ordinary shares were outstanding under the 2010 Plan. 134 The following paragraphs summarize the terms of the 2010 Plan. Types of Awards.
Under the 2010 Plan, the maximum aggregate number of shares which may be issued pursuant to all awards is 589,729,714 shares. As of February 28, 2025, options to purchase a total of 326,630,018 Class A ordinary shares were outstanding under the 2010 Plan. The following paragraphs summarize the terms of the 2010 Plan. Types of Awards.
As of February 29, 2024, options with nil exercise price to purchase a total of 191,449,720 ordinary shares were outstanding under the 2021 Plan. The following paragraphs summarize the terms of the 2021 Plan. Types of Awards. The Plan permits the awards of options and restricted share units. Plan Administration.
As of February 28, 2025, options with nil exercise price to purchase a total of 248,192,217 ordinary shares were outstanding under the 2021 Plan. The following paragraphs summarize the terms of the 2021 Plan. Types of Awards. The 2021 Plan permits the awards of options and restricted share units. Plan Administration.
The plan shall terminate on December 2, 2031, provided that our board may terminate the plan at any time and for any reason.
The plan shall terminate on May 23, 2034, provided that our board may terminate the plan at any time and for any reason.
As of February 29, 2024, other grantees as a group held options to purchase 280,631,243 Class A ordinary shares of our company, with exercise prices ranging from US$0 to US$0.51 per share. C. BOARD PRACTICES Board of Directors Our board of directors consists of eight directors.
As of February 28, 2025, other grantees as a group held options to purchase 337,279,490 Class A ordinary shares of our company, with exercise prices ranging from US$0 to US$0.51 per share. C. BOARD PRACTICES Board of Directors Our board of directors consists of eight directors.
Our mainland China subsidiaries and variable interest entities are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.
Our mainland China subsidiaries and variable interest entities are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. For share incentive grants to our officers and directors, see “Item 6. Directors, Senior Management and Employees—B.
Directors and Executive Officers Age Position/Title Junjie He 39 Chairman of the Board Yu Gong 55 Chief Executive Officer and Director Dou Shen 44 Director Fei Qi 42 Director Shanshan Cui 48 Director Weijian Shan 70 Director Sam Hanhui Sun 51 Independent Director Conor Chia-hung Yang 61 Independent Director Jun Wang 45 Chief Financial Officer Xiaohui Wang 55 Chief Content Officer Wenfeng Liu 45 Chief Technology Officer Youqiao Duan 54 Senior Vice President Xianghua Yang 47 Senior Vice President Junjie He has served as our director since March 2021 and chairman of our board of directors since November 2022.
Directors and Executive Officers Age Position/Title Junjie He 40 Chairman of the Board Yu Gong 56 Chief Executive Officer and Director Dou Shen 45 Director Fei Qi 43 Director Shanshan Cui 49 Director Weijian Shan 71 Director Sam Hanhui Sun 52 Independent Director Conor Chia-hung Yang 62 Independent Director Jun Wang 46 Chief Financial Officer Xiaohui Wang 56 Chief Content Officer Youqiao Duan 55 Senior Vice President Xianghua Yang 48 Senior Vice President Junjie He has served as our director since March 2021 and chairman of our board of directors since November 2022.
A director may vote with respect to any contract, proposed contract or arrangement in which he is materially interested provided (i) such director, if his interest in such contract or arrangement is material, has declared the nature of his interest at the earliest meeting of the board at which it is practicable for him to do so, either specifically or by way of a general notice and (ii) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the audit committee.
Subject to the Listing Rules of the Nasdaq Stock Market and disqualification by the chairman of the relevant board meeting, a director may vote with respect to any contract, proposed contract or arrangement in which he is materially interested provided (i) such director, if his interest in such contract or arrangement is material, has declared the nature of his interest at the meeting of the board, either specifically or by way of a general notice and (ii) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the audit committee.
As of February 29, 2024, none of our Class B ordinary shares are held by record holders in the United States. 141 For options and restricted share units granted to our officers, directors and employees, see “— B.
As of February 28, 2025, none of our Class B ordinary shares are held by record holders in the United States. For options and restricted share units granted to our officers, directors and employees, see “Item 6. Directors, Senior Management and Employees — B.
To our knowledge, as of February 29, 2024, 3,495,489,090 of our Class A ordinary shares were held by three record holders in the United States, representing 95.0% of our total issued and outstanding Class A ordinary shares as of such date (excluding 177,276,292 Class A ordinary shares reserved for future issuances upon the exercising or vesting of awards granted under the issuer’s share incentive plans).
To our knowledge, as of February 28, 2025, a total of 3,518,559,389 of our Class A ordinary shares were held by three record holders in the United States, representing 95.1% of our total issued and outstanding Class A ordinary shares as of such date (excluding 155,148,368 Class A ordinary shares reserved for future issuances upon the exercising or vesting of awards granted under the issuer’s share incentive plans).
He currently also serves on the board of directors of Trip.com Group Limited (Nasdaq: TCOM; SEHK: 9961). Mr. He obtained his bachelor’s degree from the Guanghua School of Management, Peking University in 2007. Yu Gong is the founder, chief executive officer and director of our company, and oversees our overall strategy and business operations. Prior to founding iQIYI, Dr.
He obtained his bachelor’s degree from the Guanghua School of Management, Peking University in 2007. Yu Gong is the founder, chief executive officer and director of our company, and oversees our overall strategy and business operations. Prior to founding iQIYI, Dr.
Class A ordinary shares are not convertible into Class B ordinary shares under any circumstance. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.
(5) Representing (i) 7,933,331 Class A ordinary shares, in the form of ADSs, and (ii) 2,876,391,396 Class B ordinary shares held by Baidu Holdings Limited, a company incorporated in British Virgin Islands, and (iii) 164,705,882 Class B ordinary shares held by Baidu (Hong Kong) Limited, a company incorporated in Hong Kong.
(2) Representing (i) 7,933,331 Class A ordinary shares, in the form of ADSs, and (ii) 2,876,391,396 Class B ordinary shares held by Baidu Holdings Limited, a company incorporated in British Virgin Islands, and (iii) 164,705,882 Class B ordinary shares held by Baidu (Hong Kong) Limited, a company incorporated in Hong Kong, as reported in the Amendment No. 1 to the Schedule 13D filed jointly by Baidu (Hong Kong) Limited, Baidu Holdings Limited and Baidu, Inc. on March 14, 2022.
Under the 2017 Plan, the maximum aggregate number of ordinary shares which may be issued pursuant to all awards was 720,000 ordinary shares, all of which have been granted in the form of restricted share units.
Under the 2017 Plan, the maximum aggregate number of ordinary shares which may be issued pursuant to all awards is 720,000 ordinary shares. This entire allotment has been granted in the form of restricted share units, and the pool of ordinary shares reserved under the 2017 Plan has been fully utilized.
EMPLOYEES We had 5,856, 4,981 and 4,788 employees as of December 31, 2021, 2022 and 2023, respectively. As of December 31, 2023, we had 2,691 employees in Beijing and 2,097 employees in other cities in mainland China and overseas.
EMPLOYEES We had 4,981, 4,788 and 4,673 employees as of December 31, 2022, 2023 and 2024, respectively. As of December 31, 2024, we had 2,696 employees in Beijing and 1,977 employees in other cities in mainland China and overseas.
For share incentive grants to our officers and directors, see “—Share Incentive Plans.” Employment Agreements and Indemnification Agreements We have entered into an employment agreement with each of our executive officers. Under these agreements, each of our executive officers is employed at will. We may terminate employment for cause.
Compensation—Share Incentive Plans.” Employment Agreements and Indemnification Agreements We have entered into an employment agreement with each of our executive officers. Under these agreements, each of our executive officers is employed at will. We may terminate employment for cause. We may also terminate an executive officer’s employment without cause upon 60-day advance written notice.
Sun has been the Chairman of VSP Private Fund Management (Zhuhai) Co., Limited since 2021. From 2016 to 2020, Mr. Sun was a venture partner at Blue Lake Capital. From 2010 to 2015, Mr. Sun served various positions at Qunar Cayman Islands Limited, a Nasdaq-listed company, including Qunar’s president in 2015 and its chief financial officer from 2010 to 2015.
Sun was a venture partner at Blue Lake Capital. From 2010 to 2015, Mr. Sun served various positions at Qunar Cayman Islands Limited, a Nasdaq-listed company, including Qunar’s president in 2015 and its chief financial officer from 2010 to 2015. From 2007 to 2009, Mr. Sun was the chief financial officer of KongZhong Corporation, a Nasdaq-listed company.
Wang also serves as president of our Professional Content Business Group (PCG). Prior to joining iQIYI, Mr.
Wang is responsible for the procurement, production and operations of content business. From 2019, Mr. Wang also serves as president of our Professional Content Business Group (PCG). Prior to joining iQIYI, Mr.
Sun currently serves as a director on the boards of Zhihu Inc. (NYSE: ZH) and Yiren Digital Ltd. (NYSE: YRD) and YSB Inc. (SEHK: 9885). Mr. Sun served as an independent director of Fang Holdings Limited (NYSE: SFUN) from September 2010 to May 2019, Sunlands Technology Group (NYSE: STG) from March 2018 to July 2019 and CAR Inc.
(SEHK: 9885). Mr. Sun served as an independent director of Fang Holdings Limited (NYSE: SFUN) from September 2010 to May 2019, Sunlands Technology Group (NYSE: STG) from March 2018 to July 2019 and CAR Inc. (formerly SEHK: 699) from August 2014 to July 2021, when CAR Inc. was privatized. Mr.
Wang obtained a bachelor’s degree in English from Tsinghua University in July 2000 and a master’s degree in business administration from the University of Chicago in June 2008. Xiaohui Wang joined us in 2016 as our chief content officer. Mr. Wang is responsible for the procurement, production and operations of content business. From 2019, Mr.
Morgan Securities (Asia Pacific) Limited with his last position being the vice president of investment banking. Mr. Wang obtained a bachelor’s degree in English from Tsinghua University in July 2000 and a master’s degree in business administration from the University of Chicago in June 2008. Xiaohui Wang joined us in 2016 as our chief content officer. Mr.
Yang has been the chief financial officer of Ehang Holdings Limited (Nasdaq: EH) since September 2023. From 2007 to 2023, Mr. Yang served in several chief financial officer positions, including Tuniu Corporation (Nasdaq: TOUR), E-Commerce China Dangdang Inc., and AirMedia Group Inc. Mr.
From 2007 to 2023, Mr. Yang served in several chief financial officer positions, including Tuniu Corporation (Nasdaq: TOUR), E-Commerce China Dangdang Inc., and AirMedia Group Inc. Mr. Yang was the chief executive officer of Rock Mobile Corporation from 2004 to 2007, and the chief financial officer of the Asia Pacific region for CellStar Asia Corporation from 1999 to 2004.
Mr. He joined Baidu (Nasdaq: BIDU; SEHK: 9888) in June 2019. Currently serving as a senior vice president of Baidu, Mr. He was appointed as the leader, and be in full charge, of the Mobile Ecosystem Group (MEG) in May 2022. Prior to his current position, Mr.
Mr. He joined Baidu (Nasdaq: BIDU; SEHK: 9888) in June 2019 and currently serves as the Interim Chief Financial Officer of Baidu. Mr. He served as the Senior Corporate Vice President of Baidu and General Manager of Mobile Ecosystem Group (MEG), and was in full charge of MEG from May 2022 to October 2024. Prior to that, Mr.
Shan holds an M.A. and a Ph.D. from the University of California, Berkeley, and an M.B.A. from the University of San Francisco. Mr. Shan graduated with a major in English from the Beijing University of International Business and Economics. Sam Hanhui Sun has served as our independent director since March 2018. Mr.
Shan holds an M.A. and a Ph.D. from the University of California, Berkeley, and an M.B.A. from the University of San Francisco. Sam Hanhui Sun has served as our independent director since March 2018. Mr. Sun has been the Chairman of VSP Private Fund Management (Zhuhai) Co., Limited since 2021. From 2016 to 2020, Mr.
The shares reserved and to be issued under the 2010 Plan and the 2021 Plan have been registered on the Form S-8 filed on May 24, 2018 and the Form S-8 filed on March 28, 2022, respectively. 136 The following table summarizes, as of February 29, 2024, the outstanding options that we granted to our directors and executive officers: Name Class A Ordinary Shares Underlying Options Awarded Exercise Price (US$/Share) Date of Grant Date of Expiration Yu Gong 152,298,401 0 to 0.51 Various dates from 2010/10/18 to 2023/6/3 Various dates from 2024/12/15 to 2033/6/3 Jun Wang * 0 to 0.51 Various dates from 2018/2/28 to 2023/6/3 Various dates from 2028/2/28 to 2033/6/3 Xiaohui Wang * 0 to 0.51 Various dates from 2016/8/5 to 2023/6/3 Various dates from 2026/8/5 to 2033/6/3 Wenfeng Liu * 0 to 0.51 Various dates from 2014/12/15 to 2023/6/3 Various dates from 2024/12/15 to 2033/6/3 Youqiao Duan * 0 to 0.51 Various dates from 2014/12/25 to 2023/6/3 Various dates from 2024/12/25 to 2033/6/3 Xianghua Yang * 0 to 0.5 Various dates from 2014/12/25 to 2023/6/3 Various dates from 2024/12/25 to 2033/6/3 Total 249,044,059 Notes: * The aggregate number of ordinary shares exercisable from all options granted is less than 1% of our total issued and outstanding ordinary shares.
The following table summarizes, as of February 28, 2025, the outstanding options that we granted to our directors and executive officers: Name Class A Ordinary Shares Underlying Options Awarded Exercise Price (US$/Share) Date of Grant Date of Expiration Yu Gong 155,280,390 0 to 0.51 Various dates from October 18, 2010 to April 29, 2024 Various dates from October 16, 2030 to April 29, 2034 Jun Wang * 0 to 0.51 Various dates from February 28, 2018 to April 29, 2024 Various dates from February 28, 2028 to April 29, 2034 Xiaohui Wang * 0 to 0.51 Various dates from August 5, 2016 to April 29, 2024 Various dates from August 5, 2026 to April 29, 2034 Youqiao Duan * 0 to 0.51 Various dates from August 5, 2016 to April 29, 2024 Various dates from August 5, 2026 to April 29, 2034 Xianghua Yang * 0 to 0.51 Various dates from August 5, 2016 to April 29, 2024 Various dates from August 5, 2026 to April 29, 2034 Total 237,542,745 / / / Notes: * The aggregate number of ordinary shares exercisable from all options granted is less than 1% of our total issued and outstanding ordinary shares.
From 2007 to 2009, Mr. Sun was the chief financial officer of KongZhong Corporation, a Nasdaq-listed company. From 2004 to 2007, Mr. Sun served in several financial controller positions at Microsoft China R&D Group, Maersk China Co. Ltd., and SouFun.com . From 1995 to 2004, Mr. Sun worked in KPMG’s auditing practice 132 group. Mr.
From 2004 to 2007, Mr. Sun served in several financial controller positions at Microsoft China R&D Group, Maersk China Co. Ltd., and SouFun.com . From 1995 to 2004, Mr. Sun worked in KPMG’s auditing practice group. Mr. Sun currently serves as a director on the boards of Zhihu Inc. (NYSE: ZH) and Yiren Digital Ltd. (NYSE: YRD) and YSB Inc.
(formerly SEHK: 699) from August 2014 to July 2021, when CAR Inc. was privatized. Mr. Sun received a bachelor’s degree in business administration from Beijing Institute of Technology. He is a Certified Public Accountant in mainland China. Conor Chia-hung Yang has served as our independent director since April 2022. Mr.
Sun received a bachelor’s degree in business administration from Beijing Institute of Technology. He is a Certified Public Accountant in mainland China. Conor Chia-hung Yang has served as our independent director since April 2022. Mr. Conor Yang has also served as EHang’s (Nasdaq: EH) board director since December 2019 and as EHang’s chief financial officer since September 2023.
We issued Class A ordinary shares represented by our ADSs in our initial public offering in April 2018. Holders of our Class B ordinary shares may choose to convert their Class B ordinary shares into the same number of Class A ordinary shares at any time.
Holders of our Class B ordinary shares may choose to convert their Class B ordinary shares into the same number of Class A ordinary shares at any time. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstance.
(6) Representing 489,802,551 Class A ordinary shares issuable upon conversion of the PAG Notes held by PAGAC IV-1 (Cayman) Limited, 303,753,520 Class A ordinary shares issuable upon conversion of the PAG Notes held by PAGAC IV-4 (Cayman) Limited, 210,000 Class A ordinary shares held by Pacific Alliance Asia Opportunity Fund L.P., and 7,900,431 Class A ordinary shares held by Polymer Asia Fund LP, as reported in the Amendment No. 2 to the Schedule 13D filed jointly by PAGAC IV-1 (Cayman) Limited, PAGAC IV-2 (Cayman) Limited, PAGAC IV-4 (Cayman) Limited, PAGAC IV-6 (Cayman) Limited, PAG Asia IV LP, PAG Asia Capital GP IV Limited, PAG Capital Limited, Pacific Alliance Group Limited and PAG on October 19, 2023.
(3) Represents (i) 793,556,071 Class A ordinary shares issuable upon conversion of the PAG Notes held by PAGAC IV-4 (Cayman) Limited, (ii) 16,335,634 Class A ordinary shares issuable upon conversion of the PAG Notes held by Pacific Alliance Asia Opportunity Fund L.P., (iii) 1,539,097 Class A ordinary shares issuable upon conversion of the PAG Notes held by PAG S Class Public Pooled LP, (iv) 7,694,085 Class A ordinary shares issuable upon conversion of the PAG Notes held by PAG Capital Structure Opportunity Fund LP, and (v) 142,044 Class A ordinary shares issuable upon conversion of the PAG Notes held by PAG-P Asia Fund L.P., as reported in the Amendment No. 4 to the Schedule 13D filed jointly by PAGAC IV-1 (Cayman) Limited, PAGAC IV-2 (Cayman) Limited, PAGAC IV-4 (Cayman) Limited, PAGAC IV-6 (Cayman) Limited, PAG Asia IV LP, PAG Asia Capital GP IV Limited, PAG Capital Limited, Pacific Alliance Group Limited and PAG on December 4, 2024.
Jun Wang has served as our chief financial officer since February 2022. Mr. Wang has been engaged with us in January 2018 and has been responsible for advising on major capital market transactions since then. Prior to joining us, he served as a partner of Waterwood Group Limited, a private equity firm, from December 2015 to October 2017.
Yang received his master’s degree in business administration from the University of California, Los Angeles (UCLA). Jun Wang has served as our chief financial officer since February 2022. Mr. Wang has been engaged with us in January 2018 and has been responsible for advising on major capital market transactions since then.
The calculations in the table below are based on 6,717,641,643 ordinary shares outstanding as of February 29, 2024, comprising of 3,676,544,365 Class A ordinary shares (excluding 177,276,292 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards under our share incentive plans) and 3,041,097,278 Class B ordinary shares.
SHARE OWNERSHIP Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 28, 2025: • each of our directors and executive officers; and • each person known to us to own beneficially 5% or more of our ordinary shares. 117 The calculations in the table below are based on 6,740,711,936 ordinary shares outstanding as of February 28, 2025, comprising of 3,699,614,658 Class A ordinary shares (excluding 155,148,368 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards under our share incentive plans) and 3,041,097,278 Class B ordinary shares.
From June 2014 to August 2015, he served as a managing director of TBP Consulting (Hong Kong) Limited. From July 2008 to June 2014, he worked at J.P. Morgan Securities (Asia Pacific) Limited with his last position being the vice president of investment banking. Mr.
Prior to joining us, he served as a partner of Waterwood Group Limited, a private equity firm, from December 2015 to October 2017. From June 2014 to August 2015, he served as a managing director of TBP Consulting (Hong Kong) Limited. From July 2008 to June 2014, he worked at J.P.
Yang currently also serves as an independent director of I-Mab (Nasdaq: IMAB), Tongcheng Travel Holdings Limited (HKSE: 0780), UP Fintech Holding Ltd (Nasdaq: TIGR), Smart Share Global Limited (Nasdaq: EM) and DDC Enterprise Limited (Nasdaq: DDC). Mr. Yang received his master’s degree in business administration from the University of California, Los Angeles.
Prior to that, Mr. Yang was a senior banker at Goldman Sachs (Asia) L.L.C. and Morgan Stanley Asia Limited from 1992 to 1999. Mr. Yang currently also serves as an independent director of Tongcheng Travel Holdings Limited (HKSE: 0780), UP Fintech Holding Ltd (Nasdaq: TIGR) and Smart Share Global Limited (Nasdaq: EM). Mr.
The registered address of Cannes Ventures Limited is 190 Elgin Avenue, George Town, Grand Cayman, Cayman Islands. (2) The address of Weijian Shan is 33/F, Three Pacific Place, 1 Queen’s Road East, Hong Kong. (3) The address of Sam Hanhui Sun is 64 Donggong Street, Dongcheng District, Beijing 100009, China.
The registered address of Cannes Ventures Limited is 190 Elgin Avenue, George Town, Grand Cayman, Cayman Islands.
The registered address of Best Ventures Limited is c/o P.O. Box 2221, Road Town, Tortola, British Virgin Islands. Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to ten votes per share.
Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to ten votes per share. We issued Class A ordinary shares represented by our ADSs in our initial public offering in April 2018.
Removed
Yang was the chief executive officer of Rock Mobile Corporation from 2004 to 2007, and the chief financial officer of the Asia Pacific region for CellStar Asia Corporation from 1999 to 2004. Prior to that, Mr. Yang was a senior banker at Goldman Sachs (Asia) L.L.C., Lehman Brothers Asia Limited and Morgan Stanley Asia Limited from 1992 to 1999. Mr.
Added
The plan shall terminate on December 2, 2031, provided that our board may terminate the plan at any time and for any reason. 2024 Share Incentive Plan We adopted the 2024 Share Incentive Plan, which we refer to as the 2024 Plan, on May 23, 2024, for the purpose of promoting the success and enhance the value of iQIYI, Inc., by linking the personal interests of the directors, employees consultants and other individuals to those of our shareholders and, by providing an incentive for outstanding performance, to generate superior returns for our shareholders.
Removed
Wenfeng Liu joined us in 2012 and is our chief technology officer. From 2019, Mr. Liu also serves as president of our Infrastructure and Intelligent Content Distribution Business Group (IIG). Mr. Liu served as our vice president of technology, IT operation, product marketing and business development. Prior to joining us, Mr.
Added
Under the 2024 Plan, the maximum aggregate number of ordinary shares which may be issued pursuant to all awards is initially 350,000,000 Class A ordinary shares. As of February 28, 2025, no awards were outstanding under the 2024 Plan. The following paragraphs summarize the terms of the 2024 Plan. Types of Awards.
Removed
Liu served as research and development manager from 2011 to 2012 at VMware China Research Center, where he led the research, development and distribution of various update and maintenance releases of Vmware vSphere projects. From 2003 to 2011, Mr.
Added
The 2024 Plan permits the awards of options and restricted share units. Plan Administration.
Removed
Liu served in various senior positions at Intel China Research Center, including the role of research and development manager between 2007 to 2011, in which position he spearheaded Intel’s various global R&D initiatives. Mr. Liu holds a bachelor’s degree and a master’s degree in computer science from Zhejiang University.
Added
A committee of one or more members of the board acts as the plan administrator, and the board shall conduct the general administration of the plan if required by applicable laws, and with respect to awards granted to members of the committee that acts as the plan administrator.
Removed
As of February 29, 2024, the amount of ordinary shares which may be issued pursuant to all awards under the 2017 had been used up, with 369,500 of the granted restricted share units forfeited due to the departure of certain grantees, and the remaining 350,500 restricted share units vested and exercised.
Added
The plan administrator will determine the participants who are to receive awards, the type or types of awards to be granted, the number of awards to be granted, and the terms and conditions of each award grant. The plan administrator can amend outstanding awards and interpret the terms of the 2024 Plan and any award agreement. Award Agreement.
Removed
Our number of employees decreased over the past three years because we implemented an efficiency enhancement initiative aimed at optimizing resource utilization and maximizing productivity.
Added
Awards granted under the 2024 Plan are evidenced by an award agreement that sets forth the terms and conditions for each grant. Exercise Price. The excises price of an option will be determined by the plan administrator.
Removed
SHARE OWNERSHIP Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of February 29, 2024: • each of our directors and executive officers; and • each person known to us to own beneficially 5% or more of our ordinary shares.
Added
In certain circumstances, such as a recapitalization, a spin-off, reorganization, merger, separation and split-up, the plan administrator may adjust the exercise price of outstanding options and share appreciation rights. 114 Eligibility. We may grant awards to our directors, employees and consultants. Term of the Awards.
Removed
Ordinary Shares Beneficially Owned Class A Ordinary Shares Beneficially Owned (†) Class B Ordinary Shares Beneficially Owned (††) Voting Power (†††) Number % Number % % Directors and Executive Officers:** Junjie He — — — — — Yu Gong (1) 148,633,833 3.9 — — * Dou Shen * * — — * Fei Qi — — — — — Shanshan Cui — — — — — Weijian Shan (2) — — — — — Sam Hanhui Sun (3) — — — — — Conor Chia-hung Yang (4) — — — — — Jun Wang * * — — — Xiaohui Wang * * — — * Wenfeng Liu * * — — * Youqiao Duan * * — — * Xianghua Yang * * — — * All directors and executive officers as a group 213,322,887 5.5 — — * Principal Shareholders: Baidu (5) 7,933,331 * 3,041,097,278 100.0 89.2 PAG (6) 801,666,502 17.8 — — 2.3 Best Ventures Limited (7) 341,874,885 9.3 — — 1.0 Notes: * Less than 1%. * * Except for Junjie He, Dou Shen, Fei Qi and Shanshan Cui, and as indicated otherwise below, the business address of our directors and executive officers is 4/F, iQIYI Youth Center, Yoolee Plaza, No. 21, North Road of Workers’ Stadium, Chaoyang District, Beijing, 100027, China.
Added
The term of each option or share appreciation right granted under the 2024 Plan shall not exceed ten years from date of the grant unless otherwise determined by the shareholders or the board under the condition that our company decides to follow home country practice. Vesting Schedule.
Removed
(4) The address of Conor Chia-hung Yang is 12/F, No. 1217 Dongfang Road, Pudong, Shanghai 200122, China.
Added
In general, the plan administrator determines the vesting schedule, which is set forth in the award agreement. Transfer Restrictions. Awards may not be transferred in any manner by the recipient other than by will or the laws of descent and distribution, except as otherwise provided by the plan administrator. Termination.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

17 edited+4 added−2 removed17 unchanged
Biggest changeAs of December 31, 2021, 2022 and 2023, the total outstanding balance represents an interest-free loan of RMB50.0 million that is due on demand, and an interest-free loan of RMB650.0 million provided by Baidu in January 2018. The RMB650.0 million interest-free loan was repaid in full in March 2023.
Biggest changeAs of December 31, 2022, 2023 and 2024, we had RMB700.0 million, RMB50.0 million and RMB50.0 million (US$6.9 million), respectively, in loans due to Baidu. As of December 31, 2022, the total outstanding balance represents an interest-free loan of RMB50.0 million that is due on demand, and an interest-free loan of RMB650.0 million provided by 121 Baidu in January 2018.
We have the right to defer filing of a registration statement for a period of not more than 90 days after the receipt of the request of the initiating holders under certain conditions, but we cannot exercise the deferral right more than once in any twelve-month period and we cannot register any other share during such twelve-month period.
We have the right to defer filing of a registration statement for a period of not more than 90 days after the receipt of the request of the initiating holders under certain conditions, but we cannot exercise the deferral right more than once in any twelve-month period 122 and we cannot register any other share during such twelve-month period.
Organizational Structure—Contractual Arrangements with the Variable Interest Entities and Their Respective Shareholders.” 143 Transactions with Shareholders and Affiliates Baidu We enjoy significant business synergies with Baidu primarily in the form of complementary content offerings for users and cross-sale of each other’s services.
Organizational Structure—Contractual Arrangements with the Variable Interest Entities and Their Respective Shareholders.” Transactions with Shareholders and Affiliates Baidu We enjoy significant business synergies with Baidu primarily in the form of complementary content offerings for users and cross-sale of each other’s services.
In the event we are no longer controlled by Baidu, either we or Baidu may terminate this agreement. Loan Agreement Under the master business cooperation agreement, Baidu would provide us with a RMB650.0 million (US$91.6 million) loan, which mature on the fifth anniversary of the grant date.
In the event we are no longer controlled by Baidu, either we or Baidu may terminate this agreement. Loan Agreement Under the master business cooperation agreement, Baidu would provide us with a RMB650.0 million loan, which mature on the fifth anniversary of the grant date.
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. MAJOR SHAREHOLDERS See “Item 6. Directors, Senior Management and Employees — E. Share Ownership.” B. RELATED PARTY TRANSACTIONS Contractual Arrangements with the Variable Interest Entities and Their Respective Shareholders See “Item 4. Information on the Company—C.
ITEM 7. MAJOR SHAREHO LDERS AND RELATED PARTY TRANSACTIONS A. MAJOR SHAREHOLDERS See “Item 6. Directors, Senior Management and Employees — E. Share Ownership.” B. RELATED PARTY TRANSACTIONS Contractual Arrangements with the Variable Interest Entities and Their Respective Shareholders See “Item 4. Information on the Company—C.
Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation — Employment Agreements and Indemnification Agreements.” Share Option Grants See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.” C. INTERESTS OF EXPERTS AND COUNSEL Not applicable. 146
Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation — Employment Agreements and Indemnification Agreements.” Share Award Grants See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.” C. INTERESTS OF EXPERTS AND COUNSEL Not applicable.
Transactions other than membership and advertising services revenue were insignificant for the years ended December 31, 2021, 2022 and 2023. We incurred cost of revenues for license fees in the amount of RMB13.9 million, RMB8.2 million and RMB20.4 million (US$2.9 million) for the years ended December 31, 2021, 2022 and 2023, respectively.
Transactions other than membership and advertising services revenue were insignificant for the years ended December 31, 2022, 2023 and 2024. We incurred cost of revenues for license fees in the amount of RMB8.2 million, RMB20.4 million and RMB35.6 million (US$4.9 million) for the years ended December 31, 2022, 2023 and 2024, respectively.
The balance mainly represents amounts due from our equity investees for content distribution services or paid in advance by our company for licensed copyrights acquisition. 145 As of December 31, 2021, 2022 and 2023, we had RMB1,309.2 million, RMB1,043.5 million and RMB953.8 million (US$134.4 million), respectively, due to other related parties.
The balance mainly represents amounts due from our equity investees for content distribution services or paid in advance by our company for licensed copyrights acquisition. As of December 31, 2022, 2023 and 2024, we had RMB1,043.5 million, RMB953.8 million and RMB1,113.4 million (US$152.5 million), respectively, due to other related parties.
Under the master business cooperation agreement, we and Baidu agree to cooperate with each other in areas including but not limited to AI technology, smart devices/DuerOS (the dialog-type AI system and open platform developed by Baidu), cloud services, online advertising, internet traffic, data and content, and to treat each other as the most preferred strategic partner in our areas of cooperation.
Master Business Cooperation Agreement We have entered into a master business cooperation agreement with Baidu on January 19, 2018. 120 Under the master business cooperation agreement, we and Baidu agree to cooperate with each other in areas including but not limited to AI technology, smart devices/DuerOS (the dialog-type AI system and open platform developed by Baidu), cloud services, online advertising, internet traffic, data and content, and to treat each other as the most preferred strategic partner in our areas of cooperation.
The balance mainly represents amounts due from Baidu for advertising, membership and other services. As of December 31, 2021, 2022 and 2023, we had RMB1,405.5 million, RMB1,879.1 million and RMB2,030.4 million (US$286.0 million), respectively, due to Baidu. The related party balances mainly represented accrued expenses for bandwidth services and cloud services provided by Baidu.
The balance mainly represents amounts due from Baidu for advertising, membership and other services. As of December 31, 2022, 2023 and 2024, we had RMB1,879.1 million, RMB2,030.4 million and RMB2,134.8 million (US$292.5 million), respectively, due to Baidu. The related party balances mainly represented accrued expenses for bandwidth services and cloud services provided by Baidu.
Other related party transactions, including services provided by/to equity investees which we or Baidu has significant influence over in the ordinary course of business, were insignificant for each of the years presented. As of December 31, 2021, 2022 and 2023, we had RMB201.6 million, RMB144.0 million and RMB424.2 million (US$59.7 million), respectively, due from other related parties.
Other related party transactions, including services provided by/to equity investees which we or Baidu has significant influence over in the ordinary course of business, were insignificant for each of the years presented. As of December 31, 2022, 2023 and 2024, we had RMB144.0 million, RMB424.2 million and RMB377.9 million (US$51.8 million), respectively, due from other related parties.
In accordance with the subscription agreements, Baidu subscribed for Class B ordinary shares. Other Transactions with Baidu For the years ended December 31, 2021, 2022 and 2023, we generated membership services revenue of nil, RMB54.4 million and RMB92.9 million (US$13.1 million), respectively, and advertising services revenue of 144 RMB122.9 million, RMB55.7 million and RMB17.7 million (US$2.5 million), respectively, from Baidu.
In accordance with the subscription agreements, Baidu subscribed for Class B ordinary shares. Other Transactions with Baidu For the years ended December 31, 2022, 2023 and 2024, we generated membership services revenue of RMB54.4 million, RMB92.9 million and RMB90.8 million (US$12.4 million), respectively, and advertising services revenue of RMB55.7 million, RMB17.7 million and RMB7.5 million (US$1.0 million), respectively, from Baidu.
We incurred cost of revenues for bandwidth services and cloud services in the amount of RMB918.8 million, RMB653.0 million and RMB550.7 million (US$77.6 million) for the years ended December 31, 2021, 2022 and 2023, respectively.
We incurred cost of revenues for bandwidth services and cloud services in the amount of RMB653.0 million, RMB550.7 million and RMB575.3 million (US$78.8 million) for the years ended December 31, 2022, 2023 and 2024, respectively.
For the years ended December 31, 2021, 2022 and 2023, we purchased content from equity investees in the amount of RMB2,358.7 million, RMB1,513.7 million and RMB1,602.5 million (US$225.7 million), respectively.
For the years ended December 31, 2022, 2023 and 2024, we purchased content from equity investees in the amount of RMB1,513.7 million, RMB1,602.5 million and RMB1,745.7 million (US$239.2 million), respectively.
We incurred selling, general and administrative expenses for advertising services provided by Baidu in the amount of RMB13.4 million, RMB47.6 million and RMB116.1 million (US$16.3 million) for the years ended December 31, 2021, 2022 and 2023, respectively. As of December 31, 2021, 2022 and 2023, we had RMB34.9 million, RMB20.0 million and RMB4.4 million (US$0.6 million), respectively, due from Baidu.
We incurred selling, general and administrative expenses for advertising services provided by Baidu in the amount of RMB47.6 million, RMB116.1 million and RMB112.7 million (US$15.4 million) for the years ended December 31, 2022, 2023 and 2024, respectively. As of December 31, 2022, 2023 and 2024, we had RMB20.0 million, RMB4.4 million and RMB1.2 million (US$0.2 million), respectively, due from Baidu.
As of December 31, 2023, we had RMB1,437.0 million (US$202.4 million) due from PAGAC IV-4. Other Transactions with Related Parties For the years ended December 31, 2021, 2022 and 2023, we generated content distribution revenue of RMB297.3 million, RMB190.4 million and RMB260.1 million (US$36.6 million), respectively, from equity investees.
As of December 31, 2023 and 2024, we had RMB1,437.0 million and RMB3,854.9 million (US$528.1 million), respectively, due from PAGAC IV-4. Other Transactions with Related Parties For the years ended December 31, 2022, 2023 and 2024, we generated content distribution revenue of RMB190.4 million, RMB260.1 million and RMB231.8 million (US$31.8 million), respectively, from equity investees.
PAG We issued an aggregate amount of US$550 million convertible senior notes due January 2028 to PAG. The PAG Notes are secured by certain collateral arrangements. In September 2023, our subsidiary, iQIYI HK Limited (“iQIYI HK”), entered into a facility agreement with PAGAC IV-4 (Cayman) Limited (“PAGAC IV-4”), an entity affiliated with PAG.
On the maturity date, we are obligated to pay a premium at 30% of the principal amount of the PAG Notes, in addition to repaying the principal amount itself. In September 2023, our subsidiary, iQIYI HK Limited (“iQIYI HK”), entered into a facility agreement with PAGAC IV-4 (Cayman) Limited (“PAGAC IV-4”), an entity affiliated with PAG.
Removed
Master Business Cooperation Agreement We have entered into a master business cooperation agreement with Baidu on January 19, 2018.
Added
The RMB650.0 million interest-free loan was repaid in full in March 2023. As of December 31, 2023, and 2024, the total outstanding balance represented an interest-free loan of 50.0 million that was due on demand. PAG We issued an aggregate amount of US$550 million convertible senior notes due January 2028 to PAG.
Removed
As of December 31, 2021, 2022 and 2023, we had RMB700.0 million, RMB700.0 million and RMB50.0 million (US$7.0 million), respectively, in loans due to Baidu.
Added
The PAG Notes are secured by certain collateral arrangements. The PAG Notes bear an interest rate of 6% per annum and will mature on January 1, 2028. Holders of the PAG Notes also have the right to require us to repurchase all or part of their notes in the event of certain fundamental changes or events of default.
Added
In August 2024, we entered into a new facility agreement with PAG, supplementing the prior facility agreement executed in September 2023. Together, these agreements provide PAG with aggregate loan facilities of up to US$522.5 million, carrying an interest rate of 6% per annum.
Added
For each drawdown under these facilities, PAG releases an equivalent amount of restricted cash collateralized by us under the PAG Notes. Following PAG’s total drawdown of US$400.0 million under the facility agreements, PAG’s repurchase right for the US$522.5 million principal of the PAG Notes on or shortly after the third anniversary of the issuance date had been waived.

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