TLDR:
- iQIYI (NASDAQ:IQ) stock dropped 9.25% after reporting a net loss of RMB189 million in Q4 2024, compared to RMB466 million profit in Q4 2023
- Full-year 2024 revenue declined 8.3% to RMB29.22 billion, with net income falling 60% to RMB764 million
- The company launched a $300 million convertible bond offering with 4.25-4.75% annual coupon rate and 5-year maturity
- Proceeds will be used to repay existing debt and general corporate purposes
- Despite recent stock decline, iQIYI shares have risen about 20% in 2025, with market cap at $2.3 billion
Chinese video streaming platform iQIYI (NASDAQ:IQ) reported disappointing financial results for 2024, with the company swinging to a fourth-quarter net loss while simultaneously announcing a new $300 million convertible bond offering to strengthen its financial position.
The company’s fourth-quarter results showed a stark reversal from the previous year, posting a net loss of RMB189 million. This stands in contrast to the RMB466 million net income recorded in the same period of 2023, marking a notable decline in profitability.
Full-year performance for 2024 similarly showed weakening metrics across key areas. Net income dropped by 60% to RMB764 million, down from RMB1.9 billion in 2023. Revenue for the year decreased by 8.3% to RMB29.22 billion, compared to RMB31.87 billion in the previous year.
The fourth quarter of 2024 proved particularly challenging, with quarterly revenue declining by 14% to RMB6.6 billion from RMB7.7 billion in the same period of 2023. These results triggered a sharp market reaction, with iQIYI’s stock price falling 9.25% when the earnings were announced.
Despite the disappointing numbers, iQIYI’s Chief Finance Officer Jun Wang maintained an optimistic outlook. “We continued to execute with a focus on discipline and efficiency, which led to sequential growth in operating profit for the fourth quarter,” Wang stated, adding that strong operational momentum was extending into early 2025.
Convertible Bond Offering
iQIYI announced a $300 million convertible bond offering. According to terms reviewed by Reuters, the unsecured senior notes will have a five-year maturity period and offer a coupon rate ranging from 4.25% to 4.75% per year, with payments to be made quarterly.
The bond issuance is being managed by major financial institutions, with Bank of America, Morgan Stanley, and JPMorgan serving as joint bookrunners for the deal. The company plans to use the proceeds to repay or repurchase existing debt securities and for general corporate purposes.
Despite the recent earnings-related stock decline, iQIYI’s shares have shown positive momentum in 2025, rising approximately 20% since the start of the year. As of Wednesday’s close, the stock traded at $2.42 per share, giving the company a market capitalization of $2.3 billion.
The company’s recent performance comes amid broader movement in Chinese tech stocks, which have seen gains in recent weeks. This uptick has been attributed to optimism surrounding the DeepSeek AI breakthrough and what appears to be a more favorable regulatory environment for internet companies.
The market’s reaction to iQIYI’s earnings report was swift and clear. The 9.25% drop in share price on Tuesday reflected investor concerns about the company’s financial performance and future prospects.
In terms of operational metrics, the decline in both quarterly and annual revenue suggests challenges in the company’s core streaming business. The 14% decrease in fourth-quarter revenue represents the largest quarterly decline reported in the available data.
Managing Debt
The convertible bond offering appears to be part of iQIYI’s strategy to manage its debt structure and maintain financial flexibility. The timing of the announcement, following the release of annual results, suggests a proactive approach to addressing the company’s financial needs.
The combination of falling revenue and declining profitability has put pressure on iQIYI’s financial metrics. The 60% drop in full-year net income represents a substantial decrease in the company’s bottom line performance.
The quarterly results show a company in transition, with the shift from profit to loss in the fourth quarter highlighting the current challenges in the Chinese streaming market. This change comes as the broader industry faces various operational and competitive pressures.
iQIYI’s stock closed at $2.42 on Wednesday, with trading volume remaining consistent with historical patterns. The company’s market capitalization of $2.3 billion reflects the market’s current valuation of the business following these developments.
Oliver Dale
Editor-in-Chief of CoinCentral and founder of Kooc Media, A UK-Based Online Media Company. Believer in Open-Source Software, Blockchain Technology & a Free and Fair Internet for all. His writing has been quoted by Nasdaq, Dow Jones, Investopedia, The New Yorker, Forbes, Techcrunch & More. Contact Oliver@coincentral.com
