iQIYI, Inc.

Thank you for standing by and welcome to the IKEA fourth quarter and fiscal year 2025 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Ms. Chang Yu, IR Director of the company. Please go ahead.

Thank you, Operator. Hello, everyone, and thank you for joining ITE's fourth quarter and fiscal year 2025 earnings conference call. The company's results were released earlier today and are available on the company's investor relations website at ir.ite.com. On the call today are Mr. Yu Gong, our founder, director, and CEO, Ms. Ying Zeng, our interim CFO, Mr. Xiao Gui Wang, our chief content officer, Mr. Youqiao Duan, Senior Vice President of our Membership Business, Mr. Xianghua Yang, Senior Vice President of International and Online Game Business, and Mr. Gang Wu, Senior Vice President of Brand Advertising Business. Mr. Vong will give a brief overview of the company's business operations and highlights, followed by Ying, who will go through the financials. After the prepared remarks, the management team will participate in the Q&A session. Before we proceed, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. IT does not undertake any obligation to update any forward-looking statement except as required under applicable law. I will now pass on to Mr. Gong. Please go ahead.

Hello, everyone, and thank you for joining us today. In 2025, we focused on strengthening our core business to renew growth while achieving advancements in emerging This effort drove a solid year-end performance, with total revenue in Q4 returned to growth both annually and sequentially. Notably, our long-form drummers secured number one in the real-ship market share on enlightened data annual rankings, with five titles exceeding 10,000 for the IT popularity score. More importantly, we have made remarkable breakthroughs in IP franchise development, moving beyond making individual hit titles to building evergreen IPs that drive growth across diverse formats. Strange tales of time dynasty stand as a stellar example as a flagship IP with for consecutive blockbuster seasons. Its influence has expanded from long to short and micro dramas, as well as offline experience. Emergency businesses continue to demonstrate strong growth potential. Our overseas business has evolved into a sustainable and scalable second growth engine. powered by accelerated organic momentum. In 2025, membership services revenue increased by over 30% year over year, with growth accelerating to 40% in the second half of the year. The subscriber base reached an all-time high, and at the same time, Our experience business has entered a critical stage of development. For IP-based consumer products, we have built a dedicated in-house team and upgraded from a listening-only approach to a dual-track model, combining self-operated mechanism merchandise with listening. This strategy shifts stress in our control over IP operations and amplifies monetization efficiency. On the offline experience round, we launched our first IT land in Yangzhou on February 8, 2026, receiving positive initial reception. Two additional parts are scheduled to open later this year. 2026 marks a key step towards scaled development as we build the experience business into a new engine for long-term value creation. Now, let's dive into the details of our business performance in Q4. Starting with content, the cornerstone of our business. For long-form drummers, we secured the number one view-shape market share for enlightened data, driven by a robust slate of premium content and purposeful serialized IPs that boost engagement and commercial results. Strange Tales of Tang Dynasty III to Chang'an marked our first title with two seasons exceeding a popularity score of 10,000. Among 2025 new releases, it ranked number one in ad revenue and number two in membership revenue. Following this momentum, The crime drama, The Punishment 2, Father, became the first title of 2026 to surpass 10,000 for the popularity score. It is also our second franchise with two seasons achieving this milestone. Shifting to movies, we maintained a diverse lineup with broad demographic appeal. For IT originals, the summer sale article hit the shadow's edge for Feng Zhiyun, extending its offline success to the online domain. It not only topped all Q4 field releases by peak IT popularity index score, but also became the highest rated domestic action crime film over the past decade on Douban. Additionally, our original online film, The Sixth Robber, it showed that a new all-time high for the popularity score within its category. For movies broadcasted On our platform, we retained the number one Bioshape market share for 16 consecutive quarters. In Q4, we rolled out diversified titles, including The Warm Seed, Dead Two Rights, Nanjing Zhao Xianghuan, The Animated Feature, Nobody, Lang Langshan, Xiao Yao Gui, The Fantasy Comedy, ADVENTURE and the female-oriented FEACH flew away. Furthermore, our innovative revenue sharing model decided to optimize returns for fields with limited cell article bounce of its performance gained further traction. The return of the lame hero, Bi Zhengming's Zhengming, generated RMB 36 million in shell revenue, ranking first among all titles under this model. According to Variety Show, our dual focus on long-running franchise and fresh innovative IPs show market-leading performance in 2025. According to Enlightened Data, three of our multi-season titles ranked in the top 10 most watched multi-season variety shows and the two new releases ranked in the top three most watched new shows our originals continued to set benchmark the wrap of china wrapped its ninth season this year cementing its position as china's longest running online variety IP. Additionally, Hi Young Farmers 3, a spin-off of the beloved Become a Farmer franchise, featuring the boy group, reached an all-time high in its popularity score this season. Among brand new originals, Wander Together, Yu Zhou, Shen Shuo, and Qin Zhuyi exceeded 8,300 for popularity score. We also expanded IP values from merchandise partnerships with brands for Hi! Young Farmers 3, The Blooming Journey 2, Yilu Fanhua, and Wander Together, unlocking new revenue potential. Turning to micro drummers, we have expanded free content to over 70% of all 20,000 title library to broaden engagement. Our original portfolio is scaling to over 150 titles today. Filled record high membership and distribution revenues in Q4 from these offerings. Spin-off from Strange Tales of Tang Dynasty, The Child's Detective, Tangui Qitan Zhi, Chang'an Xianwei, and the Nite Health Library, Tangui Qitan Zhi, Jiu Chonglong, both hit new highs for population score. Notably, over 70% of their debut week viewers also watched the long-form scenarios, helping to extend the IP's lifespan. This releases not only boosted membership viewers, but also attracted top tier brand partnership, moving well beyond the conventional performance ad model. Building on the momentum of the premium micro drummers, we are working into micro animations and business models centered on free content with a pipeline of over thousand titles in place. Micro animation viewship and the time span are growing rapidly. Beyond content, we further amplified our IP values from flagship marketing events. In December 2025, we hosted the annual IT screen night alongside a two-day IT screen carnival in Macau to honor the year's standout productions and talents. The event drew over 200 million on-site attendees and livestream viewers and brought together around 300 celebrities and industry partners. Next, let's dive into our 1726 content strategy and the exciting Q1 lineup. Starting with drummers, our Q1 slate includes Love Between Lives, Da Xi, soars into cloud shells, Tai Ping Nian, born to be alive, Sheng Ming Shu, how dare you, Cheng He Li Tong, the devil between us, Chu Le, dazzling days, Sui Yue You Qing Shi, pursuit of jade, Zhu Yu, and the life after you young, Zheng Qi Chun Lai. For movies, we will match audience demand with diverse slates, spanning top-seller article releases and online movies. Q1 line-up features original online movies such as Northeastern Brothers Season 3, Dongbei and Girl, and The Thing City, Sao E, alongside licensed titles such as Ge Zhi Tang, De Xian Ji Zhi. For variety shows, we are enhancing the long-term operation of multi-season IPs. We are exploring fresh and innovative new IPs. PQ1 releases include Five Hearts, Season 6 Wu Ha, His Song Season, Two, You Ge, as well as new IPs such as Wonders Gather, Tonight Commendation, Jinye Xiyou Xiu. For micro-germs, we will focus on creating original content with quality and innovation while enhancing operations, commercializations, and deepening integration of AI. Q1 key titles include Return to a Better Tomorrow, Xin Ying Xiong Ben Se, The Rise of a False Noble Woman, Jia Gui Nu Jing Jie Lu, and The Ember Hour. For animations, we will meaningfully expand our line-up of original Chinese animation compared with previous years. In Q1, our slave features original long grinding scenarios, such as the great ruler, Da Zhuzan, and against the gods, Ning Qianxian, as well as popular IP, including How Dare You, Season 2, and Waves of Crisis, the Hindi. For children's content, we will secure top-tier SSIPs, scale, and original productions, and expand our AI-driven portfolio. In Q1, key offerings include a brand-new original title, Detective Babu, Xiao Xiong Mao Da Shen Tan, Da Zhan Ba Ba La, alongside licensed shows such as Power Patrol Season 11, Wang Dong Dui Da Gong, and the latest season of Pleasant goat and big, big wolf. Moving on to the membership services. Over the past few quarters, our membership services revenue has shown consistent year-over-year recovery, driven by diverse premium offerings in Q4. Members enjoy the popular titles such as Strange Tales of Tang Dynasty III to Chang'an, Silent Owner, Chen Mo's Glory, Fitted Hearts, Yi Xiao Sui Ge, Legend of the Magnate, Da Sheng Yi Ren, and Source and Beloved. We revitalized our membership units through a range of operational initiatives. For example, we boosted new subscriptions and upgrades to the S-Diamonds plan by offering inclusive perks such as free express packages, which provided early access to finalists at no extra cost. In 2020-21, express packages were available for over 40 drivers. Additionally, we are stressing member retention by emphasizing annual memberships during holiday promotions, e-commerce festivals, and bundle partnership offers. To further increase the value of memberships, we introduced additional inclusive benefits, including five VIP events in the first quarter featuring participation in offline show recordings, advanced screenings, and the exciting IT Screen Night. In particular, IT Screen Night event was highly praised for inclusive perks like red carpet viewing privilege and live feeds featuring their favorite celebrities. Moving on to advertising business. In Q4, brand advertising revenue grows both annually and sequentially. revenues from variety shows and dramas both delivered double-digit annual growth while core and vertical such as food and beverage, internet services and e-commerce and telecom services all recorded double-digit annual growth. Beyond long-form videos, all micro dramas and micro-variety shows are gaining considerable attention from brand advertisers. For micro drummers, we have successfully engaged several renowned brands in 2025 through tailored content, bundled sales that integrates product placements with self-branding and a string of collaborations. Likewise, Our micro-variety shorts have received strong market recognition, fostering long-term partnerships with multiple clients and driving impressive revenue growth. For ProMorphis S, we regained sequential revenue growth in Q4, driven by a healthier and more balanced advertiser portfolio. Revenue from small and mid-sized advertisers grew both annually and sequentially. By vertical, internet services, e-commerce, and financial services lead growth. Additionally, we have deployed a proprietary large AI model for scaled ad delivery, leveraging deep semantic understanding that has boosted commercial rates. Moving on to technology, we introduced a network of proprietary AI agent platform designed to revolutionize professional content creation by integrating leading global large models with IT expertise in professional content production. NadoPro effectively streamlines the production pipeline from script evaluation to final generation. Currently, in its closed beta phase, NadoPro is empowering our internal teams and select partners in a wide variety of professional content, such as feature films, dramas, animation. In addition, Total work of pioneering AI agent-based NPC platform continues to redefine entertainment experience. Users can now engage with over 1,700 NPC agents from our popular titles such as dialogue, fan fiction, and virtual social interaction. The platform creates powerful synergies with heat content delivers immersive emotion connection with fans and extends the long tail value of our IP strong user adoption is translating into commercial success and revenue from total war raising Chevrolet year over year in 2025 in addition to pushing the boundaries of AI applications. We are leading the industry with cutting-edge virtual production technology. Our in-house developed IQ stage system has meaningfully enhanced the efficiency of vehicle scene shots for the artificial heat. PacSense 3. achievements delivered unparalleled results with zero frame drops and zero analyzing, representing the highest standard for virtual production in car scenes in China. And IT innovation is at the core of everything we do. It's a portfolio of over 10,000 patent applications. We are proud to rank number 72 among the top 100 Chinese enterprises for valid invention patents. In 2025 alone, we filed nearly 1,000 new patent applications, most of them driving achievements in AI. across content development, production, broadcasting, and offline experiences. Moving on to the business performance in regions outside of mainland China, in Q4, we continue to deliver robust growth, with membership revenue increasing by 40% annually. Markets such as Brazil, Mexico, and Indonesia show exceptional performance, with membership revenue surging by over 80% annually. Also, performance is driven by the growing popularity of our seed drummers, which have shown substantial annual revenue growth, notably speed and love. Shuanghui was a standout hit in 2025, emerging as the best-performing C-Drama during the peak viewing period and topping popularity charts in 14 markets on our international platform. It performed exceptionally well in key regions like Thailand, Malaysia, and Singapore, where it leads its category on Google Trends. Its success extended further with the spring of a variety show, Thai Sweet, which became one of the most popular Chinese variety shows over this time for this year. We are also wrapping up. production of local original content with strong user reception. The original Ops Amin Jail stood out as the top Taiwanese drama on our platform in 2025. Moreover, our Thai original variety show, Running Man Thailand, launched in February 2026, has secured exceptional brand advertising partnerships. Apart from long-form content, microgenres captivated increased engagement among overseas audiences in Q4. Membership revenue from microgenres hit a new high, driven by original such as Spring in the Palace and Wide Scene and licensed hits from China like Midsummer's Wanderlust, or efforts in creating local original microgenres. have also started to show results with five titles premiered in December 2025 featuring local content for South Korea, Thailand, the UK, and Indonesia. Among these, the Korean microgrammer Darling Is It All a Coincidence and the Thai micro drama Catch Me If You Love Me have outperformed, gaining notable popularity across and beyond our platform. In addition to content, in Q4, we held For major offline marketing events in Thailand, Indonesia, Malaysia, and Singapore featuring Chinese celebrities, this event amplified the influence of our content and the commercial value of our platform, forged stronger partnerships, and propelled the global reach of Chinese content. Moving on to experience business, We are focusing on two core areas, IP-based consumer products and IT labs. By leveraging our extensive IP assets, we aim to build a new engine for sustainable long-term growth. For IP-based consumer products, our software-operated merchandise demonstrated solid progress, highlighted by top-selling collectible cars from premium drivers like the Journey of Legend. For IP licensing, the strength of Tang Dynasty 3 to Chang'an secures strong partnerships across food and beverage, beauty, and art trust. and source and send new sales records during its broadcast period. Looking ahead to 2023, we plan to grow our IP licensing business and expand our self-operated merchandise beyond classic broadcast to more categories. For IT land, we adopted a live asset model By combining AI and XR technology with IPs, we create immersive experiences that are more efficient, flexible, and require less space and investment than traditional theme parks. Our first IT lab was successfully opened in Yangzhou on February 8th. Kaifeng and Beijing locations are set to open later this year, each incorporating unique local elements to deliver tailored experiences. Revenue will primarily come from ticket sales and onsite spending. Looking ahead, we aim to position ITland as a key sales channel for IP-based consumer products. and a vital platform for maximizing the long-term value of our IP portfolio. In summary, in 2026 we will focus on three key strategies. strategic goals. First, we were stressing our domestic call by enhancing the quality of original content, stressing membership and advertising businesses. Second, we will aim to sustain strong growth in our overseas and experience business, building more robust engines for long-term expansion. Third, over the past several months, rapid advancements in AI large models worldwide has revealed a clear insight. The content production industry will be revolutionized within the next one to three years. This transformation will significantly cut production costs, lower barriers to professional content creation, and boost both the quality and the quality content. These exciting changes will greatly benefit media platforms, especially IT. To seize this opportunity, we are dedicated to building a dynamic AIGC ecosystem transitioning our platform from a centralized to a decentralized model. We look forward to showing detailed initiatives at our upcoming IT World Conference on April. Now, let me hand it over to Yingfeng for the financials.

Thanks, Mr. Gong, and hello, everyone. Let me walk you through the key numbers for Q4. Total revenue for Q4 was 6.8 billion RMB, up 2% sequentially. Membership services revenue reached 4.1 billion RMB, down 3% sequentially due to seasonality. Online advertising revenue was 1.4 billion RMB, up 9% sequentially, primarily driven by the streaming content and e-commerce double 11 candidates. Content distribution revenue reached 787.7 million RMB, up 22% sequentially, primarily driven by the increase in cash transactions. Other revenues were 547.9 million RMB, down 6% sequentially. Moving on to cost and expenses. Content cost was 3.8 billion RMB, down 5% sequentially. As we adopt a more accurate content acquisition strategy centered on quality, total operating expenses were 1.4 billion RMB, up 2% sequentially. Turning to profit and cash balance, non-GAAP operating income was 143.5 million RMB. Now that operating income margin was 2%. As of the end of Q4, we had cash, cash equivalents, restricted cash, short-term investments, and long-term restricted cash, including prepayments and other assets, at a total of 4.7 billion RMB. At quarter end, the company had a loan of 636.6 million U.S. dollars to PAG recorded under the line item of prepayments and other assets. For detailed financial data, please refer to our last release on our IR website. Now I will open the floor for Q&A.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. In the interest of time, we ask that you please limit to one question per person. Your first question comes from Zheqing Zhang with CICC. Please go ahead.

Thank you, Manager Chen, for accepting the question. Recently, AI video production models have been constantly upgrading, such as C-DANCE 2.0 and similar models have basically reached the film industry level. I would like to ask Manager Chen to share how this will affect iQIYI, especially in terms of content production and cost reduction, and what plans iQIYI has in this regard. Thank you. and thanks management for taking my question uh with recent upgrades in ai video generation models like sedans which are approaching production level quality could management share your view on how this advance advancements may impact ig's business particularly in content production and the cost structure what's your plan on leveraging ai video generation models thank you

Thank you, Gong Yu. Let me answer your question.

Video models significantly reduce the cost of video production and shorten production time. And it will also create a threshold for some newbies to be able to do a good long-term content. So its impact is to let more people enter the long-term business. That will inevitably lead to a large increase in the number and quality of long-term customers. As a long-term media platform, IT is very good for IT.

Thank you, Christine. Our CEO is taking this question. Video generation models will substantially reduce the cost of producing long-form videos, shorten production time, and lower the barrier to creation. This potentially will attract more new creators to this business, and then ultimately lead to more creations for the long-form video production, and this is very much beneficial to long-form video platforms like ITE, which means this will lead to increase in both the quantity and quality of long-form video content.

Let me talk about the influence of different types. Manga is the original content of the AI era, so it is now produced by AI. The short film of children's animation is now verified to be a large model and produced directly. The cost of production has been reduced to one tenth or less than the original process or actual shooting. Now, online movies, animation, documentaries, etc. are also using a lot of AI-guided methods to produce. The most difficult ones are real-life movies, real-life gatherings, and variety shows. Now they are also using some. Let me just dissect the impact of AI generation content for each content genre.

For example, the micro animation is actually an AI-native content created entirely by AI. And for children's animation and also micro-trauma, it has been demonstrated that large models can produce these content, and reducing the production cost to one-tenth or less compared to traditional methods. For online films, animation, and documentary, et cetera, these are rapidly permitted by AI-led production approaches as well. Among all these long-form video content, the most difficult ones to produce are the live action content. For example, the theatrical films, drama series, and variety shows. And in fact, these content have in part adopted AI in their production process. And the results have proven that these have significantly reduced the content production costs. And based on our projections and estimations that we think the AI-led commercial film probably will emerge within the next two to three years.

IT is mainly based on two aspects. On the one hand, the nanoprof, which is developed by Zhenghai, is specifically used for film production. For ITE, we are actually placing our focus on two areas to embrace these AI initiatives.

On one hand, we have developed Navajo Pro, an industry-specific AI agent for video content production. And on the other hand, we are working to build a new AIG console ecosystem through various operation methods. Hopefully that we can attract more creative talents under this new AI era. Thank you. Thank you.

Thank you. Your next question comes from Maggie Yeh with CLSA. Please go ahead.

晚上好,感谢管理层的提问机会。 想请教一下公司2026年整体的内容策略的规划, 比如我们在聚集综艺、电影、微剧等主要品类上的重点, 或者说如何去考量自制与外采内容。 Conventional work pass through companies' content strategy for 2026 in more details. For example, how are we thinking about the key priorities across different genres, including drama, variety shows, film and micro drama, et cetera? And how are you thinking about the mix of self-produced content versus licensed one? Thank you.

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

Given the current volume of in-production dramas, we will slightly reduce the number of dramas to be produced in 2026.

and place greater emphasis on top-tier titles in terms of their quality.

In terms of the realistic and suspense crime genres,

And these content categories have been IPE's strength, in fact. And in these areas, we'll continue to maintain our innovation to create new content and more creative content, and then maintain our advantage in these areas.

At the same time, since the beginning of 2025, we have paid special attention to increasing the supply of female-oriented content. Starting in 2025, we have increased the supply of female-oriented content

For example, starting from the end of 2025, we started to go to a new variety show called Winter Together. This is targeting for the new female users. And also at the beginning of 2026, we also launched a young female-oriented drama called How Dare You.

For young male users, we have released multiple original animations this year, including the long-running series The Great Ruler, How Dare You, Season 2, and A Weight of Choices.

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

We recently introduced a unified revenue sharing policy across eight major content categories.

including dramas and films. And under this new framework, production partners' return actually will be more directly linked to each title's revenue contribution and allowing outstanding works to earn higher returns.

OK.

Apart from the content category, for example, like theoretical films and drama series, like Mr. Gong mentioned earlier, we are actually gradually adopting and actually very proactively adopting AI-led production for categories such as micro-animation, animation, and micro-drama. While we're applying AI across other content categories to perhaps cost, and also accelerate timelines. Thank you.

Thank you. Your next question comes from Lincoln Kong with Goldman Sachs.

Please go ahead.

Thank you for accepting my question. I would like to ask about the overseas business. What is the business plan and strategy of the AICI in 2026? uh thank you management for taking my questions my question is about overseas business how's our plan and strategy for 2026 thank you thank you lincoln we'll invite um our senior vice president of international business um mr uh to take this question please go ahead um

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

For 2026, our strategy is to sustain high revenue growth rate or even accelerate our growth rate. In terms of the content strategy, our market-tailored content mixes actually have proven effective and continue to attract users.

But for sea dramas, they continue to expand their influence overseas. And the sea dramas will remain at the core of our overseas content portfolio, especially genres with strong cross-culture appeals, such as ancient costume romance and contemporary romance. I'm sorry, one more thing.

Yeah, go ahead. . AI's translation, dubbing, and dubbing have greatly improved efficiency and reduced costs, and also increased the speed of upload. By fully utilizing social media channels and using AI-generated advertising materials, we have greatly reduced costs and increased efficiency in terms of advertising, and achieved low-cost and high-efficiency content transmission. At the same time, we will continue to increase the impact of advertising and live activities online, For content, we actually ramp up original production and local content licensing in Thailand, Malaysia, and Indonesia.

And in terms of operations, AI-powered translation and dubbing actually have significantly improved efficiency. reduced costs, and accelerated the content release schedule. Going forward, we will fully leverage social media channels and use AI to generate promotional assets, enabling low-cost, high-efficiency content distribution and user reach. Meanwhile, we will continue online and offline advertising to further amplify the influence of C-Drama. And last but not least, we will continue to promote content and strengthen our brand presence in international markets through initiatives such as celebrity main sign-ups and also offline events. Thank you. Thank you.

Thank you.

Your next question comes from Rebecca Zhu with Morgan Stanley. Please go ahead. Hi, thank you for accepting my question.

我的问题是关于爱奇艺乐园的。 请问管理层是不是可以分享杨州的爱奇艺乐园开源以来的运营表现, 以及我们在2026年的体验业务的一些具体的规划? Thank you, management, for taking my question. My question is about IT land. Could management share the operating performance of IQ Lend Yangzhou since it's opening? Also, can you please share the 2026 plan for this business? Thank you.

Thank you, Rebecca. I will invite our CEO, Mr. Gong, to take this question.

Okay, thank you. Yangzhou is a good business, including Chen Ningchi's stage, strong theater,

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

It has been less than 20 days since the opening of the store, especially after experiencing the long-term price of the whole business. The overall effect is in line with the expectations of the users, and the payment is relatively positive. It is reflected in the main OKA platform, and the score is more than 4.8. Today, some platforms have already reached 4.9, and they are full.

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

From opening to the last day of the long-term holiday, the number of tourists continues to rise. From the actual population, from 4 to 5 years old, up to 10 years old, all the tourists can attend the event.

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

And this year, Yangzhou, Yangzhou is going to open in March. It's a long-term trend. So, in addition to the 3rd and 4th months, there are also the 5th and 1st months, the 7th and 8th months, the 17th and 11th months, and the long-term price of the 11th month. Then, it is estimated that the entry rate of these 3-day long-term trends may increase by 1 to 2 times compared to the past 10 days.

We are looking at the potential for a one to two times increase in peak single day revenue during the following peak period. For Yangzhou location, it actually has its special areas for the spring season, especially March and April is a peak travel season for Yangzhou. And also upcoming we have the labor holiday in May, the summer months of July and August, and also the National Day holiday in October. And all these key holidays and periods could potentially boost

the revenue performance compared to the first 20 days.

And the expected growth will come probably from two major areas. from a more deeper, you know, operation to a more finer detailed operation for the entire IT event and also the increased efficiency for IT event as well.

In the nuclear power plant, we also received 100 yuan from Colombia. The current product is not yet rich enough, so the next part will continue to be rich. Then, both Colombia and the number of buyers will increase.

Currently, the average transaction value for consumer products at ITE land is about 100 RMB. We think there's potential for growth in the future. We will try to load more products in the future and also to extend to other content categories as we do a more refined consumer product team operation. For this year, we will focus more on the self-operated IP consumer products, and the operations will be strengthened this year, and this will lead to a revenue potential growth of 100% this year.

Thank you. Thank you. Your next question comes from Gigi Zhao with Guangzhou. Please go ahead.

Thank you for answering my question. 我还是比较关注我们在海外的一个发展, 然后也看到二五年取得了很好的一个成绩, 所以我也想理解一下我们的海外内容的一个分发, 可能目前看是以博内的这个自制剧为主的这个翻译到全球去分发, 那么我不知道就是该怎么想我们海外业务的一个利润率和博内的会员业务相比是怎么样的, 那有没有一些比如说在海外会员的这个up pool, Thank you.

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

. . . . . . Okay.

In terms of our content, our brand or our slogan is the beloved Asian content. So we focus not only Chinese content, but Also, the Asian content as well. Of course, Chinese content, which we call C-pop or C-drama, is our foundation because all the content has been already produced for our domestic business. So we only have to incur some of the dubbing and also translation, which is the cost. With AI, it's much more efficient and controllable. But in addition to C drama and also Chinese content, we also have, for example, Japanese animation, also Korean dramas, and also the local content, for example, for the Thai region, Malaysia, and also Indonesia. So this is how we set apart from many of the Western players overseas. And for example, the Netflix and other houses, they host a lot of the Western content, whereas For us, we are a home of the developed Asian content.

Then I would like to add something about VG, which is the VG of the digital screen. Since last year, we have gradually launched some digital screen VGs overseas. At present, the digital screen VGs are ranked second in our entire streaming category, and the growth rate is very fast. During the period of time, its overall income and market share have gone up. This is also a very important category in contrast to other video platforms at present.

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

The second question is about membership and process. This is different for each country. We set different prices for each country or region. It's a middle position. It's a little cheaper than some of the most expensive video platforms, but it's a little higher than some of the cheaper ones, but it's in the middle. In the same way, it has a great deal to do with the local pricing and consumption level in different countries. It's very different from some relatively more developed countries in the West, or its pricing will be much higher than the domestic pricing. And in terms of a question regarding ARPU and also membership performance, for ARPU, actually, for each region, it's actually different.

Overall speaking, we would think we're at the mid-range of the price tier. For each different region, we expect a different price sense. For areas more developed, similar to the Western spending powers, the ARPU is a bit higher from the China domestic region. And for the developing regions, for example, like the Southeast Asia, the average ARPU is a bit lower than the China domestic region. But overall speaking, I will say that overseas ARPU will be greater

or more than the China domestic airport.

And in terms of the membership retention, in overseas business, we adopt the premium model, which is the free plus paid content model. And in areas such as more developed regions, I will say that this is very much similar to their spending habit and the retention is actually a bit better than domestic areas. But in some of the areas such as the developing regions, the retention performance is a bit lower. But overall speaking, the overall membership retention is similar to domestic levels. Thank you.

Thank you.

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

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

Thank you, everyone, for joining the call today. And if you have any further questions, please do not hesitate to contact us.

Thank you. Thank you.

Bye-bye.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.