iQIYI, Inc.

Thank you for standing by and welcome to the RKE first quarter 2026 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. Cheng Yu, IR Director of the company. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining ITE's first quarter 2026 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. Yim Sung, our interim CFO, Mr. Xiaohui Wang, our chief content officer, Mr. Liu Jiaojuan, senior vice president of our membership business, and Mr. Xiangpa Yang, Senior Vice President of International and Online Game Business. Mr. Gong will give a brief overview of the company's business operations and highlights, followed by me, 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. IDE 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. The coherency of BrickSoma AI and a supportive domestic regulatory landscape is fundamental. fundamentally reshaping entertainment and creating incredible opportunities for ITE. Let me show ITE's value acquisition in this new area from three perspectives. Three important are called today. Igniting new growth engines. and building for the long term. Let's start with the first perspective, reinforcing our core fundamental foundational threats. Premium content remains the cornerstone of our strategy. And in Q1, we reaffirmed as comparing appeal for audiences. of the worst lineup of heat dramas, including The Punishment 2, Da Zui Er, Born to be Alive, Shen Meng Shu, Pursued Object, Zhu Yu, and How Dare You, Chun'er Qitong, secured a dominant position in the core drama category per Enlightened Data. Moving forward, our commitment to content quality is stronger than ever, designed to deliver expert experience that profoundly connects with viewers. This focus is revitalizing our core operations, evidenced by the sequential growth in membership revenue. We are also highly encouraged by the supportive domestic regulatory landscape, which is accelerating the content approval progress and driving stronger capital efficiency. Importantly, these regulatory policies are unlocking innovation across new formats. This includes short-form dramas. 15 to 25 minutes per episode with flexible episode costs, and internet feature films, which are limited to three chapters of 60 minutes each. These formats are not only a shortened production cycle and lower capital barriers, but also attract a broader pool of creative talent, enabling more innovative storytelling than traditional long-form content. Furthermore, AI is perfectly suited for AI integration, ultimately enriching our portfolio and maximizing our ROI. Looking ahead, we plan to launch over 100 short-form dramas in 2026 while steadily building our internet feature film slate. By continually delivering premium long-form content while drastically expanding into new formats, we are reinforcing our foundational strengths. Importantly, this expansion is efficient allowing us to capture new opportunities without putting additional pressure on our overall content costs. Second, we are igniting new growth engines. Among our emerging business segments, our overseas business has established it as a proven second growth driver. In Q1, overseas membership annual surged by over 40% annually. This success stemmed from a highly differentiated market positioning. Compared to global pairs, we focused on premium Asian content tailored primarily for young female demographics. We think our Asian content portfolio see drummers whose global influence continue to rise, serve as the key catalyst for our international expansion, complemented by a growing slate of local content. Geographically, we are acquiring our presence in Southeast Asia while also expanding into high-growth markets in the Middle East and Latin America. with Brazil as a key focus. We are also deeply integrating AI across our global operations to drive efficiency. Parallel to our market expansion, we are maximizing IP value through our experience business, expanding our content value from online to offline, and extending the IP lifecycle For IP-based consumer products, we are driving deeper user engagement, so merchandising will empower popular IPs to generate both casting window and long-tail monetization. Finally, all foreign into offline experience is yielding encouraging results. Our first IT event in Yangzhou has gathered solid initial feedback, allowing us to rapidly accumulate operational experience to apply to other locations. Thirdly, we are laying a robust foundation for long-term goals, powered by AI and all decentralized platforms. AI is breaking down The historic barrier that once made quality content costly, time-consuming, igniting, explore growth in both creators and the content value, anticipating that this accelerating shift will soon outgrow the traditional centralized media platform model. We have strategically pivoted to build an upgraded and a vibrant decentralized social media ecosystem. This will add lots of central value for decentralized ecosystem greatly expands content supply, allowing us to meet diverse demand at a whole new scale. Creators have a, creators will have greater opportunities to break through another phase. Retaining full ownership of their IP and converting it into fail-attractive returns, while also cultivating private traffic, building lawyers and base, and gathering valuable data from developed user interactions. Meanwhile, for IT originals, We are sharpening our focus on premium content while the decentralized platform drives scale of original well-supplied ads of signature offerings. Additionally, we are building a combo, cohesive support system so creators can focus purely on creativity. One key pillar is NADOCRA, and she is a proprietary platform for zero-grade content production. NADOCRA is powered by both public and self-deployed LATCH models, but it goes beyond generic models. It's built upon our years of technology infrastructure and deep content expertise. We transform Years of industry know-how into AI agent and combines them with our core IP and digital assets to deliver accessible platform capabilities. NadoPro offers one-stop services from content creation to operations and commercial collaborations. Beyond NadoPro, we offer professional training and work spaces We also facilitate financing solutions connecting talent with capital from our own funds and external investor networks. Now, let's explore what defines IT's long-term investment value and how we are uniquely positioned to lead in the AI area. Our confidence rests on two core pillars. how to replicate competitive mount. We possess a unique brand of deep content expertise and cutting-edge technology. We have a proven DNA of innovation from pioneering general specific sales brands to now leading the AIGC transformation in the industry. Crucially, we possess a vast high-quality IP library that is essential in the AI area, alongside a high-engaged user base that we are committed to serving with excellence. Second, a long-term structural enhancement to our business, economics, AI is poised to address major industry pain points, expanding our margins and maximizing capital efficiency. At the same time, decentralized platforms will boost content diversity to capture broader audiences, while IT alternatives focus on crafting enduring premium IPs together. These initiatives fuel our diversified monetization system, expanding membership, advertising, and offline experiences, unlocking IP values across both domestic and global markets. Before we dive into Q1 details, I want to emphasize our core philosophy, the true power of technology as to empower humanity, not replace it. It will serve audiences with richer, deeply resonant content. It will empower creators to overcome human limitations, turning their boldest inspiration into reality with absolute efficiency and freedom. Ultimately, it will elevate the entire industry, unlocking new avenues for growth and helping more creators, especially young talent, realize both their creative vision and commercial value. Now, let's move on to the detailed performance in Q1. Let's start with content. We are pioneering AI-driven storytelling and talent cultivation. In Q1, we unveiled Peter Paul IT AI Delta, featuring a suite of 16 titles across science fiction, thriller, wuxia, and fantasy genres. Each running 11 to 20 minutes, NADO Pro powered the key production process from capture design and scene setting to storyboarding, demonstrating AI's transformative potential in professional content creation. In terms of our long-form drama performance, The Punishment 2 became our second front chart with two seasons exceeding the 10,000 ITA popularity score. Pursuit of Jade also surpassed 10,000, while All In Cause produced a custom drama, How Dare You, exceeded 9,000. Both Pursuit of Jade and How Dare You resounded strongly with young female audiences further solidifying our connection with these key demographics. Furthermore, we secured our leadership in realistic and suspense genres. Born to Be Alive earned the highest toolbar rating among all domestic drama releases in Q1. And People Between Us 2 entered our suspense theater was also well-received by users. Four variety shows of in-house production went there together. Yu Zhou, Shan Shuo, Qin Zhuyi topped the enlightened market share ranking for the first quarter. For animations, we expanded our offering with four key original titles. Among these, the long-running The Great Ruler, Da Zhuzai, continued to captivate audiences, and season two of How Dare You achieved a strong synergy with its drama scenarios. For microdramas, original production contributed over half of revenue from this category in Q1. AIGC has emerged as a powerful driver for content releases. In Q1, we launched more than Suits of the AI-generated microgrammars further enriching our offerings. Finally, for microanimation and AI-native formats, we are rapidly expanding our library, which features over 14,000 titles as of quarter end, with viewership continuing to rise steadily. Next, let me show our Q2 content pipeline. Our drama serials line up features a rich variety of titles, from historical epics to niche gems, including Echoes of Southern Moves, 八千笔录云和月, Bloom Life, 他是两个, Born with Luck, 地质上犯罪, The Earth, and archives the Nanyang mystery, Nan Bu Dao An. Among the already released titles, Born with Luck gained wide popularity driven by its innovative storytelling, combining comedy and mystery. and surpassed an IT-populated score of 10,000, becoming the third to reach such mark this year. For films, our pipeline includes original online movies, The Thin Tree, Free World, Wings of Death, Miles B.T., and The Counterfeit with Chao Chung-an. For licensed titles, we will release theoretical hits on our platform like Pegasus 3 featuring Shun, Awaking of Insects in Silence, Jinzhou Shun, and Blades of the Goddess, Biao Ren, along with the online film The Legend Hunter, Xiong Jun. For variety shows, we will continue to captivate audiences with established front charts such as Five Hearts Season 6, Become a Farmer Season 4, The Drop of China 2026, and Yes, I Do Season 6. While launching new IPs like Voice of Young, Chaoran, Qingchun de He Chang, for microgrammers, we have a diverse slate. schedule, including perfect match, ,, ,, ,, ,, ,, ,, and the of Phoenix. For admissions and the children's content, we will continue the long running against You can check and then you build a localized adaption of the BBC classic. Now turning to membership business, revenue will grow sequentially, primarily driven by premium titles, including pursued object, the punishment tool, how they are used, and the demo between us. Additionally, All refined upselling strategies and value-driven membership options successfully encouraged users to extend their plans, driving a year-over-year increase in average subscription duration for monthly subscribers this quarter. Additionally, all higher-care upselling membership continued to scale, driven by a high highly differentiated value proposition that features free express package. Next, moving on to advertising business or brand as revenue contribution from targeted drummers. The COVID double digit annual growth with titles like Born to be Alive, How Dare You, and the pursuit of JIT gained strong recognition from advertisers sector-wise. Food and beverage, internet services, and e-commerce all achieved double-digit annual growth. Furthermore, we are expanding our advertising appeal across new content formats. For example, we partnered with leading advertisers to co-produce stream of content for micro-dramas, creating new avenues for brand integration. On the technology front, AI continues to empower our advertising operations. We leverage NanoPro to produce marketing materials and combine AIDC capabilities with our IPs to generate high-quality ad content. Learning Q2, our focus will be on maximizing ad sales across premium variety shows, dramas, and the traditional display ads. We further enhancing monetization on large screens. Concurrently, we will continue to leverage AI to optimize advertising efficiency. For performance ads, the advertiser mix is Healthier and more balanced revenue from small and mid-sized advertisers recorded strong annual growth with suspended improvements by sectors. Internet services, e-commerce, and minigames delivered outstanding quarterly results. Additionally, monetization efficiency for microgrammers emerged as measured by revenue per inventory unit increased by over 60% year-over-year. For the rest of the year, our strategy for performance has focused on four key areas. First, expanding our client base across high-growth verticals, including internet services, short-form videos, mini-games, and AI tools. capturing greater market share during peak window such as major e-commerce festivals. Third, enhancing monetization efficiency through AI-powered capabilities. Finally, typing into additional ad budgets by harnessing a more diverse content ecosystem and upgraded ad placement system. Moving on to our business performance in regions outside of mainland China. Membership revenue increased by over 40% annually in Southeast Asia markets. Membership revenue from Indonesia grew by over 80% annually. Meanwhile, Portuguese and Spanish-speaking regions demonstrated robust growth with membership revenue by over 100% annually. Average daily subscribers reached a new high. The global influence of C-Dramas continues to expand. Notably, the pursuit of jet labs, performance across multiple markets, and a secure top position on our international platform, Billshape Rankings, is top to Google Trends, among all C drummers broadcast during the same window in 15 markets and set a record as the most searched Chinese drummer on Google. Beyond C drummers, we are scaling original local productions to elevate the appeal of our content library particularly. In case of Southeast Asia markets in Q1, our first original Thailand show, Running Man Thailand, delivered exceptional results, setting multiple new records for variety shows on our international platform. Google Trends confirmed its position as the most popular. over the past three years, and the title earned strong recognition from advertisers. Meanwhile, our first original Indonesian drummer is on track to premiere in Q2, marking a further step in our localization journey. Our overseas micro-drummer business also gained momentum with growing revenue or contribution filled by both licensed and original content. Our original production pipelines consistently deliver new releases across multiple languages, including English, Thai, Korean, and Indonesian. Next, our experience business. We focus on two core areas, IT-based consumer products and IT land. For IT-based consumer products, our soft-operated merchandise deliver solid performance with collectible tasks from pursuit of a new sales record in its category. For offline experience business, our first IT land in Yangzhou performed in line with expectations and was highly acclaimed for its scenery design, immersive experiences, and technology-enabled interactions. Going forward, we will continue refining operations and introducing new creative offerings to encourage repeat visits and onsite consumption. Furthermore, we are leveraging our experience gained in Yangzhou to drive to development of new location in Kaifeng and Beijing, which are progressing smoothly. Now, I would like to hand it to Ying for the financials. Thank you.