More paid users, booming advertising boost iQiyi's Q2 revenue

China's Netflix-like video website iQiyi posted a revenue growth in the second quarter thanks to the increase in paid users and booming advertising income, the Nasdaq-listed firm said on Friday. 

In the second quarter, iQiyi's revenue reached 7.6 billion yuan (US$1.2 billion), up 3 percent from a year ago and near the high end of its guidance. Its operating loss in the quarter was 1.1 billion yuan, narrowing from 1.3 billion yuan a year ago.

Its paid subscribers amounted to 106.2 million by June. 

"Despite the fact that the second quarter is traditionally an off-season, the number of our subscribers grew, driven by hit original dramas," said Gong Yu, iQiyi's founder and chief executive.

iQiyi's business also grew rapidly in lower-tier cities in China and gained more users from overseas expansion, Gong added.

The industry has benefited from surging demand for digital entertainment during the epidemic, analysts said.

As well as increased paid subscriptions, iQiyi's online advertising business income grew 15 percent year on year to 1.8 billion yuan. It came from the booming demand of brands which spent more on online channels, iQiyi said.

In the domestic market, Baidu-backed iQiyi, Tencent Video and Alibaba-backed Youku are the top three video websites. All are facing strong competition from the likes of Douyin and Kuaishou where users are spending more and more time. 

In the third quarter, iQiyi expects revenues to hit 7.62 to 8.05 billion yuan, a growth range of 6 to 12 percent from a year ago.