Chinese streaming firm iQIYI saw its first quarter losses increase to $406 million (RMB2.88 billion), while revenues and subscriptions improved.

The NASDAQ-listed company reported 119 million paying subscribers, a year-on year increase of 23%. That implies growth of 12 million subscribers in the January to end of March period in which much of China was in stay-at-home or lockdown mode due to the coronavirus outbreak.

With average spending per user also increasing, the subs spurt lifted subscription revenues by 35% in the quarter. Games and content sales revenues also increased. But advertising revenues plunged 27% to $217 million, and other revenues were also down. Overall group revenues managed a 9% increase to $1.1 billion (RMB7.6 billion).

Gong Yu, founder and CEO said: “We delivered solid results during the first quarter despite very challenging environment caused by the COVID-19 outbreak.” Net losses in the equivalent quarter last year were RMB1.81 billion. Losses in the fourth quarter of 2019 were RMB2.50 billion.

In its guidance for the second quarter of 2020, iQIYI said it expects total net revenues to be between RMB7.25 billion (US$1.02 billion) and RMB7.67 billion (US$1.08 billion), representing a 2% to 8% increase from the same period in 2019.”

Cash on hand at the end of March was down to $1.4 billion. That compared with $1.7 billion at the end of December.

The company’s content costs increased by 11% to $836 million in the first quarter. For the near future, the company threw out a crumb of comfort as the effects of the coronavirus outbreak begin to diminish. “With content production back up and running since late March, iQIYI is gradually recovering toward the normal level, and short-term uncertainties on future pipeline caused by the pandemic is fading away, and the content pipeline for the second quarter is very strong.”

Content highlights in the January-March period included the fifth and final season of “iPARTMENT,” viewed by over 170 million users by the time its finale was aired, and girl group talent show “Youth With You Season 2,” where K-pop star Lisa from Blackpink was one of the mentors.

https://variety.com/2020/biz/asia/iqiyi-quarterly-losses-grow-cornavirus-lockdown-subscribers-1234610412/