Welcome to the iQIYI second quarter 2026 earnings conference call. All participants are in 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 hand the conference over to Ms. Chang You, IR Director of the company. Please go ahead. Thank you, operator. Hello, everyone, and thank you for joining iQIYI's second 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.iqiyi.com. On the call today are Mr. Yu Gong, our Founder, Director, and CEO; Mr. Ying Tian, our CFO; Mr. Xiaohui Wang, our CCO, 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. Gong 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. iQIYI does not undertake any obligation to update any Forward-Looking statements except as required under applicable law. I will now pass on to Mr. Gong. Please go ahead. Hello, everyone. In the second quarter, we continued to reinforce our core business, high quality, diversified content, powered by top industry-leading performance. According to Enlightent Data, we maintained the number one market share in each of the long-form drama, film, and the children's content categories. For short-form dramas, Abrege, we made a major breakthrough, reaching number one market share for the first time in June. Financial performance also improved quarter-over-quarter. Total revenues grew sequentially, and our non-GAAP operating loss narrowed substantially, approaching breakeven. We are fully announcing our strategic transformation. First, we are shifting from a centralized media to a decentralized creator and a user-centric social media ecosystem. AI can dramatically lower the cost and the barrier to content creation, turning what was once a niche professional activity into a mass capability, and triggering an unparalleled surge in content supply. Because traditional centralized models cannot accommodate this scale and diversity, we are upgrading our content acquisition and distribution mechanism to efficiently connect creators and audiences. Second, we are taking an all-in approach on AI to revolutionize both live action production and pure AIGC. Our guiding principle is clear: maximizing cost efficiency without compromising quality. Together, these two pillars reinforce each other like a flywheel. AI drives rapid growth in content supply, which help us move faster toward a decentralized model. As we decentralize, more creators can participate, users get more engaged, and our platform becomes even stronger. In Q2, both strategies moved from plans to measurable results over time. They will structurally improve our content costs, revenue quality, profitability, and cash flow. Let me walk you through the progress. Our decentralization. We are improving our platform and accelerating the creator ecosystem. In April, we refreshed our core creator hub, the iQIYI Creator Center. Early signs are promising. The number of creators and uploads are all trending higher. Content with short production cycle, lower production scale, and a good fit for AI-driven creation has seen especially strong growth. For various types of content, the daily average number of uploaded works in the second quarter increased by 30%- 500% compared to the first quarter. In June, daily views for micro dramas and micro animations were up by double digits compared with March. Short-form dramas and animation are also gaining traction. Looking ahead, more long-form video categories will join the decentralized content ecosystem as we preserve iQIYI's premium content advantage. We will broaden our content slate by adopting lighter, more flexible content acquisition models. On content production, AI is substantially optimizing production efficiency and cost structure. First, in live action, AI is streamlining the entire workshop workflow. For example, we leveraged AI in our original, "Her Prime" Season 2, "Jie Jie Dang Jia," to achieve a tenfold leap in rough cut efficiency compared to traditional methods. Second, for content types well-suited to AIGC production can reduce production costs and timelines by 70% - 90% compared with traditional methods, while pushing past the physical limits of live action shooting. Naturally, AI adoption is faster in AIGC-heavy formats. We have launched multiple AI-generated internet feature films. A major milestone was the July premiere of "Mystic Tale: Qi Tan," the industry's first AIGC internet feature film to launch with an internet drama and a few distribution methods. This marks the official shift of long-form AIGC from technical testing to standardized large-scale production. In addition, year-to-date, we have launched 16 AI-generated short-form dramas under our revenue-sharing model, with the thriller, "Handmaiden," as the top-performing title. In the second half of the year, we have launched a diversified slate of AIGC titles, including multiple iQIYI-invested films, with an even broader pipeline across expanded categories next year. Currently, we have multiple AI-generated short-form dramas in development. NadoPro is our studio-grade production platform for creators. It runs on optimized third-party and in-house models, plus iQIYI's longstanding expertise in professional content. By replacing costly steps with lower compute and tool cost, it lowers barriers and speeds up professional content production. Our strategy is clear. Internally, NadoPro caps development and production costs. Externally, NadoPro explores new revenue streams and gradually converts our professional production capabilities into incremental revenue. NadoPro's edge isn't generating AI output. It turns the key parts of long-form production, script writing, shot design, workflows, digital asset editing, and dubbing into platform features. It delivers an end-to-end workflow, connects talent with content assets, and makes progress repeatable and reusable. Nado Pro is evolving from a tool into a comprehensive creator ecosystem. It links content demand with creators and enables them to realize commercial returns through a flexible business model. This activates a flywheel. Commercial returns encourage more content supply, expanded supply fortifies the ecosystem. A stronger ecosystem scales both creators and works, powering a creation platform for iQIYI's decentralized content ecosystem. We believe these advantages will improve content production efficiency, lower unit costs, and increase both users and revenue. As we roll them out across all operations and scale, we expect their contributions to profit and cash flow to steadily materialize. Now, let's move on to the detailed performance in Q2. Let's start with content. Our premium content is well-recognized by users and the industry. At the Magnolia Award this June, one of China's top TV honors, Bai Yulan Jiang, iQIYI titles and their creative teams won 14 of 23 awards, including 10 of 11 in the drama category, well ahead of peers. In Q2, our content performed well across formats. In long-form dramas, we continue to focus on female-centric stories with "Here" ranking among this year's top two titles by ad revenue. We also reinforced our lead in suspense-thriller innovation. The suspense comedy "Born with Luck" surpassed the 10,000 iQIYI popularity score and drove strong membership sign-ups. While in April, "Zuo Ye Jiang Zhi" from our iQIYI Suspense Theater earned strong reviews. Our original title, "Archives: The Nanyang Mystery" exceeded a 9,300 popularity index score, and the non-exclusive "The Epic of Minyu" topped 8,500. In place-supported short-form dramas, typically 15- 25 minutes per episode with flexible episode counts, we delivered exciting early results. Per Enlightent Data, our market share doubled from 25% in March to 50% in June, taking number one for the first time. The strong performance was supported by our original, "The Fireman: 10th Anniversary" which reached a peak daily market share above 60%. Short-form titles can offer structural advantages over long-form dramas, potentially reducing average per-minute costs by over 50% and shortening production to approval timelines by 30%- 50%. In micro dramas, we've released premier live-action titles like "Everything About Secretary Li", "Falling for You", and "Phoenix Blade," all resonated well with audiences. AIGC scaled quickly under a revenue-sharing model, accounting for over 50% of our micro portfolio and unique visitors in June, while AI-native micro animations expanded with strong sequential growth in views and time spent. In films, we maintained a diversified slate of different audiences. Originals like "The Counterfeit", "The Twin Train" received positive feedback, while licensed "The Article Heath", "Packers 3", "Blades of the Gods", "Top Care 2" were also well-received on our platform. In variety shows, we launched seven originals in Q2 with our flagship from chess delivering sustained value. "Five Hearts" across our popularity index score of 9,000, reaching a new franchise high. For 10 years, Evergreen IP, "The Rap of China 2026" also stood out, surpassing a popularity index score of 8,800. In animation, we further solidified our original offers. The long-running "Against the Gods" with premiere in April, topped our animation popularity index chart and brought notable of platform users back to iQIYI. Together with, "The Great Ruler," we now have two long-running titles to keep users engaged year-round. Finally, in children's content, we reinforced our leadership with the return of our original IP sequel, The Odd Squad and the localized adaption of the BBC classic, Teletubbies. Next, let me show our pipeline for the second half of the year. Our summer long-form drama features a diversified lineup, which includes multiple female-oriented titles like Road to Success, Key to the Phoenix Heart, OVERDO, Genius Girlfriend, Spring of The Blade, Abyss, and In My Prime. Complemented by the military theme, Windblown Warriors and the major realistic drama, Forging Justice. For the remainder of the year, we will premiere The Great Long March, Take a Nap, Small Town Remedy, and River of No Return. As for short dramas, our upcoming releases include Death of Winter, [Non-English content], The Fifth Group of Fatal Cases, The Sixth Group of Fatal Cases, [Non-English content], and The Great Nobody 2, [Non-English content]. In films, our pipeline features original theatrical films including Winter and the Summer, [Non-English content], No Goal to the Child, [Non-English content], and Prohibition, [Non-English content], in the second half of the year. On the licensed front, our pipeline includes Vanishing Point, [Non-English content], and The Furious, [Non-English content] this summer, with I Know Who You Are, [Non-English content], A Matter of Qing Shu, and Crossing, [Non-English content], slated for the latter half of the year. For internet feature films, which are limited to a maximum of three chapters, each at least 60 minutes long, our pipeline includes multiple AIGC titles based on the classic IP, The Fireman, [Non-English content]. The first two chapters, A Butterfly Dream, and The Dream of Celestial Maiden, are set to launch this summer. Additionally, audiences can also enjoy a strong lineup of live-action titles including Motor Game, and Speed and Battle, [Non-English content] this summer. Shifting to variety shows, we are deepening audience engagement with established IPs, including The Rap of China 2026, The King of Stand-up Comedy Season 3, [Non-English content], and HER PRIME 2 this summer, followed by The Blooming Journey, [Non-English content] 3, and Wander Together 2, [Non-English content] in the second half. For animations, this year could be iQIYI's strongest animation summer to date. The lineup features A Good Day to Ascend, [Non-English content], Race the Bias, Demands, Pandora, [Non-English content], Golden Cough, [Non-English content], and To Be a Winner, [Non-English content], alongside the AIGC titles The Legend of King Hongwu, [Non-English content], and The Legend of King JiFa, [Non-English content]. For children's content, our summer slate features a new season of the popular Pleasant Goat and Big Big Wolf, [Non-English content], as well as original AIGC animations like La La Beat. Looking ahead at the second half of the year, we will roll out the original AIGC animation, Wusheng Armor, and Carmen and the Burst Fruit Truck, and Tasty Travel, [Non-English content]. Now, turning to membership business. Revenue declined sequentially due to seasonality. We are strengthening the business with more refined operations. For example, targeted discounts for students and teachers drove a year-over-year increase of over 60% in quarter-end subscribers within this cohort. We also continue to enhance membership value with our express package. in Q2, we launched express packages across 16 dramas, driving a nearly 80% annual increase in total participants. In addition, we are expanding joint membership with frequently purchased top-tier brands popular among young users to support membership growth and retention. Next, moving on to advertising business. For brand ads, revenue from drama targeted ads delivered double-digit year-over-year growth. By sector, beauty, personal care, and healthcare recorded double-digit year-over-year growth. We also depend on use of AI in ad operations and now support customized AIGC creative. For performance ads, revenue returned to year-over-year growth. We continue to optimize advertiser mix. Revenue from small and midsize advertisers delivered strong year-over-year growth. Sector-wise, revenue from advertisers in AI applications, instant retail, and e-commerce recorded a strong year-over-year growth. We further strengthened results with AI by upgrading our proprietary large models, improving targeting precision and driving revenue. Moving on to our business performance in regions outside of mainland China. In Q2, this business sustained rapid growth. Membership revenue grew 40% year-over-year. Portuguese and Spanish-speaking regions demonstrated robust growth. Notably, membership revenue from Brazil and Mexico surged by over 215% and 150% year-over-year respectively. Arabic-speaking markets also show strong potential, with membership revenue increasing 85%. The global influence of C-drama continues to expand. In Q2, membership revenue from C-dramas grew over 40% year-over-year. A standout hit was "Fate Chooses You," or "Jia Ou Tian Cheng." It topped our international platform rankings across 14 regions in its first week, and stayed in the top 10 of the C-dramas chart for 10 consecutive weeks. On the local production front, we are accelerating our pace. Our first original Indonesian drama, "The Other Sister," gained strong traction per Google Trends, as it became the number one local Internet drama in Indonesia in the first half of 2026. Micro-dramas were another major highlight. Serving as the second-largest membership revenue contributor, following long-form dramas. In Q2, membership revenue from this category grew over 300% year-over-year. This momentum was partly fueled by stronger original production. Notably, originals rose to three of the top 10 contributors to membership revenue. AIGC was another key driver of our overseas micro-drama expansion. In Q2, we launched AI-generated titles in multiple languages, including English, Thai, and Korean. Our original titles delivered exceptional efficiency, recovering production costs within the same quarter and demonstrating stable profit potential. We are scaling supply through both originals and external partnerships. In May, we released our first original AI-generated micro-drama overseas, which quickly ranked in the top three for micro-drama revenue on our international platform. The title was produced by Nadou Pro, which helped us establish full-blown AIGC know-how, laying a strong foundation for scale production. In parallel, we are proactively forging external partnerships to connect overseas script production and tool ecosystem, including Nadou Pro, unlocking capacity, and scaling AIGC supply. Beyond content, we are driving growth with strong memberships. We have partnered with Vision+ in Indonesia, and we will launch joint membership with Viu in more markets in the second half. We are excited about the future potential of our overseas business. With that, I will hand it over to Ying Tian, our new CFO, to walk you through some of the financials. Okay, thank you, Mr. Gong, and hello, everyone. Let me walk you through iQIYI financial results for Q2. Total revenues were RMB 6.3 billion, up 1% sequentially. Membership services revenue was RMB 4.0 billion, down 4% sequentially, primarily due to seasonality. Online advertising revenue was RMB 1.2 billion, flat sequentially. Content distribution revenue was RMB 681.5 million, up 90% sequentially, driven by the increase in content distribution revenue related to the drama series. Other revenues were RMB 344.9 million, down 17% sequentially. Moving on to cost and operations. Operating expenses, content cost was RMB 1.8 billion, up 2% sequentially. Total operating expenses were RMB 1.1 billion, down 6% sequentially, reflecting disciplined marketing spend. Non-GAAP operating loss narrowed by 8% sequentially from RMB 148.6 million in Q1 to RMB 130.3 million, bringing us close to the breakeven. Turning to cash flow, net cash provided by operating activities increased to RMB 339.6 million from RMB 186.4 million in Q1. As of the end of Q2, we had cash, cash equivalents, restricted cash, and short-term investments of RMB 4.1 billion. Separately, as of the quarter-end, w e had a loan principal of $636.6 million receivable from PAG, included in prepayment and other assets on the consolidated balance sheet. We remain focused on creating long-term shareholders value. In March 2026, we announced a share repurchase program of up to $100 million, effective through September 2027. As of June 30th, we had repurchased approximately 21.6 million ADSs for aggregated cost of $24.1 million. For further details, please refer to today's earnings on our investor relations website, ir.iQIYI.com. With that, we are ready to take questions. Operator, please proceed. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Please ask questions in Chinese first, and then translate the questions into English. Please ask one question each time and go back into the queue for more questions. Your first question comes from Xueqing Zhang with CICC. [Non-English content] Thanks for taking my question. I would like to ask with AI technology and the market involved rapidly, how management say iQIYI's business model developing in the future, and what are the company's key strategic and operational priorities going forward? Thank you. [Non-English content] Thank you. The CEO takes this question. He says, "We see iQIYI as the beneficiary of AI now and also in the long term. To capture this opportunity, we are making some strategic transformation for our business. Mainly focus on two main pillars. Decentralization, which meaning transforming from the media centric platform to a decentralized content ecosystem, and also all in AI. These two pillars, we believe, will mutually reinforce each other and jointly driving a flywheel effect across the number of creators, the volume of content, the user base, and potentially revenue performance. [Non-English content] Okay. Premium content will still remain at the core of our business. We believe AI will significantly lower production cost for premium content, shorten production cycles, and potentially enable production and visual effects that were previously difficult to achieve through live action. [Non-English content] On decentralization, we're mostly focusing on our IQ ID, which is the iQIYI Creator Center. We have seen some positive initial progress, such as the number of creators, the content upload numbers, all trending well. We're seeing AI adoption is progressing across our core content categories and with initial breakthroughs achieved. For example, for the projects we built in productions and also launched. In the future, we expect a greater scale of content to be released next year. [Non-English content] Over the long term, we believe these two strategies, meaning the decentralization and all in AI. These two will structurally improve our content cost, revenue quality, profitability and cash flow. Thank you. Thanks. Your next question comes from Lincoln Kong with Goldman Sachs. [Non-English content] Thank you very much for taking my question. My question is about iQIYI's overall AIGC strategy, and how is our plan in terms of each content categories. Thank you. Thanks, Lincoln. We will invite our Chief Content Officer, Mr. Xiaohui, to take this question. Please go ahead. [Non-English content] First of all, we believe AI reduces the basic costs and barriers to production, but it does not lower the bar for creativity and judgment. We leverage AI to optimize the economics of content production, while reinforcing our core moat, which is storytelling and aesthetic judgments, emotional expression, and also visual language. Our goal is to advance on both fronts: premium content quality and scaled content supply. Strategically, we will prioritize core long form video while accommodating micro drama and micro animation. We use a revenue sharing model to improve capital turnover. [Non-English content] We will share our thoughts by category based on the pace of AI adoption at scale. First of all, for micro dramas, we are seeing rapid adoption with AIGC as the primary source of supply. We primarily use a revenue sharing model and leverage algorithm recommendations and a decentralized operation to deliver a diversified, rapidly refreshed and a scaled content supply. [Non-English content] For micro animation, we believe these are AI native content, so AIGC will serve as the primary supply. [Non-English content] For animations and children's content, these have mature CG industrialization, are a good fit in our view, and we're seeing rapid AI adoption. AI significantly boosts efficiency and our pipeline is expanding. For next year, we will release more AIGC titles to serve niche audiences and broaden our stable supply. [Non-English content] For short-form dramas and internet feature films, these are medium in production complexity and volume, and compared to long-form content, these are lighter in complexity and also in volume. We're actively adopting AI, focusing on genres like fantasy, supernatural, and adventures to widen our genre mix. Some titles have already launched, and we will speed up at-scale releases, balancing cost efficiency and content diversity. So far, we have released 16 AIGC short-form dramas under a revenue sharing model, along with several internet feature films. [Non-English content] For long-form dramas and theatrical films, we believe carry the highest emotional and artistic value. These are relatively slower to adopt AI at scale. For these content, we will focus on live action, put quality first, use AI to support our production, and use AI to reduce costs. [Non-English content] Thank you. Your next question comes from Vicky Wei with Citi. [Non-English content] In the context of the AI era and the ongoing shift towards decentralization, how do you view iQIYI's core competitiveness, and what kind of value does iQIYI offer to content creators? Thank you. Thank you. We will invite our CEO to take this question. [Non-English content] We believe in the AI era, video industry competition centers to end-to-end capabilities, which is from concept to commercialization. There are quite a few essentials that are required for this. For example, the ability to bring together professional talent, generate compelling ideas, run industrialized production, have a comprehensive understanding of content review and compliance, deliver effective content distribution, and drive diversified monetization. These are the core moats iQIYI have built over the past decade. [Non-English content] Our values to creators, there are three areas that we are targeting and also a slogan. Help them to be seen, generate income, and gain recognition. First of all, iQIYI has a major share of the video entertainment audiences, so the creators have greater capabilities or possibilities to be seen on iQIYI platform. iQIYI has deep expertise in long-form video production, and we have established a very mature industrialized content production mechanism. [Non-English content] In addition, iQIYI also has massive viewership data, a very rich IP, and also licensing resources. Also, a very strong ecosystem support. [Non-English content] We have built a seven-pillar creator support system. The IQ ID, which is the iQIYI Creator Center, Nado Pro, our professional production platform, physical creative centers offline, training programs, and iQIYI Nado and AIGC Venture Summit helping the creators with the fund support. The Peter Pau × iQIYI AI Theater for benchmark productions. Last but not least, a dedicated creators customer service. [Non-English content] On August 20th in Beijing, which is in two days, we will host the iQIYI World Conference, featuring in-depth discussions on content ecosystem development, frontier on AI opportunities, and creator empowerment. Thank you. Thank you. Your next question comes from Ze Xu with Guangfa Securities. [Non-English content] And thanks for taking my question. I want to know about the latest development in overseas business and how the operational experience from more mature markets like Thailand can be replicated in other markets. Thank you. Thank you, Gigi. We will invite Mr. Xianghua Yang to take this question. [Non-English content] Our overseas business maintained rapid growth in Q2, with overall membership revenue grew 40% year-over-year, and we remain profitable on a managerial accounting basis. Thailand is the market where we entered earliest and where our operating model is relatively mature. It still delivered solid growth year-over-year in Q2, with steady top-line growth and continued profitability improvement in the quarter as well. In new markets such as Brazil and Mexico, we see membership revenue increased 215% and 150% year-over-year respectively. [Non-English content] We categorize our overseas markets into mature, growth, and potential markets, where mature markets we aim for stable profitability, growth markets focus on accelerating revenue with disciplined investments. [Non-English content] Thailand serves as our proving ground. What we have validated is a set of reusable operating capabilities. Using C-drama as the foundation and a sustained marketing to amplify influence of Chinese content and extending a local content supply, and tailoring the content that is adapted to the local audiences. [Non-English content] We are also partnering with our local carriers, platforms, and payment channels to scale the membership base. We are also leveraging AI to improve the translation and distribution, and also production efficiency. [Non-English content] Because the content preferences and collaboration channel structures differ by markets, what we replicate are these underlying capabilities, while the local teams do make targeted adaptations. For example, applying Thailand's operating capabilities to other markets. [Non-English content] Our strategy is not to chase country counts. We are guided by unit economics and operating contribution. We will expand into new markets after validating revenue quality and profit-generating capabilities. Thank you. There are no further phone questions at this time. I will now hand back to the company for closing remarks. Thank you everyone for joining the call today. If you have further questions, do not hesitate to contact us. Thank you, and see you next quarter. That does conclude our conference for today. Thank you for participating. You may now disconnect.