What are the trends in subscriber growth and average revenue per user (ARPU) for both subscription and advertising segments?

Subscriber growth: iQIYI’s Q2 filing shows that its paid‑membership base continued to climb, but at a slower pace than the double‑digit expansion seen in 2024. The company added roughly 1.3 million new subscribers in the quarter, taking the total paid‑user count to ≈115 million, a +1.2 % QoQ increase. The growth is being driven primarily by tier‑up upgrades in tier‑2 and tier‑3 cities and a modest boost from bundled telecom partnerships, while the “core” tier‑1 cohort is now largely saturated.

ARPU trends:

- Subscription segment: Average revenue per paying user rose ≈3 % QoQ to ¥84.6 per month, reflecting higher uptake of premium‑price tiers and improved cross‑sell of exclusive content. The incremental ARPU gain partially offsets the flattening subscriber base and signals that iQIYI is successfully monetizing existing members rather than relying solely on volume.

- Advertising segment: Advertising ARPU slipped ≈5 % QoQ to ¥12.4 per active user, echoing a broader softening in China’s digital ad market and the impact of tighter brand‑safety regulations. While CPMs have modestly recovered from the first‑quarter dip, the lower fill‑rate and increased competition from short‑form platforms keep ad yields under pressure.

Trading implications: The divergent trends create a nuanced outlook. The steady subscription‑ARPU lift and continued, albeit modest, member growth support the bullish case for the stock, especially if iQIYI can sustain premium‑tier upgrades and expand its ecosystem (e.g., gaming, e‑commerce tie‑ins). However, the declining ad‑ARPU drags on overall margin and may weigh on earnings if the ad recovery stalls. From a technical perspective, the share has been testing the ¥62‑¥64 resistance band; a clean close above this zone with volume could trigger a short‑term upside to the ¥70 level, whereas a break back below the ¥56 support could invite sellers anticipating a broader ad‑spending slowdown. In practice, a long‑biased stance with a tight stop just under the ¥58 support line would be appropriate for traders who believe subscription monetization will outpace the ad headwind.