iQiyi (NASDAQ: IQ) reported its third quarter financial results after the closing bell on Wednesday. The Company reported narrower-than-expected losses, sending shares soaring by 14.3% on Thursday morning.

For the quarter, iQiyi reported earnings loss of USD 0.70 per share on revenue of USD 1 Billion. FactSet analysts expected an earnings loss of 0.71 per share on revenue of USD 1.04 Billion.

Revenue during the quarter rose by 7% year-over-year, driven by the increase in total subscribing members.

At the end of the quarter, iQiyi reported total subscribing members of 105.8 million compared to 80.7 million the same quarter a year ago, representing a 31% increase. Moreover, 99.2% of iQiyi’s total members were paying subscribing members.

Membership services revenue increased by 30% year-over-year to USD 520 Million, driven by the Company’s growth in premium content as well as various operational initiatives during the quarter.

Online advertising revenue totaled USD 289.2 Million, representing a 14% decrease year-over-year. iQiyi noted that the decline was due to challenging macroeconomic conditions ongoing in China, which delayed the certain content launches and intensified competition in the ad space.

Content distribution revenue reached USD 95.2 Million, decreasing by 18% year-over-year. Meanwhile, other revenues grew by 12% to USD 130.4 Million, driven primarily by iQiyi’s game business.

“We continued to make solid progress during the quarter as we march toward our vision of building a technology-based entertainment giant,” commented Dr. Yu Gong, Founder, Director and Chief Executive Officer of iQIYI. “Growing 30% year-over-year, our subscription business contributed more than half of our total quarterly revenues for the first time. This once again demonstrated the strength of our platform and validated our dedication to producing high quality original content. Leveraging our cutting-edge AI technology, we are continually fine-tuning our content offerings, optimizing our monetization efficiencies, and exploring potential new runways for future growth. With the rapid development of 5G, we believe there will be astonishing new opportunities ahead, and we will continue to push forward the convergence between technology and art to create deeper value and greater prospects for the future.”

For the fourth quarter, iQiyi is expecting revenue of USD 960 Million to USD 1.02 Billion, while FactSet analysts are expecting revenue of USD 1.01 Billion.