Chinese online video streaming service provider iQiyi reported a 6 percent year-on-year increase in revenue in the third quarter, strongly fueled by the steady growth in its membership services.

Unaudited financial results show the company's third-quarter revenue reached 7.6 billion yuan ($1.2 billion). The report also noted iQiyi's net loss expanded to 1.7 billion yuan from 1.2 billion during the same period in 2020.

The company, popularly considered China's equivalent to Netflix, saw its membership services revenue in the third quarter rise 8 percent year-over-year to 4.3 billion yuan, while its total subscribing members reached 103.6 million as of the end of September.

Membership services remained the biggest revenue contributor in the third quarter, the earnings report said. The company attributed this to its refined membership strategy and innovative operational initiatives that focused on elevating the user experience.

The company reported its online advertising services revenue decreased 10 percent to 1.7 billion yuan in the third quarter, primarily due to less premium content launched during the quarter and challenging macroeconomic environment in China.

According to the report, the content distribution revenue jumped 60 percent year-on-year to 627.1 million, mainly driven by more content titles distributed to other platforms during the quarter. And revenue from other sources reached 1 billion yuan, up 3 percent from the same period in 2020.

"During the third quarter, we experienced significant uncertainty in terms of content scheduling, which resulted in softer than expected top-line performance," said Gong Yu, chief executive officer of iQiyi.

Gong said the company expects uncertainty to largely remain, and is proactively adapting itself to the new market environment.

"We are determined to continue improving the efficiency of our operations as we execute our diversified content strategy. Meanwhile, we are seeing a promising growth trajectory for our new initiatives, such as iQiyi Lite and our overseas business," Gong said. "We will continue to take the lead in rolling out new intelligent production capabilities and driving the industrialization of the long-form video production process, which will help to further optimize our operating efficiency."

Thomas Chong, an equity analyst at Jefferies Group LLC, said for 2021 he factors in higher operating costs related to the marketing of the lite version and overseas expansion, expecting the company's total revenue to grow about 8 percent year-on-year to 32 billion yuan.