EX-99.1 2 d782149dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Baidu Announces First Quarter 2024 Results

BEIJING, China, May 16, 2024 – Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888 (HKD Counter) and 89888 (RMB Counter)), (“Baidu” or the “Company”), a leading AI company with strong Internet foundation, today announced its unaudited financial results for the first quarter ended March 31, 2024.

“Baidu Core’s online marketing revenue remained stable, while the end-to-end optimization of our AI technology stack continued to propel the growth of our AI Cloud revenue during the quarter,” said Robin Li, Co-founder and CEO of Baidu. “As a new era of Gen-AI unfolds in China, foundation models like ERNIE will serve as the underlying infrastructure, infusing various facets of people’s lives. We are making our ERNIE family of models increasingly affordable and efficient. This should provide Baidu with even greater opportunities ahead.”

“In the first quarter of 2024, Baidu Core’s non-GAAP operating margin expanded both year-over-year and quarter-over-quarter to 23.5%. We have established a track record of consistently improving operational efficiency. In the coming quarters, we will execute on what is needed to optimize our operational efficiency in support of our AI enabled businesses and high-quality growth, and maintain a healthy non-GAAP operating margin,” said Rong Luo, CFO of Baidu.

First Quarter 2024 Financial Highlights1

 

     Baidu, Inc.  
(In millions except per    Q1     Q4     Q1              
ADS, unaudited)    2023     2023     2024     YOY     QOQ  
     RMB     RMB     RMB     US$              

Total revenues

     31,144       34,951       31,513       4,365       1     (10 %) 

Operating income

     4,980       5,392       5,484       760       10     2

Operating income (non-GAAP) 2

     6,428       7,075       6,673       924       4     (6 %) 

Net income to Baidu

     5,825       2,599       5,448       755       (6 %)      110

Net income to Baidu (non-GAAP) 2

     5,727       7,755       7,011       971       22     (10 %) 

Diluted earnings per ADS

     15.92       6.77       14.91       2.07       (6 %)      120

Diluted earnings per ADS (non-GAAP) 2

     16.10       21.86       19.91       2.76       24     (9 %) 

Adjusted EBITDA 2

     8,145       9,057       8,244       1,142       1     (9 %) 

Adjusted EBITDA margin

     26     26     26     26    

 

1 

Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 7.2203 as of March 29, 2024, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader.

2 

Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details).

 

1


     Baidu Core  
     Q1     Q4     Q1              
(In millions, unaudited)    2023     2023     2024     YOY     QOQ  
     RMB     RMB     RMB     US$              

Total revenues

     22,998       27,488       23,803       3,297       4     (13 %) 

Operating income

     4,091       4,668       4,538       629       11     (3 %) 

Operating income (non-GAAP) 2

     5,363       6,197       5,586       774       4     (10 %) 

Net income to Baidu Core

     5,513       2,440       5,150       713       (7 %)      111

Net income to Baidu Core (non-GAAP) 2

     5,268       7,500       6,628       918       26     (12 %) 

Adjusted EBITDA2

     7,003       8,118       7,118       986       2     (12 %) 

Adjusted EBITDA margin

     30     30     30     30    

Operational Highlights

Corporate

 

   

Baidu returned US$229 million to shareholders since the beginning of Q1 2024, bringing the cumulative repurchase to US$898 million under the 2023 share repurchase program.

 

   

Baidu released its annual ESG Report on May 13, 2024, which details Baidu’s latest ESG policies and sustainability initiatives. (http://esg.baidu.com/Uploads/Baidu_2023_ESG_Report.pdf).

AI Cloud

 

   

PaddlePaddle developer community grew to 13 million in mid-April, 2024.

 

   

Baidu expanded the ERNIE family of models, by launching several lightweight large language models in Q1 2024, making ERNIE increasingly affordable.

 

   

Baidu launched and improved the tools on its MaaS platform for enterprise customers in Q1 2024. These tools aim to facilitate the development of AI-native applications, AI agents, and the creation of customized models on Baidu’s MaaS platform.

Intelligent Driving

 

   

Apollo Go, Baidu’s autonomous ride-hailing service, provided about 826K rides in the first quarter of 2024, up 25% year over year. As of April 19, 2024, the cumulative rides provided to the public by Apollo Go surpassed 6 million.

Mobile Ecosystem

 

   

In March 2024, Baidu App’s MAUs reached 676 million, up 3% year over year.

 

   

Managed Page accounted for 50% of Baidu Core’s online marketing revenue in the first quarter of 2024.

 

2


First Quarter 2024 Financial Results

Total revenues were RMB31.5 billion ($4.37 billion), increasing 1% year over year.

 

   

Revenue from Baidu Core was RMB23.8 billion ($3.30 billion), increasing 4% year over year; online marketing revenue was RMB17.0 billion ($2.36 billion), up 3% year over year, and non-online marketing revenue was RMB6.8 billion ($935 million), up 6% year over year, mainly driven by AI Cloud business.

 

   

Revenue from iQIYI was RMB7.9 billion ($1.10 billion), decreasing 5% year over year.

Cost of revenues was RMB15.3 billion ($2.12 billion), increasing 1% year over year, primarily due to an increase in traffic acquisition costs and costs related to AI Cloud business, partially offset by the decrease in content costs.

Selling, general and administrative expenses were RMB5.4 billion ($745 million), accounting for 17% of total revenues in the quarter, compared to 18% in the same period last year.

Research and development expenses were RMB5.4 billion ($742 million), decreasing 1% year over year, primarily due to a decrease in personnel related expenses and other R&D expenditures, partially offset by the increase in server depreciation expenses and server custody fees which support Gen-AI research and development inputs.

Operating income was RMB5.5 billion ($760 million). Baidu Core operating income was RMB4.5 billion ($629 million), and Baidu Core operating margin was 19%. Non-GAAP operating income was RMB6.7 billion ($924 million). Non-GAAP Baidu Core operating income was RMB5.6 billion ($774 million), and non-GAAP Baidu Core operating margin was 23%.

Total other income, net was RMB1.2 billion ($173 million), decreasing 52% year over year, primarily due to a decrease in fair value gain from long-term investments, partially offset by the increase in net foreign exchange gain.

Income tax expense was RMB883 million ($122 million), compared to RMB1.2 billion in the same period last year.

 

3


Net income attributable to Baidu was RMB5.4 billion ($755 million), and diluted earnings per ADS was RMB14.91 ($2.07). Net income attributable to Baidu Core was RMB5.2 billion ($713 million), and net margin for Baidu Core was 22%. Non-GAAP net income attributable to Baidu was RMB7.0 billion ($971 million). Non-GAAP diluted earnings per ADS was RMB19.91 ($2.76). Non-GAAP net income attributable to Baidu Core was RMB6.6 billion ($918 million), and non-GAAP net margin for Baidu Core was 28%.

Adjusted EBITDA was RMB8.2 billion ($1.14 billion) and adjusted EBITDA margin was 26%. Adjusted EBITDA for Baidu Core was RMB7.1 billion ($986 million) and adjusted EBITDA margin for Baidu Core was 30%.

As of March 31, 2024, cash, cash equivalents, restricted cash and short-term investments were RMB191.8 billion ($26.56 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB185.8 billion ($25.73 billion). Free cash flow was RMB4.2 billion ($579 million), and free cash flow excluding iQIYI was RMB3.3 billion ($452 million).

Conference Call Information

Baidu’s management will hold an earnings conference call at 8.00 AM on May 16, 2024, U.S. Eastern Time (8.00 PM on May 16, 2024, Beijing Time).

Please register in advance of the conference call using the link provided below. It will automatically direct you to the registration page of “Baidu Inc. Q1 2024 Earnings Conference Call”. Please follow the steps to enter your registration details, then click “Register”. Upon registering, you will then be provided with the dial-in number, the passcode, and your unique access PIN. This information will also be emailed to you as a calendar invite.

For pre-registration, please click:

https://s1.c-conf.com/diamondpass/10038153-8wbttd.html

In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), the passcode and unique access PIN) provided in the calendar invite that you have received following your pre-registration.

Additionally, a live and archived webcast of this conference call will be available at https://ir.baidu.com.

 

4


About Baidu

Founded in 2000, Baidu’s mission is to make the complicated world simpler through technology. Baidu is a leading AI company with strong Internet foundation, trading on NASDAQ under “BIDU” and HKEX under “9888”. One Baidu ADS represents eight Class A ordinary shares.

Contacts

Investors Relations, Baidu, Inc.

Tel: +86-10-5992-8888

Email: ir@baidu.com

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, Baidu’s and other parties’ strategic and operational plans, contain forward-looking statements. Baidu may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in announcements made on the website of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Baidu’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Baidu’s growth strategies; its future business development, including development of new products and services; its ability to attract and retain users and customers; competition in the Chinese Internet search and newsfeed market; competition for online marketing customers; changes in the Company’s revenues and certain cost or expense items as a percentage of its revenues; the outcome of ongoing, or any future, litigation or arbitration, including those relating to intellectual property rights; the expected growth of the Chinese-language Internet search and newsfeed market and the number of Internet and broadband users in China; Chinese governmental policies relating to the Internet and Internet search providers, and general economic conditions in China and elsewhere. Further information regarding these and other risks is included in the Company’s annual report on Form 20-F and other documents filed with the Securities and Exchange Commission, and announcements on the website of the Hong Kong Stock Exchange. Baidu does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of the press release, and Baidu undertakes no duty to update such information, except as required under applicable law.

 

5


Non-GAAP Financial Measures

To supplement Baidu’s consolidated financial results presented in accordance with GAAP, Baidu uses the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to Baidu, non-GAAP net margin, non-GAAP diluted earnings per ADS, adjusted EBITDA, adjusted EBITDA margin and free cash flow. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Baidu believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain items that may not be indicative of its recurring core business operating results, such as operating performance excluding non-cash charges or non-operating in nature. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Baidu’s historical performance and liquidity. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Company’s results of operations. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data.

Non-GAAP operating income represents operating income excluding share-based compensation expenses, and amortization and impairment of intangible assets resulting from business combinations.

Non-GAAP net income attributable to Baidu represents net income attributable to Baidu excluding share-based compensation expenses, amortization and impairment of intangible assets resulting from business combinations, disposal gain or loss, impairment of long-term investments, and fair value change of long-term investments, adjusted for related income tax effects. Baidu’s share of equity method investments for these non-GAAP reconciling items, amortization and impairment of intangible assets not on the investees’ books, accretion of their redeemable non-controlling interests, and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per share, adjusted for related income tax effects, are also excluded.

 

6


Non-GAAP diluted earnings per ADS represents diluted earnings per ADS calculated by dividing non-GAAP net income attributable to Baidu, by the weighted average number of ordinary shares expressed in ADS. Adjusted EBITDA represents operating income excluding depreciation, amortization and impairment of intangible assets resulting from business combinations, and share-based compensation expenses.

For more information on non-GAAP financial measures, please see the tables captioned “Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measure.”

 

7


First Quarter 2024 Financial Highlights 1

 

     Baidu, Inc.              
(In millions except per ADS, unaudited)    Q1     Q4     Q1              
   2023     2023     2024     YOY     QOQ  
     RMB     RMB     RMB     US$              

Total revenues

     31,144       34,951       31,513       4,365       1     (10 %) 

Operating income

     4,980       5,392       5,484       760       10     2

Operating income (non-GAAP) 2

     6,428       7,075       6,673       924       4     (6 %) 

Net income to Baidu

     5,825       2,599       5,448       755       (6 %)      110

Net income to Baidu (non-GAAP) 2

     5,727       7,755       7,011       971       22     (10 %) 

Diluted earnings per ADS

     15.92       6.77       14.91       2.07       (6 %)      120

Diluted earnings per ADS (non-GAAP) 2

     16.10       21.86       19.91       2.76       24     (9 %) 

Adjusted EBITDA 2

     8,145       9,057       8,244       1,142       1     (9 %) 

Adjusted EBITDA margin

     26     26     26     26    
     Baidu Core              
(In millions, unaudited)    Q1     Q4     Q1              
   2023     2023     2024     YOY     QOQ  
     RMB     RMB     RMB     US$              

Total revenues

     22,998       27,488       23,803       3,297       4     (13 %) 

Operating income

     4,091       4,668       4,538       629       11     (3 %) 

Operating income (non-GAAP) 2

     5,363       6,197       5,586       774       4     (10 %) 

Net income to Baidu Core

     5,513       2,440       5,150       713       (7 %)      111

Net income to Baidu Core (non-GAAP) 2

     5,268       7,500       6,628       918       26     (12 %) 

Adjusted EBITDA 2

     7,003       8,118       7,118       986       2     (12 %) 

Adjusted EBITDA margin

     30     30     30     30    

 

1 

Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB7.2203 as of March 29, 2024, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader.

2 

Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details).

 

8


Baidu, Inc.

Condensed Consolidated Statements of Income

(In millions except for per share (or ADS) information, unaudited)

 

     Three Months Ended  
     March 31,     December 31,     March 31,     March 31,  
     2023     2023     2024     2024  
     RMB     RMB     RMB     US$(2)  

Revenues:

        

Online marketing services

     17,972       20,804       18,490       2,561  

Others

     13,172       14,147       13,023       1,804  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     31,144       34,951       31,513       4,365  
  

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

        

Cost of revenues(1)

     15,152       17,418       15,291       2,118  

Selling, general and administrative(1)

     5,589       5,854       5,375       745  

Research and development(1)

     5,423       6,287       5,363       742  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     26,164       29,559       26,029       3,605  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     4,980       5,392       5,484       760  

Other income (loss):

        

Interest income

     1,915       2,064       2,091       290  

Interest expense

     (804     (774     (766     (106

Foreign exchange (loss) gain, net

     (106     (449     401       56  

Share of losses from equity method investments

     (48     (2,970     (205     (28

Others, net

     1,638       (398     (275     (39
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (loss), net

     2,595       (2,527     1,246       173  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     7,575       2,865       6,730       933  

Income tax expense (benefit)

     1,193       (96     883       122  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     6,382       2,961       5,847       811  

Net income attributable to noncontrolling interests

     557       362       399       56  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Baidu

     5,825       2,599       5,448       755  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per ADS (1 ADS representing 8 Class A ordinary shares):

 

     

-Basic

     16.17       6.85       14.97       2.07  

-Diluted

     15.92       6.77       14.91       2.07  

Earnings per share for Class A and Class B ordinary shares:

 

     

-Basic

     2.02       0.86       1.87       0.26  

-Diluted

     1.99       0.85       1.86       0.26  

Weighted average number of Class A and Class B ordinary shares outstanding (in millions):

 

   

-Basic

     2,798       2,812       2,804       2,804  

-Diluted

     2,837       2,830       2,816       2,816  

 

(1)   Includes share-based compensation expenses as follows:

 

                   

Cost of revenues

     98       159       108       15  

Selling, general and administrative

     463       411       417       58  

Research and development

     828       1,068       618       86  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total share-based compensation expenses

     1,389       1,638       1,143       159  

 

(2)

All translations from RMB to U.S. dollars are made at a rate of RMB7.2203 to US$1.00, the exchange rate in effect as of March 29, 2024 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

 

9


Baidu, Inc.

Condensed Consolidated Balance Sheets

(In millions, unaudited)

 

     December 31,      March 31,      March 31,  
     2023      2024      2024  
     RMB      RMB      US$  

ASSETS

        

Current assets:

        

Cash and cash equivalents

     25,231        30,418        4,213  

Restricted cash

     11,503        11,591        1,605  

Short-term investments, net

     168,670        149,781        20,744  

Accounts receivable, net

     10,848        10,935        1,514  

Amounts due from related parties

     1,424        1,173        162  

Other current assets, net

     12,579        13,580        1,882  
  

 

 

    

 

 

    

 

 

 

Total current assets

     230,255        217,478        30,120  
  

 

 

    

 

 

    

 

 

 

Non-current assets:

        

Fixed assets, net

     27,960        28,157        3,900  

Licensed copyrights, net

     6,967        6,920        958  

Produced content, net

     13,377        13,613        1,885  

Intangible assets, net

     881        873        121  

Goodwill

     22,586        22,586        3,128  

Long-term investments, net

     47,957        46,947        6,502  

Long-term time deposits and held-to-maturity investments

     24,666        45,407        6,289  

Amounts due from related parties

     195        289        40  

Deferred tax assets, net

     2,100        2,256        312  

Operating lease right-of-use assets

     10,851        10,692        1,481  

Other non-current assets

     18,964        19,479        2,699  
  

 

 

    

 

 

    

 

 

 

Total non-current assets

     176,504        197,219        27,315  
  

 

 

    

 

 

    

 

 

 

Total assets

     406,759        414,697        57,435  
  

 

 

    

 

 

    

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

  

Current liabilities:

        

Short-term loans

     10,257        13,716        1,900  

Accounts payable and accrued liabilities

     37,717        36,739        5,089  

Customer deposits and deferred revenue

     14,627        13,641        1,889  

Deferred income

     306        232        32  

Long-term loans, current portion

     2        23        3  

Convertible senior notes, current portion

     2,802        2,855        395  

Notes payable, current portion

     6,029        6,136        850  

Amounts due to related parties

     1,603        1,475        204  

Operating lease liabilities

     3,108        3,114        431  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     76,451        77,931        10,793  
  

 

 

    

 

 

    

 

 

 

Non-current liabilities:

        

Deferred income

     200        198        27  

Deferred revenue

     481        509        70  

Amounts due to related parties

     77        72        10  

Long-term loans

     14,223        14,705        2,037  

Notes payable

     34,990        35,605        4,931  

Convertible senior notes

     8,144        8,357        1,157  

Deferred tax liabilities

     2,725        2,818        390  

Operating lease liabilities

     5,040        4,886        677  

Other non-current liabilities

     1,820        1,853        258  
  

 

 

    

 

 

    

 

 

 

Total non-current liabilities

     67,700        69,003        9,557  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     144,151        146,934        20,350  
  

 

 

    

 

 

    

 

 

 

Redeemable noncontrolling interests

     9,465        9,906        1,372  

Equity

        

Total Baidu shareholders’ equity

     243,626        248,007        34,349  

Noncontrolling interests

     9,517        9,850        1,364  
  

 

 

    

 

 

    

 

 

 

Total equity

     253,143        257,857        35,713  
  

 

 

    

 

 

    

 

 

 

Total liabilities, redeemable noncontrolling interests, and equity

     406,759        414,697        57,435  
  

 

 

    

 

 

    

 

 

 

 

10


Baidu, Inc.  

Selected Information 

(In millions, unaudited) 

 

    Three months ended
    Three months ended
    Three months ended
    Three months ended
 
    March 31, 2023 (RMB)     December 31, 2023 (RMB)     March 31, 2024 (RMB)     March 31, 2024 (US$)  
    Baidu
Core
    iQIYI     Elim &
adj(2)
    Baidu,
Inc.
    Baidu
Core
    iQIYI     Elim &
adj(2)
    Baidu,
Inc.
    Baidu
Core
    iQIYI     Elim &
adj(2)
    Baidu,
Inc.
    Baidu
Core
    iQIYI     Elim &
adj(2)
    Baidu,
Inc.
 

Total revenues

    22,998       8,349       (203     31,144       27,488       7,707       (244     34,951       23,803       7,927       (217     31,513       3,297       1,098       (30     4,365  

YOY

                    4     (5 %)        1        

QOQ

                    (13 %)      3       (10 %)         

Costs and expenses:

                               

Cost of revenues (1)

    9,379       5,956       (183     15,152       12,050       5,533       (165     17,418       9,839       5,631       (179     15,291       1,363       780       (25     2,118  

Selling, general and administrative (1)

    4,533       1,106       (50     5,589       4,936       948       (30     5,854       4,492       922       (39     5,375       622       128       (5     745  

Research and
development (1)

    4,995       428       —        5,423       5,834       453       —        6,287       4,934       429       —        5,363       683       59       —        742  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

    18,907       7,490       (233     26,164       22,820       6,934       (195     29,559       19,265       6,982       (218     26,029       2,668       967       (30     3,605  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

YOY

                               

Cost of revenues

                    5     (5 %)        1        

Selling, general and administrative

                    (1 %)      (17 %)        (4 %)         

Research and development

                    (1 %)      0       (1 %)         

Costs and expenses

                    2     (7 %)        (1 %)         

Operating income (loss)

    4,091       859       30       4,980       4,668       773       (49     5,392       4,538       945       1       5,484       629       131       —        760  

YOY

                    11     10       10        

QOQ

                    (3 %)      22       2        

Operating margin

    18     10       16     17     10       15     19     12       17        

Add: total other income (loss), net

    2,803       (208     —        2,595       (2,267     (260     —        (2,527     1,508       (262     —        1,246       209       (36     —        173  

Less: income tax expense (benefit)

    1,168       25       —        1,193       (134     38       —        (96     866       17       —        883       120       2       —        122  

Less: net income attributable to NCI

    213       8       336 (3)      557       95       9       258 (3)      362       30       11       358 (3)      399       5       2       49 (3)      56  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Baidu

    5,513       618       (306     5,825       2,440       466       (307     2,599       5,150       655       (357     5,448       713       91       (49     755  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

YOY

                    (7 %)      6       (6 %)         

QOQ

                    111     41       110        

Net margin

    24     7       19     9     6       7     22     8       17        

Non-GAAP financial measures:

                               

Operating income (non-GAAP)

    5,363       1,035         6,428       6,197       927         7,075       5,586       1,086         6,673       774       150         924  

YOY

                    4     5       4        

QOQ

                    (10 %)      17       (6 %)         

Operating margin (non-GAAP)

    23     12       21     23     12       20     23     14       21        

Net income attributable to Baidu (non-GAAP)

    5,268       940         5,727       7,500       681         7,755       6,628       844         7,011       918       117         971  

YOY

                    26     (10 %)        22        

QOQ

                    (12 %)      24       (10 %)         

Net margin (non-GAAP)

    23     11       18     27     9       22     28     11       22        

Adjusted EBITDA

    7,003       1,112         8,145       8,118       988         9,057       7,118       1,125         8,244       986       156         1,142  

YOY

                    2     1       1        

QOQ

                    (12 %)      14       (9 %)         

Adjusted EBITDA margin

    30     13       26     30     13       26     30     14       26        

 

(1)   Includes share-based compensation as follows:

 

                                                                   

Cost of revenues

    65       33         98       125       34         159       76       32         108       11       4         15  

Selling, general and administrative

    377       86         463       340       71         411       353       64         417       49       9         58  

Research and development

    778       50         828       1,020       48         1,068       575       43         618       80       6         86  
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

 

Total share-based compensation

    1,220       169         1,389       1,485       153         1,638       1,004       139         1,143       140       19         159  

 

(2)

Relates to intersegment eliminations and adjustments  

(3)

Relates to the net income attributable to iQIYI noncontrolling interests  

 

11


Baidu, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions, unaudited)

 

    Three months ended
March 31, 2023 (RMB)
    Three months ended
December 31, 2023 (RMB)
    Three months ended
March 31, 2024 (RMB)
    Three months ended
March 31, 2024 (US$)
 
    Baidu excl.
iQIYI
    iQIYI     Baidu,
Inc.
    Baidu excl.
iQIYI
    iQIYI     Baidu,
Inc.
    Baidu excl.
iQIYI
    iQIYI     Baidu,
Inc.
    Baidu excl.
iQIYI
    iQIYI     Baidu,
Inc.
 

Net cash provided by operating activities

    4,838       1,002       5,840       9,985       633       10,618       5,284       936       6,220       731       130       861  

Net cash (used in) provided by investing activities

    (32,816     167       (32,649     (11,805     (1,431     (13,236     (2,893     (223     (3,116     (401     (31     (432

Net cash provided by (used in) financing activities

    1,055       (3,357     (2,302     (7,586     (22     (7,608     2,126       261       2,387       295       36       331  

Effect of exchange rate changes on cash, cash equivalents and restricted cash

    (96     (9     (105     (364     (31     (395     154       15       169       21       2       23  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (decrease) increase in cash, cash equivalents and restricted cash

    (27,019     (2,197     (29,216     (9,770     (851     (10,621     4,671       989       5,660       646       137       783  

Cash, cash equivalents and restricted cash

                       

At beginning of period

    57,374       7,862       65,236       42,063       6,132       48,195       32,293       5,281       37,574       4,473       731       5,204  

At end of period

    30,355       5,665       36,020       32,293       5,281       37,574       36,964       6,270       43,234       5,119       868       5,987  

Net cash provided by operating activities

    4,838       1,002       5,840       9,985       633       10,618       5,284       936       6,220       731       130       861  

Less: Capital expenditures

    (1,295     —        (1,295     (3,641     (19     (3,660     (2,016     (22     (2,038     (279     (3     (282
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

    3,543       1,002       4,545       6,344       614       6,958       3,268       914       4,182       452       127       579  

Note: Baidu excl. iQIYI represents Baidu, Inc. minus iQIYI’s consolidated cash flows.

 

12


Baidu, Inc.

Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures

(In millions except for per ADS information, unaudited)

 

    Three months ended
March 31, 2023 (RMB)
    Three months ended
December 31, 2023 (RMB)
    Three months ended
March 31, 2024 (RMB)
    Three months ended
March 31, 2024 (US$)
 
    Baidu
Core
    iQIYI     Baidu,
Inc.
    Baidu
Core
    iQIYI     Baidu,
Inc.
    Baidu
Core
    iQIYI     Baidu,
Inc.
    Baidu
Core
    iQIYI     Baidu,
Inc.
 

Operating income

    4,091       859       4,980       4,668       773       5,392       4,538       945       5,484       629       131       760  

Add: Share-based compensation expenses

    1,220       169       1,389       1,485       153       1,638       1,004       139       1,143       140       19       159  

Add: Amortization and impairment of intangible assets(1)

    52       7       59       44       1       45       44       2       46       5       —        5  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (non-GAAP)

    5,363       1,035       6,428       6,197       927       7,075       5,586       1,086       6,673       774       150       924  

Add: Depreciation of fixed assets

    1,640       77       1,717       1,921       61       1,982       1,532       39       1,571       212       6       218  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

    7,003       1,112       8,145       8,118       988       9,057       7,118       1,125       8,244       986       156       1,142  

Net income attributable to Baidu

    5,513       618       5,825       2,440       466       2,599       5,150       655       5,448       713       91       755  

Add: Share-based compensation expenses

    1,220       169       1,297       1,484       153       1,553       1,003       139       1,066       139       19       147  

Add: Amortization and impairment of intangible assets(1)

    49       7       53       42       1       42       42       2       43       6       —        6  

Add: Disposal (gain)

    (217     —        (217     (37     (1     (38     (458     —        (458     (63     —        (63

Add: Impairment of long-term investments

    31       119       85       132       62       160       36       71       68       5       10       9  

Add: Fair value (gain) loss of long-term investments

    (1,312     10       (1,307     403       —        403       725       (23     714       100       (3     99  

Add: Reconciling items on equity method investments(2)

    (122     18       (114     3,172       —        3,172       280       —        280       39       —        39  

Add: Tax effects on non-GAAP adjustments(3)

    106       (1     105       (136     —        (136     (150     —        (150     (21     —        (21
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Baidu (non-GAAP)

    5,268       940       5,727       7,500       681       7,755       6,628       844       7,011       918       117       971  

Diluted earnings per ADS

        15.92           6.77           14.91           2.07  

Add: Accretion of the redeemable noncontrolling interests

        0.46           0.53           0.55           0.08  

Add: Non-GAAP adjustments to earnings per ADS

        (0.28         14.56           4.45           0.61  
     

 

 

       

 

 

       

 

 

       

 

 

 

Diluted earnings per ADS (non-GAAP)

        16.10           21.86           19.91           2.76  

 

(1)

This represents amortization and impairment of intangible assets resulting from business combinations.

(2)

This represents Baidu’s share of equity method investments for other non-GAAP reconciling items, amortization and impairment of intangible assets not on the investee’s books, accretion of their redeemable noncontrolling interests, and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per share.

(3)

This represents tax impact of all non-GAAP adjustments.

 

13