Baidu Announces Fourth Quarter and Fiscal Year 2023 Results

Rhea-AI Summary

Baidu, Inc. announces strong financial results for Q4 and FY 2023, with total revenues reaching RMB 34,951 million in Q4, a 6% increase YoY. Operating income grew by 37% to RMB 5,392 million. Net income to Baidu saw a 169% increase to RMB 2,599 million. Baidu Core reported revenues of RMB 27,488 million in Q4, up 7% YoY, with net income of RMB 2,440 million. The company remains focused on enhancing operational efficiencies and achieving high-quality growth in 2024.

Positive

• Strong financial performance for Baidu, Inc. in Q4 and FY 2023.
• Total revenues in Q4 reached RMB 34,951 million, a 6% increase YoY.
• Operating income grew by 37% to RMB 5,392 million.
• Net income to Baidu increased by 169% to RMB 2,599 million.
• Baidu Core reported revenues of RMB 27,488 million in Q4, up 7% YoY.
• Net income to Baidu Core was RMB 2,440 million in Q4.
• Focus on enhancing operational efficiencies and achieving high-quality growth in 2024.

Negative

• None.

Insights

Financial Analyst

The financial results of Baidu, Inc. for Q4 and the fiscal year 2023 reveal several key indicators of the company's performance. The reported 9% year-over-year (YOY) revenue growth and 37% increase in operating income highlight a strong operational year. However, a notable 48% decline in net income to Baidu in Q4 2023 compared to the same period in the previous year warrants attention. This divergence between operating income and net income could be attributed to non-operational factors, such as investments or one-time expenses, which should be examined further for a comprehensive understanding of the company's financial health.

Investors should consider the 177% increase in diluted earnings per ADS (after adjustments) for the full year, which is a significant indicator of profitability and may influence the stock's attractiveness. Baidu's share repurchase program, totaling US$669 million, is a sign of management's confidence in the company's valuation and future prospects, often viewed positively by the market.

Market Research Analyst

Baidu's solid performance in its core business segments, particularly the AI Cloud and Intelligent Driving sectors, is indicative of the company's strategic focus on high-growth areas. The expansion of the PaddlePaddle developer community and the growth in the number of models created suggest a robust ecosystem that could lead to increased innovation and a competitive edge in the AI industry. As Baidu continues to invest in Gen-AI and foundation models, it is positioning itself at the forefront of AI development, which could lead to the creation of new revenue streams and further strengthen its market position.

The company's emphasis on enhancing operational efficiencies is also noteworthy, as it indicates a commitment to cost control and margin improvement. This could result in sustained profitability and shareholder value creation in the long term. The operational highlights suggest that Baidu is not only growing its top line but also focusing on scalable and sustainable business practices.

Technology Industry Analyst

Baidu's advancements in ERNIE (Enhanced Representation through kNowledge Integration) and ERNIE Bot are particularly significant as they demonstrate the company's investment in next-generation AI technologies. The development of these technologies is critical in maintaining a competitive edge in the AI market, where innovation is rapid and continuous. The mention of Gen-AI and foundation models further underscores Baidu's commitment to leading in AI research and application, which could have far-reaching implications for the company's future product offerings and market share.

The operational highlight of Apollo Go, Baidu's autonomous ride-hailing service, suggests that the company is making tangible progress in the intelligent driving space. The success of such services is contingent on technological reliability, regulatory approval and public acceptance, all of which are essential factors to monitor as they will significantly impact Baidu's ability to monetize its investments in this area.

BEIJING, Feb. 28, 2024 /PRNewswire/ -- Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888 (HKD Counter) and 89888 (RMB Counter)) ("Baidu" or the "Company"), a leading AI company with a strong Internet foundation, today announced its unaudited financial results for the quarter and fiscal year ended December 31, 2023.

"Baidu Core reported another solid quarter," said Robin Li, Co-founder and CEO of Baidu. "Throughout 2023, we made significant strides in advancing ERNIE and ERNIE Bot, reinventing our products and services, and achieving breakthroughs in monetization. Concurrently, our core business remained resilient and healthy. Looking ahead, our commitment to Gen-AI and foundation models remains unwavering, paving the way for the [gradual] creation of a new growth engine."

"In the fourth quarter, we maintained our focus on enhancing operational efficiencies," said Rong Luo, CFO of Baidu. "As we look ahead into 2024, our goal is to persistently enhance operational efficiencies and achieve high-quality growth."

Fourth Quarter and Fiscal Year 2023 Financial Highlights^[1]

	Baidu, Inc.
(In millions except per	Q4		Q3		Q4					FY		FY
ADS, unaudited)	2022		2023		2023			YOY		2022		2023			YOY
	RMB		RMB		RMB	US$				RMB		RMB	US$
Total revenues	33,077		34,447		34,951	4,923		6 %		123,675		134,598	18,958		9 %
Operating income	4,593		6,274		5,392	759		17 %		15,911		21,856	3,078		37 %
Operating income (non-GAAP) [2]	6,497		7,596		7,075	996		9 %		23,186		28,433	4,005		23 %
Net income to Baidu	4,953		6,681		2,599	366		(48 %)		7,559		20,315	2,861		169 %
Net income to Baidu (non-GAAP) [2]	5,371		7,267		7,755	1,092		44 %		20,680		28,747	4,049		39 %
Diluted earnings per ADS	13.59		18.22		6.77	0.95		(50 %)		19.85		55.08	7.76		177 %
Diluted earnings per ADS (non-GAAP) [2]	15.25		20.40		21.86	3.08		43 %		58.93		80.85	11.39		37 %
Adjusted EBITDA [2]	8,231		9,505		9,057	1,276		10 %		29,663		35,823	5,046		21 %
Adjusted EBITDA margin	25 %		28 %		26 %	26 %				24 %		27 %	27 %

 

	Baidu Core
	Q4		Q3		Q4					FY		FY
(In millions, unaudited)	2022		2023		2023			YOY		2022		2023			YOY
	RMB		RMB		RMB	US$				RMB		RMB	US$
Total revenues	25,654		26,572		27,488	3,872		7 %		95,431		103,465	14,573		8 %
Operating income	3,782		5,498		4,668	657		23 %		14,534		18,825	2,651		30 %
Operating income (non-GAAP) [2]	5,491		6,672		6,197	873		13 %		20,948		24,748	3,486		18 %
Net income to Baidu Core	4,773		6,436		2,440	344		(49 %)		7,551		19,401	2,733		157 %
Net income to Baidu Core (non-GAAP) [2]	4,915		6,956		7,500	1,056		53 %		19,935		27,418	3,862		38 %
Adjusted EBITDA [2]	7,146		8,513		8,118	1,143		14 %		27,088		31,863	4,488		18 %
Adjusted EBITDA margin	28 %		32 %		30 %	30 %				28 %		31 %	31 %

[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 7.0999 as of December 29, 2023, 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).

Operational Highlights

Corporate

• Baidu returned US$318 million to shareholders since the beginning of Q4 2023, bringing the cumulative repurchase to US$669 million under the 2023 share repurchase program.

AI Cloud

• PaddlePaddle developer community has grown to 10.7 million and has served 235,000 businesses, as of the end of 2023. Developers have created 860,000 models on PaddlePaddle by the end of 2023.

Intelligent Driving

• Apollo Go, Baidu's autonomous ride-hailing service, provided about 839K rides in the fourth quarter of 2023, up 49% year over year. As of January 2, 2024, accumulated rides provided by Apollo Go on public roads surpassed 5 million.
• In the fourth quarter of 2023, the proportion of fully driverless orders within the overall order portfolio in Wuhan reached 45%, up from 40% in the third quarter of 2023.

Mobile Ecosystem

• In December 2023, Baidu App's MAUs reached 667 million, up 3% year over year.
• Managed Page accounted for 51% of Baidu Core's online marketing revenue in the fourth quarter of 2023.

iQIYI

• iQIYI's average daily number of total subscribing members for the quarter was 100.3 million, compared to 111.6 million for the fourth quarter of 2022 and 107.5 million for the third quarter of 2023. More importantly, iQIYI's monthly average revenue per membership (ARM) for the quarter was RMB15.98, compared to RMB14.17 for the fourth quarter of 2022 and RMB15.54 for the third quarter of 2023.

Fourth Quarter 2023 Financial Results

Total revenues were RMB35.0 billion ($4.92 billion), increasing 6% year over year.

• Revenue from Baidu Core was RMB27.5 billion ($3.87 billion), increasing 7% year over year; online marketing revenue was RMB19.2 billion ($2.70 billion), up 6% year over year, and non-online marketing revenue was RMB8.3 billion ($1.17 billion), up 9% year over year, mainly driven by AI Cloud business.
• Revenue from iQIYI was RMB7.7 billion ($1.09 billion), increasing 2% year over year.

Cost of revenues was RMB17.4 billion ($2.45 billion), increasing 3% year over year, primarily due to an increase in costs related to AI Cloud business, partially offset by a decrease in content costs.

Selling, general and administrative expenses were RMB5.9 billion ($825 million), which remained flat compared to the same period last year.

Research and development expenses were RMB6.3 billion ($886 million), increasing 11% year over year, primarily due to an increase in server depreciation expenses and server custody fees which support Gen-AI research and development inputs.

Operating income was RMB5.4 billion ($759 million). Baidu Core operating income was RMB4.7 billion ($657 million), and Baidu Core operating margin was 17%. Non-GAAP operating income was RMB7.1 billion ($996 million). Non-GAAP Baidu Core operating income was RMB6.2 billion ($873 million), and non-GAAP Baidu Core operating margin was 23%.

Total other loss, net was RMB2.5 billion ($356 million), compared to total other income, net of RMB1.8 billion for the same period last year, mainly due to a pickup of losses from an equity method investment as a result of a modification of certain terms of the underlying preferred shares.

Income tax benefit was RMB96 million ($14 million), compared to income tax expense of RMB1.3 billion for the same period last year, mainly due to a change of certain subsidiaries' amounts of valuation allowance for deferred tax assets.

Net income attributable to Baidu was RMB2.6 billion ($366 million), and diluted earnings per ADS was RMB6.77 ($0.95). Net income attributable to Baidu Core was RMB2.4 billion ($344 million), and net margin for Baidu Core was 9%. Non-GAAP net income attributable to Baidu was RMB7.8 billion ($1.09 billion). Non-GAAP diluted earnings per ADS was RMB21.86 ($3.08). Non-GAAP net income attributable to Baidu Core was RMB7.5 billion ($1.06 billion), and non-GAAP net margin for Baidu Core was 27%.

Adjusted EBITDA was RMB9.1 billion ($1.28 billion) and adjusted EBITDA margin was 26%. Adjusted EBITDA for Baidu Core was RMB8.1 billion ($1.14 billion) and adjusted EBITDA margin for Baidu Core was 30%.

As of December 31, 2023, cash, cash equivalents, restricted cash and short-term investments were RMB205.4 billion ($28.93 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB200.0 billion ($28.17 billion). Free cash flow was RMB7.0 billion ($980 million), and free cash flow excluding iQIYI was RMB6.3 billion ($894 million).

Fiscal Year 2023 Results

Total revenues were RMB134.6 billion ($18.96 billion), increasing 9% year over year.

• Revenue from Baidu Core was RMB103.5 billion ($14.57 billion), increasing 8% year over year; online marketing revenue was RMB75.1 billion ($10.58 billion), up 8% year over year, and non-online marketing revenue was RMB28.4 billion ($3.99 billion), up 9% year over year.
• Revenue from iQIYI was RMB31.9 billion ($4.49 billion), increasing 10% year over year.

Cost of revenues was RMB65.0 billion ($9.16 billion), increasing 2% year over year, primarily due to an increase in traffic acquisition costs, partially offset by a decrease in content costs and costs related to AI Cloud business.

Selling, general and administrative expenses were RMB23.5 billion ($3.31 billion), increasing 15% year over year, primarily due to an increase in channel spending and promotional marketing expenses.

Research and development expenses were RMB24.2 billion ($3.41 billion), increasing 4% year over year, primarily due to an increase in server depreciation expenses and server custody fees which support Gen-AI research and development inputs.

Operating income was RMB21.9 billion ($3.08 billion). Baidu Core operating income was RMB18.8 billion ($2.65 billion), and Baidu Core operating margin was 18%. Non-GAAP operating income was RMB28.4 billion ($4.01 billion). Non-GAAP Baidu Core operating income was RMB24.7 billion ($3.49 billion), and non-GAAP Baidu Core operating margin was 24%.

Total other income, net was RMB3.3 billion ($472 million), compared to total other loss, net of RMB5.8 billion last year, mainly due to a fair value gain of RMB198 million from long-term investments this year, compared to a fair value loss of RMB3.9 billion last year; and a decrease of RMB2.2 billion in impairment of long-term investments.

Income tax expense was RMB3.6 billion ($514 million), increasing 42% year over year, primarily due to an increase in profit before tax.

Net income attributable to Baidu was RMB20.3 billion ($2.86 billion), and diluted earnings per ADS was RMB55.08 ($7.76). Net income attributable to Baidu Core was RMB19.4 billion ($2.73 billion), and net margin for Baidu Core was 19%. Non-GAAP net income attributable to Baidu was RMB28.7 billion ($4.05 billion). Non-GAAP diluted earnings per ADS was RMB80.85 ($11.39). Non-GAAP net income attributable to Baidu Core was RMB27.4 billion ($3.86 billion), and non-GAAP net margin for Baidu Core was 26%.

Adjusted EBITDA was RMB35.8 billion ($5.05 billion) and adjusted EBITDA margin was 27%. Adjusted EBITDA for Baidu Core was RMB31.9 billion ($4.49 billion) and adjusted EBITDA margin for Baidu Core was 31%.

Free cash flow was RMB25.4 billion ($3.58 billion), and free cash flow excluding iQIYI was RMB22.1 billion ($3.11 billion).

Conference Call Information

Baidu's management will hold an earnings conference call at 7.30 AM on February 28, 2024, U.S. Eastern Time (8.30 PM on February 28, 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 Q4 2023 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/10036733-mjkcdg.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.

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.

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.

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, amortization and impairment of intangible assets resulting from business combinations, and contingent loss pertaining to legal proceeding in relation to former advertising agencies.

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, fair value change of long-term investments, and contingent loss pertaining to legal proceeding in relation to former advertising agencies, charitable donation from Baidu, 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.

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, share-based compensation expenses, and contingent loss pertaining to legal proceeding in relation to former advertising agencies.

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.

 

 

 

Baidu, Inc.
Condensed Consolidated Statements of  Income
(In millions except for per share (or ADS) information, unaudited)
		Three Months Ended								Twelve Months Ended
		December 31,		September 30,		December 31,		December 31,		December 31,		December 31,		December 31,
		2022		2023		2023		2023		2022		2023		2023
		RMB		RMB		RMB		US$(2)		RMB		RMB		US$(2)
Revenues:
Online marketing services		19,571		21,346		20,804		2,930		74,711		81,203		11,437
Others		13,506		13,101		14,147		1,993		48,964		53,395		7,521
Total revenues		33,077		34,447		34,951		4,923		123,675		134,598		18,958
Costs and expenses:
Cost of revenues(1)		16,945		16,294		17,418		2,453		63,935		65,031		9,159
Selling, general and administrative(1)		5,881		5,778		5,854		825		20,514		23,519		3,314
Research and development(1)		5,658		6,101		6,287		886		23,315		24,192		3,407
Total costs and expenses		28,484		28,173		29,559		4,164		107,764		112,742		15,880
Operating income		4,593		6,274		5,392		759		15,911		21,856		3,078
Other income (loss):
Interest income		1,647		2,082		2,064		291		6,245		8,009		1,128
Interest expense		(738)		(853)		(774)		(109)		(2,913)		(3,248)		(457)
Foreign exchange (loss) gain, net		(338)		(26)		(449)		(63)		(1,484)		595		84
Share of losses from equity method investments		(523)		(398)		(2,970)		(418)		(1,910)		(3,799)		(535)
Others, net		1,733		1,100		(398)		(57)		(5,737)		1,785		252
Total other income (loss), net		1,781		1,905		(2,527)		(356)		(5,799)		3,342		472
Income before income taxes		6,374		8,179		2,865		403		10,112		25,198		3,550
Income tax expense (benefit)		1,254		1,282		(96)		(14)		2,578		3,649		514
Net income		5,120		6,897		2,961		417		7,534		21,549		3,036
Net income (loss) attributable to noncontrolling interests		167		216		362		51		(25)		1,234		175
Net income attributable to Baidu		4,953		6,681		2,599		366		7,559		20,315		2,861
Earnings per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic		13.73		18.45		6.85		0.96		20.02		55.83		7.86
-Diluted		13.59		18.22		6.77		0.95		19.85		55.08		7.76
Earnings per share for Class A and Class B ordinary shares:
-Basic		1.72		2.31		0.86		0.12		2.50		6.98		0.98
-Diluted		1.70		2.28		0.85		0.12		2.48		6.89		0.97
Weighted average number of Class A and Class B ordinary shares outstanding (in millions):
-Basic		2,789		2,814		2,812		2,812		2,782		2,807		2,807
-Diluted		2,801		2,846		2,830		2,830		2,809		2,837		2,837
(1)  Includes share-based compensation expenses as follows:
Cost of revenues		158		139		159		23		409		590		83
Selling, general and administrative		450		358		411		58		1,750		1,678		236
Research and development		1,233		778		1,068		150		4,629		4,077		575
Total share-based compensation expenses		1,841		1,275		1,638		231		6,788		6,345		894
(2)  All translations from RMB to U.S. dollars are made at a rate of RMB 7.0999 to US$1.00, the exchange rate in effect as of December 29, 2023 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

 

 

 

Baidu, Inc.
Condensed Consolidated Balance Sheets
(In millions, unaudited)
		December 31,		December 31,		December 31,
		2022		2023		2023
		RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents		53,156		25,231		3,554
Restricted cash		11,330		11,503		1,620
Short-term investments, net		120,839		168,670		23,757
Accounts receivable, net		11,733		10,848		1,528
Amounts due from related parties		5,432		1,424		201
Other current assets, net		10,360		12,579		1,772
Total current assets		212,850		230,255		32,432
Non-current assets:
Fixed assets, net		23,973		27,960		3,938
Licensed copyrights, net		6,841		6,967		981
Produced content, net		13,002		13,377		1,884
Intangible assets, net		1,254		881		124
Goodwill		22,477		22,586		3,181
Long-term investments, net		55,297		47,957		6,755
Long-term time deposits and held-to-maturity investments		23,629		24,666		3,474
Amounts due from related parties		60		195		27
Deferred tax assets, net		2,129		2,100		296
Operating lease right-of-use assets		10,365		10,851		1,528
Other non-current assets		19,096		18,964		2,671
Total non-current assets		178,123		176,504		24,859
Total assets		390,973		406,759		57,291
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans		5,343		10,257		1,445
Accounts payable and accrued liabilities		38,014		37,717		5,312
Customer deposits and deferred revenue		13,116		14,627		2,060
Deferred income		72		306		43
Long-term loans, current portion		-		2		-
Convertible senior notes, current portion		8,305		2,802		395
Notes payable, current portion		6,904		6,029		849
Amounts due to related parties		5,067		1,603		226
Operating lease liabilities		2,809		3,108		438
Total current liabilities		79,630		76,451		10,768
Non-current liabilities:
Deferred income		159		200		28
Deferred revenue		331		481		68
Amounts due to related parties		99		77		11
Long-term loans		13,722		14,223		2,003
Notes payable		39,893		34,990		4,928
Convertible senior notes		9,568		8,144		1,147
Deferred tax liabilities		2,898		2,725		384
Operating lease liabilities		4,810		5,040		710
Other non-current liabilities		2,058		1,820		257
Total non-current liabilities		73,538		67,700		9,536
Total liabilities		153,168		144,151		20,304
Redeemable noncontrolling interests		8,393		9,465		1,333
Equity
Total Baidu shareholders' equity		223,478		243,626		34,314
Noncontrolling interests		5,934		9,517		1,340
Total equity		229,412		253,143		35,654
Total liabilities, redeemable noncontrolling interests, and equity		390,973		406,759		57,291

 

 

 

Baidu, Inc.
Selected Information
(In millions, unaudited)
		Three months ended December 31, 2022 (RMB)						Three months ended September 30, 2023 (RMB)						Three months ended December 31, 2023 (RMB)						Three months ended December 31, 2023 (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		25,654	7,593	(170)		33,077		26,572	8,015	(140)		34,447		27,488	7,707	(244)		34,951		3,872	1,086	(35)		4,923
YOY														7 %	2 %			6 %
QOQ														3 %	(4 %)			1 %
Costs and expenses:
Cost of revenues (1)		11,712	5,405	(172)		16,945		10,610	5,840	(156)		16,294		12,050	5,533	(165)		17,418		1,698	779	(24)		2,453
Selling, general and administrative (1)		4,969	939	(27)		5,881		4,810	981	(13)		5,778		4,936	948	(30)		5,854		695	134	(4)		825
Research and development (1)		5,191	467	-		5,658		5,654	447	-		6,101		5,834	453	-		6,287		822	64	-		886
Total costs and expenses		21,872	6,811	(199)		28,484		21,074	7,268	(169)		28,173		22,820	6,934	(195)		29,559		3,215	977	(28)		4,164
YOY
Cost of revenues														3 %	2 %			3 %
Selling, general and administrative														(1 %)	1 %			(0 %)
Research and development														12 %	(3 %)			11 %
Costs and expenses														4 %	2 %			4 %
Operating income (loss)		3,782	782	29		4,593		5,498	747	29		6,274		4,668	773	(49)		5,392		657	109	(7)		759
YOY														23 %	(1 %)			17 %
QOQ														(15 %)	3 %			(14 %)
Operating margin		15 %	10 %			14 %		21 %	9 %			18 %		17 %	10 %			15 %
Add: total other income (loss), net		2,271	(490)	-		1,781		2,159	(254)	-		1,905		(2,267)	(260)	-		(2,527)		(319)	(37)	-		(356)
Less: income tax expense (benefit)		1,265	(11)	-		1,254		1,272	10	-		1,282		(134)	38	-		(96)		(19)	5	-		(14)
Less: net income (loss) attributable to NCI		15	(1)	153	(3)	167		(51)	7	260	(3)	216		95	9	258	(3)	362		13	1	37	(3)	51
Net income (loss) attributable to Baidu		4,773	304	(124)		4,953		6,436	476	(231)		6,681		2,440	466	(307)		2,599		344	66	(44)		366
YOY														(49 %)	53 %			(48 %)
QOQ														(62 %)	(2 %)			(61 %)
Net margin		19 %	4 %			15 %		24 %	6 %			19 %		9 %	6 %			7 %
Non-GAAP financial measures:
Operating income (non-GAAP)		5,491	977			6,497		6,672	895			7,596		6,197	927			7,075		873	130			996
YOY														13 %	(5 %)			9 %
QOQ														(7 %)	4 %			(7 %)
Operating margin (non-GAAP)		21 %	13 %			20 %		25 %	11 %			22 %		23 %	12 %			20 %
Net income attributable to Baidu (non- GAAP)		4,915	856			5,371		6,956	622			7,267		7,500	681			7,755		1,056	96			1,092
YOY														53 %	(20 %)			44 %
QOQ														8 %	9 %			7 %
Net margin (non-GAAP)		19 %	11 %			16 %		26 %	8 %			21 %		27 %	9 %			22 %
Adjusted EBITDA		7,146	1,056			8,231		8,513	963			9,505		8,118	988			9,057		1,143	140			1,276
YOY														14 %	(6 %)			10 %
QOQ														(5 %)	3 %			(5 %)
Adjusted EBITDA margin		28 %	14 %			25 %		32 %	12 %			28 %		30 %	13 %			26 %
(1)  Includes share-based compensation as follows:
Cost of revenues		122	36			158		107	32			139		125	34			159		18	5			23
Selling, general and administrative		355	95			450		290	68			358		340	71			411		48	10			58
Research and development		1,177	56			1,233		732	46			778		1,020	48			1,068		144	6			150
Total share-based compensation		1,654	187			1,841		1,129	146			1,275		1,485	153			1,638		210	21			231
(2) Relates to intersegment eliminations and adjustments
(3) Relates to the net income/(loss) attributable to iQIYI noncontrolling interests

 

 

 

Baidu, Inc.
Selected Information
(In millions except for per ADS information, unaudited)
		Twelve months ended December 31, 2022 (RMB)						Twelve months ended December 31, 2023 (RMB)						Twelve months ended December 31, 2023 (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.
Total revenues		95,431	28,998	(754)		123,675		103,465	31,873	(740)		134,598		14,573	4,489	(104)		18,958
YOY								8 %	10 %			9 %
Costs and expenses:
Cost of revenues (1)		42,378	22,321	(764)		63,935		42,592	23,103	(664)		65,031		5,999	3,254	(94)		9,159
Selling, general and administrative (1)		17,103	3,466	(55)		20,514		19,623	4,014	(118)		23,519		2,765	565	(16)		3,314
Research and development (1)		21,416	1,899	-		23,315		22,425	1,767	-		24,192		3,158	249	-		3,407
Total costs and expenses		80,897	27,686	(819)		107,764		84,640	28,884	(782)		112,742		11,922	4,068	(110)		15,880
YOY
Cost of revenues								1 %	4 %			2 %
Selling, general and administrative								15 %	16 %			15 %
Research and development								5 %	(7 %)			4 %
Cost and expenses								5 %	4 %			5 %
Operating income		14,534	1,312	65		15,911		18,825	2,989	42		21,856		2,651	421	6		3,078
YOY								30 %	128 %			37 %
Operating margin		15 %	5 %			13 %		18 %	9 %			16 %
Add: total other (loss) income, net		(4,453)	(1,346)	-		(5,799)		4,298	(956)	-		3,342		607	(135)	-		472
Less: income tax expense		2,494	84	-		2,578		3,568	81	-		3,649		503	11	-		514
Less: net income (loss) attributable to NCI		36	18	(79)	(3)	(25)		154	27	1,053	(3)	1,234		22	4	149	(3)	175
Net income (loss) attributable to Baidu		7,551	(136)	144		7,559		19,401	1,925	(1,011)		20,315		2,733	271	(143)		2,861
YOY								157 %	(1515 %)			169 %
Net margin		8 %	(0 %)			6 %		19 %	6 %			15 %
Non-GAAP financial measures:
Operating income (non-GAAP)		20,948	2,173			23,186		24,748	3,643			28,433		3,486	513			4,005
YOY								18 %	68 %			23 %
Operating margin (non-GAAP)		22 %	7 %			19 %		24 %	11 %			21 %
Net income attributable to Baidu (non-GAAP)		19,935	1,284			20,680		27,418	2,838			28,747		3,862	400			4,049
YOY								38 %	121 %			39 %
Net margin (non-GAAP)		21 %	4 %			17 %		26 %	9 %			21 %
Adjusted EBITDA		27,088	2,510			29,663		31,863	3,918			35,823		4,488	552			5,046
YOY								18 %	56 %			21 %
Adjusted EBITDA margin		28 %	9 %			24 %		31 %	12 %			27 %
(1)  Includes share-based compensation as follows:
Cost of revenues		261	148			409		457	133			590		64	19			83
Selling, general and administrative		1,326	424			1,750		1,363	315			1,678		192	44			236
Research and development		4,390	239			4,629		3,888	189			4,077		548	27			575
Total share-based compensation		5,977	811			6,788		5,708	637			6,345		804	90			894
(2) Relates to intersegment eliminations and adjustments
(3) Relates to the net loss attributable to iQIYI noncontrolling interests

 

 

 

Baidu, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions,unaudited)
		Three months ended				Three months ended				Three months ended				Three months ended
		December 31, 2022 (RMB)				September 30, 2023 (RMB)				December 31, 2023 (RMB)				December 31, 2023 (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		6,999	854	7,853		8,694	831	9,525		9,985	633	10,618		1,407	89	1,496
Net cash (used in) provided by investing activities		(5,902)	579	(5,323)		(11,345)	(55)	(11,400)		(11,805)	(1,431)	(13,236)		(1,662)	(202)	(1,864)
Net cash (used in) provided by financing activities		(5,124)	2,862	(2,262)		(5,253)	269	(4,984)		(7,586)	(22)	(7,608)		(1,069)	(3)	(1,072)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(1,420)	(9)	(1,429)		153	5	158		(364)	(31)	(395)		(52)	(4)	(56)
Net (decrease) increase in cash, cash equivalents and restricted cash		(5,447)	4,286	(1,161)		(7,751)	1,050	(6,701)		(9,770)	(851)	(10,621)		(1,376)	(120)	(1,496)
Cash, cash equivalents and restricted cash
At beginning of period		62,821	3,576	66,397		49,814	5,082	54,896		42,063	6,132	48,195		5,924	864	6,788
At end of period		57,374	7,862	65,236		42,063	6,132	48,195		32,293	5,281	37,574		4,548	744	5,292
Net cash provided by operating activities		6,999	854	7,853		8,694	831	9,525		9,985	633	10,618		1,407	89	1,496
Less: Capital expenditures		(1,920)	(9)	(1,929)		(3,525)	(4)	(3,529)		(3,641)	(19)	(3,660)		(513)	(3)	(516)
Free cash flow		5,079	845	5,924		5,169	827	5,996		6,344	614	6,958		894	86	980
Note: Baidu excl. iQIYI represents Baidu, Inc. minus iQIYI's consolidated cash flows.

 

 

 

Baidu, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions,unaudited)
		Twelve months ended				Twelve months ended				Twelve months ended
		December 31, 2022 (RMB)				December 31, 2023 (RMB)				December 31, 2023 (US$)
		Baidu excl. iQIYI	iQIYI	Baidu, Inc.		Baidu excl. iQIYI	iQIYI	Baidu, Inc.		Baidu excl. iQIYI	iQIYI	Baidu, Inc.
Net cash provided by (used in) operating activities		26,241	(71)	26,170		33,263	3,352	36,615		4,685	472	5,157
Net cash (used in) provided by investing activities		(4,210)	266	(3,944)		(48,657)	(1,740)	(50,397)		(6,853)	(245)	(7,098)
Net cash (used in) provided by financing activities		(10,859)	4,469	(6,390)		(9,876)	(4,286)	(14,162)		(1,391)	(604)	(1,995)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		1,606	123	1,729		189	93	282		27	13	40
Net increase (decrease) in cash, cash equivalents and restricted cash		12,778	4,787	17,565		(25,081)	(2,581)	(27,662)		(3,532)	(364)	(3,896)
Cash, cash equivalents and restricted cash
At beginning of period		44,596	3,075	47,671		57,374	7,862	65,236		8,080	1,108	9,188
At end of period		57,374	7,862	65,236		32,293	5,281	37,574		4,548	744	5,292
Net cash provided by (used in) operating activities		26,241	(71)	26,170		33,263	3,352	36,615		4,685	472	5,157
Less: Capital expenditures		(8,112)	(174)	(8,286)		(11,154)	(36)	(11,190)		(1,571)	(5)	(1,576)
Free cash flow		18,129	(245)	17,884		22,109	3,316	25,425		3,114	467	3,581
Note: Baidu excl. iQIYI represents Baidu, Inc. minus iQIYI's consolidated cash flows.

 

 

 

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				Three months ended				Three months ended				Three months ended
		December 31, 2022 (RMB)				September 30, 2023 (RMB)				December 31, 2023 (RMB)				December 31, 2023 (US$)
		Baidu Core	iQIYI	Baidu, Inc.		Baidu Core	iQIYI	Baidu, Inc.		Baidu Core	iQIYI	Baidu, Inc.		Baidu Core	iQIYI	Baidu, Inc.
Operating income		3,782	782	4,593		5,498	747	6,274		4,668	773	5,392		657	109	759
Add: Share-based compensation expenses		1,654	187	1,841		1,129	146	1,275		1,485	153	1,638		210	21	231
Add: Amortization and impairment of intangible assets(1)		55	8	63		45	2	47		44	1	45		6	-	6
Operating income (non-GAAP)		5,491	977	6,497		6,672	895	7,596		6,197	927	7,075		873	130	996
Add:  Depreciation of fixed assets		1,655	79	1,734		1,841	68	1,909		1,921	61	1,982		270	10	280
Adjusted EBITDA		7,146	1,056	8,231		8,513	963	9,505		8,118	988	9,057		1,143	140	1,276
Net income attributable to Baidu		4,773	304	4,953		6,436	476	6,681		2,440	466	2,599		344	66	366
Add: Share-based compensation expenses		1,654	187	1,748		1,128	146	1,194		1,484	153	1,553		209	22	219
Add: Amortization and impairment of intangible assets(1)		50	8	55		43	2	44		42	1	42		6	-	6
Add: Disposal (gain) loss		(484)	62	(453)		(753)	-	(753)		(37)	(1)	(38)		(5)	-	(5)
Add: Impairment of long-term investments		318	271	453		46	-	46		132	62	160		19	8	23
Add: Fair value (gain) loss of long-term investments		(1,662)	8	(1,658)		(384)	(2)	(385)		403	-	403		57	-	57
Add: Reconciling items on equity method investments(2)		377	18	386		572	-	572		3,172	-	3,172		447	-	447
Add: Tax effects on non-GAAP adjustments(3)		(111)	(2)	(113)		(132)	-	(132)		(136)	-	(136)		(21)	-	(21)
Net income attributable to Baidu (non-GAAP)		4,915	856	5,371		6,956	622	7,267		7,500	681	7,755		1,056	96	1,092
Diluted earnings per ADS				13.59				18.22				6.77				0.95
Add:  Accretion of the redeemable noncontrolling interests				0.46				0.53				0.53				0.07
Add:  Non-GAAP adjustments to earnings per ADS				1.20				1.65				14.56				2.06
Diluted earnings per ADS (non-GAAP)				15.25				20.40				21.86				3.08
(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.

 

 

 

Baidu, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures
(In millions except for ADS and per ADS information, unaudited)
		Twelve months ended				Twelve months ended				Twelve months ended
		December 31, 2022 (RMB)				December 31, 2023 (RMB)				December 31, 2023 (US$)
		Baidu Core	iQIYI	Baidu, Inc.		Baidu Core	iQIYI	Baidu, Inc.		Baidu Core	iQIYI	Baidu, Inc.
Operating income		14,534	1,312	15,911		18,825	2,989	21,856		2,651	421	3,078
Add:  Share-based compensation expenses		5,977	811	6,788		5,708	637	6,345		804	90	894
Add:  Amortization and impairment of intangible assets(1)		223	50	273		215	17	232		31	2	33
Add:  Contingent loss(2)		214	-	214		-	-	-		-	-	-
Operating income (non-GAAP)		20,948	2,173	23,186		24,748	3,643	28,433		3,486	513	4,005
Add:  Depreciation of fixed assets		6,140	337	6,477		7,115	275	7,390		1,002	39	1,041
Adjusted EBITDA		27,088	2,510	29,663		31,863	3,918	35,823		4,488	552	5,046
Net income (loss) attributable to Baidu		7,551	(136)	7,559		19,401	1,925	20,315		2,733	271	2,861
Add: Share-based compensation expenses		5,964	811	6,371		5,704	637	5,993		803	90	844
Add: Amortization and impairment of intangible assets(1)		200	50	229		195	17	204		27	2	29
Add: Disposal (gain)		(515)	(368)	(700)		(1,926)	(90)	(1,967)		(271)	(13)	(277)
Add: Impairment of long-term investments		2,180	841	2,601		479	336	631		67	47	89
Add: Fair value loss (gain) of long-term investments		3,977	(18)	3,968		(54)	4	(52)		(8)	1	(7)
Add: Reconciling items on equity method investments(3)		1,473	105	1,548	-	3,918	9	3,922	-	552	2	551
Add: Charitable donation from Baidu(4)		136	-	136		-	-	-		-	-	-
Add: Contingent loss(2)		214	-	214		-	-	-		-	-	-
Add: Tax effects on non-GAAP adjustments(5)		(1,245)	(1)	(1,246)		(299)	-	(299)		(41)	-	(41)
Net income attributable to Baidu (non-GAAP)		19,935	1,284	20,680		27,418	2,838	28,747		3,862	400	4,049
Diluted earnings per ADS				19.85				55.08				7.76
Add:  Accretion of the redeemable noncontrolling interests				1.68				2.02				0.28
Add:  Non-GAAP adjustments to earnings per ADS				37.40				23.75				3.35
Diluted earnings per ADS (non-GAAP)				58.93				80.85				11.39
(1) This represents amortization and impairment of intangible assets resulting from business combinations.
(2) This represents contingent loss pertaining to legal proceeding involving former advertising agency.
(3) 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.
(4) This represents non-recurring charitable donation to discrete events.
(5) This represents tax impact of all non-GAAP adjustments.

 

 

 

View original content:https://www.prnewswire.com/news-releases/baidu-announces-fourth-quarter-and-fiscal-year-2023-results-302073884.html

SOURCE Baidu, Inc.

FAQ

What were Baidu's total revenues in Q4 2023?

Baidu's total revenues in Q4 2023 were RMB 34,951 million.

How much did Baidu's operating income grow by in Q4 2023?

Baidu's operating income grew by 37% to RMB 5,392 million in Q4 2023.

What was the net income to Baidu in Q4 2023?

The net income to Baidu in Q4 2023 was RMB 2,599 million.

What were Baidu Core's revenues in Q4 2023?

Baidu Core reported revenues of RMB 27,488 million in Q4 2023.

What was Baidu Core's net income in Q4 2023?

Baidu Core's net income in Q4 2023 was RMB 2,440 million.

What is Baidu's focus for 2024?

Baidu's focus for 2024 is on enhancing operational efficiencies and achieving high-quality growth.