Baidu Announces Second Quarter 2023 Results

Rhea-AI Summary

Baidu Q2 2023 financial results show revenue growth of 15% YoY, with Baidu Core revenue increasing by 14% YoY. Baidu Core non-GAAP operating profit grew by 27% YoY, with non-GAAP operating margin expanding to 25%. Net income to Baidu increased by 43% YoY, while diluted earnings per ADS increased by 42% YoY. Baidu's autonomous ride-hailing service, Apollo Go, provided 714K rides in Q2 2023, up 149% YoY. Baidu App's MAUs reached 677 million, up 8% YoY. iQIYI's average daily number of total subscribing members was 111.2 million.

Positive

• Baidu's revenue growth, non-GAAP operating profit growth, and increased net income are positive indicators for the stock. The growth of Baidu's autonomous ride-hailing service and Baidu App's MAUs also contribute to the positive outlook.

Negative

• None.

BEIJING, Aug. 22, 2023 /PRNewswire/ -- 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 second quarter ended June 30, 2023.

"In the second quarter of 2023, Baidu Core accelerated revenue and profit growth, driven by the solid performance of online marketing business and operating leverage," said Robin Li, Co-founder and CEO of Baidu. "Generative AI and large language models hold immense transformative power in numerous industries, presenting a significant market opportunity for us. To stay ahead of the game, we keep upgrading our models to generate more creative responses, while improving training throughput and lowering inference costs. Our latest foundation model, ERNIE 3.5, has been well recognized by our cloud customers, AI developers, and industry experts. By adopting an AI-native mindset, we are reinventing our products and offerings for innovative experiences, and to support various enterprises to capture this opportunity. Overall, Baidu is committed to building a new engine around generative AI and LLM to drive sustainable long-term growth."

"Baidu Core non-GAAP operating profit grew by 27% from a year ago, with non-GAAP operating margin expanding to 25% from 22% a year ago and 23% a quarter ago. Baidu Core generated about RMB9.7 billion net cash from operating activities in the quarter. The improvement in profit and margins as well as strong cash generation were primarily driven by revenue acceleration and efficiency gain," said Rong Luo, CFO of Baidu. "Baidu has invested in AI for over a decade and is well-positioned to capitalize on the opportunities arising from generative AI and LLM. As we look ahead, we remain steadfast in investing in AI, in particular large language models and generative AI in the upcoming quarters."

 

 

Second Quarter 2023 Financial Highlights[1]
		Baidu, Inc.
		Three Months Ended
(In millions except per ADS, unaudited)		June 30,		March 31,		June 30,
		2022		2023		2023			YOY		QOQ
		RMB		RMB		RMB	US$
Total revenues		29,647		31,144		34,056	4,697		15 %		9 %
Operating income		3,400		4,980		5,210	718		53 %		5 %
Operating income (non-GAAP) [2]		5,493		6,428		7,334	1,011		34 %		14 %
Net income to Baidu		3,637		5,825		5,210	718		43 %		(11 %)
Net income to Baidu (non-GAAP) [2]		5,541		5,727		7,998	1,103		44 %		40 %
Diluted earnings per ADS		9.97		15.92		14.17	1.95		42 %		(11 %)
Diluted earnings per ADS (non-GAAP) [2]		15.79		16.10		22.55	3.11		43 %		40 %
Adjusted EBITDA [2]		7,054		8,145		9,116	1,257		29 %		12 %
Adjusted EBITDA margin		24 %		26 %		27 %	27 %
		Baidu Core
		Three Months Ended
(In millions, unaudited)		June 30,		March 31,		June 30,
		2022		2023		2023			YOY		QOQ
		RMB		RMB		RMB	US$
Total revenues		23,160		22,998		26,407	3,642		14 %		15 %
Operating income		3,246		4,091		4,568	630		41 %		12 %
Operating income (non-GAAP) [2]		5,121		5,363		6,516	899		27 %		21 %
Net income to Baidu Core		3,716		5,513		5,012	691		35 %		(9 %)
Net income to Baidu Core (non-GAAP) [2]		5,449		5,268		7,694	1,061		41 %		46 %
Adjusted EBITDA [2]		6,597		7,003		8,229	1,135		25 %		18 %
Adjusted EBITDA margin		28 %		30 %		31 %	31 %
[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 7.2513 as of June 30, 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 launched ERNIE 3.5 in May 2023, which is the latest foundation model powering ERNIE Bot, Baidu's conversational AI bot. According to IDC's latest report on the technological abilities of AI models, issued in July 2023, ERNIE 3.5 excels in many areas, such as algorithm, industry coverage, developer tools, and ecosystem.
• Baidu earned a position in the China edition of the S&P Global Sustainability Yearbook, in recognizing its exceptional ESG scores. The selection stems from a comprehensive evaluation of 1,600 Chinese companies as part of the S&P Global 2022 Corporate Sustainability Assessment, underscoring Baidu's sustainability practices.

AI Cloud

• PaddlePaddle developer community grew to 8 million in mid-August, 2023. PaddlePaddle is Baidu's self-developed open-source deep learning framework.
• According to IDC's 2022 report on China's public cloud market, Baidu was once again ranked the No.1 AI Cloud provider in China, maintaining this position for the fourth consecutive year.

Intelligent Driving

• Apollo Go, Baidu's autonomous ride-hailing service, provided around 714K rides in the second quarter of 2023, up 149% year over year. As of June 30, 2023, the cumulative rides provided to the public by Apollo Go reached 3.3 million.
• Apollo Go received permits to offer fully driverless ride-hailing services to the public in Shenzhen Pingshan area in June. Apollo Go has now been granted permission to provide fully driverless ride-hailing services to the public in four cities, including Beijing, Shenzhen, Wuhan and Chongqing.
• Apollo Go received permits to conduct fully driverless testing on open roads in Shanghai Pudong area in July.

Other Growth Initiatives

• Xiaodu ranked No.1 in smart display shipments and smart speaker shipments in China for the first quarter of 2023, according to IDC and Canalys.

Mobile Ecosystem

• In June 2023, Baidu App's MAUs reached 677 million, up 8% year over year.
• Managed Page accounted for 52% of Baidu Core's online marketing revenue in the second quarter of 2023.

iQIYI

• iQIYI's average daily number of total subscribing members for the quarter was 111.2 million, compared to 98.3 million for the second quarter of 2022 and 128.9 million for the first quarter of 2023.

Second Quarter 2023 Financial Results 

Total revenues were RMB 34.1 billion ($4.70 billion), increasing 15% year over year.

Revenue from Baidu Core was RMB 26.4 billion ($3.64 billion), increasing 14% year over year; online marketing revenue was RMB 19.6 billion ($2.71 billion), up 15% year over year, and non-online marketing revenue was RMB 6.8 billion ($937 million), up 12% year over year.

Revenue from iQIYI was RMB 7.8 billion ($1.08 billion), increasing 17% year over year.

Cost of revenues was RMB 16.2 billion($2.23 billion), increasing 7% year over year, primarily due to an increase in content costs and traffic acquisition costs.

Selling, general and administrative expenses were RMB 6.3 billion ($869 million), increasing 32% year over year, primarily due to an increase in channel spending and promotional marketing expenses.

Research and development expense was RMB 6.4 billion ($880 million), increasing 1% year over year, primarily due to an increase in server depreciation expenses and cloud related expenses which support ERNIE Bot research inputs, partially offset by the decrease in personnel related expenses.

Operating income was RMB 5.2 billion ($718 million). Baidu Core operating income was RMB 4.6 billion ($630 million), and Baidu Core operating margin was 17%. Non-GAAP operating income was RMB 7.3 billion ($1.01 billion). Non-GAAP Baidu Core operating income was RMB 6.5 billion ($899 million), and non-GAAP Baidu Core operating margin was 25%.

Total other income, net was RMB 1.4 billion ($189 million), increasing 807% year over year, primarily due to the increase in net foreign exchange gain and net interest income, partially offset by the increase of fair value loss from long-term investments.

Income tax expense was RMB 1.3 billion($175 million), compared to RMB 25 million in the same period last year. The lower level of income tax expense in the second quarter of 2022 is primarily due to the reversal of certain tax expenses based on the 2021 tax return. Apart from the reversal, the main reason for the increase of income tax expense is the increase in profit before tax year over year.

Net income attributable to Baidu was RMB 5.2 billion ($718 million), and diluted earnings per ADS was RMB 14.17 ($1.95). Net income attributable to Baidu Core was RMB 5.0 billion ($691 million), and net margin for Baidu Core was 19%. Non-GAAP net income attributable to Baidu was RMB 8.0 billion ($1.10 billion). Non-GAAP diluted earnings per ADS was RMB 22.55($3.11). Non-GAAP net income attributable to Baidu Core was RMB 7.7 billion ($1.06 billion), and non-GAAP net margin for Baidu Core was 29%.

Adjusted EBITDA was RMB 9.1 billion ($1.26 billion) and adjusted EBITDA margin was 27%. Adjusted EBITDA for Baidu Core was RMB 8.2 billion ($1.14 billion) and adjusted EBITDA margin for Baidu Core was 31%.

As of June 30, 2023, cash, cash equivalents, restricted cash and short-term investments were RMB 201.5 billion ($27.79 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 196.9 billion ($27.15billion). Free cash flow was RMB 7.9 billion ($1.09 billion), and free cash flow excluding iQIYI was RMB 7.1 billion ($973 million).

Conference Call Information

Baidu's management will hold an earnings conference call at 8 AM on August 22, 2023, U.S. Eastern Time (8 PM on August 22, 2023, 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 Q2 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/10032710-f851qv.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.

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, 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, 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.

 

 

 

Baidu, Inc.
Condensed Consolidated Statements of  Income
(In millions except for per share (or ADS) information, unaudited)
		Three Months Ended								Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,		June 30,		June 30,
		2022		2023		2023		2023		2022		2023		2023
		RMB		RMB		RMB		US$(2)		RMB		RMB		US$(2)
Revenues:
Online marketing services		18,268		17,972		21,081		2,907		35,197		39,053		5,386
Others		11,379		13,172		12,975		1,790		22,861		26,147		3,606
Total revenues		29,647		31,144		34,056		4,697		58,058		65,200		8,992
Costs and expenses:
Cost of revenues(1)		15,171		15,152		16,167		2,230		30,717		31,319		4,319
Selling, general and administrative(1)		4,784		5,589		6,298		869		9,440		11,887		1,639
Research and development(1)		6,292		5,423		6,381		880		11,900		11,804		1,628
Total costs and expenses		26,247		26,164		28,846		3,979		52,057		55,010		7,586
Operating income		3,400		4,980		5,210		718		6,001		10,190		1,406
Other income (loss):
Interest income		1,525		1,915		1,948		269		2,979		3,863		533
Interest expense		(741)		(804)		(817)		(113)		(1,451)		(1,621)		(224)
Foreign exchange (loss) gain, net		(329)		(106)		1,176		162		(340)		1,070		148
Share of losses from equity method investments		(603)		(48)		(383)		(53)		(1,011)		(431)		(59)
Others, net		299		1,638		(555)		(76)		(2,987)		1,083		149
Total other income (loss), net		151		2,595		1,369		189		(2,810)		3,964		547
Income before income taxes		3,551		7,575		6,579		907		3,191		14,154		1,953
Income tax expense		25		1,193		1,270		175		416		2,463		340
Net income		3,526		6,382		5,309		732		2,775		11,691		1,613
Net (loss) income attributable to noncontrolling interests		(111)		557		99		14		23		656		90
Net income attributable to Baidu		3,637		5,825		5,210		718		2,752		11,035		1,523
Earnings per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic		10.06		16.17		14.34		1.98		7.23		30.55		4.21
-Diluted		9.97		15.92		14.17		1.95		7.15		30.05		4.14
Earnings per share for Class A and Class B ordinary shares:
-Basic		1.26		2.02		1.79		0.25		0.91		3.82		0.53
-Diluted		1.25		1.99		1.77		0.24		0.89		3.76		0.52
Weighted average number of Class A and Class B ordinary shares outstanding  (in millions):
-Basic		2,780		2,798		2,804		2,804		2,773		2,801		2,801
-Diluted		2,811		2,837		2,834		2,834		2,806		2,836		2,836
(1)  Includes share-based compensation expenses as follows:
Cost of revenues		85		98		194		27		167		292		40
Selling, general and administrative		443		463		446		62		820		909		124
Research and development		1,493		828		1,403		193		2,357		2,231		309
Total share-based compensation expenses		2,021		1,389		2,043		282		3,344		3,432		473
(2)  All translations from RMB to U.S. dollars are made at a rate of RMB 7.2513 to US$1.00, the exchange rate in effect as of June 30, 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,		June 30,		June 30,
		2022		2023		2023
		RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents		53,156		42,060		5,800
Restricted cash		11,330		11,325		1,562
Short-term investments, net		120,839		148,095		20,423
Accounts receivable, net		11,733		11,624		1,603
Amounts due from related parties		5,432		4,806		663
Other current assets, net		10,360		10,864		1,498
Total current assets		212,850		228,774		31,549
Non-current assets:
Fixed assets, net		23,973		24,312		3,353
Licensed copyrights, net		6,841		6,463		891
Produced content, net		13,002		12,722		1,754
Intangible assets, net		1,254		1,064		147
Goodwill		22,477		22,586		3,115
Long-term investments, net		55,297		53,153		7,330
Long-term time deposits and held-to-maturity investments		23,629		24,147		3,330
Amounts due from related parties		60		176		24
Deferred tax assets, net		2,129		1,906		263
Operating lease right-of-use assets		10,365		10,446		1,441
Other non-current assets		19,096		20,573		2,837
Total non-current assets		178,123		177,548		24,485
Total assets		390,973		406,322		56,034
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans		5,343		8,479		1,169
Accounts payable and accrued liabilities		38,014		36,046		4,971
Customer deposits and deferred revenue		13,116		14,588		2,012
Deferred income		72		138		19
Long-term loans, current portion		-		31		4
Convertible senior notes, current portion		8,305		23		3
Notes payable, current portion		6,904		13,410		1,849
Amounts due to related parties		5,067		5,067		699
Operating lease liabilities		2,809		2,916		402
Total current liabilities		79,630		80,698		11,128
Non-current liabilities:
Deferred income		159		106		15
Deferred revenue		331		423		58
Amounts due to related parties		99		88		12
Long-term loans		13,722		14,421		1,989
Notes payable		39,893		35,745		4,929
Convertible senior notes		9,568		11,447		1,579
Deferred tax liabilities		2,898		2,992		413
Operating lease liabilities		4,810		4,794		661
Other non-current liabilities		2,058		2,154		297
Total non-current liabilities		73,538		72,170		9,953
Total liabilities		153,168		152,868		21,081
Redeemable noncontrolling interests		8,393		9,088		1,253
Equity
Total Baidu shareholders' equity		223,478		235,643		32,497
Noncontrolling interests		5,934		8,723		1,203
Total equity		229,412		244,366		33,700
Total liabilities, redeemable noncontrolling interests, and equity		390,973		406,322		56,034

 

 

 

Baidu, Inc.
Selected Information
(In millions, unaudited)
		Three months ended June 30, 2022 (RMB)						Three months ended March 31, 2023 (RMB)						Three months ended June 30, 2023 (RMB)						Three months ended June 30, 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		23,160	6,657	(170)		29,647		22,998	8,349	(203)		31,144		26,407	7,802	(153)		34,056		3,642	1,076	(21)		4,697
YOY														14 %	17 %			15 %
QOQ														15 %	(7 %)			9 %
Costs and expenses:
Cost of revenues (1)		10,114	5,248	(191)		15,171		9,379	5,956	(183)		15,152		10,553	5,774	(160)		16,167		1,456	796	(22)		2,230
Selling, general and administrative (1)		3,990	801	(7)		4,784		4,533	1,106	(50)		5,589		5,344	979	(25)		6,298		737	135	(3)		869
Research and development (1)		5,810	482	-		6,292		4,995	428	-		5,423		5,942	439	-		6,381		819	61	-		880
Total costs and expenses		19,914	6,531	(198)		26,247		18,907	7,490	(233)		26,164		21,839	7,192	(185)		28,846		3,012	992	(25)		3,979
YOY
Cost of revenues														4 %	10 %			7 %
Selling, general and administrative														34 %	22 %			32 %
Research and development														2 %	(9 %)			1 %
Costs and expenses														10 %	10 %			10 %
Operating income		3,246	126	28		3,400		4,091	859	30		4,980		4,568	610	32		5,210		630	84	4		718
YOY														41 %	384 %			53 %
QOQ														12 %	(29 %)			5 %
Operating margin		14 %	2 %			11 %		18 %	10 %			16 %		17 %	8 %			15 %
Add: total other income (loss), net		442	(291)	-		151		2,803	(208)	-		2,595		1,603	(234)	-		1,369		221	(32)	-		189
Less: income tax (benefit) expense		(11)	36	-		25		1,168	25	-		1,193		1,262	8	-		1,270		174	1	-		175
Less: net (loss) income attributable to NCI		(17)	13	(107)	(3)	(111)		213	8	336	(3)	557		(103)	3	199	(3)	99		(14)	-	28	(3)	14
Net income (loss) attributable to Baidu		3,716	(214)	135		3,637		5,513	618	(306)		5,825		5,012	365	(167)		5,210		691	51	(24)		718
YOY														35 %	-			43 %
QOQ														(9 %)	(41 %)			(11 %)
Net margin		16 %	(3 %)			12 %		24 %	7 %			19 %		19 %	5 %			15 %
Non-GAAP financial measures:
Operating income (non-GAAP)		5,121	344			5,493		5,363	1,035			6,428		6,516	786			7,334		899	108			1,011
YOY														27 %	128 %			34 %
QOQ														21 %	(24 %)			14 %
Operating margin (non-GAAP)		22 %	5 %			19 %		23 %	12 %			21 %		25 %	10 %			22 %
Net income attributable to Baidu (non-GAAP)		5,449	79			5,541		5,268	940			5,727		7,694	595			7,998		1,061	82			1,103
YOY														41 %	653 %			44 %
QOQ														46 %	(37 %)			40 %
Net margin (non-GAAP)		24 %	1 %			19 %		23 %	11 %			18 %		29 %	8 %			23 %
Adjusted EBITDA		6,597	429			7,054		7,003	1,112			8,145		8,229	855			9,116		1,135	118			1,257
YOY														25 %	99 %			29 %
QOQ														18 %	(23 %)			12 %
Adjusted EBITDA margin		28 %	6 %			24 %		30 %	13 %			26 %		31 %	11 %			27 %
(1)  Includes share-based compensation as follows:
Cost of revenues		49	36			85		65	33			98		160	34			194		22	5			27
Selling, general and administrative		339	104			443		377	86			463		356	90			446		50	12			62
Research and development		1,431	62			1,493		778	50			828		1,358	45			1,403		187	6			193
Total share-based compensation		1,819	202			2,021		1,220	169			1,389		1,874	169			2,043		259	23			282
(2) Relates to intersegment eliminations and adjustments
(3) Relates to the net income/(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
		June 30, 2022 (RMB)				March 31, 2023 (RMB)				June 30, 2023 (RMB)				June 30, 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		7,658	48	7,706		4,838	1,002	5,840		9,746	886	10,632		1,344	122	1,466
Net cash (used in) provided by investing activities		(3,027)	(653)	(3,680)		(32,816)	167	(32,649)		7,309	(421)	6,888		1,008	(58)	950
Net cash provided by (used in) financing activities		877	(334)	543		1,055	(3,357)	(2,302)		1,908	(1,176)	732		263	(162)	101
Effect of exchange rate changes on cash, cash equivalents and restricted cash		1,230	75	1,305		(96)	(9)	(105)		496	128	624		68	18	86
Net increase (decrease) in cash, cash equivalents and restricted cash		6,738	(864)	5,874		(27,019)	(2,197)	(29,216)		19,459	(583)	18,876		2,683	(80)	2,603
Cash, cash equivalents and restricted cash
At beginning of period		43,924	3,883	47,807		57,374	7,862	65,236		30,355	5,665	36,020		4,186	781	4,967
At end of period		50,662	3,019	53,681		30,355	5,665	36,020		49,814	5,082	54,896		6,869	701	7,570
Net cash provided by operating activities		7,658	48	7,706		4,838	1,002	5,840		9,746	886	10,632		1,344	122	1,466
Less: Capital expenditures		(2,124)	(66)	(2,190)		(1,295)	-	(1,295)		(2,693)	(13)	(2,706)		(371)	(2)	(373)
Free cash flow		5,534	(18)	5,516		3,543	1,002	4,545		7,053	873	7,926		973	120	1,093
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
		June 30, 2022 (RMB)				March 31, 2023 (RMB)				June 30, 2023 (RMB)				June 30, 2023 (US$)
		Baidu Core	iQIYI	Baidu, Inc.		Baidu Core	iQIYI	Baidu, Inc.		Baidu Core	iQIYI	Baidu, Inc.		Baidu Core	iQIYI	Baidu, Inc.
Operating income		3,246	126	3,400		4,091	859	4,980		4,568	610	5,210		630	84	718
Add: Share-based compensation expenses		1,819	202	2,021		1,220	169	1,389		1,874	169	2,043		259	23	282
Add: Amortization and impairment of intangible assets(1)		56	16	72		52	7	59		74	7	81		10	1	11
Operating income (non-GAAP)		5,121	344	5,493		5,363	1,035	6,428		6,516	786	7,334		899	108	1,011
Add:  Depreciation of fixed assets		1,476	85	1,561		1,640	77	1,717		1,713	69	1,782		236	10	246
Adjusted EBITDA		6,597	429	7,054		7,003	1,112	8,145		8,229	855	9,116		1,135	118	1,257
Net income (loss) attributable to Baidu		3,716	(214)	3,637		5,513	618	5,825		5,012	365	5,210		691	51	718
Add: Share-based compensation expenses		1,815	202	1,916		1,220	169	1,297		1,872	169	1,949		258	23	269
Add: Amortization and impairment of intangible assets(1)		50	16	59		49	7	53		61	7	65		8	1	9
Add: Disposal (gain)		(25)	-	(25)		(217)	-	(217)		(919)	(89)	(959)		(127)	(12)	(132)
Add: Impairment of long-term investments		222	11	228		31	119	85		270	155	340		38	21	47
Add: Fair value (gain) loss of long-term investments		(547)	2	(546)		(1,312)	10	(1,307)		1,239	(4)	1,237		171	(1)	171
Add: Reconciling items on equity method investments(2)		403	60	455		(122)	18	(114)		296	(9)	292		41	(1)	40
Add: Charitable donation from Baidu(4)		136	-	136		-	-	-		-	-	-		-	-	-
Add: Tax effects on non-GAAP adjustments(3)		(321)	2	(319)		106	(1)	105		(137)	1	(136)		(19)	-	(19)
Net income attributable to Baidu (non-GAAP)		5,449	79	5,541		5,268	940	5,727		7,694	595	7,998		1,061	82	1,103
Diluted earnings per ADS				9.97				15.92				14.17				1.95
Add:  Accretion of the redeemable noncontrolling interests				0.39				0.46				0.50				0.07
Add:  Non-GAAP adjustments to earnings per ADS				5.43				(0.28)				7.88				1.09
Diluted earnings per ADS (non-GAAP)				15.79				16.10				22.55				3.11
(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.
(4) This represents non-recurring charitable donation to discrete events.

 

 

 

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SOURCE Baidu, Inc.