Baidu Announces Third Quarter 2023 Results

Rhea-AI Summary

Baidu, Inc. (BIDU) Reports Solid Q3 2023 Financial Results with 6% Revenue Growth, Launches ERNIE 4.0, and Appoints New Independent Director

Positive

• Total revenues increased by 6% year over year to RMB 34.4 billion ($4.72 billion)
• Operating income rose by 18% to RMB 6.3 billion ($860 million)
• Net income to Baidu grew by 28% to RMB 6.7 billion ($916 million)
• Adjusted EBITDA margin increased to 28%

Negative

• Selling, general and administrative expenses rose by 11% year over year
• Net income to Baidu Core decreased by 10% to RMB 882 million

BEIJING, Nov. 21, 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 third quarter ended September 30, 2023.

"Baidu reported solid third-quarter financial results, demonstrating resilience in a challenging economic climate," said Robin Li, Co-founder and CEO of Baidu. "I am particularly pleased with our continuous technological enhancements and product improvements against the backdrop of emerging opportunities in generative AI and foundation models. Notably, we launched ERNIE 4.0, our most powerful foundation model. We have also harnessed the power of ERNIE and ERNIE Bot to reinvent our consumer-facing and enterprise-facing products, as well as our own operations, providing AI-native experiences and driving efficiency gains. Meanwhile, we've fully opened ERNIE API to cloud enterprises, empowering them to develop their own AI-native applications and solutions. Our AI-centric business and product strategy should set the stage for sustained multi-year revenue and profit expansion within our ERNIE and ERNIE Bot ecosystem."

"Baidu Core maintained stable margins in the quarter," said Rong Luo, CFO of Baidu. "Our ongoing investments in AI have underpinned technological and product innovations. Moving forward, while we will continue prioritizing investments in AI, especially in generative AI and foundation models, we will do so with an unrelenting focus on efficiency and strategic resource allocation."

Third Quarter 2023 Financial Highlights^[1]

	Baidu, Inc.
(In millions except per	Q3		Q2		Q3
ADS, unaudited)	2022		2023		2023			YOY		QOQ
	RMB		RMB		RMB	US$
Total revenues	32,540		34,056		34,447	4,721		6 %		1 %
Operating income	5,317		5,210		6,274	860		18 %		20 %
Operating income (non-GAAP) [2]	7,200		7,334		7,596	1,041		6 %		4 %
Net (loss) income to Baidu	(146)		5,210		6,681	916		-		28 %
Net income to Baidu (non-GAAP) [2]	5,889		7,998		7,267	996		23 %		(9 %)
Diluted (loss) earnings per ADS	(0.87)		14.17		18.22	2.50		-		29 %
Diluted earnings per ADS (non-GAAP) [2]	16.87		22.55		20.40	2.80		21 %		(10 %)
Adjusted EBITDA [2]	8,879		9,116		9,505	1,303		7 %		4 %
Adjusted EBITDA margin	27 %		27 %		28 %	28 %
	Baidu Core
	Q3		Q2		Q3
(In millions, unaudited)	2022		2023		2023			YOY		QOQ
	RMB		RMB		RMB	US$
Total revenues	25,239		26,407		26,572	3,642		5 %		1 %
Operating income	4,982		4,568		5,498	754		10 %		20 %
Operating income (non-GAAP) [2]	6,650		6,516		6,672	914		0 %		2 %
Net income to Baidu Core	25		5,012		6,436	882		25644 %		28 %
Net income to Baidu Core (non-GAAP) [2]	5,767		7,694		6,956	953		21 %		(10 %)
Adjusted EBITDA[2]	8,239		8,229		8,513	1,167		3 %		3 %
Adjusted EBITDA margin	33 %		31 %		32 %	32 %
[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 7.2960 as of September 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 launched ERNIE 4.0 (EB4) in October 2023. EB4 is now accessible to users on ERNIE Bot. In addition, enterprise customers can use EB4 via our cloud API.
• Baidu returned US$126 million to shareholders since the beginning of Q3 2023, bringing the cumulative repurchase to US$351 million under the current share repurchase program.
• Baidu established the Technology Ethics Committee in October 2023 to guide the practices of technology professionals.

Intelligent Driving

• Apollo Go, Baidu's autonomous ride-hailing service, provided 821K rides in the third quarter of 2023, up 73% year over year. As of September 30, 2023, the cumulative rides provided to the public by Apollo Go reached 4.1 million.

Mobile Ecosystem

• In September 2023, Baidu App's MAUs reached 663 million, up 5% year over year.
• Managed Page accounted for 53% of Baidu Core's online marketing revenue in the third quarter of 2023.

iQIYI

• iQIYI's average daily number of total subscribing members for the quarter was 107.5 million, compared to 101.0 million for the third quarter of 2022 and 111.2 million for the second quarter of 2023. More importantly, iQIYI's monthly average revenue per membership (ARM^[3]) for the quarter was RMB15.54, compared to RMB13.90 for the third quarter of 2022 and RMB14.82 for the second quarter of 2023, increasing 12% year over year.

[3] The monthly ARM for the quarter is calculated by dividing iQIYI's total revenues from membership services during a given quarter by the average daily number of total subscribing members for that quarter and the number of months in the quarter.

Third Quarter 2023 Financial Results 

Total revenues were RMB 34.4 billion ($4.72 billion), increasing 6% year over year.

• Revenue from Baidu Core was RMB 26.6 billion ($3.64 billion), increasing 5% year over year; online marketing revenue was RMB 19.7 billion ($2.70 billion), up 5% year over year, and non-online marketing revenue was RMB 6.9 billion ($943 million), up 6% year over year.
• Revenue from iQIYI was RMB 8.0 billion ($1.10 billion), increasing 7% year over year.

Cost of revenues was RMB 16.3 billion ($2.23 billion), which remained essentially unchanged compared to the same period last year.

Selling, general and administrative expenses were RMB 5.8 billion ($792 million), increasing 11% year over year, primarily due to an increase in channel spending and promotional marketing expenses.

Research and development expenses were RMB 6.1 billion ($836 million), increasing 6% year over year, primarily due to an increase in server depreciation expenses and server custody fees which support ERNIE Bot research inputs.

Operating income was RMB 6.3 billion ($860 million). Baidu Core operating income was RMB 5.5 billion ($754 million), and Baidu Core operating margin was 21%. Non-GAAP operating income was RMB 7.6 billion ($1.04 billion). Non-GAAP Baidu Core operating income was RMB 6.7 billion ($914 million), and non-GAAP Baidu Core operating margin was 25%.

Total other income, net was RMB 1.9 billion ($261 million), compared to total other loss, net of RMB 4.8 billion for the same period last year, mainly due to: (1) a recognition of RMB 338 million gain versus RMB 3.1 billion loss for the same period last year from fair value changes in long-term investments; and (2) a decrease in impairment of long-term investments by RMB 1.4 billion.

Income tax expense was RMB 1.3 billion ($175 million), increasing 41% year over year, primarily due to an increase in profit before tax.

Net income attributable to Baidu was RMB 6.7 billion ($916 million), and diluted earnings per ADS was RMB 18.22 ($2.50). Net income attributable to Baidu Core was RMB 6.4 billion ($882 million), and net margin for Baidu Core was 24%. Non-GAAP net income attributable to Baidu was RMB 7.3 billion ($996 million). Non-GAAP diluted earnings per ADS was RMB 20.40 ($2.80). Non-GAAP net income attributable to Baidu Core was RMB 7.0 billion ($953 million), and non-GAAP net margin for Baidu Core was 26%.

Adjusted EBITDA was RMB 9.5 billion ($1.30 billion) and adjusted EBITDA margin was 28%. Adjusted EBITDA for Baidu Core was RMB 8.5 billion ($1.17 billion) and adjusted EBITDA margin for Baidu Core was 32%.

As of September 30, 2023, cash, cash equivalents, restricted cash and short-term investments were RMB 202.7 billion ($27.78 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 197.4 billion ($27.06 billion). Free cash flow was RMB 6.0 billion ($822 million), and free cash flow excluding iQIYI was RMB 5.2 billion ($709 million).

Recent Development

Baidu has appointed Ms. Sandy Ran Xu as an independent director of the Board of Directors of the Company (the "Board"), effective from January 1, 2024.

Ms. Xu has served as CEO and executive director of JD.com since May 2023. Prior to her current role, Ms. Xu served as CFO of JD.com from June 2020 to May 2023. Prior to joining JD.com, Ms. Xu was an audit partner and spent nearly 20 years with PricewaterhouseCoopers Zhong Tian LLP, Beijing office and PricewaterhouseCoopers, San Jose office. Ms. Xu currently also serves as a director of Yonghui Supermarket Co., Ltd. Ms. Xu was a Certified Public Accountant in both China and the United States. Ms. Xu received her bachelor's degree with a double major in information science and economics from Peking University.

Conference Call Information

Baidu's management will hold an earnings conference call at 7.30 AM on November 21, 2023, U.S. Eastern Time (8.30 PM on November 21, 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 Q3 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/10034602-0jdhg4.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, 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
		September 30,		June 30,		September 30,		September 30,
		2022		2023		2023		2023
		RMB		RMB		RMB		US$(2)
Revenues:
Online marketing services		19,943		21,081		21,346		2,926
Others		12,597		12,975		13,101		1,795
Total revenues		32,540		34,056		34,447		4,721
Costs and expenses:
Cost of revenues(1)		16,273		16,167		16,294		2,233
Selling, general and administrative(1)		5,193		6,298		5,778		792
Research and development(1)		5,757		6,381		6,101		836
Total costs and expenses		27,223		28,846		28,173		3,861
Operating income		5,317		5,210		6,274		860
Other (loss) income:
Interest income		1,619		1,948		2,082		285
Interest expense		(724)		(817)		(853)		(117)
Foreign exchange (loss) gain, net		(806)		1,176		(26)		(4)
Share of losses from equity method investments		(376)		(383)		(398)		(55)
Others, net		(4,483)		(555)		1,100		152
Total other (loss) income, net		(4,770)		1,369		1,905		261
Income before income taxes		547		6,579		8,179		1,121
Income tax expense		908		1,270		1,282		175
Net (loss) income		(361)		5,309		6,897		946
Net (loss) income attributable to noncontrolling interests		(215)		99		216		30
Net (loss) income attributable to Baidu		(146)		5,210		6,681		916
(Loss) earnings per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic		(0.87)		14.34		18.45		2.53
-Diluted		(0.87)		14.17		18.22		2.50
(Loss) earnings per share for Class A and Class B ordinary shares:
-Basic		(0.11)		1.79		2.31		0.32
-Diluted		(0.11)		1.77		2.28		0.31
Weighted average number of Class A and Class B ordinary shares outstanding  (in millions):
-Basic		2,790		2,804		2,814		2,814
-Diluted		2,790		2,834		2,846		2,846
(1)  Includes share-based compensation expenses as follows:
Cost of revenues		84		194		139		19
Selling, general and administrative		480		446		358		49
Research and development		1,039		1,403		778		108
Total share-based compensation expenses		1,603		2,043		1,275		176
(2)  All translations from RMB to U.S. dollars are made at a rate of RMB 7.2960 to US$1.00, the exchange rate in effect as of September 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,		September 30,		September 30,
		2022		2023		2023
		RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents		53,156		34,908		4,785
Restricted cash		11,330		11,392		1,561
Short-term investments, net		120,839		156,359		21,431
Accounts receivable, net		11,733		10,712		1,468
Amounts due from related parties		5,432		4,962		680
Other current assets, net		10,360		12,084		1,656
Total current assets		212,850		230,417		31,581
Non-current assets:
Fixed assets, net		23,973		26,481		3,630
Licensed copyrights, net		6,841		6,992		958
Produced content, net		13,002		12,626		1,731
Intangible assets, net		1,254		1,012		139
Goodwill		22,477		22,586		3,096
Long-term investments, net		55,297		52,553		7,203
Long-term time deposits and held-to-maturity investments		23,629		25,260		3,462
Amounts due from related parties		60		147		20
Deferred tax assets, net		2,129		1,783		244
Operating lease right-of-use assets		10,365		10,512		1,441
Other non-current assets		19,096		20,665		2,832
Total non-current assets		178,123		180,617		24,756
Total assets		390,973		411,034		56,337
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans		5,343		11,735		1,608
Accounts payable and accrued liabilities		38,014		37,184		5,096
Customer deposits and deferred revenue		13,116		15,043		2,062
Deferred income		72		151		21
Long-term loans, current portion		-		1		-
Convertible senior notes, current portion		8,305		3,114		427
Notes payable, current portion		6,904		6,179		847
Amounts due to related parties		5,067		5,241		718
Operating lease liabilities		2,809		2,953		405
Total current liabilities		79,630		81,601		11,184
Non-current liabilities:
Deferred income		159		119		16
Deferred revenue		331		421		58
Amounts due to related parties		99		83		11
Long-term loans		13,722		14,472		1,984
Notes payable		39,893		35,861		4,915
Convertible senior notes		9,568		8,349		1,144
Deferred tax liabilities		2,898		2,750		377
Operating lease liabilities		4,810		4,830		662
Other non-current liabilities		2,058		1,838		253
Total non-current liabilities		73,538		68,723		9,420
Total liabilities		153,168		150,324		20,604
Redeemable noncontrolling interests		8,393		9,276		1,271
Equity
Total Baidu shareholders' equity		223,478		242,427		33,227
Noncontrolling interests		5,934		9,007		1,235
Total equity		229,412		251,434		34,462
Total liabilities, redeemable noncontrolling interests, and equity		390,973		411,034		56,337

 

 

Baidu, Inc.
Selected Information
(In millions, unaudited)
		Three months ended September 30, 2022 (RMB)						Three months ended June 30, 2023 (RMB)						Three months ended September 30, 2023 (RMB)						Three months ended September 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		25,239	7,471	(170)		32,540		26,407	7,802	(153)		34,056		26,572	8,015	(140)		34,447		3,642	1,098	(19)		4,721
YOY														5 %	7 %			6 %
QOQ														1 %	3 %			1 %
Costs and expenses:
Cost of revenues (1)		10,745	5,705	(177)		16,273		10,553	5,774	(160)		16,167		10,610	5,840	(156)		16,294		1,454	800	(21)		2,233
Selling, general and administrative (1)		4,231	980	(18)		5,193		5,344	979	(25)		6,298		4,810	981	(13)		5,778		659	135	(2)		792
Research and development (1)		5,281	476	-		5,757		5,942	439	-		6,381		5,654	447	-		6,101		775	61	-		836
Total costs and expenses		20,257	7,161	(195)		27,223		21,839	7,192	(185)		28,846		21,074	7,268	(169)		28,173		2,888	996	(23)		3,861
YOY
Cost of revenues														(1 %)	2 %			0 %
Selling, general and administrative														14 %	0 %			11 %
Research and development														7 %	(6 %)			6 %
Costs and expenses														4 %	1 %			3 %
Operating income		4,982	310	25		5,317		4,568	610	32		5,210		5,498	747	29		6,274		754	102	4		860
YOY														10 %	141 %			18 %
QOQ														20 %	22 %			20 %
Operating margin		20 %	4 %			16 %		17 %	8 %			15 %		21 %	9 %			18 %
Add: total other (loss) income, net		(4,108)	(662)	-		(4,770)		1,603	(234)	-		1,369		2,159	(254)	-		1,905		296	(35)	-		261
Less: income tax expense		866	42	-		908		1,262	8	-		1,270		1,272	10	-		1,282		174	1	-		175
Less: net (loss) income attributable to NCI		(17)	1	(199)	(3)	(215)		(103)	3	199	(3)	99		(51)	7	260	(3)	216		(6)	1	35	(3)	30
Net income (loss) attributable to Baidu		25	(395)	224		(146)		5,012	365	(167)		5,210		6,436	476	(231)		6,681		882	65	(31)		916
YOY														25644 %	-			-
QOQ														28 %	30 %			28 %
Net margin		0 %	(5 %)			(0 %)		19 %	5 %			15 %		24 %	6 %			19 %
Non-GAAP financial measures:
Operating income (non-GAAP)		6,650	525			7,200		6,516	786			7,334		6,672	895			7,596		914	123			1,041
YOY														0 %	70 %			6 %
QOQ														2 %	14 %			4 %
Operating margin (non-GAAP)		26 %	7 %			22 %		25 %	10 %			22 %		25 %	11 %			22 %
Net income attributable to Baidu (non- GAAP)		5,767	187			5,889		7,694	595			7,998		6,956	622			7,267		953	85			996
YOY														21 %	233 %			23 %
QOQ														(10 %)	5 %			(9 %)
Net margin (non-GAAP)		23 %	3 %			18 %		29 %	8 %			23 %		26 %	8 %			21 %
Adjusted EBITDA		8,239	615			8,879		8,229	855			9,116		8,513	963			9,505		1,167	132			1,303
YOY														3 %	57 %			7 %
QOQ														3 %	13 %			4 %
Adjusted EBITDA margin		33 %	8 %			27 %		31 %	11 %			27 %		32 %	12 %			28 %
(1)  Includes share-based compensation as follows:
Cost of revenues		45	39			84		160	34			194		107	32			139		15	4			19
Selling, general and administrative		375	105			480		356	90			446		290	68			358		40	9			49
Research and development		978	61			1,039		1,358	45			1,403		732	46			778		100	8			108
Total share-based compensation		1,398	205			1,603		1,874	169			2,043		1,129	146			1,275		155	21			176
(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
		September 30, 2022 (RMB)				June 30, 2023 (RMB)				September 30, 2023 (RMB)				September 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		8,543	196	8,739		9,746	886	10,632		8,694	831	9,525		1,192	114	1,306
Net cash provided by (used in) investing activities		7,603	407	8,010		7,309	(421)	6,888		(11,345)	(55)	(11,400)		(1,555)	(8)	(1,563)
Net cash (used in) provided by financing activities		(5,967)	(106)	(6,073)		1,908	(1,176)	732		(5,253)	269	(4,984)		(720)	37	(683)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		1,980	60	2,040		496	128	624		153	5	158		21	1	22
Net increase (decrease) in cash, cash equivalents and restricted cash		12,159	557	12,716		19,459	(583)	18,876		(7,751)	1,050	(6,701)		(1,062)	144	(918)
Cash, cash equivalents and restricted cash
At beginning of period		50,662	3,019	53,681		30,355	5,665	36,020		49,814	5,082	54,896		6,828	697	7,525
At end of period		62,821	3,576	66,397		49,814	5,082	54,896		42,063	6,132	48,195		5,766	841	6,607
Net cash provided by operating activities		8,543	196	8,739		9,746	886	10,632		8,694	831	9,525		1,192	114	1,306
Less: Capital expenditures		(2,140)	(48)	(2,188)		(2,693)	(13)	(2,706)		(3,525)	(4)	(3,529)		(483)	(1)	(484)
Free cash flow		6,403	148	6,551		7,053	873	7,926		5,169	827	5,996		709	113	822
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
		September 30, 2022 (RMB)				June 30, 2023 (RMB)				September 30, 2023 (RMB)				September 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		4,982	310	5,317		4,568	610	5,210		5,498	747	6,274		754	102	860
Add: Share-based compensation expenses		1,398	205	1,603		1,874	169	2,043		1,129	146	1,275		155	21	176
Add: Amortization and impairment of intangible assets(1)		56	10	66		74	7	81		45	2	47		5	-	5
Add: Contingent loss(4)		214	-	214		-	-	-		-	-	-		-	-	-
Operating income (non-GAAP)		6,650	525	7,200		6,516	786	7,334		6,672	895	7,596		914	123	1,041
Add:  Depreciation of fixed assets		1,589	90	1,679		1,713	69	1,782		1,841	68	1,909		253	9	262
Adjusted EBITDA		8,239	615	8,879		8,229	855	9,116		8,513	963	9,505		1,167	132	1,303
Net income (loss) attributable to Baidu		25	(395)	(146)		5,012	365	5,210		6,436	476	6,681		882	65	916
Add: Share-based compensation expenses		1,394	205	1,497		1,872	169	1,949		1,128	146	1,194		155	20	164
Add: Amortization and impairment of intangible assets(1)		50	10	56		61	7	65		43	2	44		6	-	6
Add: Disposal (gain)		(6)	-	(6)		(919)	(89)	(959)		(753)	-	(753)		(103)	-	(103)
Add: Impairment of long-term investments		1,042	376	1,230		270	155	340		46	-	46		6	-	6
Add: Fair value loss (gain) of long-term investments		3,149	(27)	3,135		1,239	(4)	1,237		(384)	(2)	(385)		(53)	-	(53)
Add: Reconciling items on equity method investments(2)		237	16	245		296	(9)	292		572	-	572		78	-	78
Add: Contingent loss(4)		214	-	214		-	-	-		-	-	-		-	-	-
Add: Tax effects on non-GAAP adjustments(3)		(338)	2	(336)		(137)	1	(136)		(132)	-	(132)		(18)	-	(18)
Net income attributable to Baidu (non-GAAP)		5,767	187	5,889		7,694	595	7,998		6,956	622	7,267		953	85	996
Diluted earnings per ADS				(0.87)				14.17				18.22				2.50
Add:  Accretion of the redeemable noncontrolling interests				0.45				0.50				0.53				0.07
Add:  Non-GAAP adjustments to earnings per ADS				17.29				7.88				1.65				0.23
Diluted earnings per ADS (non-GAAP)				16.87				22.55				20.40				2.80
(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 contingent loss pertaining to legal proceeding involving former advertising agency.

 

 

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SOURCE Baidu, Inc.

FAQ

What are Baidu, Inc.'s (BIDU) total revenues for Q3 2023?

Baidu, Inc. reported total revenues of RMB 34.4 billion ($4.72 billion) for Q3 2023, marking a 6% year-over-year growth.

How much did Baidu, Inc.'s (BIDU) net income grow in Q3 2023?

Net income to Baidu increased by 28% to RMB 6.7 billion ($916 million) in Q3 2023.

What is the significance of Baidu, Inc.'s (BIDU) new foundation model ERNIE 4.0?

Baidu launched ERNIE 4.0, its most powerful foundation model, which is expected to drive sustained multi-year revenue and profit expansion within the ERNIE and ERNIE Bot ecosystem.

What is the impact of Baidu, Inc.'s (BIDU) new appointment of an independent director?

Baidu has appointed Ms. Sandy Ran Xu as an independent director of the Board of Directors, effective from January 1, 2024. Ms. Xu brings extensive experience from her roles at JD.com and PricewaterhouseCoopers, adding valuable expertise to the company's leadership.