Baidu Announces Second Quarter 2023 Results

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.