BEIJING, April 27 /PRNewswire-Asia/ -- Baidu, Inc. (Nasdaq: BIDU), the
leading Chinese language Internet search provider, today announced its
unaudited financial results for the first quarter ended March 31, 2009(1).
(Logo: http://www.newscom.com/cgi-bin/prnh/20081103/BAIDULOGO )
First Quarter 2009 Highlights
-- Total revenues in the first quarter of 2009 were RMB810.7 million
($118.6 million), a 41.1% increase from the corresponding period in
2008.
-- Operating profit in the first quarter of 2009 was RMB198.5 million
($29.1 million), a 34.7% increase from the corresponding period in
2008.
-- Net income in the first quarter of 2009 was RMB181.1 million ($26.5
million), a 23.5% increase from the corresponding period in 2008.
Diluted earnings per share ("EPS") for the first quarter of 2009 was
RMB5.22 ($0.76); diluted EPS excluding share-based compensation
expenses (non-GAAP) for the first quarter of 2009 was RMB5.89
($0.86). Costs and expenses related to Baidu's Japan operations for
the first quarter of 2009 were RMB39.5 million ($5.8 million), which
reduced diluted EPS by RMB1.14 ($0.17).
(1) This announcement contains translations of certain RMB amounts into
U.S. dollars at specified rates solely for the convenience of the
reader. Unless otherwise noted, all translations from RMB to U.S.
dollars are made at a rate of RMB6.8329 to US$1.00, the effective
noon buying rate as of March 31, 2009 in The City of New York for
cable transfers of RMB as certified for customs purposes by the
Federal Reserve Bank of New York.
"Despite the typical seasonality associated with the Chinese New Year
holiday and overall macro economic challenges, we were able to deliver strong
results by focusing on executing initiatives that drove overall performance,"
said Robin Li, Baidu's chairman and CEO. "In this uncertain economic
environment, we see tremendous opportunity to reinforce to our customers the
inherent advantages of our pay-for-performance platform. We are confident in
our ability to continue growing."
Jennifer Li, Baidu's chief financial officer, added, "During the quarter,
our balanced approach to controlling costs allowed us to maintain healthy
margins even as we continued to invest in important initiatives. Going forward,
we will continue to invest in a disciplined fashion, particularly in the areas
of user experience, monetization, operating efficiency and branding."
Recent Business Updates
On April 15, 2009, as a part of Project Aladdin, an initiative aimed at
improving search comprehensiveness by uncovering useful parts of the hidden
web, Baidu launched the beta version of an open data sharing platform. The new
platform allows webmasters and developers to submit data to Baidu in order to
generate direct search results for dynamic information.
On April 20, 2009, the company publicly launched Baidu Online Marketing
Professional Edition, also known as Phoenix Nest, an enhanced bidding platform
for online marketing customers. This platform offers customers more choices
for keywords, enhanced tools for managing marketing budget, and additional
data points to analyze ROI. For Baidu's users, we believe that Professional
Edition will produce more relevant paid search results, resulting in an
improved search experience.
First Quarter 2009 Results
Baidu reported total revenues of RMB810.7 million ($118.6 million) for the
first quarter of 2009, representing a 41.1% increase from the corresponding
period in 2008.
Online marketing revenues for the first quarter of 2009 were RMB810.2
million ($118.6 million), representing a 41.5% increase from the corresponding
period in 2008. Baidu had more than 185,000 active online marketing customers
in the first quarter of 2009, representing a 14.9% increase from the
corresponding period in 2008 and a 6.1% decrease from the previous quarter.
Revenue per online marketing customer for the first quarter was approximately
RMB4,400 ($644), a 22.2% increase from the corresponding period in 2008 and a
decrease of 4.3% from the previous quarter. The sequential decreases were
primarily due to the usual seasonality associated with the Chinese New Year, a
weaker economy, and the carry-over effect of the actions Baidu took near the
end of 2008 to improve the quality of its customer base.
Traffic acquisition cost (TAC) as a component of cost of revenues was
RMB124.1 million ($18.2 million), representing 15.3% of total revenues, as
compared to 13.3% in the corresponding period in 2008 and 14.6% in the fourth
quarter of 2008. The increase in TAC as a percentage of total revenues
reflects the continued fast growth of Baidu's Union business.
Bandwidth costs as a component of cost of revenues were RMB48.3 million
($7.1 million), representing 6.0% of total revenues, compared to 6.7% in the
corresponding period in 2008. Depreciation costs as a component of cost of
revenues were RMB59.6 million ($8.7 million), representing 7.4% of total
revenues, compared to 9.3% in the corresponding period in 2008. The decreases
in bandwidth and depreciation costs as percentages of total revenues reflect
efficiency improvement as well as increased scalability of investment in
capital expenditure.
Selling, general and administrative expenses were RMB204.3 million ($29.9
million), representing an increase of 39.0% from the corresponding period in
2008, primarily due to the increase in marketing expense as part of our
branding efforts.
Research and development expenses were RMB85.7 million ($12.5 million),
representing a 66.7% increase from the corresponding period in 2008, primarily
due to the increased number of research and development personnel.
Share-based compensation expenses, which were allocated to related
operating costs and expense line items, increased in aggregate by 44.9% to
RMB23.5 million ($3.4 million) in the first quarter of 2009 from RMB16.2
million in the corresponding period in 2008. The increase in share-based
compensation expenses was primarily due to an increase in options and
restricted shares awarded to employees.
Operating profit was RMB198.5 million ($29.1 million), representing a
34.7% increase from the corresponding period in 2008. Operating profit
excluding share-based compensation expenses (non-GAAP) was RMB222.0 million
($32.5 million), a 35.7% increase from the corresponding period in 2008.
Income tax expense was RMB26.9 million ($3.9 million), compared to an
income tax expense of RMB10.9 million for the corresponding period in 2008.
The effective tax rate for the first quarter of 2009 was 12.9% as compared to
6.9% for the corresponding period in 2008. The increase in effective tax rate
was primarily due to the expiration or lapsing of tax holidays previously
enjoyed by some Baidu entities.
Net income was RMB181.1 million ($26.5 million), representing a 23.5%
increase from the corresponding period in 2008. Basic and diluted EPS for the
first quarter of 2009 amounted to RMB5.25 ($0.77) and RMB5.22 ($0.76),
respectively.
Net income excluding share-based compensation expenses (non-GAAP) was
RMB204.6 million ($29.9 million), a 25.7% increase from the corresponding
period in 2008. Basic and diluted EPS excluding share based compensation
expense (non-GAAP) for the first quarter of 2009 amounted to RMB5.93 ($0.87)
and RMB5.89 ($0.86), respectively.
As of March 31, 2009, the Company had cash, cash equivalents and
short-term investments of RMB2.8 billion ($405.5 million). Net operating cash
inflow and capital expenditures for the first quarter of 2009 were RMB247.4
million ($36.2 million) and RMB41.7 million ($6.1 million), respectively.
Adjusted EBITDA (non-GAAP), defined in this announcement as earnings
before interest, taxes, depreciation, amortization, other non-operating income
and share-based compensation expenses, was RMB296.6 million ($43.4 million)
for the first quarter of 2009, representing a 29.9% increase from the
corresponding period in 2008.
Outlook for Second Quarter 2009
Baidu currently expects to generate total revenues in an amount ranging
from RMB1,070 million ($157 million) to RMB1,100 million ($161 million) for
the second quarter of 2009, representing a 32% to 36% sequential increase.
This forecast reflects Baidu's current and preliminary view, which is subject
to change.
Conference Call Information
Baidu's management will hold an earnings conference call at 8 PM on April
27, 2009 U.S. Eastern Daylight Time (8 AM on April 28, 2009 Beijing/Hong Kong
time).
Dial-in details for the conference call are as follows:
US: +1-617-614-3452
UK: +44-207-365-8426
Hong Kong: +852-3002-1672
Passcode for all regions: 50990188
A replay of the conference call may be accessed by phone at the following
number until May 4, 2009:
International: +1-617-801-6888
Passcode: 98320803
Additionally, a live and archived webcast of this conference call will be
available at http://ir.baidu.com .
About Baidu
Baidu, Inc. is the leading Chinese language Internet search provider. As a
technology-based media company, Baidu aims to provide the best way for people
to find information. In addition to serving Internet search users, Baidu
provides an effective platform for businesses to reach potential customers.
Baidu's ADSs, each of which represents one Class A ordinary share, currently
trade on the NASDAQ Global Select Market under the symbol "BIDU."
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, the outlook for second quarter 2009 and
quotations from management in this announcement, as well as Baidu's 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 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 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: our growth strategies; our future
business development, including development of new products and services; our
ability to attract and retain users and customers; competition in the Chinese
and Japanese language Internet search markets; competition for online
marketing customers; changes in our revenues and certain cost or expense items
as a percentage of our 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 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, Japan and elsewhere. Further information
regarding these and other risks is included in our annual report on Form 20-F
and other documents filed with the Securities and Exchange Commission. 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 April 27, 2009, and Baidu
undertakes no duty to update such information, except as required under
applicable law.
About Non-GAAP Financial Measures
To supplement Baidu's consolidated financial results presented in
accordance with GAAP, Baidu uses the following measures defined as non-GAAP
financial measures by the SEC: adjusted EBITDA, operating profit excluding
share-based compensation expenses, net income excluding share-based
compensation expenses, and basic and diluted EPS excluding share-based
compensation expenses. 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. For more
information on these non-GAAP financial measures, please see the tables
captioned "Reconciliations of non-GAAP results of operations measures to the
nearest comparable GAAP measures" and "Reconciliation from net cash provided
by operating activities to adjusted EBITDA" set forth at the end of this
release.
Baidu believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its performance and liquidity by excluding
certain expenses, particularly share-based compensation expenses, that may not
be indicative of its operating We believe that both management and investors
benefit from referring to these non-GAAP financial measures in assessing our
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. Baidu has computed its non-GAAP
financial measures using the same consistent method from quarter to quarter
since April 1, 2006. We believe 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 share-based compensation charge that has been and
will continue to be for the foreseeable future a significant recurring expense
in our results of operations. A limitation of using non-GAAP Adjusted EBITDA
is that it does not include all items that impact our net income for the
period. Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from each non-GAAP measure.
The accompanying tables have more details on the reconciliations between GAAP
financial measures that are most directly comparable to non-GAAP financial
measures.
Baidu, Inc.
Condensed Consolidated Balance Sheets
March 31, December 31, March 31,
(in RMB thousands) 2009 2008 2008
Unaudited Audited Unaudited
ASSETS
Current assets:
Cash and cash equivalents 2,494,320 2,362,171 1,427,298
Short-term investments 276,329 301,244 238,776
Accounts receivable, net 76,434 92,777 65,432
Prepaid expenses and other
current assets 76,785 80,007 70,330
Receivables from a shareholder -- 10,697 --
Deferred tax assets, net 5,580 5,580 2,587
Total current assets 2,929,448 2,852,476 1,804,423
Non-current assets:
Fixed assets, net 767,159 789,714 678,716
Land use right, net 94,032 94,520 95,984
Intangible assets, net 28,896 31,263 38,932
Goodwill 54,083 51,082 51,086
Investments, net 12,300 12,281 15,061
Deferred tax assets, net 27,679 26,537 20,496
Other non-current assets 85,416 80,118 52,574
Total non-current assets 1,069,565 1,085,515 952,849
TOTAL ASSETS 3,999,013 3,937,991 2,757,272
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued expenses and other
liabilities 410,740 423,029 296,220
Customers' deposits 379,090 422,526 270,169
Deferred revenue 5,662 3,441 12,452
Deferred income 52 332 1,835
Total current liabilities 795,544 849,328 580,676
Non-current liabilities:
Deferred income -- -- 52
Total non-current liabilities -- -- 52
Total liabilities 795,544 849,328 580,728
Shareholders' equity
Class A Ordinary Shares, Par
value US$0.00005 per share,
825,000,000 shares authorized,
and 25,641,847 shares and
25,678,183 shares issued and
outstanding as at December 31,
2008 and March 31, 2009 11 11 10
Class B Ordinary Shares, Par
value US$0.00005 per share,
35,400,000 shares authorized,
and 8,873,986 shares and
8,873,986 shares issued and
outstanding as at December 31,
2008 and March 31, 2009 4 4 4
Additional paid-in capital 1,183,217 1,218,356 1,197,281
Accumulated other
comprehensive loss (116,305) (109,552) (99,085)
Retained earnings 2,136,542 1,979,844 1,078,334
Total shareholders' equity 3,203,469 3,088,663 2,176,544
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 3,999,013 3,937,991 2,757,272
Baidu, Inc.
Condensed Consolidated Statements of Income
For the Three Months Ended
(in RMB thousands except for share, March 31, March 31, December 31,
per share information) 2009 2008 2008
Unaudited Unaudited Unaudited
Revenues:
Online marketing services 810,193 572,710 901,389
Other services 518 1,686 731
Total revenues 810,711 574,396 902,120
Operating costs and expenses:
Cost of revenues (note 1, 2) (322,235) (228,592) (336,543)
Selling, general and administrative
(note 2) (204,300) (147,031) (175,313)
Research and development (note 2) (85,670) (51,406) (85,541)
Total operating costs and expenses (612,205) (427,029) (597,397)
Operating profit 198,506 147,367 304,723
Other income:
Interest income 9,123 10,604 15,320
Exchange loss, net -- (1,708) (2)
Other income, net 385 1,194 10,451
Total other income 9,508 10,090 25,769
Income before income taxes 208,014 157,457 330,492
Income taxes (26,897) (10,859) (41,826)
Net income 181,117 146,598 288,666
Earnings per share for Class A and
Class B ordinary shares:
Basic 5.25 4.29 8.39
Diluted 5.22 4.22 8.31
Weighted average aggregate number of
Class A and Class B ordinary shares
outstanding:
Basic 34,525,338 34,154,776 34,392,036
Diluted 34,727,972 34,765,164 34,740,057
(1) Cost of revenues are detailed as
follows:
Business tax and surcharges (48,868) (35,071) (58,215)
Traffic acquisition costs (124,119) (76,632) (131,352)
Bandwidth costs (48,280) (38,365) (49,245)
Depreciation costs (59,616) (53,194) (57,908)
Operational costs (39,719) (24,415) (38,317)
Share-based compensation expenses (1,633) (915) (1,506)
Total cost of revenues (322,235) (228,592) (336,543)
(2) Includes share-based compensation
expenses as follows:
Cost of revenues (1,633) (915) (1,506)
Selling, general and administrative (11,156) (8,014) (10,220)
Research and development (10,665) (7,252) (9,765)
Total share-based compensation
expenses (23,454) (16,181) (21,491)
Reconciliations of non-GAAP results of operations measures to the nearest
comparable GAAP measures (*) (in RMB thousands, unaudited)
Three months ended March 31, 2008
GAAP Result Adjustment Non-GAAP Results
Operating profit 147,367 16,181 163,548
Three months ended March 31, 2008
GAAP Result Adjustment Non-GAAP Results
Net income 146,598 16,181 162,779
Three months ended December 31, 2008
GAAP Result Adjustment Non-GAAP Results
Operating profit 304,723 21,491 326,214
Three months ended December 31, 2008
GAAP Result Adjustment Non-GAAP Results
Net income 288,666 21,491 310,157
Three months ended March 31, 2009
GAAP Result Adjustment Non-GAAP Results
Operating profit 198,506 23,454 221,960
Three months ended March 31, 2009
GAAP Result Adjustment Non-GAAP Results
Net income 181,117 23,454 204,571
(*) The adjustment is only for share-based compensation.
Reconciliation from net cash provided by operating activities to adjusted
EBITDA(*) (in RMB thousands, unaudited)
Three months ended As a % of
March 31, 2008 total revenues
Net cash provided by operating activities 248,876 43%
Changes in assets and liabilities, net
of effects of acquisitions (21,273) -4%
Income taxes expenses 10,859 2%
Interest income and other, net (10,090) -2%
Adjusted EBITDA 228,372 39%
Three months ended As a % of
December 31, 2008 total revenues
Net cash provided by operating activities 482,108 53%
Changes in assets and liabilities, net
of effects of acquisitions (99,277) -11%
Income taxes expenses 41,826 5%
Interest income and other, net (25,769) -3%
Adjusted EBITDA 398,888 44%
Three months ended As a % of
March 31, 2009 total revenues
Net cash provided by operating activities 247,438 31%
Changes in assets and liabilities, net
of effects of acquisitions 31,799 4%
Income taxes expenses 26,897 3%
Interest income and other, net (9,508) -1%
Adjusted EBITDA 296,626 37%
(*) Definition of adjusted EBITDA: earnings before interest, taxes,
depreciation, amortization, other non-operating income, and
share-based compensation expenses.
For investor inquiries, please contact:
Baidu, Inc.
Victor Tseng
Tel: +86-10-8260-7558
Email: ir@baidu.com
For investor and media inquiries please contact:
China
Brunswick Group (Beijing)
Cynthia He
Tel: +86-10-6566-2256
Email: che@brunswickgroup.com
U.S.
Brunswick Group (New York)
Mike Guerin
Tel: +1-212-333-3810
Email: mguerin@brunswickgroup.com
SOURCE Baidu, Inc.
-0- 04/27/2009
/CONTACT: Baidu, Inc., Victor Tseng, +86-10-8260-7558, ir@baidu.com or
Brunswick Group (Beijing), Cynthia He, +86-10-6566-2256,
che@brunswickgroup.com, and Brunswick Group (New York), Mike Guerin,
+1-212-333-3810, mguerin@brunswickgroup.com, both for Baidu, Inc./
/Photo: http://www.newscom.com/cgi-bin/prnh/20081103/BAIDULOGO /
/Web site: http://www.baidu.com
http://ir.baidu.com/
(BIDU)
CO: Baidu, Inc.
ST: China
IN: CPR ITE MLM
SU: ERN ERP CCA
MS-LG
-- CNM041 --
3293 04/27/2009 17:00 EDT http://www.prnewswire.com