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Baidu Announces First Quarter 2016 Results
"We had an excellent start to 2016, and we've made great strides toward realization of our vision to connect people with information and services and provide an integrated solution to our customers," said
"We are pleased to deliver very strong results for the first quarter, and our integrated online marketing and transaction services platform continued to exhibit strength and momentum," said
First Quarter 2016 Operational Highlights
- Mobile search monthly active users (MAUs) were 663 million for the month of
March 2016 , an increase of 9% year-over-year - Mobile maps MAUs were 321 million for the month of
March 2016 , an increase of 19% year-over-year - Gross merchandise value[2] (GMV) for Transaction Services totaled
RMB16.0 billion ($2.5 billion ) for the first quarter of 2016, an increase of 268% year-over-year - Baidu Wallet activated accounts reached 65 million at the end of
March 2016 , an increase of 152% year-over-year
Changes to Board Composition
- Mr.
William Decker will step down from the Company's board of directors (the "Board"), effective onApril 29, 2016 . Mr. Decker has served as a member of the Board and chairman of the audit committee of the Board sinceOctober 2005 ; - Mr.
Brent Callinicos , a member of the Board and audit committee, has been appointed as the chairman of the audit committee, effective onApril 29 , 2016.
First Quarter 2016 Financial Highlights
- Total revenues in the first quarter of 2016 were
RMB15.821 billion ($2.454 billion ), a 31.2% year-over-year increase, excluding Qunar[3] in the first quarter of 2015. Mobile revenue represented 60% of total revenues for the first quarter of 2016, compared to 50% for the corresponding period in 2015. - Operating profit in the first quarter of 2016 was
RMB2.211 billion ($342.9 million ), a 2.6% increase from the corresponding period in 2015. Transaction Services reduced non-GAAP operating margins by 25.7 percentage points and iQiyi further reduced non-GAAP operating margins by 8.7 percentage points for the first quarter of 2016. - Net income attributable to
Baidu in the first quarter of 2016 wasRMB1.987 billion ($308.1 million ), an 18.9% decrease from the corresponding period in 2015. Diluted earnings attributable toBaidu per ADS for the first quarter of 2016 wereRMB5.38 ($0.84) ; non-GAAP net income attributable to Baidu[4] in the first quarter of 2016 wasRMB2.359 billion ($365.8 million ), a 13.9% decrease from the corresponding period in 2015; non-GAAP diluted earnings per ADS[5] for the first quarter of 2016 wereRMB6.80 ($1.06) .
In the following section, comparison and analysis are provided based on reported consolidated financial results. For ease of comparison, a table with apples-to-apples adjusted financials and metrics excluding Qunar can be found at the end of the following section.
First Quarter 2016 Results
Online marketing revenues for the first quarter of 2016 were
Revenue per online marketing customer for the first quarter of 2016 was approximately
Traffic acquisition cost as a component of cost of revenues was
Bandwidth costs as a component of cost of revenues were
Depreciation costs as a component of cost of revenues were
Operational costs as a component of cost of revenues were
Content costs as a component of cost of revenues were
Selling, general and administrative expenses were
Research and development expenses were
Share-based compensation expenses, which were allocated to related operating costs and expense line items, were
Operating profit was
Income tax expense was
Net income attributable to
Non-GAAP net income attributable to
As of
Adjusted EBITDA was
Summary of adjusted financial information (excluding Qunar)[7]
(RMB in millions, unless otherwise noted)
Three months ended March 31, |
YoY variance |
|||||
2016 |
2015 |
|||||
Adjusted revenues |
15,821 |
12,055 |
31.2% |
|||
Active online marketing customer (000) |
587 |
473 |
24.1% |
|||
Revenue per active online marketing customer (RMB) |
25,400 |
25,000 |
1.6% |
|||
Adjusted cost of revenues |
7,563 |
5,151 |
46.8% |
|||
Adjusted selling, general and administrative expenses |
3,946 |
2,403 |
64.2% |
|||
Adjusted research and development expenses |
2,101 |
2,000 |
5.0% |
|||
Adjusted operating profit |
2,211 |
2,501 |
(11.6%) |
Outlook for Second Quarter 2016
Conference Call Information
Dial-in details for the earnings conference call are as follows:
International: |
+65 67135090 |
China: |
4006208038 |
US: |
+1 8456750437 |
UK: |
+44 2036214779 |
Hong Kong: |
+852 30186771 |
Passcode for all regions: |
90850148 |
A replay of the conference call may be accessed by phone at the following number until May 6, 2016:
International: |
+61 2 8199 0299 |
Passcode: |
90850148 |
Additionally, a live and archived webcast of this conference call will be available at http://ir.baidu.com.
About
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 the second quarter 2016 and quotations from management in this announcement, as well as
About Non-GAAP Financial Measures
To supplement
Non-GAAP operating profit represents operating profit excluding share-based compensation expenses.
Non-GAAP net income attributable to
Non-GAAP diluted earnings per ADS represents diluted earnings per ADS calculated based on non-GAAP net income attributable to
Adjusted EBITDA represents operating profit excluding depreciation, amortization and share-based compensation expenses.
Free cash flow represents net cash provided by operating activities less capital expenditures.
For more information on non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measures".
For investor and media inquiries, please contact:
Tel: +86-10-5992-4958
Investor inquiries email: ir@baidu.com
Media inquiries email: intlcomm@baidu.com
[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 RMB6.4480 to US$1.00, the effective noon buying rate as of March 31, 2016, in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. |
[2] |
Gross merchandise value (GMV) is defined as GMV generated by the Baidu platform, through products such as Baidu Nuomi, Baidu Takeout Delivery and Baidu Wallet. GMV is defined as the value of confirmed orders of products and services, regardless of whether the service has been consumed or delivered. |
[3] |
Qunar Cayman Islands Limited ("Qunar") financials were consolidated in Baidu's financial statements from July 2011 to October 26, 2015. Following Baidu's exchange of Qunar shares with Ctrip, Baidu deconsolidated Qunar's financials after October 26, 2015. |
[4] |
Non-GAAP net income attributable to Baidu represents net income attributable to Baidu excluding share-based compensation expenses and the gain or loss associated with the issuance of the shares by our equity method investees at a price higher or lower than our carrying value per share. |
[5] |
Non-GAAP diluted earnings per ADS represents diluted earnings per ADS calculated based on non-GAAP net income attributable to Baidu. |
[6] |
The number of active online marketing customers and revenue per online active customer exclude our group-buying related businesses for consistency with previous reporting. |
[7] |
The adjusted figures in the table only exclude Qunar related figures from Baidu's consolidated results for the first quarter of 2015. Share-based compensation was allocated to related operating costs and expense line items. |
Baidu, Inc. |
|||||
Condensed Consolidated Statements of Income |
|||||
Three Months Ended |
|||||
March 31, |
December 31, |
March 31, |
|||
(In RMB thousands except for share, per share (or ADS) information) |
2015 |
2015 |
2016 |
||
Unaudited |
Unaudited |
Unaudited |
|||
Revenues: |
|||||
Online marketing services |
12,518,757 |
17,610,379 |
14,930,530 |
||
Other services |
205,859 |
1,088,415 |
890,042 |
||
Total revenues |
12,724,616 |
18,698,794 |
15,820,572 |
||
Operating costs and expenses: |
|||||
Cost of revenues (note 1, 2) |
(5,326,103) |
(8,149,327) |
(7,563,184) |
||
Selling, general and administrative (note 2) |
(2,956,867) |
(4,527,813) |
(3,945,944) |
||
Research and development (note 2) |
(2,286,333) |
(2,486,778) |
(2,100,707) |
||
Total operating costs and expenses |
(10,569,303) |
(15,163,918) |
(13,609,835) |
||
Operating profit |
2,155,313 |
3,534,876 |
2,210,737 |
||
Other income: |
|||||
Interest income |
561,213 |
572,725 |
596,120 |
||
Interest expense |
(199,128) |
(299,372) |
(268,389) |
||
Foreign exchange income(loss), net |
8,992 |
106,007 |
(66,166) |
||
Gain (loss) from equity method investments |
(7,979) |
23,119 |
(117,092) |
||
Other income, net |
90,875 |
24,294,280 |
298,119 |
||
Total other income |
453,973 |
24,696,759 |
442,592 |
||
Income before income taxes |
2,609,286 |
28,231,635 |
2,653,329 |
||
Income taxes |
(541,000) |
(3,579,909) |
(674,750) |
||
Net income |
2,068,286 |
24,651,726 |
1,978,579 |
||
Less: net loss attributable to noncontrolling interests |
(380,994) |
(60,085) |
(8,252) |
||
Net income attributable to Baidu |
2,449,280 |
24,711,811 |
1,986,831 |
||
Earnings per share for Class A and Class B ordinary shares: |
|||||
Net income attributable to Baidu -Basic |
67.86 |
711.02 |
53.95 |
||
Net income attributable to Baidu -Diluted |
67.57 |
709.15 |
53.82 |
||
Earnings per ADS (1 Class A ordinary share equals 10 ADSs ): |
|||||
Net income attributable to Baidu -Basic |
6.79 |
71.10 |
5.40 |
||
Net income attributable to Baidu -Diluted |
6.76 |
70.92 |
5.38 |
||
Weighted average number of Class A and Class B ordinary shares outstanding: |
|||||
Basic |
35,112,842 |
34,588,703 |
34,599,297 |
||
Diluted |
35,267,371 |
34,679,673 |
34,681,988 |
||
(1) Cost of revenues are detailed as follows: |
|||||
Sales tax and surcharges |
(948,209) |
(1,259,925) |
(1,047,564) |
||
Traffic acquisition costs |
(1,721,629) |
(2,616,319) |
(2,233,208) |
||
Bandwidth costs |
(849,628) |
(1,000,957) |
(1,088,038) |
||
Depreciation costs |
(588,648) |
(692,046) |
(707,332) |
||
Operational costs |
(600,857) |
(1,181,667) |
(1,092,153) |
||
Content costs |
(608,420) |
(1,381,875) |
(1,382,468) |
||
Share-based compensation expenses |
(8,712) |
(16,538) |
(12,421) |
||
Total cost of revenues |
(5,326,103) |
(8,149,327) |
(7,563,184) |
||
(2) Includes share-based compensation expenses as follows: |
|||||
Cost of revenues |
(8,712) |
(16,538) |
(12,421) |
||
Selling, general and administrative |
(117,855) |
(100,353) |
(105,036) |
||
Research and development |
(164,509) |
(224,129) |
(191,605) |
||
Total share-based compensation expenses |
(291,076) |
(341,020) |
(309,062) |
Baidu, Inc. |
|||
Condensed Consolidated Balance Sheets |
|||
December 31 |
March 31 |
||
(In RMB thousands except for number of shares and per share data) |
2015 |
2016 |
|
Audited |
Unaudited |
||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
9,959,932 |
12,593,244 |
|
Restricted cash |
95,997 |
229,887 |
|
Short-term investments |
57,969,242 |
58,752,895 |
|
Accounts receivable, net |
3,927,256 |
3,539,699 |
|
Amounts due from related parties |
1,940,559 |
66,105 |
|
Other assets, current |
4,340,677 |
4,416,235 |
|
Total current assets |
78,233,663 |
79,598,065 |
|
Non-current assets: |
|||
Fixed assets, net |
10,627,127 |
10,489,450 |
|
Intangible assets, net |
3,334,619 |
3,421,210 |
|
Goodwill |
15,395,573 |
15,395,573 |
|
Long-term investments, net |
37,958,591 |
38,299,459 |
|
Amounts due from related parties |
9,725 |
9,745 |
|
Deferred tax assets, net |
1,008,174 |
1,269,036 |
|
Other assets, non-current |
1,285,836 |
1,669,032 |
|
Total non-current assets |
69,619,645 |
70,553,505 |
|
Total assets |
147,853,308 |
150,151,570 |
|
LIABILITIES AND EQUITY |
|||
Current liabilities: |
|||
Short-term loans |
100,000 |
174,200 |
|
Accounts payable and accrued liabilities |
17,840,192 |
18,815,173 |
|
Customer advances and deposits |
5,420,230 |
5,148,409 |
|
Deferred revenue |
375,672 |
640,983 |
|
Deferred income |
559,855 |
556,766 |
|
Long-term loans, current portion |
974,820 |
969,780 |
|
Capital lease obligation |
46,088 |
38,984 |
|
Amounts due to related parties |
785,945 |
137,761 |
|
Total current liabilities |
26,102,802 |
26,482,056 |
|
Non-current liabilities: |
|||
Deferred income |
17,413 |
17,969 |
|
Long-term loans |
3,239,676 |
3,224,387 |
|
Notes payable |
30,702,116 |
30,553,131 |
|
Deferred tax liabilities |
3,441,290 |
3,409,548 |
|
Capital lease obligation |
8,435 |
587 |
|
Other non-current liabilities |
125,860 |
108,766 |
|
Total non-current liabilities |
37,534,790 |
37,314,388 |
|
Total liabilities |
63,637,592 |
63,796,444 |
|
Redeemable noncontrolling interests |
3,947,879 |
4,047,838 |
|
Equity |
|||
Class A Ordinary Shares, par value US$0.00005 per share, 825,000,000 shares authorized, and 27,113, 541 shares and 27,136,692 shares issued and outstanding as at December 31, 2015 and March 31, 2016 |
12 |
12 |
|
Class B Ordinary Shares, par value US$0.00005 per share, 35,400,000 shares authorized, and 7,492,921 shares and 7,492,921 shares issued and outstanding as at December 31, 2015 and March 31, 2016 |
3 |
3 |
|
Additional paid-in capital |
6,402,349 |
6,744,598 |
|
Retained earnings |
74,659,355 |
76,525,815 |
|
Accumulated other comprehensive loss |
(806,056) |
(967,077) |
|
Total Baidu, Inc. shareholders' equity |
80,255,663 |
82,303,351 |
|
Noncontrolling interests |
12,174 |
3,937 |
|
Total equity |
80,267,837 |
82,307,288 |
|
Total liabilities, redeemable noncontrolling interests, and equity |
147,853,308 |
150,151,570 |
Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measures (in RMB thousands except for share and per ADS information, unaudited) |
|||||
Three months ended |
|||||
March 31, 2015 |
December 31, 2015 |
March 31, 2016 |
|||
Operating profit |
2,155,313 |
3,534,876 |
2,210,737 |
||
Add: Share-based compensation expenses |
291,076 |
341,020 |
309,062 |
||
Non-GAAP operating profit |
2,446,389 |
3,875,896 |
2,519,799 |
||
Add: Depreciation of fixed assets |
667,969 |
772,684 |
795,589 |
||
Add: Amortization of intangible assets |
181,866 |
166,632 |
141,875 |
||
Adjusted EBITDA |
3,296,224 |
4,815,212 |
3,457,263 |
||
Three months ended |
|||||
March 31, 2015 |
December 31, 2015 |
March 31, 2016 |
|||
Net income attributable to Baidu |
2,449,280 |
24,711,811 |
1,986,831 |
||
Add: Share-based compensation expenses |
291,076 |
341,020 |
309,062 |
||
Add: Loss associated with the dilution of an equity method investee |
- |
- |
62,858 |
||
Non-GAAP net income attributable to Baidu |
2,740,356 |
25,052,831 |
2,358,751 |
||
Weighted average number of ADS used in computing non- |
352,673,707 |
346,796,727 |
346,819,877 |
||
Non-GAAP diluted earnings per ADS |
7.77 |
72.24 |
6.80 |
Reconciliation from net cash provided by operating activities to free cash flow (in RMB thousands, unaudited) |
||||||
Three months ended |
As a % of |
Three months ended |
As a % of |
Three months ended |
As a % of |
|
March 31, 2015 |
total revenues |
December 31, 2015 |
total revenues |
March 31, 2016 |
total revenues |
|
Net cash provided by operating activities |
2,839,481 |
22% |
6,070,158 |
32% |
4,742,232 |
30% |
Less: Capital expenditures |
(1,021,341) |
-8% |
(1,423,527) |
-8% |
(825,565) |
-5% |
Free cash flow |
1,818,140 |
14% |
4,646,631 |
25% |
3,916,667 |
25% |
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