Baidu Announces First Quarter 2022 Results

BEIJING, May 26, 2022 /PRNewswire/ -- Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888) ("Baidu" or the "Company"), a leading AI company with strong Internet foundation, today announced its unaudited financial results for the first quarter ended March 31, 2022.

"Baidu delivered solid first quarter results, especially with regard to our cloud and intelligent driving businesses. Baidu AI Cloud reported another quarter of strong revenue growth and Apollo Go was granted the first permit in China to provide driverless ride-hailing services on public roads in Beijing," said Robin Li, Co-founder and CEO of Baidu. "Since mid-March, our business has been negatively impacted by the recent COVID-19 resurgence in China. Although challenges related to the virus continue to pressure our near term business operations, we remain confident that our new AI businesses will boost the long-term growth of Baidu and contribute to China's innovation-driven economy and sustainable development."

"Revenues from Baidu Core remained healthy with non-ad revenues increasing by 35% year over year, driven by Baidu AI Cloud, which grew 45% year over year in the quarter," said Rong Luo, CFO of Baidu. "Looking ahead, we remain committed to quality revenue growth and an enduring business model. In addition, we will further enhance our overall operational efficiency to drive long-term growth."

First Quarter 2022 Financial Highlights^[1]

Operational Highlights  

Corporate

• Baidu released its annual ESG Report in May 2022, which details Baidu's ESG policies and sustainability initiatives (http://esg.baidu.com/en/esg_download.html).

AI Cloud

• PaddlePaddle developer community has grown to 4.77 million and has served 180,000 businesses and created 560,000 models, as of May 20, 2022.
• Baidu ACE smart transportation has been adopted by 41 cities, up from 16 cities a year ago, based on contract value of over RMB10 million, as of the end of the first quarter of 2022.

Intelligent Driving

• Baidu received a nomination letter from Dongfeng Motor, a Top 3 domestic automaker, in April 2022, indicating that Dongfeng Motor intends to adopt Apollo Self Driving (ANP, AVP, HD Map) in one of its popular models. This followed the nomination letter from BYD earlier this year.
• On April 28^th 2022, Apollo Go was granted the permits to provide driverless ride hailing services on public roads of the Yizhuang region of Beijing. Apollo also received the first permits in Chongqing to conduct driverless testing on May 20^th, 2022.
• Apollo Go provided 196K rides in the first quarter of 2022. 
• Apollo Go is now available in ten cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Changsha, Cangzhou, Yangquan, Wuzhen Water Town in Jiaxing and Wuhan. Apollo Go expanded into Wuzhen Water Town in Jiaxing on March 26, 2022 and Wuhan on May 10, 2022.

Other Growth Initiatives

• Xiaodu again ranked No.1 in smart display shipments globally for 2021, according to Strategy Analytics and Canalys. Xiaodu continues to be ranked No.1 in smart speaker shipments in China for 2021, according to Strategy Analytics, IDC and Canalys.

Mobile Ecosystem

• In March, Baidu App's MAUs reached 632 million, up 13% year over year, and daily logged in users reached 83%.
• In March, Baidu Smart Mini Program ("SMPs") MAUs reached 508 million, up 22% year over year, and the number of SMPs grew by 26% year over year.
• Revenue from Managed Page grew by 31% and reached 47% of Baidu Core's online marketing revenue in the first quarter of 2022.

iQIYI

• iQIYI's average daily number of total subscribing members for the quarter was 101 million, compared to 105 million for the first quarter of 2021 and 97 million for the fourth quarter of 2021.

First Quarter 2022 Financial Results

Total revenues were RMB 28.4 billion ($4.48 billion), increasing 1% year over year.

• Revenue from Baidu Core was RMB 21.4 billion ($3.37 billion), increasing 4% year over year; online marketing revenue was RMB 15.7 billion ($2.47 billion), decreasing 4% year over year, and non-online marketing revenue was RMB 5.7 billion ($903 million), up 35% year over year, driven by cloud and other AI-powered businesses.
• Revenue from iQIYI was RMB 7.3 billion ($1.15 billion), decreasing 9% year over year.

Cost of revenues was RMB 15.5 billion ($2.45 billion), increasing 4% year over year, primarily due to an increase in cost of goods sold, traffic acquisition costs, bandwidth costs, and other costs related to new AI business, offset by a decrease in content costs.

Selling, general and administrative expenses were RMB 4.7 billion ($735 million), decreasing 11% year over year, primarily due to a decrease in channel spending, promotional marketing and expected credit losses.

Research and development expense was RMB 5.6 billion ($885 million), increasing 10% year over year, primarily due to an increase in personnel related expense.

Operating income was RMB 2.6 billion ($410 million). Baidu Core operating income was RMB 2.5 billion ($398 million), and Baidu Core operating margin was 12%. Non-GAAP operating income was RMB 4.0 billion ($630 million). Non-GAAP Baidu Core operating income was RMB 3.7 billion ($581 million), and non-GAAP Baidu Core operating margin was 17%.

Total other loss, net was RMB 3.0 billion ($466 million), which mainly included a fair value loss of RMB 3.0 billion from long-term investments. A significant portion of long-term investments, including but not limited to investments in equity securities of public and private companies, private equity funds and digital assets, is subject to quarterly fair value adjustments, which may contribute to net income volatility in future periods.

Income tax expense was RMB 391 million ($62 million), decreasing 75% year over year, primarily due to a decrease in profit before tax and an increase in deduction on certain expenses that were previously considered non-deductible.

Net loss attributable to Baidu was RMB 885 million ($140 million), and diluted loss per ADS was RMB 2.87 ($0.45). Net loss attributable to Baidu Core was RMB 963 million ($152 million). Non-GAAP net income attributable to Baidu was RMB 3.9 billion ($612 million). Non-GAAP diluted earnings per ADS was RMB 11.22 ($1.77). Non-GAAP net income attributable to Baidu Core was RMB 3.8 billion ($600 million), and non-GAAP net margin for Baidu Core was 18%.

Adjusted EBITDA was RMB 5.5 billion ($867 million) and adjusted EBITDA margin was 19%. Adjusted EBITDA for Baidu Core was RMB 5.1 billion ($805 million) and adjusted EBITDA margin for Baidu Core was 24%. 

As of March 31, 2022, cash, cash equivalents, restricted cash and short-term investments were RMB 191.0 billion ($30.13 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 185.8 billion ($29.31 billion). Free cash flow was negative RMB 107 million ($17 million), and free cash flow excluding iQIYI was RMB 1.1 billion ($175 million).

Conference Call Information

Baidu's management will hold an earnings conference call at 8.00AM on May 26, 2022, U.S. Eastern Time (8.00PM on May 26, 2022, Beijing Time).

Please register in advance of the conference call using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID by email.

For pre-registration, please click

http://apac.directeventreg.com/registration/event/3917105

It will automatically direct you to the registration page of "Baidu Q1 2022 Earnings Conference Call", where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter " 3917105".

In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), Direct Event passcode and unique registrant ID) provided in the confirmation email that you have received following your pre-registration.

Additionally, a live and archived webcast of this conference call will be available at http://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.

Contacts

Investors Relations, Baidu, Inc.
Tel: +86-10-5992-8888
Email: ir@baidu.com

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 and iQIYI's non-recurring employee severance costs.

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, contingent loss pertaining to legal proceeding in relation to former advertising agencies, iQIYI's non-recurring employee severance costs, disposal gain or loss, impairment of long-term investments, fair value change of long-term investments, charitable donation from Baidu, 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 shares, 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, contingent loss pertaining to legal proceeding in relation to former advertising agencies, iQIYI's non-recurring employee severance costs, 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.