Baidu Announces Fourth Quarter and Fiscal Year 2023 Results
BEIJING, Feb. 28, 2024 /PRNewswire/ -- Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888 (HKD Counter) and 89888 (RMB Counter)) ("Baidu" or the "Company"), a leading AI company with a strong Internet foundation, today announced its unaudited financial results for the quarter and fiscal year ended December 31, 2023.
"Baidu Core reported another solid quarter," said Robin Li, Co-founder and CEO of Baidu. "Throughout 2023, we made significant strides in advancing ERNIE and ERNIE Bot, reinventing our products and services, and achieving breakthroughs in monetization. Concurrently, our core business remained resilient and healthy. Looking ahead, our commitment to Gen-AI and foundation models remains unwavering, paving the way for the [gradual] creation of a new growth engine."
"In the fourth quarter, we maintained our focus on enhancing operational efficiencies," said Rong Luo, CFO of Baidu. "As we look ahead into 2024, our goal is to persistently enhance operational efficiencies and achieve high-quality growth."
Fourth Quarter and Fiscal Year 2023 Financial Highlights([1])
Baidu, Inc.
(In millions except per Q4 Q3 Q4 FY FY
ADS, unaudited) 2022 2023 2023 YOY 2022 2023 YOY
RMB RMB RMB US$ RMB RMB US$
Total revenues 33,077 34,447 34,951 4,923 6 % 123,675 134,598 18,958 9 %
Operating income 4,593 6,274 5,392 759 17 % 15,911 21,856 3,078 37 %
Operating income 6,497 7,596 7,075 996 9 % 23,186 28,433 4,005 23 %
(non-GAAP) [2]
Net income to Baidu 4,953 6,681 2,599 366 (48 %) 7,559 20,315 2,861 169 %
Net income to Baidu 5,371 7,267 7,755 1,092 44 % 20,680 28,747 4,049 39 %
(non-GAAP) [2]
Diluted earnings per 13.59 18.22 6.77 0.95 (50 %) 19.85 55.08 7.76 177 %
ADS
Diluted earnings per 15.25 20.40 21.86 3.08 43 % 58.93 80.85 11.39 37 %
ADS (non-GAAP) [2]
Adjusted EBITDA [2] 8,231 9,505 9,057 1,276 10 % 29,663 35,823 5,046 21 %
Adjusted EBITDA 25 % 28 % 26 % 26 % 24 % 27 % 27 %
margin
Baidu Core
Q4 Q3 Q4 FY FY
(In millions, unaudited) 2022 2023 2023 YOY 2022 2023 YOY
RMB RMB RMB US$ RMB RMB US$
Total revenues 25,654 26,572 27,488 3,872 7 % 95,431 103,465 14,573 8 %
Operating income 3,782 5,498 4,668 657 23 % 14,534 18,825 2,651 30 %
Operating income 5,491 6,672 6,197 873 13 % 20,948 24,748 3,486 18 %
(non-GAAP) [2]
Net income to Baidu 4,773 6,436 2,440 344 (49 %) 7,551 19,401 2,733 157 %
Core
Net income to Baidu 4,915 6,956 7,500 1,056 53 % 19,935 27,418 3,862 38 %
Core (non-GAAP) [2]
Adjusted EBITDA [2] 7,146 8,513 8,118 1,143 14 % 27,088 31,863 4,488 18 %
Adjusted EBITDA 28 % 32 % 30 % 30 % 28 % 31 % 31 %
margin
[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 7.0999 as of December 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 returned US$318 million to shareholders since the beginning of Q4
2023, bringing the cumulative repurchase to US$669 million under the
2023 share repurchase program.
AI Cloud
-- PaddlePaddle developer community has grown to 10.7 million and has
served 235,000 businesses, as of the end of 2023. Developers have
created 860,000 models on PaddlePaddle by the end of 2023.
Intelligent Driving
-- Apollo Go, Baidu's autonomous ride-hailing service, provided about 839K
rides in the fourth quarter of 2023, up 49% year over year. As of
January 2, 2024, accumulated rides provided by Apollo Go on public roads
surpassed 5 million.
-- In the fourth quarter of 2023, the proportion of fully driverless orders
within the overall order portfolio in Wuhan reached 45%, up from 40% in
the third quarter of 2023.
Mobile Ecosystem
-- In December 2023, Baidu App's MAUs reached 667 million, up 3% year over
year.
-- Managed Page accounted for 51% of Baidu Core's online marketing revenue
in the fourth quarter of 2023.
iQIYI
-- iQIYI's average daily number of total subscribing members for the
quarter was 100.3 million, compared to 111.6 million for the fourth
quarter of 2022 and 107.5 million for the third quarter of 2023. More
importantly, iQIYI's monthly average revenue per membership (ARM) for
the quarter was RMB15.98, compared to RMB14.17 for the fourth quarter of
2022 and RMB15.54 for the third quarter of 2023.
Fourth Quarter 2023 Financial Results
Total revenues were RMB35.0 billion ($4.92 billion), increasing 6% year over year.
-- Revenue from Baidu Core was RMB27.5 billion ($3.87 billion), increasing
7% year over year; online marketing revenue was RMB19.2 billion ($2.70
billion), up 6% year over year, and non-online marketing revenue was
RMB8.3 billion ($1.17 billion), up 9% year over year, mainly driven by
AI Cloud business.
-- Revenue from iQIYI was RMB7.7 billion ($1.09 billion), increasing 2%
year over year.
Cost of revenues was RMB17.4 billion ($2.45 billion), increasing 3% year over year, primarily due to an increase in costs related to AI Cloud business, partially offset by a decrease in content costs.
Selling, general and administrative expenses were RMB5.9 billion ($825 million), which remained flat compared to the same period last year.
Research and development expenses were RMB6.3 billion ($886 million), increasing 11% year over year, primarily due to an increase in server depreciation expenses and server custody fees which support Gen-AI research and development inputs.
Operating income was RMB5.4 billion ($759 million). Baidu Core operating income was RMB4.7 billion ($657 million), and Baidu Core operating margin was 17%. Non-GAAP operating income was RMB7.1 billion ($996 million). Non-GAAP Baidu Core operating income was RMB6.2 billion ($873 million), and non-GAAP Baidu Core operating margin was 23%.
Total other loss, net was RMB2.5 billion ($356 million), compared to total other income, net of RMB1.8 billion for the same period last year, mainly due to a pickup of losses from an equity method investment as a result of a modification of certain terms of the underlying preferred shares.
Income tax benefit was RMB96 million ($14 million), compared to income tax expense of RMB1.3 billion for the same period last year, mainly due to a change of certain subsidiaries' amounts of valuation allowance for deferred tax assets.
Net income attributable to Baidu was RMB2.6 billion ($366 million), and diluted earnings per ADS was RMB6.77 ($0.95). Net income attributable to Baidu Core was RMB2.4 billion ($344 million), and net margin for Baidu Core was 9%. Non-GAAP net income attributable to Baidu was RMB7.8 billion ($1.09 billion). Non-GAAP diluted earnings per ADS was RMB21.86 ($3.08). Non-GAAP net income attributable to Baidu Core was RMB7.5 billion ($1.06 billion), and non-GAAP net margin for Baidu Core was 27%.
Adjusted EBITDA was RMB9.1 billion ($1.28 billion) and adjusted EBITDA margin was 26%. Adjusted EBITDA for Baidu Core was RMB8.1 billion ($1.14 billion) and adjusted EBITDA margin for Baidu Core was 30%.
As of December 31, 2023, cash, cash equivalents, restricted cash and short-term investments were RMB205.4 billion ($28.93 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB200.0 billion ($28.17 billion). Free cash flow was RMB7.0 billion ($980 million), and free cash flow excluding iQIYI was RMB6.3 billion ($894 million).
Fiscal Year 2023 Results
Total revenues were RMB134.6 billion ($18.96 billion), increasing 9% year over year.
-- Revenue from Baidu Core was RMB103.5 billion ($14.57 billion),
increasing 8% year over year; online marketing revenue was RMB75.1
billion ($10.58 billion), up 8% year over year, and non-online marketing
revenue was RMB28.4 billion ($3.99 billion), up 9% year over year.
-- Revenue from iQIYI was RMB31.9 billion ($4.49 billion), increasing 10%
year over year.
Cost of revenues was RMB65.0 billion ($9.16 billion), increasing 2% year over year, primarily due to an increase in traffic acquisition costs, partially offset by a decrease in content costs and costs related to AI Cloud business.
Selling, general and administrative expenses were RMB23.5 billion ($3.31 billion), increasing 15% year over year, primarily due to an increase in channel spending and promotional marketing expenses.
Research and development expenses were RMB24.2 billion ($3.41 billion), increasing 4% year over year, primarily due to an increase in server depreciation expenses and server custody fees which support Gen-AI research and development inputs.
Operating income was RMB21.9 billion ($3.08 billion). Baidu Core operating income was RMB18.8 billion ($2.65 billion), and Baidu Core operating margin was 18%. Non-GAAP operating income was RMB28.4 billion ($4.01 billion). Non-GAAP Baidu Core operating income was RMB24.7 billion ($3.49 billion), and non-GAAP Baidu Core operating margin was 24%.
Total other income, net was RMB3.3 billion ($472 million), compared to total other loss, net of RMB5.8 billion last year, mainly due to a fair value gain of RMB198 million from long-term investments this year, compared to a fair value loss of RMB3.9 billion last year; and a decrease of RMB2.2 billion in impairment of long-term investments.
Income tax expense was RMB3.6 billion ($514 million), increasing 42% year over year, primarily due to an increase in profit before tax.
Net income attributable to Baidu was RMB20.3 billion ($2.86 billion), and diluted earnings per ADS was RMB55.08 ($7.76). Net income attributable to Baidu Core was RMB19.4 billion ($2.73 billion), and net margin for Baidu Core was 19%. Non-GAAP net income attributable to Baidu was RMB28.7 billion ($4.05 billion). Non-GAAP diluted earnings per ADS was RMB80.85 ($11.39). Non-GAAP net income attributable to Baidu Core was RMB27.4 billion ($3.86 billion), and non-GAAP net margin for Baidu Core was 26%.
Adjusted EBITDA was RMB35.8 billion ($5.05 billion) and adjusted EBITDA margin was 27%. Adjusted EBITDA for Baidu Core was RMB31.9 billion ($4.49 billion) and adjusted EBITDA margin for Baidu Core was 31%.
Free cash flow was RMB25.4 billion ($3.58 billion), and free cash flow excluding iQIYI was RMB22.1 billion ($3.11 billion).
Conference Call Information
Baidu's management will hold an earnings conference call at 7.30 AM on February 28, 2024, U.S. Eastern Time (8.30 PM on February 28, 2024, 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 Q4 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/10036733-mjkcdg.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, 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 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
Twelve Months Ended
December 31, September 30, December 31, December 31, December 31, December 31, December 31,
2022 2023 2023 2023 2022 2023 2023
RMB RMB RMB US$ RMB RMB US$
(2) (2)
Revenues:
Online marketing services 19,571 21,346 20,804 2,930 74,711 81,203 11,437
Others 13,506 13,101 14,147 1,993 48,964 53,395 7,521
Total revenues 33,077 34,447 34,951 4,923 123,675 134,598 18,958
Costs and expenses:
Cost of revenues(1) 16,945 16,294 17,418 2,453 63,935 65,031 9,159
Selling, general and administrative(1) 5,881 5,778 5,854 825 20,514 23,519 3,314
Research and development(1) 5,658 6,101 6,287 886 23,315 24,192 3,407
Total costs and expenses 28,484 28,173 29,559 4,164 107,764 112,742 15,880
Operating income 4,593 6,274 5,392 759 15,911 21,856 3,078
Other income (loss):
Interest income 1,647 2,082 2,064 291 6,245 8,009 1,128
Interest expense (738) (853) (774) (109) (2,913) (3,248) (457)
Foreign exchange (loss) gain, net (338) (26) (449) (63) (1,484) 595 84
Share of losses from equity method investments (523) (398) (2,970) (418) (1,910) (3,799) (535)
Others, net 1,733 1,100 (398) (57) (5,737) 1,785 252
Total other income (loss), net 1,781 1,905 (2,527) (356) (5,799) 3,342 472
Income before income taxes 6,374 8,179 2,865 403 10,112 25,198 3,550
Income tax expense (benefit) 1,254 1,282 (96) (14) 2,578 3,649 514
Net income 5,120 6,897 2,961 417 7,534 21,549 3,036
Net income (loss) attributable to noncontrolling interests 167 216 362 51 (25) 1,234 175
Net income attributable to Baidu 4,953 6,681 2,599 366 7,559 20,315 2,861
Earnings per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic 13.73 18.45 6.85 0.96 20.02 55.83 7.86
-Diluted 13.59 18.22 6.77 0.95 19.85 55.08 7.76
Earnings per share for Class A and Class B ordinary shares:
-Basic 1.72 2.31 0.86 0.12 2.50 6.98 0.98
-Diluted 1.70 2.28 0.85 0.12 2.48 6.89 0.97
Weighted average number of Class A and Class B ordinary shares outstanding (in millions):
-Basic 2,789 2,814 2,812 2,812 2,782 2,807 2,807
-Diluted 2,801 2,846 2,830 2,830 2,809 2,837 2,837
(1) Includes share-based compensation expenses as follows:
Cost of revenues 158 139 159 23 409 590 83
Selling, general and administrative 450 358 411 58 1,750 1,678 236
Research and development 1,233 778 1,068 150 4,629 4,077 575
Total share-based compensation expenses 1,841 1,275 1,638 231 6,788 6,345 894
(2) All translations from RMB to U.S. dollars are made at a rate of RMB 7.0999 to US$1.00, the exchange rate in effect as of December 29, 2023 as set forth in the H.10 statistical release of The Board
of Governors of the Federal Reserve System.
Baidu, Inc.
Condensed Consolidated Balance Sheets
(In millions, unaudited)
December 31, December 31, December 31,
2022 2023 2023
RMB RMB US$
ASSETS
Current assets:
Cash and cash equivalents 53,156 25,231 3,554
Restricted cash 11,330 11,503 1,620
Short-term investments, net 120,839 168,670 23,757
Accounts receivable, net 11,733 10,848 1,528
Amounts due from related parties 5,432 1,424 201
Other current assets, net 10,360 12,579 1,772
Total current assets 212,850 230,255 32,432
Non-current assets:
Fixed assets, net 23,973 27,960 3,938
Licensed copyrights, net 6,841 6,967 981
Produced content, net 13,002 13,377 1,884
Intangible assets, net 1,254 881 124
Goodwill 22,477 22,586 3,181
Long-term investments, net 55,297 47,957 6,755
Long-term time deposits and held-to-maturity investments 23,629 24,666 3,474
Amounts due from related parties 60 195 27
Deferred tax assets, net 2,129 2,100 296
Operating lease right-of-use assets 10,365 10,851 1,528
Other non-current assets 19,096 18,964 2,671
Total non-current assets 178,123 176,504 24,859
Total assets 390,973 406,759 57,291
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans 5,343 10,257 1,445
Accounts payable and accrued liabilities 38,014 37,717 5,312
Customer deposits and deferred revenue 13,116 14,627 2,060
Deferred income 72 306 43
Long-term loans, current portion 2
Convertible senior notes, current portion 8,305 2,802 395
Notes payable, current portion 6,904 6,029 849
Amounts due to related parties 5,067 1,603 226
Operating lease liabilities 2,809 3,108 438
Total current liabilities 79,630 76,451 10,768
Non-current liabilities:
Deferred income 159 200 28
Deferred revenue 331 481 68
Amounts due to related parties 99 77 11
Long-term loans 13,722 14,223 2,003
Notes payable 39,893 34,990 4,928
Convertible senior notes 9,568 8,144 1,147
Deferred tax liabilities 2,898 2,725 384
Operating lease liabilities 4,810 5,040 710
Other non-current liabilities 2,058 1,820 257
Total non-current liabilities 73,538 67,700 9,536
Total liabilities 153,168 144,151 20,304
Redeemable noncontrolling interests 8,393 9,465 1,333
Equity
Total Baidu shareholders' equity 223,478 243,626 34,314
Noncontrolling interests 5,934 9,517 1,340
Total equity 229,412 253,143 35,654
Total liabilities, redeemable noncontrolling interests, 390,973 406,759 57,291
and equity
Baidu, Inc.
Selected Information
(In millions, unaudited)
Three months ended Three months ended Three months ended
Three months ended
December 31, 2022 (RMB) September 30, 2023 (RMB)
December 31, 2023 (RMB)
December 31, 2023 (US$)
Baidu iQIYI Elim & Baidu, Baidu iQIYI Elim & Baidu, Baidu iQIYI Elim & Baidu, Baidu Core iQIYI Elim & Baidu,
adj(2) Inc. adj(2) Inc.
Core adj(2) Inc. Core adj(2) Inc. Core
Total revenues 25,654 7,593 (170) 33,077 26,572 8,015 (140) 34,447 27,488 7,707 (244) 34,951 3,872 1,086 (35) 4,923
YOY 7 % 2 % 6 %
QOQ 3 % (4 %) 1 %
Costs and expenses:
Cost of revenues (1) 11,712 5,405 (172) 16,945 10,610 5,840 (156) 16,294 12,050 5,533 (165) 17,418 1,698 779 (24) 2,453
Selling, general and administrative (1) 4,969 939 (27) 5,881 4,810 981 (13) 5,778 4,936 948 (30) 5,854 695 134 (4) 825
Research and development (1) 5,191 467 5,658 5,654 447 6,101 5,834 453 6,287 822 64 886
Total costs and expenses 21,872 6,811 (199) 28,484 21,074 7,268 (169) 28,173 22,820 6,934 (195) 29,559 3,215 977 (28) 4,164
YOY
Cost of revenues 3 % 2 % 3 %
Selling, general and administrative (1 %) 1 % (0 %)
Research and development 12 % (3 %) 11 %
Costs and expenses 4 % 2 % 4 %
Operating income (loss) 3,782 782 29 4,593 5,498 747 29 6,274 4,668 773 (49) 5,392 657 109 (7) 759
YOY 23 % (1 %) 17 %
QOQ (15 %) 3 % (14 %)
Operating margin 15 % 10 % 14 % 21 % 9 % 18 % 17 % 10 % 15 %
Add: total other income (loss), net 2,271 (490) 1,781 2,159 (254) 1,905 (2,267) (260) (2,527) (319) (37) (356)
Less: income tax expense (benefit) 1,265 (11) 1,254 1,272 10 1,282 (134) 38 (96) (19) 5 (14)
Less: net income (loss) attributable to NCI 15 (1) 153 (3) 167 (51) 7 260 (3) 216 95 9 258 (3) 362 13 1 37 (3) 51
Net income (loss) attributable to Baidu 4,773 304 (124) 4,953 6,436 476 (231) 6,681 2,440 466 (307) 2,599 344 66 (44) 366
YOY (49 %) 53 % (48 %)
QOQ (62 %) (2 %) (61 %)
Net margin 19 % 4 % 15 % 24 % 6 % 19 % 9 % 6 % 7 %
Non-GAAP financial measures:
Operating income (non-GAAP) 5,491 977 6,497 6,672 895 7,596 6,197 927 7,075 873 130 996
YOY 13 % (5 %) 9 %
QOQ (7 %) 4 % (7 %)
Operating margin (non-GAAP) 21 % 13 % 20 % 25 % 11 % 22 % 23 % 12 % 20 %
Net income attributable to Baidu (non- 4,915 856 5,371 6,956 622 7,267 7,500 681 7,755 1,056 96 1,092
GAAP)
YOY 53 % (20 %) 44 %
QOQ 8 % 9 % 7 %
Net margin (non-GAAP) 19 % 11 % 16 % 26 % 8 % 21 % 27 % 9 % 22 %
Adjusted EBITDA 7,146 1,056 8,231 8,513 963 9,505 8,118 988 9,057 1,143 140 1,276
YOY 14 % (6 %) 10 %
QOQ (5 %) 3 % (5 %)
Adjusted EBITDA margin 28 % 14 % 25 % 32 % 12 % 28 % 30 % 13 % 26 %
(1) Includes share-based compensation as follows:
Cost of revenues 122 36 158 107 32 139 125 34 159 18 5 23
Selling, general and administrative 355 95 450 290 68 358 340 71 411 48 10 58
Research and development 1,177 56 1,233 732 46 778 1,020 48 1,068 144 6 150
Total share-based compensation 1,654 187 1,841 1,129 146 1,275 1,485 153 1,638 210 21 231
(2) Relates to intersegment eliminations and adjustments
(3) Relates to the net income/(loss) attributable to iQIYI noncontrolling interests
Baidu, Inc.
Selected Information
(In millions except for per ADS information, unaudited)
Twelve months ended
Twelve months ended
Twelve months ended
December 31, 2022 (RMB)
December 31, 2023 (RMB)
December 31, 2023 (US$)
Baidu iQIYI Elim & Baidu, Baidu iQIYI Elim & Baidu, Baidu Core iQIYI Elim & Baidu,
adj(2) Inc. adj(2) Inc.
Core adj(2) Inc. Core
Total revenues 95,431 28,998 (754) 123,675 103,465 31,873 (740) 134,598 14,573 4,489 (104) 18,958
YOY 8 % 10 % 9 %
Costs and expenses:
Cost of revenues (1) 42,378 22,321 (764) 63,935 42,592 23,103 (664) 65,031 5,999 3,254 (94) 9,159
Selling, general and administrative (1) 17,103 3,466 (55) 20,514 19,623 4,014 (118) 23,519 2,765 565 (16) 3,314
Research and development (1) 21,416 1,899 23,315 22,425 1,767 24,192 3,158 249 3,407
Total costs and expenses 80,897 27,686 (819) 107,764 84,640 28,884 (782) 112,742 11,922 4,068 (110) 15,880
YOY
Cost of revenues 1 % 4 % 2 %
Selling, general and administrative 15 % 16 % 15 %
Research and development 5 % (7 %) 4 %
Cost and expenses 5 % 4 % 5 %
Operating income 14,534 1,312 65 15,911 18,825 2,989 42 21,856 2,651 421 6 3,078
YOY 30 % 128 % 37 %
Operating margin 15 % 5 % 13 % 18 % 9 % 16 %
Add: total other (loss) income, net (4,453) (1,346) (5,799) 4,298 (956) 3,342 607 (135) 472
Less: income tax expense 2,494 84 2,578 3,568 81 3,649 503 11 514
Less: net income (loss) attributable to NCI 36 18 (79) (3) (25) 154 27 1,053 (3) 1,234 22 4 149 (3) 175
Net income (loss) attributable to Baidu 7,551 (136) 144 7,559 19,401 1,925 (1,011) 20,315 2,733 271 (143) 2,861
YOY 157 % (1515 %) 169 %
Net margin 8 % (0 %) 6 % 19 % 6 % 15 %
Non-GAAP financial measures:
Operating income (non-GAAP) 20,948 2,173 23,186 24,748 3,643 28,433 3,486 513 4,005
YOY 18 % 68 % 23 %
Operating margin (non-GAAP) 22 % 7 % 19 % 24 % 11 % 21 %
Net income attributable to Baidu (non-GAAP) 19,935 1,284 20,680 27,418 2,838 28,747 3,862 400 4,049
YOY 38 % 121 % 39 %
Net margin (non-GAAP) 21 % 4 % 17 % 26 % 9 % 21 %
Adjusted EBITDA 27,088 2,510 29,663 31,863 3,918 35,823 4,488 552 5,046
YOY 18 % 56 % 21 %
Adjusted EBITDA margin 28 % 9 % 24 % 31 % 12 % 27 %
(1) Includes share-based compensation as follows:
Cost of revenues 261 148 409 457 133 590 64 19 83
Selling, general and administrative 1,326 424 1,750 1,363 315 1,678 192 44 236
Research and development 4,390 239 4,629 3,888 189 4,077 548 27 575
Total share-based compensation 5,977 811 6,788 5,708 637 6,345 804 90 894
(2) Relates to intersegment eliminations and adjustments
(3) Relates to the net 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
December 31, 2022 (RMB) September 30, 2023 December 31, 2023 (RMB) December 31, 2023
(RMB) (US$)
Baidu iQIYI Baidu, Baidu iQIYI Baidu, Baidu iQIYI Baidu, Baidu iQIYI Baidu,
excl. Inc. excl. Inc. excl. Inc. excl. Inc.
iQIYI iQIYI iQIYI iQIYI
Net cash provided by operating activities 6,999 854 7,853 8,694 831 9,525 9,985 633 10,618 1,407 89 1,496
Net cash (used in) provided by investing activities (5,902) 579 (5,323) (11,345) (55) (11,400) (11,805) (1,431) (13,236) (1,662) (202) (1,864)
Net cash (used in) provided by financing activities (5,124) 2,862 (2,262) (5,253) 269 (4,984) (7,586) (22) (7,608) (1,069) (3) (1,072)
Effect of exchange rate changes on cash, cash (1,420) (9) (1,429) 153 5 158 (364) (31) (395) (52) (4) (56)
equivalents and restricted cash
Net (decrease) increase in cash, cash equivalents (5,447) 4,286 (1,161) (7,751) 1,050 (6,701) (9,770) (851) (10,621) (1,376) (120) (1,496)
and restricted cash
Cash, cash equivalents and restricted cash
At beginning of period 62,821 3,576 66,397 49,814 5,082 54,896 42,063 6,132 48,195 5,924 864 6,788
At end of period 57,374 7,862 65,236 42,063 6,132 48,195 32,293 5,281 37,574 4,548 744 5,292
Net cash provided by operating activities 6,999 854 7,853 8,694 831 9,525 9,985 633 10,618 1,407 89 1,496
Less: Capital expenditures (1,920) (9) (1,929) (3,525) (4) (3,529) (3,641) (19) (3,660) (513) (3) (516)
Free cash flow 5,079 845 5,924 5,169 827 5,996 6,344 614 6,958 894 86 980
Note: Baidu excl. iQIYI represents Baidu, Inc. minus iQIYI's consolidated cash flows.
Baidu, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions,unaudited)
Twelve months ended Twelve months ended Twelve months ended
December 31, 2022 (RMB) December 31, 2023 (RMB) December 31, 2023
(US$)
Baidu iQIYI Baidu, Baidu iQIYI Baidu, Baidu iQIYI Baidu,
excl. Inc. excl. Inc. excl. Inc.
iQIYI iQIYI iQIYI
Net cash provided by (used in) operating activities 26,241 (71) 26,170 33,263 3,352 36,615 4,685 472 5,157
Net cash (used in) provided by investing activities (4,210) 266 (3,944) (48,657) (1,740) (50,397) (6,853) (245) (7,098)
Net cash (used in) provided by financing activities (10,859) 4,469 (6,390) (9,876) (4,286) (14,162) (1,391) (604) (1,995)
Effect of exchange rate changes on cash, cash 1,606 123 1,729 189 93 282 27 13 40
equivalents and restricted cash
Net increase (decrease) in cash, cash equivalents 12,778 4,787 17,565 (25,081) (2,581) (27,662) (3,532) (364) (3,896)
and restricted cash
Cash, cash equivalents and restricted cash
At beginning of period 44,596 3,075 47,671 57,374 7,862 65,236 8,080 1,108 9,188
At end of period 57,374 7,862 65,236 32,293 5,281 37,574 4,548 744 5,292
Net cash provided by (used in) operating activities 26,241 (71) 26,170 33,263 3,352 36,615 4,685 472 5,157
Less: Capital expenditures (8,112) (174) (8,286) (11,154) (36) (11,190) (1,571) (5) (1,576)
Free cash flow 18,129 (245) 17,884 22,109 3,316 25,425 3,114 467 3,581
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
December 31, 2022 (RMB) September 30, 2023 (RMB) December 31, 2023 (RMB) December 31, 2023 (US$)
Baidu iQIYI Baidu, Baidu iQIYI Baidu, Baidu iQIYI Baidu, Baidu iQIYI Baidu,
Core Inc. Core Inc. Core Inc. Core Inc.
Operating income 3,782 782 4,593 5,498 747 6,274 4,668 773 5,392 657 109 759
Add: Share-based compensation expenses 1,654 187 1,841 1,129 146 1,275 1,485 153 1,638 210 21 231
Add: Amortization and impairment of intangible assets(1) 55 8 63 45 2 47 44 1 45 6 6
Operating income (non-GAAP) 5,491 977 6,497 6,672 895 7,596 6,197 927 7,075 873 130 996
Add: Depreciation of fixed assets 1,655 79 1,734 1,841 68 1,909 1,921 61 1,982 270 10 280
Adjusted EBITDA 7,146 1,056 8,231 8,513 963 9,505 8,118 988 9,057 1,143 140 1,276
Net income attributable to Baidu 4,773 304 4,953 6,436 476 6,681 2,440 466 2,599 344 66 366
Add: Share-based compensation expenses 1,654 187 1,748 1,128 146 1,194 1,484 153 1,553 209 22 219
Add: Amortization and impairment of intangible assets(1) 50 8 55 43 2 44 42 1 42 6 6
Add: Disposal (gain) loss (484) 62 (453) (753) (753) (37) (1) (38) (5) (5)
Add: Impairment of long-term investments 318 271 453 46 46 132 62 160 19 8 23
Add: Fair value (gain) loss of long-term investments (1,662) 8 (1,658) (384) (2) (385) 403 403 57 57
Add: Reconciling items on equity method investments(2) 377 18 386 572 572 3,172 3,172 447 447
Add: Tax effects on non-GAAP adjustments(3) (111) (2) (113) (132) (132) (136) (136) (21) (21)
Net income attributable to Baidu (non-GAAP) 4,915 856 5,371 6,956 622 7,267 7,500 681 7,755 1,056 96 1,092
Diluted earnings per ADS 13.59 18.22 6.77 0.95
Add: Accretion of the redeemable noncontrolling interests 0.46 0.53 0.53 0.07
Add: Non-GAAP adjustments to earnings per ADS 1.20 1.65 14.56 2.06
Diluted earnings per ADS (non-GAAP) 15.25 20.40 21.86 3.08
(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.
Baidu, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures
(In millions except for ADS and per ADS information, unaudited)
Twelve months ended Twelve months ended Twelve months ended
December 31, 2022 (RMB) December 31, 2023 (RMB) December 31, 2023 (US$)
Baidu iQIYI Baidu, Baidu iQIYI Baidu, Baidu iQIYI Baidu,
Core Inc. Core Inc. Core Inc.
Operating income 14,534 1,312 15,911 18,825 2,989 21,856 2,651 421 3,078
Add: Share-based compensation expenses 5,977 811 6,788 5,708 637 6,345 804 90 894
Add: Amortization and impairment of intangible assets(1) 223 50 273 215 17 232 31 2 33
Add: Contingent loss(2) 214 214
Operating income (non-GAAP) 20,948 2,173 23,186 24,748 3,643 28,433 3,486 513 4,005
Add: Depreciation of fixed assets 6,140 337 6,477 7,115 275 7,390 1,002 39 1,041
Adjusted EBITDA 27,088 2,510 29,663 31,863 3,918 35,823 4,488 552 5,046
Net income (loss) attributable to Baidu 7,551 (136) 7,559 19,401 1,925 20,315 2,733 271 2,861
Add: Share-based compensation expenses 5,964 811 6,371 5,704 637 5,993 803 90 844
Add: Amortization and impairment of intangible assets(1) 200 50 229 195 17 204 27 2 29
Add: Disposal (gain) (515) (368) (700) (1,926) (90) (1,967) (271) (13) (277)
Add: Impairment of long-term investments 2,180 841 2,601 479 336 631 67 47 89
Add: Fair value loss (gain) of long-term investments 3,977 (18) 3,968 (54) 4 (52) (8) 1 (7)
Add: Reconciling items on equity method investments(3) 1,473 105 1,548 3,918 9 3,922 552 2 551
Add: Charitable donation from Baidu(4) 136 136
Add: Contingent loss(2) 214 214
Add: Tax effects on non-GAAP adjustments(5) (1,245) (1) (1,246) (299) (299) (41) (41)
Net income attributable to Baidu (non-GAAP) 19,935 1,284 20,680 27,418 2,838 28,747 3,862 400 4,049
Diluted earnings per ADS 19.85 55.08 7.76
Add: Accretion of the redeemable noncontrolling interests 1.68 2.02 0.28
Add: Non-GAAP adjustments to earnings per ADS 37.40 23.75 3.35
Diluted earnings per ADS (non-GAAP) 58.93 80.85 11.39
(1) This represents amortization and impairment of intangible assets resulting from business combinations.
(2) This represents contingent loss pertaining to legal proceeding involving former advertising agency.
(3) 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.
(4) This represents non-recurring charitable donation to discrete events.
(5) This represents tax impact of all non-GAAP adjustments.
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SOURCE Baidu, Inc.
