Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2024

Commission File Number: 000-51469

 

 

BAIDU, INC.

 

 

Baidu Campus

No. 10 Shangdi 10th Street

Haidian District, Beijing 100085

The People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒   Form 40-F ☐

 

 

 

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Exhibit 99.1 — Press Release—Baidu Announces First Quarter 2024 Results

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BAIDU, INC.
By		:		/s/ Rong Luo
Name		:		Rong Luo
Title		:		Chief Financial Officer

Date: May 16, 2024

Exhibit 99.1

Baidu Announces First Quarter 2024 Results

BEIJING, China, May 16, 2024 – 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 first quarter ended March 31, 2024.

“Baidu Core’s online marketing revenue remained stable, while the end-to-end optimization of our AI technology stack continued to propel the growth of our AI Cloud revenue during the quarter,” said Robin Li, Co-founder and CEO of Baidu. “As a new era of Gen-AI unfolds in China, foundation models like ERNIE will serve as the underlying infrastructure, infusing various facets of people’s lives. We are making our ERNIE family of models increasingly affordable and efficient. This should provide Baidu with even greater opportunities ahead.”

“In the first quarter of 2024, Baidu Core’s non-GAAP operating margin expanded both year-over-year and quarter-over-quarter to 23.5%. We have established a track record of consistently improving operational efficiency. In the coming quarters, we will execute on what is needed to optimize our operational efficiency in support of our AI enabled businesses and high-quality growth, and maintain a healthy non-GAAP operating margin,” said Rong Luo, CFO of Baidu.

First Quarter 2024 Financial Highlights¹

 

		Baidu, Inc.
(In millions except per		Q1				Q4				Q1
ADS, unaudited)		2023				2023				2024								YOY				QOQ
		RMB				RMB				RMB				US$
Total revenues			31,144				34,951				31,513				4,365				1	%			(10	%)
Operating income			4,980				5,392				5,484				760				10	%			2	%
Operating income (non-GAAP) 2			6,428				7,075				6,673				924				4	%			(6	%)
Net income to Baidu			5,825				2,599				5,448				755				(6	%)			110	%
Net income to Baidu (non-GAAP) 2			5,727				7,755				7,011				971				22	%			(10	%)
Diluted earnings per ADS			15.92				6.77				14.91				2.07				(6	%)			120	%
Diluted earnings per ADS (non-GAAP) 2			16.10				21.86				19.91				2.76				24	%			(9	%)
Adjusted EBITDA 2			8,145				9,057				8,244				1,142				1	%			(9	%)
Adjusted EBITDA margin			26	%			26	%			26	%			26	%

 

1	Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 7.2203 as of March 29, 2024, 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).

 

1

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		Baidu Core
		Q1				Q4				Q1
(In millions, unaudited)		2023				2023				2024								YOY				QOQ
		RMB				RMB				RMB				US$
Total revenues			22,998				27,488				23,803				3,297				4	%			(13	%)
Operating income			4,091				4,668				4,538				629				11	%			(3	%)
Operating income (non-GAAP) 2			5,363				6,197				5,586				774				4	%			(10	%)
Net income to Baidu Core			5,513				2,440				5,150				713				(7	%)			111	%
Net income to Baidu Core (non-GAAP) 2			5,268				7,500				6,628				918				26	%			(12	%)
Adjusted EBITDA2			7,003				8,118				7,118				986				2	%			(12	%)
Adjusted EBITDA margin			30	%			30	%			30	%			30	%

Operational Highlights

Corporate

 

•

Baidu returned US$229 million to shareholders since the beginning of Q1 2024, bringing the cumulative repurchase to US$898 million under the 2023 share repurchase program.

 

•

Baidu released its annual ESG Report on May 13, 2024, which details Baidu’s latest ESG policies and sustainability initiatives. (http://esg.baidu.com/Uploads/Baidu_2023_ESG_Report.pdf).

AI Cloud

 

•

PaddlePaddle developer community grew to 13 million in mid-April, 2024.

 

•

Baidu expanded the ERNIE family of models, by launching several lightweight large language models in Q1 2024, making ERNIE increasingly affordable.

 

•

Baidu launched and improved the tools on its MaaS platform for enterprise customers in Q1 2024. These tools aim to facilitate the development of AI-native applications, AI agents, and the creation of customized models on Baidu’s MaaS platform.

Intelligent Driving

 

•

Apollo Go, Baidu’s autonomous ride-hailing service, provided about 826K rides in the first quarter of 2024, up 25% year over year. As of April 19, 2024, the cumulative rides provided to the public by Apollo Go surpassed 6 million.

Mobile Ecosystem

 

•

In March 2024, Baidu App’s MAUs reached 676 million, up 3% year over year.

 

•

Managed Page accounted for 50% of Baidu Core’s online marketing revenue in the first quarter of 2024.

 

2

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First Quarter 2024 Financial Results

Total revenues were RMB31.5 billion ($4.37 billion), increasing 1% year over year.

 

•

Revenue from Baidu Core was RMB23.8 billion ($3.30 billion), increasing 4% year over year; online marketing revenue was RMB17.0 billion ($2.36 billion), up 3% year over year, and non-online marketing revenue was RMB6.8 billion ($935 million), up 6% year over year, mainly driven by AI Cloud business.

 

•

Revenue from iQIYI was RMB7.9 billion ($1.10 billion), decreasing 5% year over year.

Cost of revenues was RMB15.3 billion ($2.12 billion), increasing 1% year over year, primarily due to an increase in traffic acquisition costs and costs related to AI Cloud business, partially offset by the decrease in content costs.

Selling, general and administrative expenses were RMB5.4 billion ($745 million), accounting for 17% of total revenues in the quarter, compared to 18% in the same period last year.

Research and development expenses were RMB5.4 billion ($742 million), decreasing 1% year over year, primarily due to a decrease in personnel related expenses and other R&D expenditures, partially offset by the increase in server depreciation expenses and server custody fees which support Gen-AI research and development inputs.

Operating income was RMB5.5 billion ($760 million). Baidu Core operating income was RMB4.5 billion ($629 million), and Baidu Core operating margin was 19%. Non-GAAP operating income was RMB6.7 billion ($924 million). Non-GAAP Baidu Core operating income was RMB5.6 billion ($774 million), and non-GAAP Baidu Core operating margin was 23%.

Total other income, net was RMB1.2 billion ($173 million), decreasing 52% year over year, primarily due to a decrease in fair value gain from long-term investments, partially offset by the increase in net foreign exchange gain.

Income tax expense was RMB883 million ($122 million), compared to RMB1.2 billion in the same period last year.

 

3

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Net income attributable to Baidu was RMB5.4 billion ($755 million), and diluted earnings per ADS was RMB14.91 ($2.07). Net income attributable to Baidu Core was RMB5.2 billion ($713 million), and net margin for Baidu Core was 22%. Non-GAAP net income attributable to Baidu was RMB7.0 billion ($971 million). Non-GAAP diluted earnings per ADS was RMB19.91 ($2.76). Non-GAAP net income attributable to Baidu Core was RMB6.6 billion ($918 million), and non-GAAP net margin for Baidu Core was 28%.

Adjusted EBITDA was RMB8.2 billion ($1.14 billion) and adjusted EBITDA margin was 26%. Adjusted EBITDA for Baidu Core was RMB7.1 billion ($986 million) and adjusted EBITDA margin for Baidu Core was 30%.

As of March 31, 2024, cash, cash equivalents, restricted cash and short-term investments were RMB191.8 billion ($26.56 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB185.8 billion ($25.73 billion). Free cash flow was RMB4.2 billion ($579 million), and free cash flow excluding iQIYI was RMB3.3 billion ($452 million).

Conference Call Information

Baidu’s management will hold an earnings conference call at 8.00 AM on May 16, 2024, U.S. Eastern Time (8.00 PM on May 16, 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. Q1 2024 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/10038153-8wbttd.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.

 

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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: [phone]

Email: [e-mail]

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.

 

5

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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, and 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, and 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.

 

6

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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.”

 

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First Quarter 2024 Financial Highlights ¹

 

		Baidu, Inc.
(In millions except per ADS, unaudited)		Q1				Q4				Q1
		2023				2023				2024								YOY				QOQ
		RMB				RMB				RMB				US$
Total revenues			31,144				34,951				31,513				4,365				1	%			(10	%)
Operating income			4,980				5,392				5,484				760				10	%			2	%
Operating income (non-GAAP) 2			6,428				7,075				6,673				924				4	%			(6	%)
Net income to Baidu			5,825				2,599				5,448				755				(6	%)			110	%
Net income to Baidu (non-GAAP) 2			5,727				7,755				7,011				971				22	%			(10	%)
Diluted earnings per ADS			15.92				6.77				14.91				2.07				(6	%)			120	%
Diluted earnings per ADS (non-GAAP) 2			16.10				21.86				19.91				2.76				24	%			(9	%)
Adjusted EBITDA 2			8,145				9,057				8,244				1,142				1	%			(9	%)
Adjusted EBITDA margin			26	%			26	%			26	%			26	%
		Baidu Core
(In millions, unaudited)		Q1				Q4				Q1
		2023				2023				2024								YOY				QOQ
		RMB				RMB				RMB				US$
Total revenues			22,998				27,488				23,803				3,297				4	%			(13	%)
Operating income			4,091				4,668				4,538				629				11	%			(3	%)
Operating income (non-GAAP) 2			5,363				6,197				5,586				774				4	%			(10	%)
Net income to Baidu Core			5,513				2,440				5,150				713				(7	%)			111	%
Net income to Baidu Core (non-GAAP) 2			5,268				7,500				6,628				918				26	%			(12	%)
Adjusted EBITDA 2			7,003				8,118				7,118				986				2	%			(12	%)
Adjusted EBITDA margin			30	%			30	%			30	%			30	%

 

1	Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB7.2203 as of March 29, 2024, 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).

 

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Baidu, Inc.

Condensed Consolidated Statements of Income

(In millions except for per share (or ADS) information, unaudited)

 

		Three Months Ended
		March 31,				December 31,				March 31,				March 31,
		2023				2023				2024				2024
		RMB				RMB				RMB				US$(2)
Revenues:
Online marketing services			17,972				20,804				18,490				2,561
Others			13,172				14,147				13,023				1,804
Total revenues			31,144				34,951				31,513				4,365
Costs and expenses:
Cost of revenues(1)			15,152				17,418				15,291				2,118
Selling, general and administrative(1)			5,589				5,854				5,375				745
Research and development(1)			5,423				6,287				5,363				742
Total costs and expenses			26,164				29,559				26,029				3,605
Operating income			4,980				5,392				5,484				760
Other income (loss):
Interest income			1,915				2,064				2,091				290
Interest expense			(804	)			(774	)			(766	)			(106	)
Foreign exchange (loss) gain, net			(106	)			(449	)			401				56
Share of losses from equity method investments			(48	)			(2,970	)			(205	)			(28	)
Others, net			1,638				(398	)			(275	)			(39	)
Total other income (loss), net			2,595				(2,527	)			1,246				173
Income before income taxes			7,575				2,865				6,730				933
Income tax expense (benefit)			1,193				(96	)			883				122
Net income			6,382				2,961				5,847				811
Net income attributable to noncontrolling interests			557				362				399				56
Net income attributable to Baidu			5,825				2,599				5,448				755
Earnings per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic			16.17				6.85				14.97				2.07
-Diluted			15.92				6.77				14.91				2.07
Earnings per share for Class A and Class B ordinary shares:
-Basic			2.02				0.86				1.87				0.26
-Diluted			1.99				0.85				1.86				0.26
Weighted average number of Class A and Class B ordinary shares outstanding (in millions):
-Basic			2,798				2,812				2,804				2,804
-Diluted			2,837				2,830				2,816				2,816
(1)   Includes share-based compensation expenses as follows:
Cost of revenues			98				159				108				15
Selling, general and administrative			463				411				417				58
Research and development			828				1,068				618				86
Total share-based compensation expenses			1,389				1,638				1,143				159

 

(2)	All translations from RMB to U.S. dollars are made at a rate of RMB7.2203 to US$1.00, the exchange rate in effect as of March 29, 2024 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

 

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Baidu, Inc.

Condensed Consolidated Balance Sheets

(In millions, unaudited)

 

		December 31,				March 31,				March 31,
		2023				2024				2024
		RMB				RMB				US$
ASSETS
Current assets:
Cash and cash equivalents			25,231				30,418				4,213
Restricted cash			11,503				11,591				1,605
Short-term investments, net			168,670				149,781				20,744
Accounts receivable, net			10,848				10,935				1,514
Amounts due from related parties			1,424				1,173				162
Other current assets, net			12,579				13,580				1,882
Total current assets			230,255				217,478				30,120
Non-current assets:
Fixed assets, net			27,960				28,157				3,900
Licensed copyrights, net			6,967				6,920				958
Produced content, net			13,377				13,613				1,885
Intangible assets, net			881				873				121
Goodwill			22,586				22,586				3,128
Long-term investments, net			47,957				46,947				6,502
Long-term time deposits and held-to-maturity investments			24,666				45,407				6,289
Amounts due from related parties			195				289				40
Deferred tax assets, net			2,100				2,256				312
Operating lease right-of-use assets			10,851				10,692				1,481
Other non-current assets			18,964				19,479				2,699
Total non-current assets			176,504				197,219				27,315
Total assets			406,759				414,697				57,435
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans			10,257				13,716				1,900
Accounts payable and accrued liabilities			37,717				36,739				5,089
Customer deposits and deferred revenue			14,627				13,641				1,889
Deferred income			306				232				32
Long-term loans, current portion			2				23				3
Convertible senior notes, current portion			2,802				2,855				395
Notes payable, current portion			6,029				6,136				850
Amounts due to related parties			1,603				1,475				204
Operating lease liabilities			3,108				3,114				431
Total current liabilities			76,451				77,931				10,793
Non-current liabilities:
Deferred income			200				198				27
Deferred revenue			481				509				70
Amounts due to related parties			77				72				10
Long-term loans			14,223				14,705				2,037
Notes payable			34,990				35,605				4,931
Convertible senior notes			8,144				8,357				1,157
Deferred tax liabilities			2,725				2,818				390
Operating lease liabilities			5,040				4,886				677
Other non-current liabilities			1,820				1,853				258
Total non-current liabilities			67,700				69,003				9,557
Total liabilities			144,151				146,934				20,350
Redeemable noncontrolling interests			9,465				9,906				1,372
Equity
Total Baidu shareholders’ equity			243,626				248,007				34,349
Noncontrolling interests			9,517				9,850				1,364
Total equity			253,143				257,857				35,713
Total liabilities, redeemable noncontrolling interests, and equity			406,759				414,697				57,435

 

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Baidu, Inc.  

Selected Information 

(In millions, unaudited) 

 

		Three months ended																Three months ended																Three months ended																Three months ended
		March 31, 2023 (RMB)																December 31, 2023 (RMB)																March 31, 2024 (RMB)																March 31, 2024 (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			22,998				8,349				(203	)			31,144				27,488				7,707				(244	)			34,951				23,803				7,927				(217	)			31,513				3,297				1,098				(30	)			4,365
YOY																																			4	%			(5	%)							1	%
QOQ																																			(13	%)			3	%							(10	%)
Costs and expenses:
Cost of revenues (1)			9,379				5,956				(183	)			15,152				12,050				5,533				(165	)			17,418				9,839				5,631				(179	)			15,291				1,363				780				(25	)			2,118
Selling, general and administrative (1)			4,533				1,106				(50	)			5,589				4,936				948				(30	)			5,854				4,492				922				(39	)			5,375				622				128				(5	)			745
Research and development (1)			4,995				428				—				5,423				5,834				453				—				6,287				4,934				429				—				5,363				683				59				—				742
Total costs and expenses			18,907				7,490				(233	)			26,164				22,820				6,934				(195	)			29,559				19,265				6,982				(218	)			26,029				2,668				967				(30	)			3,605
YOY
Cost of revenues																																			5	%			(5	%)							1	%
Selling, general and administrative																																			(1	%)			(17	%)							(4	%)
Research and development																																			(1	%)			0	%							(1	%)
Costs and expenses																																			2	%			(7	%)							(1	%)
Operating income (loss)			4,091				859				30				4,980				4,668				773				(49	)			5,392				4,538				945				1				5,484				629				131				—				760
YOY																																			11	%			10	%							10	%
QOQ																																			(3	%)			22	%							2	%
Operating margin			18	%			10	%							16	%			17	%			10	%							15	%			19	%			12	%							17	%
Add: total other income (loss), net			2,803				(208	)			—				2,595				(2,267	)			(260	)			—				(2,527	)			1,508				(262	)			—				1,246				209				(36	)			—				173
Less: income tax expense (benefit)			1,168				25				—				1,193				(134	)			38				—				(96	)			866				17				—				883				120				2				—				122
Less: net income attributable to NCI			213				8				336	(3)			557				95				9				258	(3)			362				30				11				358	(3)			399				5				2				49	(3)			56
Net income (loss) attributable to Baidu			5,513				618				(306	)			5,825				2,440				466				(307	)			2,599				5,150				655				(357	)			5,448				713				91				(49	)			755
YOY																																			(7	%)			6	%							(6	%)
QOQ																																			111	%			41	%							110	%
Net margin			24	%			7	%							19	%			9	%			6	%							7	%			22	%			8	%							17	%
Non-GAAP financial measures:
Operating income (non-GAAP)			5,363				1,035								6,428				6,197				927								7,075				5,586				1,086								6,673				774				150								924
YOY																																			4	%			5	%							4	%
QOQ																																			(10	%)			17	%							(6	%)
Operating margin (non-GAAP)			23	%			12	%							21	%			23	%			12	%							20	%			23	%			14	%							21	%
Net income attributable to Baidu (non-GAAP)			5,268				940								5,727				7,500				681								7,755				6,628				844								7,011				918				117								971
YOY																																			26	%			(10	%)							22	%
QOQ																																			(12	%)			24	%							(10	%)
Net margin (non-GAAP)			23	%			11	%							18	%			27	%			9	%							22	%			28	%			11	%							22	%
Adjusted EBITDA			7,003				1,112								8,145				8,118				988								9,057				7,118				1,125								8,244				986				156								1,142
YOY																																			2	%			1	%							1	%
QOQ																																			(12	%)			14	%							(9	%)
Adjusted EBITDA margin			30	%			13	%							26	%			30	%			13	%							26	%			30	%			14	%							26	%
(1)   Includes share-based compensation as follows:
Cost of revenues			65				33								98				125				34								159				76				32								108				11				4								15
Selling, general and administrative			377				86								463				340				71								411				353				64								417				49				9								58
Research and development			778				50								828				1,020				48								1,068				575				43								618				80				6								86
Total share-based compensation			1,220				169								1,389				1,485				153								1,638				1,004				139								1,143				140				19								159

 

(2)	Relates to intersegment eliminations and adjustments

(3)	Relates to the net income attributable to iQIYI noncontrolling interests

 

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Baidu, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions, unaudited)

 

		Three months ended March 31, 2023 (RMB)												Three months ended December 31, 2023 (RMB)												Three months ended March 31, 2024 (RMB)												Three months ended March 31, 2024 (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			4,838				1,002				5,840				9,985				633				10,618				5,284				936				6,220				731				130				861
Net cash (used in) provided by investing activities			(32,816	)			167				(32,649	)			(11,805	)			(1,431	)			(13,236	)			(2,893	)			(223	)			(3,116	)			(401	)			(31	)			(432	)
Net cash provided by (used in) financing activities			1,055				(3,357	)			(2,302	)			(7,586	)			(22	)			(7,608	)			2,126				261				2,387				295				36				331
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(96	)			(9	)			(105	)			(364	)			(31	)			(395	)			154				15				169				21				2				23
Net (decrease) increase in cash, cash equivalents and restricted cash			(27,019	)			(2,197	)			(29,216	)			(9,770	)			(851	)			(10,621	)			4,671				989				5,660				646				137				783
Cash, cash equivalents and restricted cash
At beginning of period			57,374				7,862				65,236				42,063				6,132				48,195				32,293				5,281				37,574				4,473				731				5,204
At end of period			30,355				5,665				36,020				32,293				5,281				37,574				36,964				6,270				43,234				5,119				868				5,987
Net cash provided by operating activities			4,838				1,002				5,840				9,985				633				10,618				5,284				936				6,220				731				130				861
Less: Capital expenditures			(1,295	)			—				(1,295	)			(3,641	)			(19	)			(3,660	)			(2,016	)			(22	)			(2,038	)			(279	)			(3	)			(282	)
Free cash flow			3,543				1,002				4,545				6,344				614				6,958				3,268				914				4,182				452				127				579

Note: Baidu excl. iQIYI represents Baidu, Inc. minus iQIYI’s consolidated cash flows.

 

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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 March 31, 2023 (RMB)												Three months ended December 31, 2023 (RMB)												Three months ended March 31, 2024 (RMB)												Three months ended March 31, 2024 (US$)
		Baidu Core				iQIYI				Baidu, Inc.				Baidu Core				iQIYI				Baidu, Inc.				Baidu Core				iQIYI				Baidu, Inc.				Baidu Core				iQIYI				Baidu, Inc.
Operating income			4,091				859				4,980				4,668				773				5,392				4,538				945				5,484				629				131				760
Add: Share-based compensation expenses			1,220				169				1,389				1,485				153				1,638				1,004				139				1,143				140				19				159
Add: Amortization and impairment of intangible assets(1)			52				7				59				44				1				45				44				2				46				5				—				5
Operating income (non-GAAP)			5,363				1,035				6,428				6,197				927				7,075				5,586				1,086				6,673				774				150				924
Add: Depreciation of fixed assets			1,640				77				1,717				1,921				61				1,982				1,532				39				1,571				212				6				218
Adjusted EBITDA			7,003				1,112				8,145				8,118				988				9,057				7,118				1,125				8,244				986				156				1,142
Net income attributable to Baidu			5,513				618				5,825				2,440				466				2,599				5,150				655				5,448				713				91				755
Add: Share-based compensation expenses			1,220				169				1,297				1,484				153				1,553				1,003				139				1,066				139				19				147
Add: Amortization and impairment of intangible assets(1)			49				7				53				42				1				42				42				2				43				6				—				6
Add: Disposal (gain)			(217	)			—				(217	)			(37	)			(1	)			(38	)			(458	)			—				(458	)			(63	)			—				(63	)
Add: Impairment of long-term investments			31				119				85				132				62				160				36				71				68				5				10				9
Add: Fair value (gain) loss of long-term investments			(1,312	)			10				(1,307	)			403				—				403				725				(23	)			714				100				(3	)			99
Add: Reconciling items on equity method investments(2)			(122	)			18				(114	)			3,172				—				3,172				280				—				280				39				—				39
Add: Tax effects on non-GAAP adjustments(3)			106				(1	)			105				(136	)			—				(136	)			(150	)			—				(150	)			(21	)			—				(21	)
Net income attributable to Baidu (non-GAAP)			5,268				940				5,727				7,500				681				7,755				6,628				844				7,011				918				117				971
Diluted earnings per ADS											15.92												6.77												14.91												2.07
Add: Accretion of the redeemable noncontrolling interests											0.46												0.53												0.55												0.08
Add: Non-GAAP adjustments to earnings per ADS											(0.28	)											14.56												4.45												0.61
Diluted earnings per ADS (non-GAAP)											16.10												21.86												19.91												2.76

 

(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.

 

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