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 February 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

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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: February 28, 2024

Exhibit 99.1

Baidu Announces Fourth Quarter and Fiscal Year 2023 Results

BEIJING, China, February 28, 2024 — 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 Highlights¹

 

		Baidu, Inc.
(In millions except per ADS, unaudited)		Q4				Q3																FY
		2022				2023				Q4 2023								YOY				2022				FY 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 (non-GAAP)2			6,497				7,596				7,075				996				9	%			23,186				28,433				4,005				23	%
Net income to Baidu			4,953				6,681				2,599				366				(48	%)			7,559				20,315				2,861				169	%
Net income to Baidu (non-GAAP)2			5,371				7,267				7,755				1,092				44	%			20,680				28,747				4,049				39	%
Diluted earnings per ADS			13.59				18.22				6.77				0.95				(50	%)			19.85				55.08				7.76				177	%
Diluted earnings per ADS (non-GAAP)2			15.25				20.40				21.86				3.08				43	%			58.93				80.85				11.39				37	%
Adjusted EBITDA2			8,231				9,505				9,057				1,276				10	%			29,663				35,823				5,046				21	%
Adjusted EBITDA margin			25	%			28	%			26	%			26	%							24	%			27	%			27	%

 

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).

 

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		Baidu Core
(In millions, unaudited)		Q4 2022				Q3 2023				Q4 2023								YOY				FY 2022				FY 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 (non-GAAP)2			5,491				6,672				6,197				873				13	%			20,948				24,748				3,486				18	%
Net income to Baidu Core			4,773				6,436				2,440				344				(49	%)			7,551				19,401				2,733				157	%
Net income to Baidu Core (non-GAAP)2			4,915				6,956				7,500				1,056				53	%			19,935				27,418				3,862				38	%
Adjusted EBITDA2			7,146				8,513				8,118				1,143				14	%			27,088				31,863				4,488				18	%
Adjusted EBITDA margin			28	%			32	%			30	%			30	%							28	%			31	%			31	%

Operational Highlights

Corporate

 

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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

 

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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

 

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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.

 

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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.

 

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Mobile Ecosystem

 

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In December 2023, Baidu App’s MAUs reached 667 million, up 3% year over year.

 

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Managed Page accounted for 51% of Baidu Core’s online marketing revenue in the fourth quarter of 2023.

iQIYI

 

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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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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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.

 

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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).

 

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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.

Contacts

Investors Relations, Baidu, Inc.

Tel: [phone]

Email: [e-mail]

 

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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.

 

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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.

 

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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$(2)				RMB				RMB				US$(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

 

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		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$(2)				RMB				RMB				US$(2)
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.

 

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Baidu, Inc.

Condensed Consolidated Balance Sheets

(In millions, unaudited)

 

		December 31, 2022				December 31, 2023				December 31, 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

 

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		December 31, 2022				December 31, 2023				December 31, 2023
		RMB				RMB				US$
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, and equity			390,973				406,759				57,291

 

12

---

Baidu, Inc.

Selected Information

(In millions, unaudited)

 

		Three months ended December 31, 2022 (RMB)																Three months ended September 30, 2023 (RMB)																Three months ended December 31, 2023 (RMB)																Three months ended December 31, 2023 (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			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	%

 

13

---

		Three months ended December 31, 2022 (RMB)																Three months ended September 30, 2023 (RMB)																Three months ended December 31, 2023 (RMB)																Three months ended December 31, 2023 (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.
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-GAAP)			4,915				856								5,371				6,956				622								7,267				7,500				681								7,755				1,056				96								1,092
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

 

14

---

Baidu, Inc.

Selected Information

(In millions except for per ADS information, unaudited)

 

		Twelve months ended December 31, 2022 (RMB)																Twelve months ended December 31, 2023 (RMB)																Twelve months ended December 31, 2023 (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.
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	%			(1,515	%)							169	%
Net margin			8	%			(0	%)							6	%			19	%			6	%							15	%

 

15

---

		Twelve months ended December 31, 2022 (RMB)																Twelve months ended December 31, 2023 (RMB)																Twelve months ended December 31, 2023 (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.
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

 

16

---

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												September 30, 2023												December 31, 2023												December 31, 2023
		(RMB)												(RMB)												(RMB)												(US$)
		Baidu												Baidu												Baidu												Baidu
		excl.								Baidu,				excl.								Baidu,				excl.								Baidu,				excl.								Baidu,
		iQIYI				iQIYI				Inc.				iQIYI				iQIYI				Inc.				iQIYI				iQIYI				Inc.				iQIYI				iQIYI				Inc.
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 equivalents and restricted cash			(1,420	)			(9	)			(1,429	)			153				5				158				(364	)			(31	)			(395	)			(52	)			(4	)			(56	)
Net (decrease) increase in cash, cash equivalents and restricted cash			(5,447	)			4,286				(1,161	)			(7,751	)			1,050				(6,701	)			(9,770	)			(851	)			(10,621	)			(1,376	)			(120	)			(1,496	)
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. 

 

17

---

Baidu, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions, unaudited)

 

		Twelve months ended												Twelve months ended												Twelve months ended
		December 31, 2022												December 31, 2023												December 31, 2023
		(RMB)												(RMB)												(US$)
		Baidu												Baidu												Baidu
		excl.								Baidu,				excl.								Baidu,				excl.								Baidu,
		iQIYI				iQIYI				Inc.				iQIYI				iQIYI				Inc.				iQIYI				iQIYI				Inc.
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 equivalents and restricted cash			1,606				123				1,729				189				93				282				27				13				40
Net increase (decrease) in cash, cash equivalents and restricted cash			12,778				4,787				17,565				(25,081	)			(2,581	)			(27,662	)			(3,532	)			(364	)			(3,896	)
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. 

 

18

---

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												September 30, 2023												December 31, 2023												December 31, 2023
		(RMB)												(RMB)												(RMB)												(US$)
		Baidu								Baidu,				Baidu								Baidu,				Baidu								Baidu,				Baidu								Baidu,
		Core				iQIYI				Inc.				Core				iQIYI				Inc.				Core				iQIYI				Inc.				Core				iQIYI				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

 

19

---

Three months ended

Three months ended

Three months ended

Three months ended

December 31, 2022

September 30, 2023

December 31, 2023

December 31, 2023

(RMB)

(RMB)

(RMB)

(US$)

Baidu

Baidu,

Baidu

Baidu,

Baidu

Baidu,

Baidu

Baidu,

Core

iQIYI

Inc.

Core

iQIYI

Inc.

Core

iQIYI

Inc.

Core

iQIYI

Inc.

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.

 

20

---

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												December 31, 2023												December 31, 2023
		(RMB)												(RMB)												(US$)
		Baidu								Baidu,				Baidu								Baidu,				Baidu								Baidu,
		Core				iQIYI				Inc.				Core				iQIYI				Inc.				Core				iQIYI				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

 

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Twelve months ended

Twelve months ended

Twelve months ended

December 31, 2022

December 31, 2023

December 31, 2023

(RMB)

(RMB)

(US$)

Baidu

Baidu,

Baidu

Baidu,

Baidu

Baidu,

Core

iQIYI

Inc.

Core

iQIYI

Inc.

Core

iQIYI

Inc.

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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