BEIJING, Aug. 22, 2023 /PRNewswire/ — 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 second quarter ended June 30, 2023.
“In the second quarter of 2023, Baidu Core accelerated revenue and profit growth, driven by the solid performance of online marketing business and operating leverage,” said Robin Li, Co-founder and CEO of Baidu. “Generative AI and large language models hold immense transformative power in numerous industries, presenting a significant market opportunity for us. To stay ahead of the game, we keep upgrading our models to generate more creative responses, while improving training throughput and lowering inference costs. Our latest foundation model, ERNIE 3.5, has been well recognized by our cloud customers, AI developers, and industry experts. By adopting an AI-native mindset, we are reinventing our products and offerings for innovative experiences, and to support various enterprises to capture this opportunity. Overall, Baidu is committed to building a new engine around generative AI and LLM to drive sustainable long-term growth.”
“Baidu Core non-GAAP operating profit grew by 27% from a year ago, with non-GAAP operating margin expanding to 25% from 22% a year ago and 23% a quarter ago. Baidu Core generated about RMB9.7 billion net cash from operating activities in the quarter. The improvement in profit and margins as well as strong cash generation were primarily driven by revenue acceleration and efficiency gain,” said Rong Luo, CFO of Baidu. “Baidu has invested in AI for over a decade and is well-positioned to capitalize on the opportunities arising from generative AI and LLM. As we look ahead, we remain steadfast in investing in AI, in particular large language models and generative AI in the upcoming quarters.”
Second Quarter 2023 Financial Highlights[1]
Baidu, Inc.
Three Months Ended
(In millions except per ADS, unaudited)
June 30,
March 31,
June 30,
2022
2023
2023
YOY
QOQ
RMB
RMB
RMB
US$
Total revenues
29,647
31,144
34,056
4,697
15 %
9 %
Operating income
3,400
4,980
5,210
718
53 %
5 %
Operating income (non-GAAP) [2]
5,493
6,428
7,334
1,011
34 %
14 %
Net income to Baidu
3,637
5,825
5,210
718
43 %
(11 %)
Net income to Baidu (non-GAAP) [2]
5,541
5,727
7,998
1,103
44 %
40 %
Diluted earnings per ADS
9.97
15.92
14.17
1.95
42 %
(11 %)
Diluted earnings per ADS (non-GAAP) [2]
15.79
16.10
22.55
3.11
43 %
40 %
Adjusted EBITDA [2]
7,054
8,145
9,116
1,257
29 %
12 %
Adjusted EBITDA margin
24 %
26 %
27 %
27 %
Baidu Core
Three Months Ended
(In millions, unaudited)
June 30,
March 31,
June 30,
2022
2023
2023
YOY
QOQ
RMB
RMB
RMB
US$
Total revenues
23,160
22,998
26,407
3,642
14 %
15 %
Operating income
3,246
4,091
4,568
630
41 %
12 %
Operating income (non-GAAP) [2]
5,121
5,363
6,516
899
27 %
21 %
Net income to Baidu Core
3,716
5,513
5,012
691
35 %
(9 %)
Net income to Baidu Core (non-GAAP) [2]
5,449
5,268
7,694
1,061
41 %
46 %
Adjusted EBITDA [2]
6,597
7,003
8,229
1,135
25 %
18 %
Adjusted EBITDA margin
28 %
30 %
31 %
31 %
[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 7.2513 as of June 30, 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 launched ERNIE 3.5 in May 2023, which is the latest foundation model powering ERNIE Bot, Baidu’s conversational AI bot. According to IDC’s latest report on the technological abilities of AI models, issued in July 2023, ERNIE 3.5 excels in many areas, such as algorithm, industry coverage, developer tools, and ecosystem. Baidu earned a position in the China edition of the S&P Global Sustainability Yearbook, in recognizing its exceptional ESG scores. The selection stems from a comprehensive evaluation of 1,600 Chinese companies as part of the S&P Global 2022 Corporate Sustainability Assessment, underscoring Baidu’s sustainability practices.
AI Cloud
PaddlePaddle developer community grew to 8 million in mid-August, 2023. PaddlePaddle is Baidu’s self-developed open-source deep learning framework. According to IDC’s 2022 report on China’s public cloud market, Baidu was once again ranked the No.1 AI Cloud provider in China, maintaining this position for the fourth consecutive year.
Intelligent Driving
Apollo Go, Baidu’s autonomous ride-hailing service, provided around 714K rides in the second quarter of 2023, up 149% year over year. As of June 30, 2023, the cumulative rides provided to the public by Apollo Go reached 3.3 million. Apollo Go received permits to offer fully driverless ride-hailing services to the public in Shenzhen Pingshan area in June. Apollo Go has now been granted permission to provide fully driverless ride-hailing services to the public in four cities, including Beijing, Shenzhen, Wuhan and Chongqing. Apollo Go received permits to conduct fully driverless testing on open roads in Shanghai Pudong area in July.
Other Growth Initiatives
Xiaodu ranked No.1 in smart display shipments and smart speaker shipments in China for the first quarter of 2023, according to IDC and Canalys.
Mobile Ecosystem
In June 2023, Baidu App’s MAUs reached 677 million, up 8% year over year. Managed Page accounted for 52% of Baidu Core’s online marketing revenue in the second quarter of 2023.
iQIYI
iQIYI’s average daily number of total subscribing members for the quarter was 111.2 million, compared to 98.3 million for the second quarter of 2022 and 128.9 million for the first quarter of 2023.
Second Quarter 2023 Financial Results
Total revenues were RMB 34.1 billion ($4.70 billion), increasing 15% year over year.
Revenue from Baidu Core was RMB 26.4 billion ($3.64 billion), increasing 14% year over year; online marketing revenue was RMB 19.6 billion ($2.71 billion), up 15% year over year, and non-online marketing revenue was RMB 6.8 billion ($937 million), up 12% year over year.
Revenue from iQIYI was RMB 7.8 billion ($1.08 billion), increasing 17% year over year.
Cost of revenues was RMB 16.2 billion($2.23 billion), increasing 7% year over year, primarily due to an increase in content costs and traffic acquisition costs.
Selling, general and administrative expenses were RMB 6.3 billion ($869 million), increasing 32% year over year, primarily due to an increase in channel spending and promotional marketing expenses.
Research and development expense was RMB 6.4 billion ($880 million), increasing 1% year over year, primarily due to an increase in server depreciation expenses and cloud related expenses which support ERNIE Bot research inputs, partially offset by the decrease in personnel related expenses.
Operating income was RMB 5.2 billion ($718 million). Baidu Core operating income was RMB 4.6 billion ($630 million), and Baidu Core operating margin was 17%. Non-GAAP operating income was RMB 7.3 billion ($1.01 billion). Non-GAAP Baidu Core operating income was RMB 6.5 billion ($899 million), and non-GAAP Baidu Core operating margin was 25%.
Total other income, net was RMB 1.4 billion ($189 million), increasing 807% year over year, primarily due to the increase in net foreign exchange gain and net interest income, partially offset by the increase of fair value loss from long-term investments.
Income tax expense was RMB 1.3 billion($175 million), compared to RMB 25 million in the same period last year. The lower level of income tax expense in the second quarter of 2022 is primarily due to the reversal of certain tax expenses based on the 2021 tax return. Apart from the reversal, the main reason for the increase of income tax expense is the increase in profit before tax year over year.
Net income attributable to Baidu was RMB 5.2 billion ($718 million), and diluted earnings per ADS was RMB 14.17 ($1.95). Net income attributable to Baidu Core was RMB 5.0 billion ($691 million), and net margin for Baidu Core was 19%. Non-GAAP net income attributable to Baidu was RMB 8.0 billion ($1.10 billion). Non-GAAP diluted earnings per ADS was RMB 22.55($3.11). Non-GAAP net income attributable to Baidu Core was RMB 7.7 billion ($1.06 billion), and non-GAAP net margin for Baidu Core was 29%.
Adjusted EBITDA was RMB 9.1 billion ($1.26 billion) and adjusted EBITDA margin was 27%. Adjusted EBITDA for Baidu Core was RMB 8.2 billion ($1.14 billion) and adjusted EBITDA margin for Baidu Core was 31%.
As of June 30, 2023, cash, cash equivalents, restricted cash and short-term investments were RMB 201.5 billion ($27.79 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 196.9 billion ($27.15billion). Free cash flow was RMB 7.9 billion ($1.09 billion), and free cash flow excluding iQIYI was RMB 7.1 billion ($973 million).
Conference Call Information
Baidu’s management will hold an earnings conference call at 8 AM on August 22, 2023, U.S. Eastern Time (8 PM on August 22, 2023, 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 Q2 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/10032710-f851qv.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.
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, 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, 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.
Baidu, Inc.
Condensed Consolidated Statements of Income
(In millions except for per share (or ADS) information, unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
June 30,
June 30,
2022
2023
2023
2023
2022
2023
2023
RMB
RMB
RMB
US$(2)
RMB
RMB
US$(2)
Revenues:
Online marketing services
18,268
17,972
21,081
2,907
35,197
39,053
5,386
Others
11,379
13,172
12,975
1,790
22,861
26,147
3,606
Total revenues
29,647
31,144
34,056
4,697
58,058
65,200
8,992
Costs and expenses:
Cost of revenues(1)
15,171
15,152
16,167
2,230
30,717
31,319
4,319
Selling, general and administrative(1)
4,784
5,589
6,298
869
9,440
11,887
1,639
Research and development(1)
6,292
5,423
6,381
880
11,900
11,804
1,628
Total costs and expenses
26,247
26,164
28,846
3,979
52,057
55,010
7,586
Operating income
3,400
4,980
5,210
718
6,001
10,190
1,406
Other income (loss):
Interest income
1,525
1,915
1,948
269
2,979
3,863
533
Interest expense
(741)
(804)
(817)
(113)
(1,451)
(1,621)
(224)
Foreign exchange (loss) gain, net
(329)
(106)
1,176
162
(340)
1,070
148
Share of losses from equity method investments
(603)
(48)
(383)
(53)
(1,011)
(431)
(59)
Others, net
299
1,638
(555)
(76)
(2,987)
1,083
149
Total other income (loss), net
151
2,595
1,369
189
(2,810)
3,964
547
Income before income taxes
3,551
7,575
6,579
907
3,191
14,154
1,953
Income tax expense
25
1,193
1,270
175
416
2,463
340
Net income
3,526
6,382
5,309
732
2,775
11,691
1,613
Net (loss) income attributable to noncontrolling interests
(111)
557
99
14
23
656
90
Net income attributable to Baidu
3,637
5,825
5,210
718
2,752
11,035
1,523
Earnings per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic
10.06
16.17
14.34
1.98
7.23
30.55
4.21
-Diluted
9.97
15.92
14.17
1.95
7.15
30.05
4.14
Earnings per share for Class A and Class B ordinary shares:
-Basic
1.26
2.02
1.79
0.25
0.91
3.82
0.53
-Diluted
1.25
1.99
1.77
0.24
0.89
3.76
0.52
Weighted average number of Class A and Class B ordinary shares outstanding (in millions):
-Basic
2,780
2,798
2,804
2,804
2,773
2,801
2,801
-Diluted
2,811
2,837
2,834
2,834
2,806
2,836
2,836
(1) Includes share-based compensation expenses as follows:
Cost of revenues
85
98
194
27
167
292
40
Selling, general and administrative
443
463
446
62
820
909
124
Research and development
1,493
828
1,403
193
2,357
2,231
309
Total share-based compensation expenses
2,021
1,389
2,043
282
3,344
3,432
473
(2) All translations from RMB to U.S. dollars are made at a rate of RMB 7.2513 to US$1.00, the exchange rate in effect as of June 30, 2023 as set forth in the H.10 statistical release of The Board of Governors of the
Federal Reserve System.
Baidu, Inc.
Condensed Consolidated Balance Sheets
(In millions, unaudited)
December 31,
June 30,
June 30,
2022
2023
2023
RMB
RMB
US$
ASSETS
Current assets:
Cash and cash equivalents
53,156
42,060
5,800
Restricted cash
11,330
11,325
1,562
Short-term investments, net
120,839
148,095
20,423
Accounts receivable, net
11,733
11,624
1,603
Amounts due from related parties
5,432
4,806
663
Other current assets, net
10,360
10,864
1,498
Total current assets
212,850
228,774
31,549
Non-current assets:
Fixed assets, net
23,973
24,312
3,353
Licensed copyrights, net
6,841
6,463
891
Produced content, net
13,002
12,722
1,754
Intangible assets, net
1,254
1,064
147
Goodwill
22,477
22,586
3,115
Long-term investments, net
55,297
53,153
7,330
Long-term time deposits and held-to-maturity investments
23,629
24,147
3,330
Amounts due from related parties
60
176
24
Deferred tax assets, net
2,129
1,906
263
Operating lease right-of-use assets
10,365
10,446
1,441
Other non-current assets
19,096
20,573
2,837
Total non-current assets
178,123
177,548
24,485
Total assets
390,973
406,322
56,034
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans
5,343
8,479
1,169
Accounts payable and accrued liabilities
38,014
36,046
4,971
Customer deposits and deferred revenue
13,116
14,588
2,012
Deferred income
72
138
19
Long-term loans, current portion
–
31
4
Convertible senior notes, current portion
8,305
23
3
Notes payable, current portion
6,904
13,410
1,849
Amounts due to related parties
5,067
5,067
699
Operating lease liabilities
2,809
2,916
402
Total current liabilities
79,630
80,698
11,128
Non-current liabilities:
Deferred income
159
106
15
Deferred revenue
331
423
58
Amounts due to related parties
99
88
12
Long-term loans
13,722
14,421
1,989
Notes payable
39,893
35,745
4,929
Convertible senior notes
9,568
11,447
1,579
Deferred tax liabilities
2,898
2,992
413
Operating lease liabilities
4,810
4,794
661
Other non-current liabilities
2,058
2,154
297
Total non-current liabilities
73,538
72,170
9,953
Total liabilities
153,168
152,868
21,081
Redeemable noncontrolling interests
8,393
9,088
1,253
Equity
Total Baidu shareholders’ equity
223,478
235,643
32,497
Noncontrolling interests
5,934
8,723
1,203
Total equity
229,412
244,366
33,700
Total liabilities, redeemable noncontrolling interests, and
equity
390,973
406,322
56,034
Baidu, Inc.
Selected Information
(In millions, unaudited)
Three months ended
June 30, 2022 (RMB)
Three months ended
March 31, 2023 (RMB)
Three months ended
June 30, 2023 (RMB)
Three months ended
June 30, 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
23,160
6,657
(170)
29,647
22,998
8,349
(203)
31,144
26,407
7,802
(153)
34,056
3,642
1,076
(21)
4,697
YOY
14 %
17 %
15 %
QOQ
15 %
(7 %)
9 %
Costs and expenses:
Cost of revenues (1)
10,114
5,248
(191)
15,171
9,379
5,956
(183)
15,152
10,553
5,774
(160)
16,167
1,456
796
(22)
2,230
Selling, general and administrative (1)
3,990
801
(7)
4,784
4,533
1,106
(50)
5,589
5,344
979
(25)
6,298
737
135
(3)
869
Research and development (1)
5,810
482
–
6,292
4,995
428
–
5,423
5,942
439
–
6,381
819
61
–
880
Total costs and expenses
19,914
6,531
(198)
26,247
18,907
7,490
(233)
26,164
21,839
7,192
(185)
28,846
3,012
992
(25)
3,979
YOY
Cost of revenues
4 %
10 %
7 %
Selling, general and administrative
34 %
22 %
32 %
Research and development
2 %
(9 %)
1 %
Costs and expenses
10 %
10 %
10 %
Operating income
3,246
126
28
3,400
4,091
859
30
4,980
4,568
610
32
5,210
630
84
4
718
YOY
41 %
384 %
53 %
QOQ
12 %
(29 %)
5 %
Operating margin
14 %
2 %
11 %
18 %
10 %
16 %
17 %
8 %
15 %
Add: total other income (loss), net
442
(291)
–
151
2,803
(208)
–
2,595
1,603
(234)
–
1,369
221
(32)
–
189
Less: income tax (benefit) expense
(11)
36
–
25
1,168
25
–
1,193
1,262
8
–
1,270
174
1
–
175
Less: net (loss) income attributable to NCI
(17)
13
(107)
(3)
(111)
213
8
336
(3)
557
(103)
3
199
(3)
99
(14)
–
28
(3)
14
Net income (loss) attributable to Baidu
3,716
(214)
135
3,637
5,513
618
(306)
5,825
5,012
365
(167)
5,210
691
51
(24)
718
YOY
35 %
–
43 %
QOQ
(9 %)
(41 %)
(11 %)
Net margin
16 %
(3 %)
12 %
24 %
7 %
19 %
19 %
5 %
15 %
Non-GAAP financial measures:
Operating income (non-GAAP)
5,121
344
5,493
5,363
1,035
6,428
6,516
786
7,334
899
108
1,011
YOY
27 %
128 %
34 %
QOQ
21 %
(24 %)
14 %
Operating margin (non-GAAP)
22 %
5 %
19 %
23 %
12 %
21 %
25 %
10 %
22 %
Net income attributable to Baidu (non-GAAP)
5,449
79
5,541
5,268
940
5,727
7,694
595
7,998
1,061
82
1,103
YOY
41 %
653 %
44 %
QOQ
46 %
(37 %)
40 %
Net margin (non-GAAP)
24 %
1 %
19 %
23 %
11 %
18 %
29 %
8 %
23 %
Adjusted EBITDA
6,597
429
7,054
7,003
1,112
8,145
8,229
855
9,116
1,135
118
1,257
YOY
25 %
99 %
29 %
QOQ
18 %
(23 %)
12 %
Adjusted EBITDA margin
28 %
6 %
24 %
30 %
13 %
26 %
31 %
11 %
27 %
(1) Includes share-based compensation as follows:
Cost of revenues
49
36
85
65
33
98
160
34
194
22
5
27
Selling, general and administrative
339
104
443
377
86
463
356
90
446
50
12
62
Research and development
1,431
62
1,493
778
50
828
1,358
45
1,403
187
6
193
Total share-based compensation
1,819
202
2,021
1,220
169
1,389
1,874
169
2,043
259
23
282
(2) Relates to intersegment eliminations and adjustments
(3) Relates to the net income/(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
June 30, 2022 (RMB)
March 31, 2023 (RMB)
June 30, 2023 (RMB)
June 30, 2023 (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
7,658
48
7,706
4,838
1,002
5,840
9,746
886
10,632
1,344
122
1,466
Net cash (used in) provided by investing activities
(3,027)
(653)
(3,680)
(32,816)
167
(32,649)
7,309
(421)
6,888
1,008
(58)
950
Net cash provided by (used in) financing activities
877
(334)
543
1,055
(3,357)
(2,302)
1,908
(1,176)
732
263
(162)
101
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
1,230
75
1,305
(96)
(9)
(105)
496
128
624
68
18
86
Net increase (decrease) in cash, cash equivalents and
restricted cash
6,738
(864)
5,874
(27,019)
(2,197)
(29,216)
19,459
(583)
18,876
2,683
(80)
2,603
Cash, cash equivalents and restricted cash
At beginning of period
43,924
3,883
47,807
57,374
7,862
65,236
30,355
5,665
36,020
4,186
781
4,967
At end of period
50,662
3,019
53,681
30,355
5,665
36,020
49,814
5,082
54,896
6,869
701
7,570
Net cash provided by operating activities
7,658
48
7,706
4,838
1,002
5,840
9,746
886
10,632
1,344
122
1,466
Less: Capital expenditures
(2,124)
(66)
(2,190)
(1,295)
–
(1,295)
(2,693)
(13)
(2,706)
(371)
(2)
(373)
Free cash flow
5,534
(18)
5,516
3,543
1,002
4,545
7,053
873
7,926
973
120
1,093
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
June 30, 2022 (RMB)
March 31, 2023 (RMB)
June 30, 2023 (RMB)
June 30, 2023 (US$)
Baidu
Core
iQIYI
Baidu, Inc.
Baidu
Core
iQIYI
Baidu, Inc.
Baidu
Core
iQIYI
Baidu, Inc.
Baidu
Core
iQIYI
Baidu, Inc.
Operating income
3,246
126
3,400
4,091
859
4,980
4,568
610
5,210
630
84
718
Add: Share-based compensation expenses
1,819
202
2,021
1,220
169
1,389
1,874
169
2,043
259
23
282
Add: Amortization and impairment of intangible assets(1)
56
16
72
52
7
59
74
7
81
10
1
11
Operating income (non-GAAP)
5,121
344
5,493
5,363
1,035
6,428
6,516
786
7,334
899
108
1,011
Add: Depreciation of fixed assets
1,476
85
1,561
1,640
77
1,717
1,713
69
1,782
236
10
246
Adjusted EBITDA
6,597
429
7,054
7,003
1,112
8,145
8,229
855
9,116
1,135
118
1,257
Net income (loss) attributable to Baidu
3,716
(214)
3,637
5,513
618
5,825
5,012
365
5,210
691
51
718
Add: Share-based compensation expenses
1,815
202
1,916
1,220
169
1,297
1,872
169
1,949
258
23
269
Add: Amortization and impairment of intangible assets(1)
50
16
59
49
7
53
61
7
65
8
1
9
Add: Disposal (gain)
(25)
–
(25)
(217)
–
(217)
(919)
(89)
(959)
(127)
(12)
(132)
Add: Impairment of long-term investments
222
11
228
31
119
85
270
155
340
38
21
47
Add: Fair value (gain) loss of long-term investments
(547)
2
(546)
(1,312)
10
(1,307)
1,239
(4)
1,237
171
(1)
171
Add: Reconciling items on equity method investments(2)
403
60
455
(122)
18
(114)
296
(9)
292
41
(1)
40
Add: Charitable donation from Baidu(4)
136
–
136
–
–
–
–
–
–
–
–
–
Add: Tax effects on non-GAAP adjustments(3)
(321)
2
(319)
106
(1)
105
(137)
1
(136)
(19)
–
(19)
Net income attributable to Baidu (non-GAAP)
5,449
79
5,541
5,268
940
5,727
7,694
595
7,998
1,061
82
1,103
Diluted earnings per ADS
9.97
15.92
14.17
1.95
Add: Accretion of the redeemable noncontrolling interests
0.39
0.46
0.50
0.07
Add: Non-GAAP adjustments to earnings per ADS
5.43
(0.28)
7.88
1.09
Diluted earnings per ADS (non-GAAP)
15.79
16.10
22.55
3.11
(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.
(4) This represents non-recurring charitable donation to discrete events.
