Baidu Earnings Report 2Q 2023

  • Chinese tech giant Baidu reported better-than-expected revenue, up 15% year-on-year in the second quarter, boosted by growth in advertising.
  • “In the second quarter of 2023, Baidu accelerated core revenue and profit growth driven by solid performance and operating leverage of the online marketing business,” said Robin Li, co-founder and CEO of Baidu.

The Baidu Apollo Robotaxis passes by the Baidu office building in Beijing on August 21, 2023.

Bloomberg | Bloomberg | Good pictures

BEIJING – Chinese technology giant Baidu reported better-than-expected earnings on Tuesday, up 15% year-on-year in the second quarter and boosted by growth in advertising.

That’s the fastest quarterly annual growth pace in two years, according to Refinitiv data.

Baidu’s US-traded shares rose more than 4% in premarket trading.

Here’s how Baidu performed in the June quarter against Refinitiv consensus estimates:

  • Revenue: 34.1 billion yuan ($4.7 billion) vs. 33.28 billion yuan expected.

Within Baidu’s core businesses, online marketing revenue rose 15% to 19.6 billion yuan in the second quarter, and non-online marketing revenue added 12% to 6.8 billion yuan.

Earnings per American depositary share on a non-GAAP basis were 22.55 yuan, compared with 15.79 yuan in the prior year period.

“In the second quarter of 2023, Baidu accelerated core revenue and profit growth driven by the solid performance and operating leverage of the online marketing business,” said Robin Li, co-founder and CEO of Baidu.

“Generative AI and large language models have enormous transformative power across many industries, giving us a significant market opportunity,” he said.

Baidu is making progress with a Chinese-language ChatGPT alternative called ErnieBot, which was opened to the public and launched in March. OpenAI’s most popular competitor Chatbot is not easily accessible in the country.

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Last week, Baidu announced that five Ernie bot plugins — for quick text-to-video conversion and PDF search — would become more widely available to users. According to the company, all three plugins can be used simultaneously.

Last week, Baidu also unveiled an AI-powered assistant that can help with tasks including booking meetings, plane tickets and hotels. It’s not immediately clear how users will get the Assistant product.

The company also hopes to expand the reach of AI in the automobile industry. This month, the company announced a strategic deal with state-owned Sangan Automobile to develop autonomous driving capabilities based on the AI ​​model behind Baidu’s Ernie bot.

Baidu is not alone in its efforts, as other Chinese tech companies are also pushing into AI-related products. Earlier this month, e-commerce giant Alibaba said there is “strong demand” for training artificial intelligence models in the cloud and related business opportunities are just beginning.

Internet titan Tencent said during its earnings release last week that it plans to launch its own AI model later this year for use in products such as gaming and advertising.

Baidu also operates self-driving taxis in China under the Apollo Go brand. In the second quarter, Baidu said robotaxi rides ran about 714,000, up from 660,000 in the first quarter.

In November 2021, the company was allowed to charge for public robotaxi rides in Beijing. Passengers can usually book highly subsidized rides through the app.

Most robotaxis available in some areas of several major Chinese cities still have human operators.

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In June, the company said it had received approval to operate unmanned robotaxis on the outskirts of Shenzhen. This follows a similar approval to remove human crews from some robotaxis in Wuhan and Chongqing in August 2022.

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