BEIJING, Nov. 21, 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 third quarter ended September 30, 2023.
“Baidu reported solid third-quarter financial results, demonstrating resilience in a challenging economic climate,” said Robin Li, Co-founder and CEO of Baidu. “I am particularly pleased with our continuous technological enhancements and product improvements against the backdrop of emerging opportunities in generative AI and foundation models. Notably, we launched ERNIE 4.0, our most powerful foundation model. We have also harnessed the power of ERNIE and ERNIE Bot to reinvent our consumer-facing and enterprise-facing products, as well as our own operations, providing AI-native experiences and driving efficiency gains. Meanwhile, we’ve fully opened ERNIE API to cloud enterprises, empowering them to develop their own AI-native applications and solutions. Our AI-centric business and product strategy should set the stage for sustained multi-year revenue and profit expansion within our ERNIE and ERNIE Bot ecosystem.”
“Baidu Core maintained stable margins in the quarter,” said Rong Luo, CFO of Baidu. “Our ongoing investments in AI have underpinned technological and product innovations. Moving forward, while we will continue prioritizing investments in AI, especially in generative AI and foundation models, we will do so with an unrelenting focus on efficiency and strategic resource allocation.”
Third Quarter 2023 Financial Highlights[1]
Baidu, Inc.
(In millions except per
Q3
Q2
Q3
ADS, unaudited)
2022
2023
2023
YOY
QOQ
RMB
RMB
RMB
US$
Total revenues
32,540
34,056
34,447
4,721
6 %
1 %
Operating income
5,317
5,210
6,274
860
18 %
20 %
Operating income (non-GAAP) [2]
7,200
7,334
7,596
1,041
6 %
4 %
Net (loss) income to Baidu
(146)
5,210
6,681
916
–
28 %
Net income to Baidu (non-GAAP) [2]
5,889
7,998
7,267
996
23 %
(9 %)
Diluted (loss) earnings per ADS
(0.87)
14.17
18.22
2.50
–
29 %
Diluted earnings per ADS (non-GAAP) [2]
16.87
22.55
20.40
2.80
21 %
(10 %)
Adjusted EBITDA [2]
8,879
9,116
9,505
1,303
7 %
4 %
Adjusted EBITDA margin
27 %
27 %
28 %
28 %
Baidu Core
Q3
Q2
Q3
(In millions, unaudited)
2022
2023
2023
YOY
QOQ
RMB
RMB
RMB
US$
Total revenues
25,239
26,407
26,572
3,642
5 %
1 %
Operating income
4,982
4,568
5,498
754
10 %
20 %
Operating income (non-GAAP) [2]
6,650
6,516
6,672
914
0 %
2 %
Net income to Baidu Core
25
5,012
6,436
882
25644 %
28 %
Net income to Baidu Core (non-GAAP) [2]
5,767
7,694
6,956
953
21 %
(10 %)
Adjusted EBITDA[2]
8,239
8,229
8,513
1,167
3 %
3 %
Adjusted EBITDA margin
33 %
31 %
32 %
32 %
[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 7.2960 as of September 29, 2023,
as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are
provided solely for the convenience of the reader.
[2] Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of
Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details).
Operational Highlights
Corporate
Baidu launched ERNIE 4.0 (EB4) in October 2023. EB4 is now accessible to users on ERNIE Bot. In addition, enterprise customers can use EB4 via our cloud API.Baidu returned US$126 million to shareholders since the beginning of Q3 2023, bringing the cumulative repurchase to US$351 million under the current share repurchase program.Baidu established the Technology Ethics Committee in October 2023 to guide the practices of technology professionals.
Intelligent Driving
Apollo Go, Baidu’s autonomous ride-hailing service, provided 821K rides in the third quarter of 2023, up 73% year over year. As of September 30, 2023, the cumulative rides provided to the public by Apollo Go reached 4.1 million.
Mobile Ecosystem
In September 2023, Baidu App’s MAUs reached 663 million, up 5% year over year.Managed Page accounted for 53% of Baidu Core’s online marketing revenue in the third quarter of 2023.
iQIYI
iQIYI’s average daily number of total subscribing members for the quarter was 107.5 million, compared to 101.0 million for the third quarter of 2022 and 111.2 million for the second quarter of 2023. More importantly, iQIYI’s monthly average revenue per membership (ARM[3]) for the quarter was RMB15.54, compared to RMB13.90 for the third quarter of 2022 and RMB14.82 for the second quarter of 2023, increasing 12% year over year.
[3] The monthly ARM for the quarter is calculated by dividing iQIYI’s total revenues from membership services during a given quarter by the average daily number of total subscribing members for that quarter and the number of months in the quarter.
Third Quarter 2023 Financial Results
Total revenues were RMB 34.4 billion ($4.72 billion), increasing 6% year over year.
Revenue from Baidu Core was RMB 26.6 billion ($3.64 billion), increasing 5% year over year; online marketing revenue was RMB 19.7 billion ($2.70 billion), up 5% year over year, and non-online marketing revenue was RMB 6.9 billion ($943 million), up 6% year over year.Revenue from iQIYI was RMB 8.0 billion ($1.10 billion), increasing 7% year over year.
Cost of revenues was RMB 16.3 billion ($2.23 billion), which remained essentially unchanged compared to the same period last year.
Selling, general and administrative expenses were RMB 5.8 billion ($792 million), increasing 11% year over year, primarily due to an increase in channel spending and promotional marketing expenses.
Research and development expenses were RMB 6.1 billion ($836 million), increasing 6% year over year, primarily due to an increase in server depreciation expenses and server custody fees which support ERNIE Bot research inputs.
Operating income was RMB 6.3 billion ($860 million). Baidu Core operating income was RMB 5.5 billion ($754 million), and Baidu Core operating margin was 21%. Non-GAAP operating income was RMB 7.6 billion ($1.04 billion). Non-GAAP Baidu Core operating income was RMB 6.7 billion ($914 million), and non-GAAP Baidu Core operating margin was 25%.
Total other income, net was RMB 1.9 billion ($261 million), compared to total other loss, net of RMB 4.8 billion for the same period last year, mainly due to: (1) a recognition of RMB 338 million gain versus RMB 3.1 billion loss for the same period last year from fair value changes in long-term investments; and (2) a decrease in impairment of long-term investments by RMB 1.4 billion.
Income tax expense was RMB 1.3 billion ($175 million), increasing 41% year over year, primarily due to an increase in profit before tax.
Net income attributable to Baidu was RMB 6.7 billion ($916 million), and diluted earnings per ADS was RMB 18.22 ($2.50). Net income attributable to Baidu Core was RMB 6.4 billion ($882 million), and net margin for Baidu Core was 24%. Non-GAAP net income attributable to Baidu was RMB 7.3 billion ($996 million). Non-GAAP diluted earnings per ADS was RMB 20.40 ($2.80). Non-GAAP net income attributable to Baidu Core was RMB 7.0 billion ($953 million), and non-GAAP net margin for Baidu Core was 26%.
Adjusted EBITDA was RMB 9.5 billion ($1.30 billion) and adjusted EBITDA margin was 28%. Adjusted EBITDA for Baidu Core was RMB 8.5 billion ($1.17 billion) and adjusted EBITDA margin for Baidu Core was 32%.
As of September 30, 2023, cash, cash equivalents, restricted cash and short-term investments were RMB 202.7 billion ($27.78 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 197.4 billion ($27.06 billion). Free cash flow was RMB 6.0 billion ($822 million), and free cash flow excluding iQIYI was RMB 5.2 billion ($709 million).
Recent Development
Baidu has appointed Ms. Sandy Ran Xu as an independent director of the Board of Directors of the Company (the “Board”), effective from January 1, 2024.
Ms. Xu has served as CEO and executive director of JD.com since May 2023. Prior to her current role, Ms. Xu served as CFO of JD.com from June 2020 to May 2023. Prior to joining JD.com, Ms. Xu was an audit partner and spent nearly 20 years with PricewaterhouseCoopers Zhong Tian LLP, Beijing office and PricewaterhouseCoopers, San Jose office. Ms. Xu currently also serves as a director of Yonghui Supermarket Co., Ltd. Ms. Xu was a Certified Public Accountant in both China and the United States. Ms. Xu received her bachelor’s degree with a double major in information science and economics from Peking University.
Conference Call Information
Baidu’s management will hold an earnings conference call at 7.30 AM on November 21, 2023, U.S. Eastern Time (8.30 PM on November 21, 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 Q3 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/10034602-0jdhg4.html
In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), the passcode and unique access PIN) provided in the calendar invite that you have received following your pre-registration.
Additionally, a live and archived webcast of this conference call will be available at https://ir.baidu.com.
About Baidu
Founded in 2000, Baidu’s mission is to make the complicated world simpler through technology. Baidu is a leading AI company with strong Internet foundation, trading on NASDAQ under “BIDU” and HKEX under “9888”. One Baidu ADS represents eight Class A ordinary shares.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, Baidu’s and other parties’ strategic and operational plans, contain forward-looking statements. Baidu may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in announcements made on the website of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Baidu’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Baidu’s growth strategies; its future business development, including development of new products and services; its ability to attract and retain users and customers; competition in the Chinese Internet search and newsfeed market; competition for online marketing customers; changes in the Company’s revenues and certain cost or expense items as a percentage of its revenues; the outcome of ongoing, or any future, litigation or arbitration, including those relating to intellectual property rights; the expected growth of the Chinese-language Internet search and newsfeed market and the number of Internet and broadband users in China; Chinese governmental policies relating to the Internet and Internet search providers, and general economic conditions in China and elsewhere. Further information regarding these and other risks is included in the Company’s annual report on Form 20-F and other documents filed with the Securities and Exchange Commission, and announcements on the website of the Hong Kong Stock Exchange. Baidu does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of the press release, and Baidu undertakes no duty to update such information, except as required under applicable law.
Non-GAAP Financial Measures
To supplement Baidu’s consolidated financial results presented in accordance with GAAP, Baidu uses the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to Baidu, non-GAAP net margin, non-GAAP diluted earnings per ADS, adjusted EBITDA, adjusted EBITDA margin and free cash flow. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
Baidu believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain items that may not be indicative of its recurring core business operating results, such as operating performance excluding non-cash charges or non-operating in nature. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Baidu’s historical performance and liquidity. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Company’s results of operations. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data.
Non-GAAP operating income represents operating income excluding share-based compensation expenses, amortization and impairment of intangible assets resulting from business combinations, and contingent loss pertaining to legal proceeding in relation to former advertising agencies.
Non-GAAP net income attributable to Baidu represents net income attributable to Baidu excluding share-based compensation expenses, amortization and impairment of intangible assets resulting from business combinations, disposal gain or loss, impairment of long-term investments, fair value change of long-term investments, and contingent loss pertaining to legal proceeding in relation to former advertising agencies, adjusted for related income tax effects. Baidu’s share of equity method investments for these non-GAAP reconciling items, amortization and impairment of intangible assets not on the investees’ books, accretion of their redeemable non-controlling interests, and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per share, adjusted for related income tax effects, are also excluded.
Non-GAAP diluted earnings per ADS represents diluted earnings per ADS calculated by dividing non-GAAP net income attributable to Baidu, by the weighted average number of ordinary shares expressed in ADS. Adjusted EBITDA represents operating income excluding depreciation, amortization and impairment of intangible assets resulting from business combinations, share-based compensation expenses, and contingent loss pertaining to legal proceeding in relation to former advertising agencies.
For more information on non-GAAP financial measures, please see the tables captioned “Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measure.
Baidu, Inc.
Condensed Consolidated Statements of Income
(In millions except for per share (or ADS) information, unaudited)
Three Months Ended
September 30,
June 30,
September 30,
September 30,
2022
2023
2023
2023
RMB
RMB
RMB
US$(2)
Revenues:
Online marketing services
19,943
21,081
21,346
2,926
Others
12,597
12,975
13,101
1,795
Total revenues
32,540
34,056
34,447
4,721
Costs and expenses:
Cost of revenues(1)
16,273
16,167
16,294
2,233
Selling, general and administrative(1)
5,193
6,298
5,778
792
Research and development(1)
5,757
6,381
6,101
836
Total costs and expenses
27,223
28,846
28,173
3,861
Operating income
5,317
5,210
6,274
860
Other (loss) income:
Interest income
1,619
1,948
2,082
285
Interest expense
(724)
(817)
(853)
(117)
Foreign exchange (loss) gain, net
(806)
1,176
(26)
(4)
Share of losses from equity method investments
(376)
(383)
(398)
(55)
Others, net
(4,483)
(555)
1,100
152
Total other (loss) income, net
(4,770)
1,369
1,905
261
Income before income taxes
547
6,579
8,179
1,121
Income tax expense
908
1,270
1,282
175
Net (loss) income
(361)
5,309
6,897
946
Net (loss) income attributable to noncontrolling interests
(215)
99
216
30
Net (loss) income attributable to Baidu
(146)
5,210
6,681
916
(Loss) earnings per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic
(0.87)
14.34
18.45
2.53
-Diluted
(0.87)
14.17
18.22
2.50
(Loss) earnings per share for Class A and Class B ordinary shares:
-Basic
(0.11)
1.79
2.31
0.32
-Diluted
(0.11)
1.77
2.28
0.31
Weighted average number of Class A and Class B ordinary shares outstanding (in millions):
-Basic
2,790
2,804
2,814
2,814
-Diluted
2,790
2,834
2,846
2,846
(1) Includes share-based compensation expenses as follows:
Cost of revenues
84
194
139
19
Selling, general and administrative
480
446
358
49
Research and development
1,039
1,403
778
108
Total share-based compensation expenses
1,603
2,043
1,275
176
(2) All translations from RMB to U.S. dollars are made at a rate of RMB 7.2960 to US$1.00, the exchange rate in effect as of
September 29, 2023 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.
Baidu, Inc.
Condensed Consolidated Balance Sheets
(In millions, unaudited)
December 31,
September 30,
September 30,
2022
2023
2023
RMB
RMB
US$
ASSETS
Current assets:
Cash and cash equivalents
53,156
34,908
4,785
Restricted cash
11,330
11,392
1,561
Short-term investments, net
120,839
156,359
21,431
Accounts receivable, net
11,733
10,712
1,468
Amounts due from related parties
5,432
4,962
680
Other current assets, net
10,360
12,084
1,656
Total current assets
212,850
230,417
31,581
Non-current assets:
Fixed assets, net
23,973
26,481
3,630
Licensed copyrights, net
6,841
6,992
958
Produced content, net
13,002
12,626
1,731
Intangible assets, net
1,254
1,012
139
Goodwill
22,477
22,586
3,096
Long-term investments, net
55,297
52,553
7,203
Long-term time deposits and held-to-maturity investments
23,629
25,260
3,462
Amounts due from related parties
60
147
20
Deferred tax assets, net
2,129
1,783
244
Operating lease right-of-use assets
10,365
10,512
1,441
Other non-current assets
19,096
20,665
2,832
Total non-current assets
178,123
180,617
24,756
Total assets
390,973
411,034
56,337
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans
5,343
11,735
1,608
Accounts payable and accrued liabilities
38,014
37,184
5,096
Customer deposits and deferred revenue
13,116
15,043
2,062
Deferred income
72
151
21
Long-term loans, current portion
–
1
–
Convertible senior notes, current portion
8,305
3,114
427
Notes payable, current portion
6,904
6,179
847
Amounts due to related parties
5,067
5,241
718
Operating lease liabilities
2,809
2,953
405
Total current liabilities
79,630
81,601
11,184
Non-current liabilities:
Deferred income
159
119
16
Deferred revenue
331
421
58
Amounts due to related parties
99
83
11
Long-term loans
13,722
14,472
1,984
Notes payable
39,893
35,861
4,915
Convertible senior notes
9,568
8,349
1,144
Deferred tax liabilities
2,898
2,750
377
Operating lease liabilities
4,810
4,830
662
Other non-current liabilities
2,058
1,838
253
Total non-current liabilities
73,538
68,723
9,420
Total liabilities
153,168
150,324
20,604
Redeemable noncontrolling interests
8,393
9,276
1,271
Equity
Total Baidu shareholders’ equity
223,478
242,427
33,227
Noncontrolling interests
5,934
9,007
1,235
Total equity
229,412
251,434
34,462
Total liabilities, redeemable noncontrolling
interests, and equity
390,973
411,034
56,337
Baidu, Inc.
Selected Information
(In millions, unaudited)
Three months ended
September 30, 2022 (RMB)
Three months ended
June 30, 2023 (RMB)
Three months ended
September 30, 2023 (RMB)
Three months ended
September 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
25,239
7,471
(170)
32,540
26,407
7,802
(153)
34,056
26,572
8,015
(140)
34,447
3,642
1,098
(19)
4,721
YOY
5 %
7 %
6 %
QOQ
1 %
3 %
1 %
Costs and expenses:
Cost of revenues (1)
10,745
5,705
(177)
16,273
10,553
5,774
(160)
16,167
10,610
5,840
(156)
16,294
1,454
800
(21)
2,233
Selling, general and administrative (1)
4,231
980
(18)
5,193
5,344
979
(25)
6,298
4,810
981
(13)
5,778
659
135
(2)
792
Research and development (1)
5,281
476
–
5,757
5,942
439
–
6,381
5,654
447
–
6,101
775
61
–
836
Total costs and expenses
20,257
7,161
(195)
27,223
21,839
7,192
(185)
28,846
21,074
7,268
(169)
28,173
2,888
996
(23)
3,861
YOY
Cost of revenues
(1 %)
2 %
0 %
Selling, general and administrative
14 %
0 %
11 %
Research and development
7 %
(6 %)
6 %
Costs and expenses
4 %
1 %
3 %
Operating income
4,982
310
25
5,317
4,568
610
32
5,210
5,498
747
29
6,274
754
102
4
860
YOY
10 %
141 %
18 %
QOQ
20 %
22 %
20 %
Operating margin
20 %
4 %
16 %
17 %
8 %
15 %
21 %
9 %
18 %
Add: total other (loss) income, net
(4,108)
(662)
–
(4,770)
1,603
(234)
–
1,369
2,159
(254)
–
1,905
296
(35)
–
261
Less: income tax expense
866
42
–
908
1,262
8
–
1,270
1,272
10
–
1,282
174
1
–
175
Less: net (loss) income attributable to NCI
(17)
1
(199)
(3)
(215)
(103)
3
199
(3)
99
(51)
7
260
(3)
216
(6)
1
35
(3)
30
Net income (loss) attributable to Baidu
25
(395)
224
(146)
5,012
365
(167)
5,210
6,436
476
(231)
6,681
882
65
(31)
916
YOY
25644 %
–
–
QOQ
28 %
30 %
28 %
Net margin
0 %
(5 %)
(0 %)
19 %
5 %
15 %
24 %
6 %
19 %
Non-GAAP financial measures:
Operating income (non-GAAP)
6,650
525
7,200
6,516
786
7,334
6,672
895
7,596
914
123
1,041
YOY
0 %
70 %
6 %
QOQ
2 %
14 %
4 %
Operating margin (non-GAAP)
26 %
7 %
22 %
25 %
10 %
22 %
25 %
11 %
22 %
Net income attributable to Baidu (non-
GAAP)
5,767
187
5,889
7,694
595
7,998
6,956
622
7,267
953
85
996
YOY
21 %
233 %
23 %
QOQ
(10 %)
5 %
(9 %)
Net margin (non-GAAP)
23 %
3 %
18 %
29 %
8 %
23 %
26 %
8 %
21 %
Adjusted EBITDA
8,239
615
8,879
8,229
855
9,116
8,513
963
9,505
1,167
132
1,303
YOY
3 %
57 %
7 %
QOQ
3 %
13 %
4 %
Adjusted EBITDA margin
33 %
8 %
27 %
31 %
11 %
27 %
32 %
12 %
28 %
(1) Includes share-based compensation as follows:
Cost of revenues
45
39
84
160
34
194
107
32
139
15
4
19
Selling, general and administrative
375
105
480
356
90
446
290
68
358
40
9
49
Research and development
978
61
1,039
1,358
45
1,403
732
46
778
100
8
108
Total share-based compensation
1,398
205
1,603
1,874
169
2,043
1,129
146
1,275
155
21
176
(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
September 30, 2022 (RMB)
June 30, 2023 (RMB)
September 30, 2023 (RMB)
September 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
8,543
196
8,739
9,746
886
10,632
8,694
831
9,525
1,192
114
1,306
Net cash provided by (used in) investing activities
7,603
407
8,010
7,309
(421)
6,888
(11,345)
(55)
(11,400)
(1,555)
(8)
(1,563)
Net cash (used in) provided by financing activities
(5,967)
(106)
(6,073)
1,908
(1,176)
732
(5,253)
269
(4,984)
(720)
37
(683)
Effect of exchange rate changes on cash, cash
equivalents and restricted cash
1,980
60
2,040
496
128
624
153
5
158
21
1
22
Net increase (decrease) in cash, cash
equivalents and restricted cash
12,159
557
12,716
19,459
(583)
18,876
(7,751)
1,050
(6,701)
(1,062)
144
(918)
Cash, cash equivalents and restricted cash
At beginning of period
50,662
3,019
53,681
30,355
5,665
36,020
49,814
5,082
54,896
6,828
697
7,525
At end of period
62,821
3,576
66,397
49,814
5,082
54,896
42,063
6,132
48,195
5,766
841
6,607
Net cash provided by operating activities
8,543
196
8,739
9,746
886
10,632
8,694
831
9,525
1,192
114
1,306
Less: Capital expenditures
(2,140)
(48)
(2,188)
(2,693)
(13)
(2,706)
(3,525)
(4)
(3,529)
(483)
(1)
(484)
Free cash flow
6,403
148
6,551
7,053
873
7,926
5,169
827
5,996
709
113
822
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
September 30, 2022 (RMB)
June 30, 2023 (RMB)
September 30, 2023 (RMB)
September 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
4,982
310
5,317
4,568
610
5,210
5,498
747
6,274
754
102
860
Add: Share-based compensation expenses
1,398
205
1,603
1,874
169
2,043
1,129
146
1,275
155
21
176
Add: Amortization and impairment of intangible assets(1)
56
10
66
74
7
81
45
2
47
5
–
5
Add: Contingent loss(4)
214
–
214
–
–
–
–
–
–
–
–
–
Operating income (non-GAAP)
6,650
525
7,200
6,516
786
7,334
6,672
895
7,596
914
123
1,041
Add: Depreciation of fixed assets
1,589
90
1,679
1,713
69
1,782
1,841
68
1,909
253
9
262
Adjusted EBITDA
8,239
615
8,879
8,229
855
9,116
8,513
963
9,505
1,167
132
1,303
Net income (loss) attributable to Baidu
25
(395)
(146)
5,012
365
5,210
6,436
476
6,681
882
65
916
Add: Share-based compensation expenses
1,394
205
1,497
1,872
169
1,949
1,128
146
1,194
155
20
164
Add: Amortization and impairment of intangible assets(1)
50
10
56
61
7
65
43
2
44
6
–
6
Add: Disposal (gain)
(6)
–
(6)
(919)
(89)
(959)
(753)
–
(753)
(103)
–
(103)
Add: Impairment of long-term investments
1,042
376
1,230
270
155
340
46
–
46
6
–
6
Add: Fair value loss (gain) of long-term investments
3,149
(27)
3,135
1,239
(4)
1,237
(384)
(2)
(385)
(53)
–
(53)
Add: Reconciling items on equity method investments(2)
237
16
245
296
(9)
292
572
–
572
78
–
78
Add: Contingent loss(4)
214
–
214
–
–
–
–
–
–
–
–
–
Add: Tax effects on non-GAAP adjustments(3)
(338)
2
(336)
(137)
1
(136)
(132)
–
(132)
(18)
–
(18)
Net income attributable to Baidu (non-GAAP)
5,767
187
5,889
7,694
595
7,998
6,956
622
7,267
953
85
996
Diluted earnings per ADS
(0.87)
14.17
18.22
2.50
Add: Accretion of the redeemable noncontrolling
interests
0.45
0.50
0.53
0.07
Add: Non-GAAP adjustments to earnings per ADS
17.29
7.88
1.65
0.23
Diluted earnings per ADS (non-GAAP)
16.87
22.55
20.40
2.80
(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 contingent loss pertaining to legal proceeding involving former advertising agency.
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SOURCE Baidu, Inc.