Baidu announced its unaudited financial results for the third quarter ended September 30, 2014. Total revenues in the third quarter of 2014 were RMB13.520 billion ($2.203 billion), a 52.0% increase YoY.
Online marketing revenues for the third quarter of 2014 were RMB13.427 billion ($2.188 billion), representing a 51.8% increase YoY. Baidu had about 516,000 active online marketing customers in Q3 2014, representing an 11.2% increase YoY. Revenue per online marketing customer for the third quarter was approximately RMB25,900 ($4,220), a 35.6% increase YoY and a 7.0% increase QoQ.
Traffic acquisition cost was RMB1.742 billion ($283.8 million), representing 12.9% of total revenues, as compared to 11.7% in the corresponding period in 2013 and 12.7% in the second quarter of 2014. The increase reflects increased contribution of contextual ads, mobile and promotion of hao123.
Content costs as a component of cost of revenues were RMB498.1 million ($81.2 million), representing 3.7% of total revenues, compared to 2.5% in the corresponding period in 2013, and 3.0% in the previous quarter. Content costs are mainly related to iQiyi.
Selling, general and administrative expenses were RMB2.700 billion ($439.9 million), representing an increase of 95% from the corresponding period in 2013, primarily due to an increase in promotional spending for mobile products.
Research and development expenses were RMB1.832 billion ($298.4 million), a 68% increase YoY primarily due to an increase in the number of research and development personnel.
Operating profit was RMB3.920 billion ($638.6 million), representing a 17.4% increase from the corresponding period in 2013. Operating profit excluding share-based compensation expenses (non-GAAP) was RMB4.154 billion ($676.8 million), a 19.3% increase from the corresponding period in 2013.
Net income attributable to Baidu was RMB3.876 billion ($631.5 million), representing a 27.2% increase from the corresponding period in 2013. Basic and diluted earnings per ADS for the third quarter of 2014 amounted to RMB11.05 ($1.80) and RMB11.00 ($1.79), respectively.
We had another very strong quarter as we continued to leverage our tremendous assets, especially in mobile. This quarter, mobile traffic surpassed PC traffic and mobile revenue contributed 36% of our total revenue. We are particularly pleased with the progress we have made in connecting people with services through innovative O2O initiatives like Baidu Connect—a better way for businesses to connect with their targeted consumers on mobile devices,
said Robin Li, chairman and chief executive officer of Baidu.
It’s an exciting time for Baidu. The O2O market opportunity is enormous, and our leading positions in mobile search and maps, as well as our extensive sales force, position us optimally to capture that opportunity.
Baidu currently expects to generate total revenues in an amount ranging from RMB13.850 billion ($2.256 billion) to RMB14.250 billion ($2.322 billion) for the fourth quarter of 2014, representing a 45.4% to 49.6% year-over-year increase.