Baidu App’s average daily active users (“DAUs”) reached 195 million, up 21% year over year, in December 2019. Baidu’s content network BJH publisher accounts for Baidu feed reached 2.6 million, up 38% year over year, in December 2019.
Baidu has partnered with major TV and provincial satellite stations, to provide TV streaming and VOD in Baidu App and short video apps. Through Baidu’s mobile building blocks, TV stations can leverage Baidu’s powerful content distribution channels to extend their reach and allow online users to engage with the TV shows.
Merchants with HTML5 websites across many industries are switching to Baidu Managed Page, as the landing page for their search result. Revenue from Baidu Managed Page reached almost a quarter of Baidu Core’s online marketing services revenue in the fourth quarter of 2019.
Merchants with app development capabilities are adopting Baidu Smart Mini Program, whose monthly active users ('MAUs') reached 316 million, up 114% year over year, in December 2019.Click To TweetWeChat Mini Programs daily active users exceeded 300 million in 2019.
All six major express delivery companies in China have adopted Baidu Smart Mini Program, which provides native-app-like experience to logged-in users, such as allowing them to check the shipping status of their e-commerce orders and request for an express delivery simply by searching “express delivery” in Baidu App.
Baidu Smart Mini Program is also extending its reach to government services. For example, employees in China can check the information of their housing fund, similar to social security in the U.S., by simply scanning their face with Baidu App, as a logged-in user.
Top mini programs in 2019: WeChat vs. Alipay vs. Baidu
Baidu affiliated video platform iQIYI subscribers reached 106.9 million in December 2019, adding 19.5 million subscribers year over year.
Baidu Voice Assistant DuerOS
Monthly voice queries on DuerOS surpassed 5.0 billion, up by over 3 fold year over year, in December 2019. Monthly voice queries from Xiaodu first-party devices were 2.3 billion, up over 7 fold year over year.Click To TweetDuerOS skills store now offers over 3,600 skills in wide-ranging genres, including online education, gaming, and live streaming. DuerOS developer community has expanded to over 38,000 members.
Xiaodu smart speakers ranked #1 in smart speaker shipments in China and Xiaodu Smart Display ranked #1 in smart display shipments globally for full-year 2019, according to Strategy Analytics and Canalys.
Baidu released Xiaodu Smart Display X8 in December 2019, with enhanced capabilities powered by Baidu AI, allowing users to wake the device up with eye gestures, pause streaming content with hand gestures and receive report on moving objects in the house when the owner leaves home.
Baidu AI
Baidu partnered with Shanghai Pudong Development Bank, to launch a blockchain alliance with major Chinese commercial banks for inter-bank information verification built on Baidu’s Blockchain as a Service (BaaS) platform.
In November 2019, Baidu released its end-to-end far-field Automatic Speech Recognition (ASR) solutions, based on in-house designed Baidu Honghu AI chip.
Baidu Brain’s speech recognition capabilities are used across Baidu products, including Xiaodu smart speakers, DuerOS in-vehicle infotainment, Baidu Maps, and Baidu call-center enterprise solutions.
Developers have tapped Baidu Brain’s speech recognition engine on Baidu open AI platform more than 10 billion times.
Baidu is applying Baidu Kunlun, its high-performance AI chip, optimizing visual, speech, natural language processing, and other AI capabilities, to power its cloud servers.
In December 2019, Baidu’s pre-training framework for language understanding, ERNIE (Enhanced Representation through kNowledge IntEgration), became the first to score above 90 on the General Language Understanding Evaluation benchmark, or GLUE, which is widely considered as the benchmark for testing AI language understanding and otherwise dominated by U.S. technology firms and universities.
ERNIE powers Baidu search and Xiaodu smart devices, to provide the best user experience.
Baidu Maps has been selected by Tesla China to provide map cloud services, such as real-time traffic condition reporting, base map display, and point-of-interest search. Baidu Maps is a location based service platform, supporting 1.8 million developers and tracking 2 billion daily kilometers.
Baidu’s autonomous driving: Apollo

Baidu partnered with Cangzhou, Hebei province, to develop smart transportation using Baidu’s V2X solutions to improve traffic conditions and safety. The adoption of Baidu’s V2X solutions has led to a second Apollo robotaxi pilot program, launched in November 2019, with an initial fleet of 30 vehicles.
Baidu also partnered with Yinchuan, Ningxia province, to provide the provincial capital with Baidu’s V2X solutions to support autonomous trucking.
At the Apollo Partner Conference in December 2019, Apollo v5.5 was released to support urban road point-to-point autonomous driving, as well as open-platform development for V2X and IoV solutions. Apollo has garnered 177 leading OEMs, suppliers and other partners, and over 36,000 developers worldwide.
Apollo fleet has reached 3 million test kilometers on the road in December 2019, spanning across 23 cities, including Beijing, Wuhan, Cangzhou and Changchun. The municipality of Beijing granted Baidu its first batch of 40 manned autonomous driving licenses in December 2019.
Baidu Financial Results
Fourth Quarter 2019 Results
Total revenues reached RMB 28.9 billion ($4.15 billion), up 6% year over year and 3% quarter over quarter.
Online marketing revenues were RMB 20.8 billion ($2.98 billion), decreasing 2% year over year and increasing 2% quarter over quarter. Other revenues were RMB 8.1 billion ($1.17 billion), increasing 35% year over year, driven mainly by the strong growth in cloud services, smart devices, and iQIYI membership.
Revenue from Baidu Core reached RMB 21.7 billion ($3.12 billion), increasing 6% year over year and 3% quarter over quarter. Revenue from iQIYI reached RMB 7.5 billion ($1.08 billion), up 7% year over year. iQIYI membership revenue grew 21% year over year, offset by online advertising revenue declining 15% year over year.
Cost of revenues, were RMB 15.5 billion ($2.23 billion), decreasing 1% year over year, primarily due to a decrease in content costs and traffic acquisition costs, offset by increases in hardware and cloud cost of goods sold, impairment and amortization of intangible assets and depreciation expenses.
Selling, general and administrative expenses were RMB 4.0 billion ($568 million), decreasing 33% year over year, primarily due to decreased investment in channel spending and promotional marketing, as well as lower personnel-related expenses.
Research and development expenses were RMB 4.8 billion ($683 million), increasing 5% year over year, primarily due to an increase in personnel-related expenses.
Operating income was RMB 4.7 billion ($669 million) and the operating margin was 16%. Baidu Core operating income was RMB 6.9 billion ($987 million), and Baidu Core operating margin was 32%.
Non-GAAP operating income was RMB 6.8 billion ($970 million), and non-GAAP operating margin was 23%. Non-GAAP Baidu Core operating income was RMB 8.5 billion ($1.22 billion), and the non-GAAP Baidu Core operating margin was 39%.
Total other income was RMB 699 million ($101 million), compared to total other loss of RMB 60 million for Q4 2018.
Income tax expense was RMB 304 million ($44 million), compared to RMB 484 million in Q4 2018.
Net income attributable to Baidu was RMB 6.3 billion ($ 911 million), and diluted earnings per ADS was RMB 18 ($2.62). Net income attributable to Baidu Core was RMB 7.4 billion ($1.07 billion). Non-GAAP net income attributable to Baidu was RMB 9.2 billion ($1.32 billion), and non-GAAP net margin was 32%. Non-GAAP diluted earnings per ADS amounted to RMB 27 ($3.81). Non-GAAP net income attributable to Baidu Core was RMB 10.0 billion ($1.43 billion), and the non-GAAP net margin for Baidu Core was 46%.
Adjusted EBITDA was RMB 8.2 billion ($1.17 billion) and the adjusted EBITDA margin was 28%. Adjusted EBITDA to Baidu Core was RMB 9.8 billion ($1.41 billion) and the adjusted EBITDA margin for Baidu Core was 45%.
As of December 31, 2019, cash, cash equivalents, restricted cash, and short-term investments were RMB 147.4 billion ($21.17 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 135.9 billion ($19.52 billion). Free cash flow was RMB 10.1 billion ($1.46 billion). Free cash flow excluding iQIYI was RMB 8.0 billion ($1.15 billion).
The Fiscal Year 2019 Results
Total revenues reached RMB 107.4 billion ($15.43 billion), increasing 5% year over year, or 8% year over year, excluding the impact of announced divestures2. Online marketing revenues were RMB 78.1 billion ($11.22 billion), decreasing 5 % year over year. Other revenues were RMB 29.3 billion ($4.21 billion), increasing 44% year over year, driven mainly by the strong growth in iQIYI membership, cloud services, and smart devices.
Revenue from Baidu Core reached RMB 79.7 billion ($11.45 billion), increasing 2% year over year, or increasing 6% year over year, excluding the impact of announced divestures2. Revenue from iQIYI reached RMB 29.0 billion ($4.17 billion), up 16% year over year. iQIYI membership revenue grew 36% year over year, offset by online advertising revenue declining 11% year over year.
The cost of revenues was RMB 62.9 billion ($9.03 billion), increasing 21% year over year, primarily due to increases in hardware and cloud cost of goods sold, content costs, depreciation expense, traffic acquisition costs, and bandwidth costs.
Selling, general and administrative expenses were RMB 19.9 billion ($2.86 billion), increasing 4% year over year.
Research and development expenses were RMB 18.3 billion ($2.64 billion), increasing 16% year over year, primarily due to an increase in personnel-related expenses.
Operating income was RMB 6.3 billion ($906 million) and the operating margin was 6%. Baidu Core operating income was RMB 15.3 billion ($2.19 billion), and Baidu Core operating margin was 19%.
Non-GAAP operating income was RMB 12.8 billion ($1.84 billion), and non-GAAP operating margin was 12%. Non-GAAP Baidu Core operating income was RMB 20.3 billion ($2.92 billion), and the non-GAAP Baidu Core operating margin was 25%.
The total other loss was RMB 6.6 billion ($955 million), mainly due to loss on equity investment arising from other-than-temporary decline, compared to total other income of RMB 11.8 billion for 2018, which was mainly due to disposal gains from Du Xiaoman and Global DU businesses.
In Q4 2015, following a transaction where Baidu exchanged shares of its majority-owned subsidiary Qunar for a minority stake in Trip.com, it deconsolidated Qunar, recorded its investment in Trip.com at the closing-date market value and recognized a non-cash accounting gain of RMB 24.4 billion.
Since then, the market value of Trip.com shares has declined, and the continued low market price in 2019 resulted in Baidu’s recognizing a non-cash impairment loss of RMB 8.9 billion in Q3 2019. In October 2019, Baidu sold down its holding in Trip.com, reducing its interest from 19% to 12% of Trip.com’s outstanding shares.
Income tax expense was RMB 1.9 billion ($279 million), compared to RMB 4.7 billion in 2018. The decrease in income tax expense was mainly due to lower taxable income from Baidu Core.
Net income attributable to Baidu was RMB 2.1 billion ($296 million), and diluted earnings per ADS was RMB 6 ($0.80). Net income attributable to Baidu Core was RMB 7.6 billion ($1.09 billion). Non-GAAP net income attributable to Baidu was RMB 18.2 billion ($2.61 billion), and non-GAAP net margin was 17%.
Non-GAAP diluted earnings per ADS amounted to RMB 52 ($7.48). Non-GAAP net income attributable to Baidu Core was RMB 22.8 billion ($3.28 billion), and non-GAAP net margin for Baidu Core was 29%.
Adjusted EBITDA was RMB 18.4 billion ($2.65 billion) and the adjusted EBITDA margin was 17%. Adjusted EBITDA to Baidu Core was RMB 25.5 billion ($3.66 billion) and the adjusted EBITDA margin for Baidu Core was 32%.
Free cash flow was RMB 22.0 billion ($3.17 billion). Free cash flow excluding iQIYI was RMB 18.9 billion ($2.71 billion).
Financial Guidance
For the first quarter of 2020, Baidu expects revenues to be between RMB 21.0 billion ($3.0 billion) and RMB 22.9 billion ($3.3 billion), representing a decline of 5% to 13% year over year, which assumes that Baidu Core revenue will decline between 10% and 18% year over year.
The Coronavirus situation in China is evolving, and business visibility is very limited. The above forecast reflects Baidu’s current and preliminary view, which is subject to substantial uncertainty.