Revenues from Baidu Core remained healthy with non-ad revenues increasing by 35% year over year, driven by Baidu AI Cloud, which grew 45% year over year in the first quarter of 2022.
Baidu Operation Highlights
As the first independent R&D deep learning platform in China, PaddlePaddle’s developer community has grown to 4.77 million and has served 180,000 businesses, and created 560,000 models, as of May 20, 2022.
Baidu ACE smart transportation has been adopted by 41 cities, up from 16 cities a year ago, based on contract value of over RMB10 million, as of the end of the first quarter of 2022.
Baidu received a nomination letter from Dongfeng Motor, a Top 3 domestic automaker, in April 2022, indicating that Dongfeng Motor intends to adopt Apollo Self Driving (ANP, AVP, HD Map) in one of its popular models. This followed the nomination letter from BYD earlier this year.
On April 28th 2022, Apollo Go was granted the permit to provide driverless ride-hailing services on public roads of the Yizhuang region of Beijing. Apollo also received the first permits in Chongqing to conduct driverless testing on May 20th, 2022.
Apollo Go provided 196K rides in the first quarter of 2022.
Apollo Go is now available in ten cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Changsha, Cangzhou, Yangquan, Wuzhen Water Town in Jiaxing and Wuhan. Apollo Go expanded into Wuzhen Water Town in Jiaxing on March 26, 2022 and Wuhan on May 10, 2022.
Other Growth Initiatives
Xiaodu again ranked No.1 in smart display shipments globally for 2021, according to Strategy Analytics and Canalys. Xiaodu continues to be ranked No.1 in smart speaker shipments in China for 2021, according to Strategy Analytics, IDC, and Canalys.
In March, Baidu App’s MAUs reached 632 million, up 13% year over year, and daily logged-in users reached 83%.
In March, Baidu Smart Mini Program (“SMPs”) MAUs reached 508 million, up 22% year over year, and the number of SMPs grew by 26% year over year.
Revenue from Managed Page grew by 31% and reached 47% of Baidu Core’s online marketing revenue in the first quarter of 2022.
iQIYI’s average daily number of total subscribing members for the quarter was 101 million, compared to 105 million for the first quarter of 2021 and 97 million for the fourth quarter of 2021.
Financial Results in Q1 2022
Baidu’s total revenues were RMB 28.4 billion ($4.48 billion), increasing 1% year over year.
- Revenue from Baidu Core was RMB 21.4 billion ($3.37 billion), increasing 4% year over year; online marketing revenue was RMB 15.7 billion ($2.47 billion), decreasing 4% year over year, and non-online marketing revenue was RMB 5.7 billion ($903 million), up 35% year over year, driven by cloud and other AI-powered businesses.
- Revenue from iQIYI was RMB 7.3 billion ($1.15 billion), decreasing 9% year over year.
The cost of revenues was RMB 15.5 billion ($2.45 billion), increasing 4% year over year, primarily due to an increase in the cost of goods sold, traffic acquisition costs, bandwidth costs, and other costs related to new AI business, offset by a decrease in content costs.
Selling, general and administrative expenses were RMB 4.7 billion ($735 million), decreasing 11% year over year, primarily due to a decrease in channel spending, promotional marketing, and expected credit losses.
Research and development expense was RMB 5.6 billion ($885 million), increasing 10% year over year, primarily due to an increase in personnel-related expense.
Operating income was RMB 2.6 billion ($410 million). Baidu Core operating income was RMB 2.5 billion ($398 million), and Baidu Core operating margin was 12%.
Non-GAAP operating income was RMB 4.0 billion ($630 million). Non-GAAP Baidu Core operating income was RMB 3.7 billion ($581 million), and non-GAAP Baidu Core operating margin was 17%.
The total other loss, net was RMB 3.0 billion ($466 million), which mainly included a fair value loss of RMB 3.0 billion from long-term investments.
A significant portion of long-term investments, including but not limited to investments in equity securities of public and private companies, private equity funds and digital assets, is subject to quarterly fair value adjustments, which may contribute to net income volatility in future periods.
Income tax expense was RMB 391 million ($62 million), decreasing 75% year over year, primarily due to a decrease in profit before tax and an increase in deduction on certain expenses that were previously considered non-deductible.
Net loss attributable to Baidu was RMB 885 million ($140 million), and diluted loss per ADS was RMB 2.87 ($0.45). Net loss attributable to Baidu Core was RMB 963 million ($152 million).
Non-GAAP net income attributable to Baidu was RMB 3.9 billion ($612 million). Non-GAAP diluted earnings per ADS was RMB 11.22 ($1.77). Non-GAAP net income attributable to Baidu Core was RMB 3.8 billion ($600 million), and non-GAAP net margin for Baidu Core was 18%.
Adjusted EBITDA was RMB 5.5 billion ($867 million) and the adjusted EBITDA margin was 19%. Adjusted EBITDA for Baidu Core was RMB 5.1 billion ($805 million) and adjusted EBITDA margin for Baidu Core was 24%.
As of March 31, 2022, cash, cash equivalents, restricted cash and short-term investments were RMB 191.0 billion ($30.13 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 185.8 billion ($29.31 billion).
Free cash flow was negative RMB 107 million ($17 million), and free cash flow excluding iQIYI was RMB 1.1 billion ($175 million).