Baidu reports better-than-expected third-quarter revenue growth, CEO says company is resilient
Chinese tech giant Baidu reported Tuesday that its third-quarter revenue grew by 6% year-on-year to 34.45 billion yuan ($4.72 billion), beating analyst expectations. The company’s U.S.-listed shares were up around 2% in pre-market trade following the announcement.
According to Baidu CEO and co-founder Robin Li, the company’s solid third-quarter financial results demonstrate resilience in a challenging economic climate.
Online marketing revenue at Baidu, which is known for its search engine, saw a 5% increase from a year ago, while non-online marketing revenue was up by 6% in the same period. This follows a previous quarter surge of 15% from a year ago, with both online and non-online marketing revenue growing by double digits.
Adjusted earnings per American Depositary Share were reported at 20.40 yuan in the third quarter, down from 22.55 yuan in the previous three months, but up from 16.87 yuan in the year-ago period. Net income for the quarter ended Sept. 30 was 6.68 billion yuan, up from 5.21 billion yuan in the previous quarter.
Baidu’s increased revenue was accompanied by higher expenses as well. Marketing expenses contributed to an 11% year-on-year increase in selling, general, and administrative expenses, which came in at 5.8 billion yuan.
Additionally, research and development expenses rose by 6% to 6.1 billion yuan year-on-year, partly due to increased server fees to support the company’s Ernie bot research, Baidu reported. The Ernie bot is the company’s version of the artificial intelligence-powered chatbot ChatGPT.
Despite the increased expenses, Baidu CFO Rong Luo stated that the company’s ongoing investments in AI have underpinned technological and product innovations. Moving forward, while continuing to prioritize investments in AI, especially in generative AI and foundation models, the company will do so with an unrelenting focus on efficiency and strategic resource allocation.
The company’s Apollo Go robotaxi business also performed well, with 821,000 rides operated in the third quarter, up from 714,000 rides in the second three months of the year. In September, the suburban Beijing city district of Yizhuang officially permitted local robotaxi operators to charge fares for fully autonomous taxis, with no drivers inside.
Looking ahead, Baidu announced that Sandy Xu, former CFO of JD.com, would join the company as an independent director of the board starting Jan 1, 2024.