BEIJING, Feb. 22, 2023 /PRNewswire/ — Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888) (“Baidu” or the “Company”), a leading AI company with strong Internet foundation, today announced its unaudited financial results for the quarter and fiscal year ended December 31, 2022.
“2022 was a challenging year, but we used this period to prepare the company for better times. In 2023, we believe we have a clear path to reaccelerate our revenue growth, and we are now well positioned to make use of the opportunities that China’s economic recovery offers us,” said Robin Li, Co-founder and CEO of Baidu. “With our long-term investments in AI, we are poised to capitalize on the imminent inflection point in AI, unlocking exciting new opportunities across our entire business portfolio – from mobile ecosystem to AI Cloud, autonomous driving, smart devices, and beyond.”
“We initiated our efforts towards cost optimization and business efficiency at an early stage in the pandemic, creating a stronger, leaner company. In the second half of 2022, Baidu Core non-GAAP operating profit grew 14% year over year. We believe a more streamlined operation will support the sustainable development of our company over the long term,” said Rong Luo, CFO of Baidu.
Fourth Quarter and Fiscal Year 2022 Financial Highlights[1]
Baidu, Inc.
(In millions except per
Q4
Q3
Q4
FY
FY
ADS, unaudited)
2021
2022
2022
YOY
2021
2022
YOY
RMB
RMB
RMB
US$
RMB
RMB
US$
Total revenues
33,088
32,540
33,077
4,796
0 %
124,493
123,675
17,931
(1 %)
Operating income
1,958
5,317
4,593
666
135 %
10,518
15,911
2,307
51 %
Operating income (non-GAAP) [2]
4,307
7,200
6,497
942
51 %
19,030
23,186
3,362
22 %
Net income (loss) to Baidu
1,715
(146)
4,953
718
189 %
10,226
7,559
1,096
(26 %)
Net income to Baidu (non-GAAP) [2]
4,084
5,889
5,371
779
32 %
18,830
20,680
2,998
10 %
Diluted earnings (loss) per ADS
4.51
(0.87)
13.59
1.97
201 %
28.07
19.85
2.88
(29 %)
Diluted earnings per ADS (non-GAAP) [2]
11.60
16.87
15.25
2.21
31 %
53.53
58.93
8.54
10 %
Adjusted EBITDA [2]
5,757
8,879
8,231
1,193
43 %
24,914
29,663
4,301
19 %
Adjusted EBITDA margin
17 %
27 %
25 %
25 %
20 %
24 %
24 %
Baidu Core
Q4
Q3
Q4
FY
FY
(In millions, unaudited)
2021
2022
2022
YOY
2021
2022
YOY
RMB
RMB
RMB
US$
RMB
RMB
US$
Total revenues
25,978
25,239
25,654
3,719
(1 %)
95,163
95,431
13,836
0 %
Operating income
2,958
4,982
3,782
548
28 %
15,142
14,534
2,107
(4 %)
Operating income (non-GAAP) [2]
4,847
6,650
5,491
796
13 %
22,201
20,948
3,037
(6 %)
Net income to Baidu Core
2,656
25
4,773
692
80 %
13,557
7,551
1,095
(44 %)
Net income to Baidu Core (non-GAAP) [2]
4,625
5,767
4,915
713
6 %
21,292
19,935
2,890
(6 %)
Adjusted EBITDA[2]
6,210
8,239
7,146
1,036
15 %
27,682
27,088
3,927
(2 %)
Adjusted EBITDA margin
24 %
33 %
28 %
28 %
29 %
28 %
28 %
[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 6.8972 as of December 30, 2022, 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’s board of directors has authorized a new share repurchase program under which the Company may repurchase up to US$5 billion of its shares, effective through December 31, 2025. Baidu received a B rating at the latest CDP climate change scores, making a significant improvement from its D rating in 2021. CDP is a non-profit organization that runs the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts.
AI Cloud
Baidu ACE smart transportation has been adopted by 69 cities, up from 35 cities a year ago, based on contract amounts of over RMB10 million, as of the end of 2022. Baidu was once again ranked the No. 1 AI Cloud provider, according to IDC’s first half of 2022 report on China’s public cloud market for the fourth consecutive year. PaddlePaddle developer community has grown to 5.35 million and has served 200,000 businesses, as of the end of 2022. Developers have created 670,000 models on PaddlePaddle by the end of 2022.
Intelligent Driving
Apollo Go, Baidu’s autonomous ride-hailing service, provided 561K rides in the fourth quarter of 2022, up 162% year over year. The cumulative rides provided to the public by Apollo Go exceeded 2 million by the end of January 2023. Apollo Go received Beijing’s first license to test vehicles with no driver or safety operator in the car on December 30, 2022, taking Baidu one step closer to providing fully driverless ride-hailing service on public roads in the capital city.
Other Growth Initiatives
Xiaodu ranked No.1 in smart display shipments and smart speaker shipments in China for the first nine months of 2022, according to IDC, Strategy Analytics, and Canalys.
Mobile Ecosystem
In December, Baidu App’s MAUs reached 648 million, up 4% year over year. Managed Page accounted for 45% of Baidu Core’s online marketing revenue in the fourth quarter of 2022. In 2022, revenues from Managed Page accounted for 48% of total online marketing revenue, up from about 40% a year ago.
iQIYI
iQIYI’s average daily number of total subscribing members for the quarter was 111.6 million, compared to 97.0 million for the fourth quarter of 2021 and 101.0 million for the third quarter of 2022.
Fourth Quarter 2022 Financial Results
Total revenues were RMB 33.1 billion ($4.80 billion), which is basically flat from last year.
Revenue from Baidu Core was RMB 25.7 billion ($3.72 billion), decreasing 1% year over year; online marketing revenue was RMB 18.1 billion ($2.62 billion), down 6% year over year primarily due to the resurgence of Covid-19 in certain cities in China, and non-online marketing revenue was RMB 7.6 billion ($1.10 billion), up 11% year over year, mainly driven by other AI-powered businesses and cloud business. Revenue from iQIYI was RMB 7.6 billion ($1.10 billion), increasing 3% year over year.
Cost of revenues was RMB 16.9 billion ($2.46 billion), decreasing 2% year over year, primarily due to the reduction in content costs, cost of goods sold and other costs related to new AI business, partially offset by the increase in traffic acquisition costs.
Selling, general and administrative expenses were RMB 5.9 billion ($853 million), decreasing 9% year over year, primarily due to the decrease in personnel-related expenses.
Research and development expense was RMB 5.7 billion ($820 million), decreasing 23% year over year, primarily due to the decrease in personnel-related expense.
Operating income was RMB 4.6 billion ($666 million). Baidu Core operating income was RMB 3.8 billion ($548 million), and Baidu Core operating margin was 15%. Non-GAAP operating income was RMB 6.5 billion ($942 million). Non-GAAP Baidu Core operating income was RMB 5.5 billion ($796 million), and non-GAAP Baidu Core operating margin was 21%.
Total other income, net was RMB 1.8 billion ($258 million), which mainly included a fair value gain of RMB 1.6 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 and private equity funds, is subject to quarterly fair value adjustments, which may contribute to net income volatility in future periods. Total other income, net was RMB 407 million for the same period last year, which mainly included a fair value gain of RMB 1.5 billion and an impairment loss of RMB 891 million from long-term investments.
Income tax expense was RMB 1.3 billion ($181 million), decreasing 3% year over year.
Net income attributable to Baidu was RMB 5.0 billion ($718 million), and diluted earnings per ADS was RMB 13.59 ($1.97). Net income attributable to Baidu Core was RMB 4.8 billion ($692 million), and net margin for Baidu Core was 19%. Non-GAAP net income attributable to Baidu was RMB 5.4 billion ($779 million). Non-GAAP diluted earnings per ADS was RMB 15.25 ($2.21). Non-GAAP net income attributable to Baidu Core was RMB 4.9 billion ($713 million), and non-GAAP net margin for Baidu Core was 19%.
Adjusted EBITDA was RMB 8.2 billion ($1.19 billion) and adjusted EBITDA margin was 25%. Adjusted EBITDA for Baidu Core was RMB 7.1 billion ($1.04 billion) and adjusted EBITDA margin for Baidu Core was 28%.
As of December 31, 2022, cash, cash equivalents, restricted cash and short-term investments were RMB 185.3 billion ($26.87 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 177.4 billion ($25.72 billion). Free cash flow was RMB 5.9 billion ($859 million), and free cash flow excluding iQIYI was RMB 5.1 billion ($736 million).
Fiscal Year 2022 Results
Total revenues were RMB 123.7 billion ($17.93 billion), decreasing 1% year over year.
Revenue from Baidu Core was RMB 95.4 billion ($13.84 billion), which is basically flat from last year; online marketing revenue was RMB 69.5 billion ($10.08 billion), decreasing 6% year over year, and non-online marketing revenue was RMB 25.9 billion ($3.76 billion), up 22% year over year, mainly driven by cloud and other AI-powered businesses. Revenue from iQIYI was RMB 29.0 billion ($4.20 billion), decreasing 5% year over year.
Cost of revenues was RMB 63.9 billion ($9.27 billion), decreasing 1% year over year, which is basically flat from last year, primarily due to the increase in traffic acquisition costs, bandwidth costs, cost of goods sold and other costs related to new AI business, offset by the decrease in content costs.
Selling, general and administrative expenses were RMB 20.5 billion ($2.98 billion), decreasing 17% year over year, primarily due to the decrease in channel spending, promotional marketing and personnel-related expenses.
Research and development expenses were RMB 23.3 billion ($3.38 billion), decreasing 7% year over year, primarily due to the decrease in personnel-related expenses.
Operating income was RMB 15.9 billion ($2.31 billion). Baidu Core operating income was RMB 14.5 billion ($2.11 billion), and Baidu Core operating margin was 15%. Non-GAAP operating income was RMB 23.2 billion ($3.36 billion). Non-GAAP Baidu Core operating income was RMB 20.9 billion ($3.04 billion), and non-GAAP Baidu Core operating margin was 22%.
Total other loss, net was RMB 5.8 billion ($841 million), which mainly included a fair value loss of RMB 3.9 billion and an impairment 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 and private equity funds, is subject to quarterly fair value adjustments, which may contribute to net income volatility in future periods. Total other income, net was RMB 260 million for 2021, which mainly included a fair value gain of RMB 3.1 billion and an impairment loss of RMB 4.3 billion from long-term investments.
Income tax expense was RMB 2.6 billion ($374 million), decreasing 19% year over year, primarily due to deferred tax benefit recognized on fair value loss of long-term investments in 2022 whereas the Company had deferred tax expense recognized on fair value gain of long-term investments in 2021.
Net income attributable to Baidu was RMB 7.6 billion ($1.10 billion), and diluted earnings per ADS was RMB 19.85 ($2.88). Net income attributable to Baidu Core was RMB 7.6 billion ($1.10 billion), and net margin for Baidu Core was 8%. Non-GAAP net income attributable to Baidu was RMB 20.7 billion ($3.00 billion), and non-GAAP diluted earnings per ADS amounted to RMB 58.93 ($8.54). Non-GAAP net income attributable to Baidu Core was RMB 19.9 billion ($2.89 billion), and non-GAAP net margin for Baidu Core was 21%.
Adjusted EBITDA was RMB 29.7 billion ($4.30 billion) and adjusted EBITDA margin was 24%. Adjusted EBITDA to Baidu Core was RMB 27.1 billion ($3.93 billion) and adjusted EBITDA margin for Baidu Core was 28%.
Free cash flow was RMB 17.9 billion ($2.59 billion), and free cash flow excluding iQIYI was RMB 18.1 billion ($2.63 billion).
Conference Call Information
Baidu’s management will hold an earnings conference call at 7.30AM on February 22, 2023, U.S. Eastern Time (8.30PM on February 22, 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. Q4 2022 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/10028709-re5fs4.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, non-GAAP operating margin, non-GAAP net income 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 and iQIYI’s non-recurring employee severance costs.
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, contingent loss pertaining to legal proceeding in relation to former advertising agencies, iQIYI’s non-recurring employee severance costs, disposal gain or loss, impairment of long-term investments, fair value change of long-term investments, charitable donation from Baidu, 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 shares, 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, contingent loss pertaining to legal proceeding in relation to former advertising agencies, iQIYI’s non-recurring employee severance costs, and share-based compensation expenses.
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 (Loss) Income
(In millions except for per share (or ADS) information, unaudited)
Three Months Ended
Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
December 31,
December 31,
2021
2022
2022
2022
2021
2022
2022
RMB
RMB
RMB
US$(2)
RMB
RMB
US$(2)
Revenues:
Online marketing services
20,723
19,943
19,571
2,838
80,695
74,711
10,832
Others
12,365
12,597
13,506
1,958
43,798
48,964
7,099
Total revenues
33,088
32,540
33,077
4,796
124,493
123,675
17,931
Costs and expenses:
Cost of revenues(1)
17,289
16,273
16,945
2,457
64,314
63,935
9,269
Selling, general and administrative(1)
6,451
5,193
5,881
853
24,723
20,514
2,975
Research and development(1)
7,390
5,757
5,658
820
24,938
23,315
3,380
Total costs and expenses
31,130
27,223
28,484
4,130
113,975
107,764
15,624
Operating income
1,958
5,317
4,593
666
10,518
15,911
2,307
Other income (loss):
Interest income
1,514
1,619
1,647
239
5,551
6,245
905
Interest expense
(873)
(724)
(738)
(107)
(3,421)
(2,913)
(422)
Foreign exchange (loss) gain, net
(27)
(806)
(338)
(49)
100
(1,484)
(215)
Share of losses from equity method investments
(773)
(376)
(523)
(76)
(932)
(1,910)
(277)
Others, net
566
(4,483)
1,733
251
(1,038)
(5,737)
(832)
Total other income (loss), net
407
(4,770)
1,781
258
260
(5,799)
(841)
Income before income taxes
2,365
547
6,374
924
10,778
10,112
1,466
Income tax expense
1,295
908
1,254
181
3,187
2,578
374
Net income (loss)
1,070
(361)
5,120
743
7,591
7,534
1,092
Net (loss) income attributable to noncontrolling interests
(645)
(215)
167
25
(2,635)
(25)
(4)
Net income (loss) attributable to Baidu
1,715
(146)
4,953
718
10,226
7,559
1,096
Earnings (loss) per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic
4.57
(0.87)
13.73
1.99
28.64
20.02
2.90
-Diluted
4.51
(0.87)
13.59
1.97
28.07
19.85
2.88
Earnings (loss) per share for Class A and Class B ordinary shares:
-Basic
0.57
(0.11)
1.72
0.25
3.58
2.50
0.36
-Diluted
0.56
(0.11)
1.70
0.25
3.51
2.48
0.36
Weighted average number of Class A and Class B ordinary shares outstanding (in millions):
-Basic
2,780
2,790
2,789
2,789
2,758
2,782
2,782
-Diluted
2,816
2,790
2,801
2,801
2,814
2,809
2,809
(1) Includes share-based compensation expenses as follows:
Cost of revenues
134
84
158
23
399
409
59
Selling, general and administrative
533
480
450
65
1,840
1,750
253
Research and development
1,426
1,039
1,233
179
4,817
4,629
672
Total share-based compensation expenses
2,093
1,603
1,841
267
7,056
6,788
984
(2) All translations from RMB to U.S. dollars are made at a rate of RMB 6.8972 to US$1.00, the exchange rate in effect as of December 30, 2022 as set forth in the H.10 statistical release of
The Board of Governors of the Federal Reserve System.
Baidu, Inc.
Condensed Consolidated Balance Sheets
(In millions, unaudited)
December 31,
December 31,
December 31,
2021
2022
2022
RMB
RMB
US$
ASSETS
Current assets:
Cash and cash equivalents
36,850
53,156
7,707
Restricted cash
10,821
11,330
1,643
Short-term investments, net
143,243
120,839
17,520
Accounts receivable, net
9,981
11,733
1,701
Amounts due from related parties
1,368
5,432
788
Other current assets, net
11,052
10,360
1,501
Total current assets
213,315
212,850
30,860
Non-current assets:
Fixed assets, net
23,027
23,973
3,476
Licensed copyrights, net
7,258
6,841
992
Produced content, net
10,951
13,002
1,885
Intangible assets, net
1,689
1,254
182
Goodwill
22,605
22,477
3,259
Long-term investments, net
59,418
55,297
8,017
Long-term time deposits and held-to-maturity investments
7,914
23,629
3,426
Amounts due from related parties
3,487
60
9
Deferred tax assets, net
2,372
2,129
309
Operating lease right-of-use assets
12,065
10,365
1,503
Other non-current assets
15,933
19,096
2,768
Total non-current assets
166,719
178,123
25,826
Total assets
380,034
390,973
56,686
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans
4,168
5,343
775
Accounts payable and accrued liabilities
41,384
38,014
5,512
Customer deposits and deferred revenue
13,706
13,116
1,902
Deferred income
97
72
10
Long-term loans, current portion
2
–
–
Convertible senior notes, current portion
–
8,305
1,204
Notes payable, current portion
10,505
6,904
1,001
Amounts due to related parties
1,764
5,067
735
Operating lease liabilities
2,862
2,809
407
Total current liabilities
74,488
79,630
11,546
Non-current liabilities:
Deferred income
129
159
23
Deferred revenue
223
331
48
Amounts due to related parties
3,268
99
14
Long-term loans
12,629
13,722
1,990
Notes payable
43,120
39,893
5,784
Convertible senior notes
12,652
9,568
1,387
Deferred tax liabilities
3,286
2,898
420
Operating lease liabilities
5,569
4,810
697
Other non-current liabilities
718
2,058
299
Total non-current liabilities
81,594
73,538
10,662
Total liabilities
156,082
153,168
22,208
Redeemable noncontrolling interests
7,148
8,393
1,217
Equity
Total Baidu shareholders’ equity
211,459
223,478
32,401
Noncontrolling interests
5,345
5,934
860
Total equity
216,804
229,412
33,261
Total liabilities, redeemable noncontrolling interests, and equity
380,034
390,973
56,686
Baidu, Inc.
Selected Information
(In millions, unaudited)
Three months ended
December 31, 2021 (RMB)
Three months ended
September 30, 2022 (RMB)
Three months ended
December 31, 2022 (RMB)
Three months ended
December 31, 2022, 2022 (US$)
Baidu
Core
iQIYI
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Inc.
Total revenues
25,978
7,389
(279)
33,088
25,239
7,471
(170)
32,540
25,654
7,593
(170)
33,077
3,719
1,101
(24)
4,796
YOY
(1 %)
3 %
(0 %)
QOQ
2 %
2 %
2 %
Costs and expenses:
Cost of revenues (1)
11,017
6,507
(235)
17,289
10,745
5,705
(177)
16,273
11,712
5,405
(172)
16,945
1,699
784
(26)
2,457
Selling, general and administrative (1)
5,377
1,093
(19)
6,451
4,231
980
(18)
5,193
4,969
939
(27)
5,881
720
136
(3)
853
Research and development (1)
6,626
764
–
7,390
5,281
476
–
5,757
5,191
467
–
5,658
752
68
–
820
Total costs and expenses
23,020
8,364
(254)
31,130
20,257
7,161
(195)
27,223
21,872
6,811
(199)
28,484
3,171
988
(29)
4,130
YOY
Cost of revenues
6 %
(17 %)
(2 %)
Selling, general and administrative
(8 %)
(14 %)
(9 %)
Research and development
(22 %)
(39 %)
(23 %)
Cost and expenses
(5 %)
(19 %)
(8 %)
Operating income (loss)
2,958
(975)
(25)
1,958
4,982
310
25
5,317
3,782
782
29
4,593
548
113
5
666
YOY
28 %
–
135 %
QOQ
(24 %)
152 %
(14 %)
Operating margin
11 %
(13 %)
6 %
20 %
4 %
16 %
15 %
10 %
14 %
Add: total other income (loss), net
1,161
(754)
–
407
(4,108)
(662)
–
(4,770)
2,271
(490)
–
1,781
329
(71)
–
258
Less: income tax expense (benefit)
1,258
37
–
1,295
866
42
–
908
1,265
(11)
–
1,254
183
(2)
–
181
Less: net income (loss) attributable to NCI
205
10
(860)
(3)
(645)
(17)
1
(199)
(3)
(215)
15
(1)
153
(3)
167
2
–
23
(3)
25
Net income (loss) attributable to Baidu
2,656
(1,776)
835
1,715
25
(395)
224
(146)
4,773
304
(124)
4,953
692
44
(18)
718
YOY
80 %
–
189 %
QOQ
18992 %
–
–
Net margin
10 %
(24 %)
5 %
0 %
(5 %)
(0 %)
19 %
4 %
15 %
Non-GAAP financial measures:
Operating income (loss) (non-GAAP)
4,847
(515)
4,307
6,650
525
7,200
5,491
977
6,497
796
141
942
YOY
13 %
–
51 %
QOQ
(17 %)
86 %
(10 %)
Operating margin (non-GAAP)
19 %
(7 %)
13 %
26 %
7 %
22 %
21 %
13 %
20 %
Net income (loss) attributable to Baidu (non-GAAP)
4,625
(1,001)
4,084
5,767
187
5,889
4,915
856
5,371
713
124
779
YOY
6 %
–
32 %
QOQ
(15 %)
358 %
(9 %)
Net margin (non-GAAP)
18 %
(14 %)
12 %
23 %
3 %
18 %
19 %
11 %
16 %
Adjusted EBITDA
6,210
(428)
5,757
8,239
615
8,879
7,146
1,056
8,231
1,036
152
1,193
YOY
15 %
–
43 %
QOQ
(13 %)
72 %
(7 %)
Adjusted EBITDA margin
24 %
(6 %)
17 %
33 %
8 %
27 %
28 %
14 %
25 %
(1) Includes share-based compensation as follows:
Cost of revenues
90
44
134
45
39
84
122
36
158
18
5
23
Selling, general and administrative
396
137
533
375
105
480
355
95
450
51
14
65
Research and development
1,343
83
1,426
978
61
1,039
1,177
56
1,233
171
8
179
Total share-based compensation
1,829
264
2,093
1,398
205
1,603
1,654
187
1,841
240
27
267
(2) Relates to intersegment eliminations and adjustments
(3) Relates to the net income/(loss) attributable to iQIYI noncontrolling interests
Baidu, Inc.
Selected Information
(In millions except for per ADS information, unaudited)
Twelve months ended
December 31, 2021 (RMB)
Twelve months ended
December 31, 2022 (RMB)
Twelve months ended
December 31, 2022 (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.
Total revenues
95,163
30,554
(1,224)
124,493
95,431
28,998
(754)
123,675
13,836
4,204
(109)
17,931
YOY
0 %
(5 %)
(1 %)
Costs and expenses:
Cost of revenues (1)
37,838
27,513
(1,037)
64,314
42,378
22,321
(764)
63,935
6,144
3,236
(111)
9,269
Selling, general and administrative (1)
20,040
4,725
(42)
24,723
17,103
3,466
(55)
20,514
2,480
503
(8)
2,975
Research and development (1)
22,143
2,795
–
24,938
21,416
1,899
–
23,315
3,105
275
–
3,380
Total costs and expenses
80,021
35,033
(1,079)
113,975
80,897
27,686
(819)
107,764
11,729
4,014
(119)
15,624
YOY
Cost of revenues
12 %
(19 %)
(1 %)
Selling, general and administrative
(15 %)
(27 %)
(17 %)
Research and development
(3 %)
(32 %)
(7 %)
Cost and expenses
1 %
(21 %)
(5 %)
Operating income (loss)
15,142
(4,479)
(145)
10,518
14,534
1,312
65
15,911
2,107
190
10
2,307
YOY
(4 %)
(129 %)
51 %
Operating margin
16 %
(15 %)
8 %
15 %
5 %
13 %
Add: total other income (loss),net
1,793
(1,533)
–
260
(4,453)
(1,346)
–
(5,799)
(646)
(195)
–
(841)
Less: income tax expense
3,090
97
–
3,187
2,494
84
–
2,578
362
12
–
374
Less: net income (loss) attributable to NCI
288
61
(2,984)
(3)
(2,635)
36
18
(79)
(3)
(25)
4
3
(11)
(3)
(4)
Net income (loss) attributable to Baidu
13,557
(6,170)
2,839
10,226
7,551
(136)
144
7,559
1,095
(20)
21
1,096
YOY
(44 %)
(98 %)
(26 %)
Net margin
14 %
(20 %)
8 %
8 %
(0 %)
6 %
Non-GAAP financial measures:
Operating income (loss) (non-GAAP)
22,201
(3,026)
19,030
20,948
2,173
23,186
3,037
315
3,362
YOY
(6 %)
–
22 %
Operating margin (non-GAAP)
23 %
(10 %)
15 %
22 %
7 %
19 %
Net income (loss) attributable to Baidu (non-GAAP)
21,292
(4,487)
18,830
19,935
1,284
20,680
2,890
186
2,998
YOY
(6 %)
–
10 %
Net margin (non-GAAP)
22 %
(15 %)
15 %
21 %
4 %
17 %
Adjusted EBITDA
27,682
(2,623)
24,914
27,088
2,510
29,663
3,927
364
4,301
YOY
(2 %)
–
19 %
Adjusted EBITDA margin
29 %
(9 %)
20 %
28 %
9 %
24 %
(1) Includes share-based compensation as follows:
Cost of revenues
226
173
399
261
148
409
38
21
59
Selling, general and administrative
1,122
718
1,840
1,326
424
1,750
192
61
253
Research and development
4,489
328
4,817
4,390
239
4,629
637
35
672
Total share-based compensation
5,837
1,219
7,056
5,977
811
6,788
867
117
984
(2) Relates to intersegment eliminations and adjustments
(3) Relates to the net 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
December 31, 2021 (RMB)
September 30, 2022 (RMB)
December 31, 2022 (RMB)
December 31, 2022 (US$)
Baidu excl. iQIYI
iQIYI
Baidu, Inc.
Baidu excl. iQIYI
iQIYI
Baidu, Inc.
Baidu excl. iQIYI
iQIYI
Baidu, Inc.
Baidu excl. iQIYI
iQIYI
Baidu, Inc.
Net cash provided by (used in) operating
activities
5,809
(1,095)
4,714
8,543
196
8,739
6,999
854
7,853
1,015
124
1,139
Net cash (used in) provided by investing activities
(50)
2,097
2,047
7,603
407
8,010
(5,902)
579
(5,323)
(856)
84
(772)
Net cash (used in) provided by financing activities
(4,662)
(5,239)
(9,901)
(5,967)
(106)
(6,073)
(5,124)
2,862
(2,262)
(743)
415
(328)
Effect of exchange rate changes on cash, cash
equivalents and restricted cash
(589)
(74)
(663)
1,980
60
2,040
(1,420)
(9)
(1,429)
(206)
(1)
(207)
Net increase (decrease) in cash, cash
equivalents and restricted cash
508
(4,311)
(3,803)
12,159
557
12,716
(5,447)
4,286
(1,161)
(790)
622
(168)
Cash, cash equivalents and restricted cash
At beginning of period
44,088
7,386
51,474
50,662
3,019
53,681
62,821
3,576
66,397
9,109
518
9,627
At end of period
44,596
3,075
47,671
62,821
3,576
66,397
57,374
7,862
65,236
8,319
1,140
9,459
Net cash provided by (used in) operating
activities
5,809
(1,095)
4,714
8,543
196
8,739
6,999
854
7,853
1,015
124
1,139
Less: Capital expenditures
(4,213)
(24)
(4,237)
(2,140)
(48)
(2,188)
(1,920)
(9)
(1,929)
(279)
(1)
(280)
Free cash flow
1,596
(1,119)
477
6,403
148
6,551
5,079
845
5,924
736
123
859
Note: Baidu excl. iQIYI represents Baidu, Inc. minus iQIYI’s consolidated cash flows.
Baidu, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions,unaudited)
Twelve months ended
Twelve months ended
Twelve months ended
December 31, 2021 (RMB)
December 31, 2022 (RMB)
December 31, 2022 (US$)
Baidu excl. iQIYI
iQIYI
Baidu, Inc.
Baidu excl. iQIYI
iQIYI
Baidu, Inc.
Baidu excl. iQIYI
iQIYI
Baidu, Inc.
Net cash provided by (used in) operating
activities
26,074
(5,952)
20,122
26,241
(71)
26,170
3,804
(10)
3,794
Net cash (used in) provided by investing activities
(32,706)
1,262
(31,444)
(4,210)
266
(3,944)
(611)
39
(572)
Net cash provided by (used in) financing activities
26,355
(2,959)
23,396
(10,859)
4,469
(6,390)
(1,574)
648
(926)
Effect of exchange rate changes on cash, cash
equivalents and restricted cash
(726)
(217)
(943)
1,606
123
1,729
233
18
251
Net increase (decrease) in cash, cash
equivalents and restricted cash
18,997
(7,866)
11,131
12,778
4,787
17,565
1,852
695
2,547
Cash, cash equivalents and restricted cash
At beginning of period
25,599
10,941
36,540
44,596
3,075
47,671
6,466
446
6,912
At end of period
44,596
3,075
47,671
57,374
7,862
65,236
8,318
1,141
9,459
Net cash provided by (used in) operating
activities
26,074
(5,952)
20,122
26,241
(71)
26,170
3,804
(10)
3,794
Less: Capital expenditures
(10,634)
(262)
(10,896)
(8,112)
(174)
(8,286)
(1,176)
(25)
(1,201)
Free cash flow
15,440
(6,214)
9,226
18,129
(245)
17,884
2,628
(35)
2,593
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
December 31, 2021 (RMB)
September 30, 2022 (RMB)
December 31, 2022 (RMB)
December 31, 2022 (US$)
Baidu Core
iQIYI
Baidu, Inc.
Baidu Core
iQIYI
Baidu, Inc.
Baidu Core
iQIYI
Baidu, Inc.
Baidu Core
iQIYI
Baidu, Inc.
Operating income (loss)
2,958
(975)
1,958
4,982
310
5,317
3,782
782
4,593
548
113
666
Add: Share-based compensation expenses
1,829
264
2,093
1,398
205
1,603
1,654
187
1,841
240
27
267
Add: Amortization and impairment of intangible assets(1)
60
17
77
56
10
66
55
8
63
8
1
9
Add: Contingent loss(5)
–
–
–
214
–
214
–
–
–
–
–
–
Add: iQIYI non-recurring employee severance costs(6)
–
179
179
–
–
–
–
–
–
–
–
–
Operating income (loss) (non-GAAP)
4,847
(515)
4,307
6,650
525
7,200
5,491
977
6,497
796
141
942
Add: Depreciation of fixed assets
1,363
87
1,450
1,589
90
1,679
1,655
79
1,734
240
11
251
Adjusted EBITDA
6,210
(428)
5,757
8,239
615
8,879
7,146
1,056
8,231
1,036
152
1,193
Net income (loss) attributable to Baidu
2,656
(1,776)
1,715
25
(395)
(146)
4,773
304
4,953
692
44
718
Add: Share-based compensation expenses
1,805
264
1,941
1,394
205
1,497
1,654
187
1,748
240
27
253
Add: Amortization and impairment of intangible assets(1)
55
17
65
50
10
56
50
8
55
7
1
8
Add: Disposal (gain) loss
–
–
–
(6)
–
(6)
(484)
62
(453)
(70)
9
(66)
Add: Impairment of long-term investments
752
139
824
1,042
376
1,230
318
271
453
46
39
66
Add: Fair value (gain) loss of long-term investments
(1,339)
2
(1,337)
3,149
(27)
3,135
(1,662)
8
(1,658)
(241)
1
(240)
Add: Reconciling items on equity method investments(2)
430
177
521
237
16
245
377
18
386
55
3
56
Add: Charitable donation from Baidu(4)
50
–
50
–
–
–
–
–
–
–
–
–
Add: Contingent loss(5)
–
–
–
214
–
214
–
–
–
–
–
–
Add: iQIYI non-recurring employee severance costs(6)
–
179
92
–
–
–
–
–
–
–
–
–
Add: Tax effects on non-GAAP adjustments(3)
216
(3)
213
(338)
2
(336)
(111)
(2)
(113)
(16)
–
(16)
Net income (loss) attributable to Baidu (non-GAAP)
4,625
(1,001)
4,084
5,767
187
5,889
4,915
856
5,371
713
124
779
Diluted earnings (loss) per ADS
4.51
(0.87)
13.59
1.97
Add: Accretion of the redeemable noncontrolling interests
0.36
0.45
0.46
0.07
Add: Non-GAAP adjustments to earnings per ADS
6.73
17.29
1.20
0.17
Diluted earnings per ADS (non-GAAP)
11.60
16.87
15.25
2.21
(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 shares.
(3) This represents tax impact of all non-GAAP adjustments.
(4) This represents non-recurring charitable donations to discrete events.
(5) This represents contingent loss pertaining to legal proceedings involving former advertising agency.
(6) This represents non-recurring employee severance costs in relation to the iQIYI employee optimization program incurred in 2021.
Baidu, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures
(In millions except for per ADS information, unaudited)
Twelve months ended
Twelve months ended
Twelve months ended
December 31, 2021 (RMB)
December 31, 2022 (RMB)
December 31, 2022 (US$)
Baidu Core
iQIYI
Baidu, Inc.
Baidu Core
iQIYI
Baidu, Inc.
Baidu Core
iQIYI
Baidu, Inc.
Operating income (loss)
15,142
(4,479)
10,518
14,534
1,312
15,911
2,107
190
2,307
Add: Share-based compensation expenses
5,837
1,219
7,056
5,977
811
6,788
867
117
984
Add: Amortization and impairment of intangible assets(1)
246
55
301
223
50
273
32
8
40
Add: Contingent loss(5)
976
–
976
214
–
214
31
–
31
Add: iQIYI non-recurring employee severance costs(6)
–
179
179
–
–
–
–
–
–
Operating income (loss) (non-GAAP)
22,201
(3,026)
19,030
20,948
2,173
23,186
3,037
315
3,362
Add: Depreciation of fixed assets
5,481
403
5,884
6,140
337
6,477
890
49
939
Adjusted EBITDA
27,682
(2,623)
24,914
27,088
2,510
29,663
3,927
364
4,301
Net income (loss) attributable to Baidu
13,557
(6,170)
10,226
7,551
(136)
7,559
1,095
(20)
1,096
Add: Share-based compensation expenses
5,814
1,219
6,444
5,964
811
6,371
865
118
924
Add: Amortization and impairment of intangible assets(1)
220
55
251
200
50
229
29
7
33
Add: Disposal (gain)
–
(45)
(28)
(515)
(368)
(700)
(76)
(53)
(101)
Add: Impairment of long-term investments
4,144
170
4,232
2,180
841
2,601
316
122
377
Add: Fair value (gain) loss of long-term investments
(2,734)
(87)
(2,778)
3,977
(18)
3,968
577
(3)
575
Add: Reconciling items on equity method investments(2)
1,249
192
1,349
1,473
105
1,548
214
15
224
Add: Charitable donation from Baidu(4)
140
–
140
136
–
136
20
–
20
Add: Contingent loss(5)
976
–
976
214
–
214
31
–
31
Add: iQIYI non-recurring employee severance costs(6)
–
179
92
–
–
–
–
–
–
Add: Tax effects on non-GAAP adjustments(3)
(2,074)
–
(2,074)
(1,245)
(1)
(1,246)
(181)
–
(181)
Net income (loss) attributable to Baidu (non-GAAP)
21,292
(4,487)
18,830
19,935
1,284
20,680
2,890
186
2,998
Diluted earnings per ADS
28.07
19.85
2.88
Add: Accretion of the redeemable noncontrolling interests
1.00
1.68
0.24
Add: Non-GAAP adjustments to earnings per ADS
24.46
37.40
5.42
Diluted earnings per ADS (non-GAAP)
53.53
58.93
8.54
(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 shares.
(3) This represents tax impact of all non-GAAP adjustments.
(4) This represents non-recurring charitable donations to discrete events.
(5) This represents contingent loss pertaining to legal proceedings involving former advertising agency.
(6) This represents non-recurring employee severance costs in relation to the iQIYI employee optimization program incurred in 2021.