Baidu, the Chinese tech giant, reported mixed third-quarter results on Thursday, causing its shares to drop by 5.5% in morning trading. The company experienced a decline in online marketing revenue, but saw growth in its cloud business sector. Baidu’s adjusted profits per American depositary share fell 19% year-over-year to 16.60 yuan ($2.37), missing analysts’ expectations.
Total sales decreased by 3% year-over-year to 33.56 billion renminbi ($4.78 billion). Robin Li, co-founder and CEO of Baidu Core, said the flat performance in online marketing revenue was due to ongoing issues in the marketing sector. However, he noted that the growth of the AI Cloud business helped offset this.
Revenue from Baidu’s internet marketing dropped 4% year-over-year to 18.8 billion renminbi ($2.68 billion). On the other hand, non-online marketing revenue, primarily driven by the artificial intelligence cloud industry, grew by 12% year-over-year to 7.7 billion renminbi ($1.10 billion).
Baidu shares decline after Q3 results
Baidu Core’s total revenue remained stable at 26.52 billion RMB ($3.78 billion). Baidu reported that its AI model ERNIE handled 1.5 billion daily API requests in November 2024, a significant increase from 600 million in August. The company’s autonomous ride-hailing service recorded 998,000 trips during the quarter, a 20% increase from the previous year.
Baidu also expanded the operation of its sixth-generation driverless car, the RT6, on public roads in select Chinese cities. In September, the Baidu App’s monthly active users reached 704 million, a 4% increase compared to the same period last year. China’s cloud services industry is highly competitive, with companies like Baidu, Alibaba, ByteDance, Tencent Holdings Limited, and iFlytek reducing rates for big language models this year to attract more clients.
As part of its 2023 repurchase program, Baidu bought back $161 million worth of shares this quarter, bringing total buybacks to $1.4 billion. Baidu’s majority-owned online entertainment company, iQIYI, reported a 10% year-over-year sales drop to 7.2 billion renminbi ($1.03 billion), causing iQIYI’s shares to fall 4% in premarket trade. Baidu continues to focus on leveraging its AI advancements and cloud services to drive future growth in a competitive market, despite the mixed results.
