BEIJING, China, July 31, 2018 /PRNewswire/ -- Baidu, Inc.
(NASDAQ: BIDU) ("Baidu" or the "Company"), the leading Chinese
language Internet search provider, today announced its unaudited
financial results for the second quarter ended June 30, 2018[1].
"We had another strong quarter in Q2 with search exhibiting
robust revenue growth driven by AI-powered monetization
capabilities and Baidu feed continuing strong traffic and
monetization momentum," said Robin
Li, Chairman and CEO of Baidu. "On DuerOS, we are excited
about the newly launched Xiaodu series speakers and the adoption of
DuerOS, which handled over 400 million queries in June 2018, almost doubling the workload again
over a three-month span. On Apollo, we worked with King Long Motor
and Neolix Technology to launch two fully autonomous L4 vehicles.
These strong results are testament of our ability to focus and
execute on our strategy to solidify Baidu's mobile foundation and
lead in AI."
"Baidu delivered a solid second quarter with revenues growing
32%[2] year over year to
RMB 26.0 billion and non-GAAP
operating profit growing 31% to RMB 6.5
billion," said Herman Yu, CFO
of Baidu. "We continue to increase our investments in AI-powered
businesses with strong synergies and divest from non-core
businesses. This has resulted in an acceleration of our revenue
growth and allowed us to redeploy capital raised from non-core
business divestures to create long-term shareholder value and
increase return on capital."
Second Quarter 2018 Financial Highlights
- Total revenues were RMB 26.0
billion ($3.93 billion),
increasing 32% year over year. Mobile revenue represented 77% of
total net revenues, compared to 72% for the second quarter of 2017.
Total revenues of Baidu Core were RMB 20.0
billion ($3.03 billion),
increasing 28% year over year.
- Operating income was RMB 5.4
billion ($819 million),
increasing 29% year over year. Operating margin was 21%, similar to
the second quarter of 2017.
- Non-GAAP operating income was RMB 6.5
billion ($988 million),
increasing 31% year over year. Non-GAAP operating margin reached
25%, similar to the second quarter of 2017. Non-GAAP operating
income of Baidu Core, excluding iQIYI, was RMB 7.8 billion ($1.17
billion), increasing 32% year over year. Non-GAAP operating
margin of Baidu Core, excluding iQIYI, was 39%, compared to 38% for
the second quarter of 2017.
- Net income attributable to Baidu was RMB
6.4 billion ($967 million),
and diluted earnings attributable to Baidu per ADS was RMB 18 ($2.74).
Non-GAAP net income attributable to Baidu[3] was RMB 7.4 billion ($1.12
billion) and non-GAAP diluted earnings per ADS[4] was RMB 21 ($3.18).
- Adjusted EBITDA was RMB 7.4
billion ($1.12 billion), or
29% of total revenues.
Other Highlights
Corporate
- At Baidu Create, Baidu's AI developer conference, which
was attended by over 7,300 developers and partners from around the
world earlier this month in Beijing, Baidu announced the release of Baidu
Brain v3.0 and a host of other releases, as well as plans to
develop Kunlun, a high performance AI chip for cloud to edge
scenarios, including data centers, public clouds and autonomous
vehicles.
- Baidu and China Mobile formed a strategic partnership to
cooperate in AI, big data and 5G, and agreed to jointly explore
opportunities in autonomous driving and Internet of Things (IoT) at
home.
- Forbes magazine named Baidu as one of the "50 Most
Innovative Companies," recognizing Baidu's DuerOS and Apollo AI
open platforms for their leadership and innovation in
conversational AI and autonomous driving in its China edition. iQIYI was also recognized for
its leadership and innovation in online entertainment in
China.
- Baidu announced a $1 billion
share repurchase program ("2018 Share Repurchase Program") in
June 2018, which is effective for 12
months. From the announcement of the program to date, the Company
has given back to its shareholders approximately $186.8 million under the 2018 Share Repurchase
Program.
Search and Feed
- Baidu App, which offers search and personalized news feed,
continues to see robust growth, reaching 148 million daily active
users in June 2018, up 17% from the
same period last year.
- At Baidu Create, Baidu announced the launch of its smart
mini program, which allows mobile apps in the form of a mini
program to directly provide users with a seamless native-app
experience through the Baidu App and other major apps in its
network, bypassing the additional step of an app download.
- People's Daily, a major state-owned news platform in
China, joined Baijiahao ("BJH"),
Baidu feed's content network, contributing over 2,000 media
sources, representing approximately 38,000 BJH accounts.
- Baidu upgraded its AI-powered ad monitoring system, which can
now remove bad ads at a rate of up to 4,500 ads per minute.
- Baidu received the 2018 Entrepreneurship, Creativity &
Innovation Award, which recognized Coca Cola's augmented
reality marketing campaign on Baidu for its creative integration of
data, technology and marketing.
DuerOS
- Baidu released DuerOS v3.0, which features an improved
interactive user experience, enriched content ecosystem and
upgraded turn-key solutions for the DuerOS Intelligent Device
Platform. DuerOS v3.0 supports new capabilities, including
voiceprint recognition, children mode, continuous conversation
without wake words ("Geek Mode"), video recognition and more, and
added new content partners, including Discovery, VIPKID online
education and Kaishu Storytelling.
- DuerOS installed base reached 90 million devices and voice
queries surpassed 400 million in June
2018.
- In June 2018, Baidu launched
DuerOS-powered Xiaodu Smart Speaker,
which sold out 10,000 units within 90 seconds of its first two
online sales, continuing its popular Xiaodu series speaker.
- DuerOS entered the hospitality industry with Xiaodu Smart
Speakers by partnering with InterContinental Hotels Group (IHG) to
bring about AI smart hotel rooms into China, which allow customers to control their
room and ask for hotel information using Baidu's conversational
AI.
- Baidu formed strategic cooperation with over 20 global and
domestic auto OEMs, including the BMW Group, Daimler AG, Ford
Motor, Hyundai, KIA, Chery, BAIC, the FAW Group and Byton, to
provide DuerOS for auto solutions, encompassing entertainment,
internet services and safety features, using Baidu's conversational
AI, facial recognition, augmented reality navigation and other AI
capabilities.
Apollo
- King Long Motor launched Apolong, China's first fully autonomous L4 minibus,
powered by Apollo. Volume production of 100 units was reached on
July 4, 2018.
- Neolix Technology launched an L4 micro-car for cargo delivery
powered by Apollo, Baidu's autonomous driving platform.
- Baidu released Apollo v3.0, which supports volume production
for L4 minibuses (fully autonomous shuttle buses without steering
wheel) and L4 microcars (fully autonomous goods delivery vehicles),
adds autonomous L3 valet parking, and significantly shortens
autonomous vehicle development lead time.
- Apollo has garnered 119 OEM, Tier 1 parts supplier and other
partners, adding recently Jaguar Land Rover, Byton, Valeo, ADI,
Flextronics, Suning, Lionbridge and others.
- Baidu signed a memorandum of understanding with Daimler AG to
expand the companies' partnership through the Apollo autonomous
driving platform and integrate Baidu's vehicle connectivity
services into Mercedes-Benz's infotainment system MBUX. In
July 2018, Daimler became the first
global OEM to receive an autonomous driving license in Beijing using a vehicle powered by Apollo L4
technology.
- Baidu formed a partnership with BMW Group to develop vehicle
connectivity services and collaborate on autonomous driving and
smart transport. BMW Group has also joined Apollo as a board
member.
- Baidu released the Apollo Pilot Safety Report,
China's first safety report on
autonomous driving for volume production, which serves to help
define the safety framework for the industry.
AI Technology
- Baidu released Baidu Brain v3.0, which features multi-modal
deep semantic understanding to enable world-class conversational AI
in Chinese, along with a full stack of over 110 AI capabilities. At
Baidu Create, Baidu also released three advanced,
easy-to-use tool kits—EasyDL, AutoDL and AI Studio—for developers
to work with PaddlePaddle to build and train deep learning models
at scale. PaddlePaddle is Baidu's open-sourced deep learning
platform made available to developers and businesses to implement
their AI ideas.
- Baidu received top awards from prestigious AI competitions,
including 2018 WebVision Challenge (image recognition
competition) and 2018 ActivityNet Challenge (video
recognition competition).
Second Quarter 2018 Results
Total revenues reached RMB 26.0
billion ($3.93 billion),
representing a 32% increase year over year.
Online marketing revenues were RMB 21.1
billion ($3.18 billion),
representing a 25% increase year over year. Baidu had approximately
511,000 active online marketing customers[5], representing a 9% increase
year over year. Revenue per online marketing customer was
approximately RMB 41,200 ($6,200), a 16% increase year over year.
Other revenues reached RMB 4.9
billion ($742 million),
representing a 75% year over year, which was mainly due to the
robust growth in iQIYI membership and other businesses.
Revenue from Baidu Core[6] reached RMB 20.0 billion ($3.03
billion), up 28% year over year, while revenue from iQIYI
reached RMB 6.2 billion ($932 million), up 51% year over year.
Content costs were RMB 5.2
billion ($788 million),
representing a 68% increase year over year. The year-over-year
increase was mainly due to iQIYI's increased content costs and, to
a lesser extent, increased investment in BJH, Baidu feeds' content
network.
Traffic acquisition cost was RMB
2.7 billion ($408 million),
representing a 9% increase year over year.
Bandwidth costs were RMB 1.6
billion ($234 million),
representing a 12% increase year over year.
Other cost of revenues, which include depreciation costs,
operation costs, sales tax and surcharges and share-based
compensation expenses, was RMB 2.6
billion ($386 million),
increasing 5% year over year.
Selling, general and administrative expenses were
RMB 4.5 billion ($681 million), increasing 54% year over year,
primarily due to the increase in channel and promotional
marketing.
Research and development expenses were RMB 4.0 billion ($609
million), increasing 28% year over year, primarily due to
the growth of personnel-related costs.
Operating income was RMB 5.4
billion ($819 million),
increasing 29% year over year. Non-GAAP operating income was
RMB 6.5 billion ($988 million), increasing 31% year over year.
Operating income from Baidu Core was RMB 6.7
billion ($1.02 billion),
increasing 31% year over year. Non-GAAP operating income from Baidu
Core was RMB 7.8 billion
($1.17 billion), increasing 32% year
over year.
Income tax expense was RMB 1.1
billion ($164 million),
compared to RMB 564 million in the
second quarter of 2017. Effective tax rate was 18%, compared to 11%
for the second quarter of 2017, which benefited from the disposal
of certain subsidiaries.
Net loss attributable to noncontrolling interests was
RMB 1.3 billion ($201 million), which included the loss related to
the conversion of noncontrolling preferred shares to ordinary
shares upon iQIYI's IPO and the loss on investment arising from a
change in fair market value per ASC 321.
Net income attributable to Baidu was RMB 6.4 billion ($967
million), increasing 45% year over year. Diluted earnings
per ADS amounted to RMB 18
($2.74). Non-GAAP net income
attributable to Baidu was RMB 7.4
billion ($1.12 billion),
increasing 57% year over year. Non-GAAP diluted earnings per ADS
amounted to RMB 21 ($3.18).
Adjusted EBITDA reached RMB 7.4
billion ($1.12 billion) and
adjusted EBITDA margin reached 29%. Adjusted EBITDA for Baidu Core
reached RMB 8.6 billion ($1.29 billion) and adjusted EBITDA margin reached
43%.
As of June 30, 2018, cash, cash
equivalents, restricted cash and short-term investments were
RMB 128.3 billion ($19.38 billion). Net cash generated
from operating activities was RMB 7.1 billion
($1.08 billion) and capital
expenditures were RMB 1.5 billion ($227 million). Excluding iQIYI, cash, cash
equivalents, restricted cash and short-term investments were
RMB 115.2 billion ($17.41 billion), as of June 30, 2018. Excluding iQIYI, net cash
generated from operating activities was RMB
7.0 billion ($1.05 billion),
and capital expenditures were RMB 1.3
billion ($202 million).
In April 2018, Baidu entered into
definitive agreements to divest Du Xiaoman, our financial services
business. Assets of RMB 38.1 billion
($5.76 billion) and liabilities of
RMB 27.3 billion ($4.13 billion) associated with Du Xiaoman were
reclassified to assets and liabilities held for sale on the
condensed consolidated balance sheet as of June 30, 2018. The transactions contemplated
under the definitive agreements are subject to certain closing
conditions and are currently expected to close in the second half
of 2018.
Financial Guidance
For the third quarter of 2018, Baidu expects revenues to be
between RMB 27.37 billion
($4.02 billion[7]) and RMB 28.77 billion ($4.23
billion), representing a 23% to 30% increase year over year.
Excluding the impact from announced divestures, including Global DU
and Du Xiaoman, Baidu expects revenues to be between RMB 26.56 billion ($3.91
billion) and RMB 27.92 billion
($4.11 billion), representing a 26%
to 33% increase year over year. This forecast reflects Baidu's
current and preliminary view, which is subject to substantial
uncertainty.
Conference Call Information
Baidu's management will hold an earnings conference call
at 9:15 PM on July 31, 2018,
U.S. Eastern Time (9:15 AM on
August 1, 2018, Beijing/Hong Kong Time). Dial-in details for
the earnings conference call are as follows:
International:
|
+65
67135090
|
Mainland
China
|
4006208038
|
US:
|
+1
8456750437
|
UK:
|
+44
2036214779
|
Hong Kong:
|
+852
30186771
|
|
|
Passcode for all
regions:
|
3485259
|
A replay of the conference call may be accessed by phone at the
following number until August 8, 2018:
International:
|
+61 2 8199
0299
|
Passcode:
|
3485259
|
Additionally, a live and archived webcast of this conference
call will be available at http://ir.baidu.com.
About Baidu
Baidu, Inc. is the leading Chinese language Internet search
provider. Baidu aims to make a complex world simpler through
technology. Baidu's ADSs trade on the NASDAQ Global Select Market
under the symbol "BIDU." Currently, ten ADSs represent one Class A
ordinary share.
Contacts
Investors Relations, Baidu, Inc.
Tel: +86-10-5992-4958
Email: ir@baidu.com
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, the outlook for the third quarter of 2018, quotations
from management in this announcement, as well as 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 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 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 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, Japan 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. 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/loss, non-GAAP
operating margin, non-GAAP net income attributable to Baidu,
non-GAAP diluted earnings per ADS, adjusted EBITDA and adjusted
EBITDA margin. 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 not only non-cash charges, but also other
items that are infrequent or unusual 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.
Non-GAAP net income attributable to Baidu represents net income
attributable to Baidu excluding share-based compensation expenses,
the gain or loss associated with the issuance of shares by Baidu's
equity method investees at a price higher or lower than the
carrying value per share, disposal gain or loss, impairment of
long-term investments, fair value change of long-term investments,
as adjusted for related income tax effects. Non-GAAP diluted
earnings per ADS represents diluted earnings per ADS calculated
based on non-GAAP net income attributable to Baidu. Adjusted EBITDA
represents operating income excluding depreciation, amortization
(excluding the amortization of licensed copyrights and produced
content of iQIYI) 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 measures."
[1] This announcement contains translations of certain RMB
amounts into U.S. dollars at specified rates solely for the
convenience of the reader. Unless otherwise noted, all translations
from RMB to U.S. dollars are made at a rate of RMB6.6171 to US$1.00, the effective noon buying rate as of
June 29, 2018, in The City of New York for cable transfers of RMB as
certified for customs purposes by the Federal Reserve Bank of
New York.
[2] Starting from January 1, 2018,
Baidu adopted a new revenue accounting standard (ASC 606), which
reclassifies value added tax from the cost of revenues to net
against revenues. To increase comparability of operating results
and help investors better understand our business performance and
operating trends, 2017 net revenues have been used to calculate all
percentage changes in revenues, percentage changes in revenues per
online marketing customer, operating margin, non-GAAP operating
margin, and adjusted EBITDA margin. 2017 net revenues are defined
as gross revenues under legacy GAAP after the deduction of value
added taxes, which is presented on the same basis as 2018 and going
forward.
[3] Non-GAAP net income attributable to Baidu represents net
income attributable to Baidu excluding share-based compensation
expenses, the gain or loss associated with the issuance of the
shares by our equity method investees at a price higher or lower
than our carrying value per share, disposal gain or loss,
impairment of long-term investments and fair value change of
long-term investments, as adjusted for the tax effects on non-GAAP
adjustments.
[4] Non-GAAP diluted earnings per ADS represents diluted
earnings per ADS calculated based on non-GAAP net income
attributable to Baidu.
[5] The number of active online marketing customers and revenue
per online active customer exclude our group-buying and delivery
related businesses for consistency with previous reporting.
[6] Since the beginning of 2017, we have disposed of or planned
to disclose certain non-core businesses including Baidu Mobile
Games, Baidu Deliveries, Global DU businesses, and Du Xiaoman (our
financial services business). Those businesses generated
approximately RMB 1.0 billion
revenues and 0.1 billion operating profit, excluding share-based
compensation expenses, for the second quarter of 2018. We expect
these divestures together will generate approximately US$1.8 billion in cash.
[7] The translations from RMB to U.S. dollars for the expected
revenues in the third quarter of 2018 are made at a rate of
RMB6.80 to US$1.0, the rounded noon buying rate as of
July 20, 2018, in The City of New York for cable transfers of RMB as
certified for customs purposes by the Federal Reserve Bank of
New York.
Baidu,
Inc.
|
Condensed
Consolidated Statements of Income
|
|
|
Three Months
Ended
|
(In RMB millions
except for share, per share (or ADS) information)
|
|
June 30,
2017
|
|
March 31,
2018
|
|
June 30,
2018
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
Revenues:
|
|
|
|
|
|
|
Online
marketing services
|
|
17,883
|
|
17,169
|
|
21,065
|
Others
|
|
2,991
|
|
3,738
|
|
4,907
|
Total
revenues(note 1)
|
|
20,874
|
|
20,907
|
|
25,972
|
|
|
|
|
|
|
|
Operating
costs and expenses:
|
|
|
|
|
|
|
Content
costs
|
|
3,112
|
|
4,194
|
|
5,213
|
Traffic
acquisition costs
|
|
2,478
|
|
2,256
|
|
2,698
|
Bandwidth
costs
|
|
1,382
|
|
1,472
|
|
1,550
|
Others
|
|
3,610
|
|
1,981
|
|
2,551
|
Cost of
revenues (note 2)
|
|
10,582
|
|
9,903
|
|
12,012
|
Selling,
general and administrative (note 2)
|
|
2,934
|
|
3,142
|
|
4,505
|
Research and
development (note 2)
|
|
3,148
|
|
3,294
|
|
4,033
|
Total
operating costs and expenses
|
|
16,664
|
|
16,339
|
|
20,550
|
|
|
|
|
|
|
|
Operating
income
|
|
4,210
|
|
4,568
|
|
5,422
|
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
|
Interest
income
|
|
712
|
|
821
|
|
882
|
Interest
expense
|
|
(334)
|
|
(352)
|
|
(478)
|
Foreign
exchange income(loss), net
|
|
(139)
|
|
(48)
|
|
30
|
Income(loss)
from equity method investments
|
|
(118)
|
|
(177)
|
|
69
|
Other income,
net
|
|
643
|
|
1,856
|
|
231
|
Total other
income
|
|
764
|
|
2,100
|
|
734
|
|
|
|
|
|
|
|
Income
before income taxes
|
|
4,974
|
|
6,668
|
|
6,156
|
|
|
|
|
|
|
|
Income
taxes
|
|
564
|
|
1,120
|
|
1,086
|
|
|
|
|
|
|
|
Net
income
|
|
4,410
|
|
5,548
|
|
5,070
|
Less: net loss
attributable to noncontrolling interests
|
|
(5)
|
|
(1,146)
|
|
(1,332)
|
Net income
attributable to Baidu
|
|
4,415
|
|
6,694
|
|
6,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
for Class A and Class B ordinary shares:
|
|
|
|
|
|
|
Net income
attributable to Baidu -Basic
|
|
113.58
|
|
188.60
|
|
183.16
|
Net income
attributable to Baidu -Diluted
|
|
113.11
|
|
186.76
|
|
181.36
|
|
|
|
|
|
|
|
Earnings per ADS (1
Class A ordinary share equals 10 ADSs ):
|
|
|
|
|
|
|
Net income
attributable to Baidu -Basic
|
|
11.36
|
|
18.86
|
|
18.32
|
Net income
attributable to Baidu -Diluted
|
|
11.31
|
|
18.68
|
|
18.14
|
|
|
|
|
|
|
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
|
|
|
|
Basic
|
|
34,678,268
|
|
34,838,392
|
|
34,953,564
|
Diluted
|
|
34,824,387
|
|
35,180,950
|
|
35,299,428
|
|
|
|
|
|
|
|
(1) Starting on
January 1, 2018, valued added tax has been reclassified from cost
of revenues to net against revenues.
To increase
comparability of operating results and help investors better
understand our business performance and
trends, 2017 net revenues have been presented. 2017 net revenues
are defined as gross revenues under legacy
GAAP after the deduction of value added-taxes, which is presented
on the same basis as 2018 and going forward.
|
Gross
revenues
|
|
20,874
|
|
22,162
|
|
27,520
|
Less: value
added taxes
|
|
1,175
|
|
1,255
|
|
1,548
|
Net
revenues
|
|
19,699
|
|
20,907
|
|
25,972
|
|
|
|
|
|
|
|
(2) Includes
share-based compensation expenses as follows:
|
|
|
|
|
|
|
Cost of
revenues
|
|
48
|
|
35
|
|
60
|
Selling,
general and administrative
|
|
236
|
|
291
|
|
302
|
Research and
development
|
|
512
|
|
452
|
|
755
|
Total
share-based compensation expenses
|
|
796
|
|
778
|
|
1,117
|
Baidu,
Inc.
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
(In RMB millions
except for number of shares and per share data)
|
|
December 31,
2017
|
June 30,
2018
|
|
|
Audited
|
Unaudited
|
|
|
|
|
ASSETS
|
|
|
|
Current assets:
|
|
|
|
Cash and cash
equivalents
|
|
11,084
|
28,859
|
Restricted
cash
|
|
252
|
681
|
Short-term
investments
|
|
89,381
|
98,725
|
Other invested
securities
|
|
18,350
|
-
|
Accounts
receivable, net
|
|
4,571
|
4,863
|
Loans and
interest receivable, net
|
|
23,938
|
-
|
Amounts due
from related parties
|
|
168
|
785
|
Other assets,
current
|
|
3,425
|
5,948
|
Assets held for
sale
|
|
-
|
38,113
|
Total current assets
|
|
151,169
|
177,974
|
|
|
|
|
Non-current assets:
|
|
|
|
Fixed assets,
net
|
|
12,475
|
14,647
|
Intangible
assets, net
|
|
5,467
|
6,875
|
Goodwill
|
|
15,806
|
15,806
|
Long-term
investments, net
|
|
56,283
|
63,123
|
Loans and
interest receivable, net
|
|
3,467
|
-
|
Amounts due
from related parties
|
|
9
|
115
|
Deferred tax
assets, net
|
|
1,532
|
1,338
|
Other assets,
non-current
|
|
5,520
|
8,442
|
Total non-current assets
|
|
100,559
|
110,346
|
|
|
|
|
Total
assets
|
|
251,728
|
288,320
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current liabilities:
|
|
|
|
Short-term
loans
|
|
1,244
|
633
|
Amounts
due to the third-party investors
|
|
38,486
|
-
|
Accounts payable and
accrued liabilities
|
|
27,523
|
30,648
|
Customer advances and
deposits
|
|
6,785
|
6,914
|
Deferred
revenue
|
|
788
|
1,386
|
Deferred
income
|
|
568
|
542
|
Long-term loans,
current portion
|
|
10
|
10
|
Notes payable,current
portion
|
|
6,500
|
13,220
|
Amounts due to
related parties
|
|
153
|
538
|
Liabilities held for
sale
|
|
-
|
27,311
|
Total current liabilities
|
|
82,057
|
81,202
|
|
|
|
|
Non-current liabilities:
|
|
|
|
Deferred
income
|
|
73
|
49
|
Deferred
revenue
|
|
-
|
1,499
|
Long-term
loans
|
|
6,701
|
7,534
|
Notes
payable
|
|
29,111
|
32,892
|
Deferred tax
liabilities
|
|
3,375
|
3,382
|
Other non-current
liabilities
|
|
39
|
74
|
Total non-current liabilities
|
|
39,299
|
45,430
|
|
|
|
|
Total
liabilities
|
|
121,356
|
126,632
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
11,022
|
-
|
|
|
|
|
Equity
|
|
|
|
Class A Ordinary
Shares, par value US$0.00005 per share, 825,000,000 shares
authorized, and 27,614,978 shares and 27,809,471 shares
issued and outstanding as at December 31, 2017 and June 30,
2018
|
|
-
|
-
|
Class B Ordinary
Shares, par value US$0.00005 per share, 35,400,000 shares
authorized, and 7,201,254 shares and 7,201,254 shares
issued and outstanding as at December 31, 2017 and June 30,
2018
|
|
-
|
-
|
Additional paid-in
capital
|
|
12,088
|
30,663
|
Retained
earnings
|
|
102,328
|
118,113
|
Accumulated other
comprehensive income
|
|
930
|
304
|
Total Baidu, Inc. shareholders' equity
|
|
115,346
|
149,080
|
Noncontrolling interests
|
|
4,004
|
12,608
|
Total
equity
|
|
119,350
|
161,688
|
|
|
|
|
Total liabilities,
redeemable noncontrolling interests, and equity
|
|
251,728
|
288,320
|
Reconciliations of
non-GAAP financial measures to the nearest comparable GAAP
measures
|
(in RMB millions
except for share and per ADS information, unaudited)
|
|
|
|
|
|
|
|
Three months
ended
|
|
June 30,
2017
|
|
March 31,
2018
|
|
June 30,
2018
|
Operating income -
Baidu Core
|
5,154
|
|
5,624
|
|
6,736
|
Add:
Share-based compensation expenses
|
745
|
|
731
|
|
1,033
|
Non-GAAP operating
income - Baidu Core
|
5,899
|
|
6,355
|
|
7,769
|
Add:
Depreciation of fixed assets
|
847
|
|
691
|
|
760
|
Add:
Amortization of intangible assets
|
52
|
|
26
|
|
33
|
Adjusted EBITDA -
Baidu Core
|
6,798
|
|
7,072
|
|
8,562
|
|
|
|
|
|
|
Operating loss -
iQIYI
|
(991)
|
|
(1,062)
|
|
(1,328)
|
Add:
Share-based compensation expenses
|
51
|
|
47
|
|
84
|
Non-GAAP operating
loss - iQIYI
|
(940)
|
|
(1,015)
|
|
(1,244)
|
Add:
Depreciation of fixed assets
|
85
|
|
64
|
|
74
|
Add:
Amortization of intangible assets
|
18
|
|
12
|
|
45
|
Adjusted EBITDA -
iQIYI
|
(837)
|
|
(939)
|
|
(1,125)
|
|
|
|
|
|
|
Operating income -
consolidated
|
4,210
|
|
4,568
|
|
5,422
|
Add:
Share-based compensation expenses
|
796
|
|
778
|
|
1,117
|
Non-GAAP operating
income - consolidated
|
5,006
|
|
5,346
|
|
6,539
|
Add:
Depreciation of fixed assets
|
932
|
|
755
|
|
834
|
Add:
Amortization of intangible assets
|
70
|
|
38
|
|
44
|
Adjusted
EBITDA-consolidated
|
6,008
|
|
6,139
|
|
7,417
|
|
|
|
|
|
|
|
Three months
ended
|
|
June 30,
2017
|
|
March 31,
2018
|
|
June 30,
2018
|
Net income
attributable to Baidu
|
4,415
|
|
6,694
|
|
6,402
|
Add: Share-based
compensation expenses
|
796
|
|
778
|
|
1,081
|
Add: Loss associated
with the dilution of equity method investees, net of tax
|
324
|
|
53
|
|
174
|
Add: Disposal
loss(gain), net of tax
|
(805)
|
|
489
|
|
114
|
Add: Impairment of
long-term investments, net of tax
|
-
|
|
83
|
|
-
|
Add: Fair value
change of long-term investments, net of tax
|
-
|
|
(3,512)
|
|
(338)
|
Non-GAAP net
income attributable to Baidu
|
4,730
|
|
4,585
|
|
7,433
|
|
|
|
|
|
|
Weighted average
number of ADS used in computing non-
GAAP diluted earnings per ADS
|
348,243,867
|
|
351,809,497
|
|
352,994,277
|
|
|
|
|
|
|
GAAP diluted
earnings per ADS
|
11.31
|
|
18.68
|
|
18.14
|
Add: Accretion
of the redeemable noncontrolling interests
|
1.37
|
|
0.35
|
|
-
|
Add: Non-GAAP
adjustments to earnings per ADS
|
0.90
|
|
(6.00)
|
|
2.92
|
Non-GAAP diluted
earnings per ADS
|
13.58
|
|
13.03
|
|
21.06
|
Selected
information
|
(in RMB millions
except for share and per ADS information, unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
2017
|
|
2018
|
|
2018
|
Baidu
Core
|
|
16,626
|
|
16,127
|
|
20,018
|
iQIYI
|
|
4,326
|
|
4,877
|
|
6,170
|
Intersegment
eliminations & adjustments
|
|
(78)
|
|
(97)
|
|
(216)
|
Total
Revenues
|
|
20,874
|
|
20,907
|
|
25,972
|
|
|
|
|
|
|
|
Baidu
Core
|
|
5,154
|
|
5,624
|
|
6,736
|
iQIYI
|
|
(991)
|
|
(1,062)
|
|
(1,328)
|
Intersegment
eliminations & adjustments
|
|
47
|
|
6
|
|
14
|
Operating
income
|
|
4,210
|
|
4,568
|
|
5,422
|
Baidu
Core
|
|
33%
|
|
35%
|
|
34%
|
iQIYI
|
|
(24%)
|
|
(22%)
|
|
(22%)
|
Operating
margin (note 1)
|
|
21%
|
|
22%
|
|
21%
|
|
|
|
|
|
|
|
Baidu
Core
|
|
5,899
|
|
6,355
|
|
7,769
|
iQIYI
|
|
(940)
|
|
(1,015)
|
|
(1,244)
|
Intersegment
eliminations & adjustments
|
|
47
|
|
6
|
|
14
|
Non-GAAP
operating income
|
|
5,006
|
|
5,346
|
|
6,539
|
Baidu
Core
|
|
38%
|
|
39%
|
|
39%
|
iQIYI
|
|
(23%)
|
|
(21%)
|
|
(20%)
|
Non-GAAP
operating margin (note 1)
|
|
25%
|
|
26%
|
|
25%
|
|
|
|
|
|
|
|
Baidu
Core
|
|
6,798
|
|
7,072
|
|
8,562
|
iQIYI
|
|
(837)
|
|
(939)
|
|
(1,125)
|
Intersegment
eliminations & adjustments
|
|
47
|
|
6
|
|
(20)
|
Adjusted
EBITDA
|
|
6,008
|
|
6,139
|
|
7,417
|
Baidu
Core
|
|
43%
|
|
44%
|
|
43%
|
iQIYI
|
|
(21%)
|
|
(19%)
|
|
(18%)
|
Adjusted
EBITDA margin (note 1)
|
|
30%
|
|
29%
|
|
29%
|
|
|
|
|
|
|
|
(1) Starting on
January 1, 2018, valued added tax has been reclassified from cost
of revenues to net against revenues.
To increase
comparability of operating results and help investors better
understand our business performance and trends, 2017 net revenues
have been used to calculate operating margin, non-GAAP operating
margin, and adjusted EBITDA margin.
2017 net revenues are
defined as gross revenues under legacy GAAP after the deduction of
value added-taxes, which is presented on the same basis as 2018 and
going forward.
|
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SOURCE Baidu, Inc.