Baidu rises after Q1 beat as AI Cloud sales grow despite slowdown in marketing revenue
Seeking Alpha 16/05/2024 19:32

Baidu's (NASDAQ:BIDU) stock rose about 2% premarket on Thursday after first quarter results beat estimates.

Meanwhile, several other Chinese stock were in the green, Alibaba (BABA) +1% JD.Com (JD) +5%, and NetEase (NTES) +2%.

The company's core online marketing revenue remained stable, while its AI Cloud revenue grew during the quarter.

Baidu's non-GAAP earnings per American depositary share, or ADS, rose 24% year-over-year to RMB19.91, $2.76. Meanwhile, total revenue rose 1% year-over-year to RMB31.51B, or $4.37B. Both top and bottom line surpassed analysts estimates.

Compared to the fourth quarter of 2023, revenue fell 10% wherein it generated RMB34.95B, or $4.92B.

"Baidu Core's online marketing revenue remained stable, while the end-to-end optimization of our AI technology stack continued to propel the growth of our AI Cloud revenue during the quarter," said Baidu's Co-founder and CEO Robin Li. "We are making our ERNIE family of models increasingly affordable and efficient. This should provide Baidu with even greater opportunities ahead.

The company's generative artificial intelligence, or AI, chat tool Ernie Bot has seen over 200M users. The number for the last quarter was 50 million, according to Baidu.

Baidu also launched several lightweight large language models, or LLMs such as ERNIE Speed, ERNIE Lite, and ERNIE Tiny, in the first quarter to make it more affordable.

First quarter revenue from Baidu Core rose about 4% year-over-year to RMB23.80B, or about $3.3B. Quarter-over-quarter it fell, as fourth quarter revenue had amounted to RMB27.5B, or $3.87B.

Online marketing revenue grew 3% year over year to about RMB17 ($2.36B) ($2.70B), while non-online marketing revenue was RMB6.8B ($935M), up 6% year over year, mainly due to AI Cloud business.

Baidu's CFO Rong Luo noted that the company has established a track record of consistently improving operational efficiency.

"In the coming quarters, we will execute on what is needed to optimize our operational efficiency in support of our AI enabled businesses and high-quality growth, and maintain a healthy non-GAAP operating margin," said Luo.

The Chinese internet search giant said that in March 2024, Baidu App's Monthly Active Users, or MAUs, reached 676M, up 3% year over year.

Online entertainment service iQIYI (IQ) saw revenue decrease by 5% year-over-year to RMB7.9B, or $1.10B. Baidu owns a majority stake in the company.

Stock Buyback: Baidu said it bought back shares worth $229M since the start of the first quarter of 2024, bringing the cumulative buyback to $898M under the 2023 share repurchase program.

More on Baidu

  • Baidu Is Poised To Make The Most Of China's AI Comeback
  • Baidu: AI Boom At Mind Boggling Valuation
  • Baidu: Buy The AI Story Without Paying For It
  • Baidu Non-GAAP EPADS of $2.76 beats by $0.57, revenue of $4.37B beats by $30M
  • Baidu Q1 earnings on deck: What to expect


The content is provided as general information only and should not be taken as investment advice. All the contents shall not be taken as a recommendation to buy or sell any security or financial instruments. Any action you take resulting from information, analysis, or commentary on this article is your responsibility. Please consult your investment advisor before making any investments.

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