KEY POINTS

  • Baidu reported 2Q18 non-GAAP diluted earnings per ADS of ¥21.06, up from ¥13.58 in 2Q17. Revenues for the quarter reached ¥26.0 billion ($3.93 billion), up 24.4% year over year.
  • The Baidu app reached 148 million daily active users in 2Q18, an increase of 17% year over year. The DuerOS installation base reached 90 million devices and voice queries surpassed 400 million.
  • Management expects the topline for 3Q18 to be in the range of ¥37–¥28.77 billion ($4.02–$4.23 billion), representing a year-over-year increase of 23%–30%.

2Q18 Results

Baidu reported total revenues of¥26.0 billion ($3.93 billion)in 2Q18, an increase of 24.4% from 2Q17. Mobile revenues represented 77% of total revenues, compared to 72% in 2Q17.

  • Online marketing revenuesfor 2Q18 reached ¥21.1 billion ($3.18 billion), representing a 25% year-over-year increase. Baidu had approximately 511,000 active online marketing customers, an increase of 9% year over year.
  • Revenue per online marketingcustomer for 2Q18 was approximately ¥41,200 ($6,200), up 16% year over year.
  • Revenues from iQiYireached ¥2 billion ($932 million), up 51% year over year.
  • Selling, general and administrative expenses (SG&A)was ¥4.5billion ($681 million), an increase of 54% year over year.
  • Content costswere ¥2 billion ($788 million), up by 68% year over year. The sharp increase was primarily due to iQiYi’s increased content costs and increased investment in Baidu feeds’ content network, BJH.
  • Operating incomein 2Q18 increased by 29% year over year to reach ¥4 billion. Non-GAAP net income attributable to Baidu in 2Q18 was ¥7.8billion ($1.17 billion). Non-GAAP diluted earnings per ADS was ¥21.06 ($3.18).

 

 

Results Highlights

During 2Q18, Baidu pursued a wide range of initiatives focused on its core business and AI application:

  • The Baidu app, which offers search and personalized news feed, reached 148 million daily active users in June 2018, up 17% year over year.
  • The DuerOSinstalled base reached 90 million devices and voice queries surpassed 400 million in June 2018.
  • Baidu Brain v3.0: At its artificial intelligence (AI) developer conference Baidu Create, Baidu released Baidu Brain v3.0, which features multi-modal deep semantic understanding to enable conversational AI in Chinese, along with over 110 AI capabilities.
  • AI chip for cloud: Also at the conference, Baidu announced plans to develop a high-performance AI chip for cloud to edge scenarios, including data centers, public clouds and autonomous vehicles.

3Q18 Outlook

Baidu expects revenues for 3Q18 in the range of ¥27.37–¥28.77 billion ($4.02–$4.23 billion), representing a 23.0%30.0% increase year over year. Excluding disposed businesses, such as Global DU and Du Xiaoman Financial, the company expects revenues in the range of ¥26.56–¥27.92 billion ($3.91–$4.11 billion), representing an increase of 26.0%33.0% year over year.


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