Shulou(Shulou.com)11/24 Report--

According to the news on the morning of November 23, yesterday evening, Baidu released its unaudited financial results for the third quarter ended September 30, 2022. In the third quarter, Baidu achieved revenue of 32.54 billion yuan, up 2% from the same period last year, while net profit (non-GAAP) attributed to Baidu reached 5.89 billion yuan, up 16% from the same period last year.

According to Baidu's financial report, thanks to the continuous optimization of operation and management, Baidu's operating efficiency has been improved and its profitability has been gradually repaired. In the third quarter, Baidu's overall operating profit (non-GAAP) surged 16% year-on-year for the first time since the first quarter of 2021, while net profit growth achieved year-on-year growth for two consecutive quarters.

"despite the continuing challenges posed by the resurgence of the epidemic, Baidu Core recorded solid financial and operating results in the third quarter. Baidu core revenue returned to positive growth, driven by the gradual recovery of our online marketing business and steady growth in smart cloud revenue." Said Robin Li, founder, chairman and chief executive of Baidu.

According to Robin Li, Baidu Apollo automotive solutions continue to be recognized by leading automakers this quarter, with radish fast running operating orders exceeding 474000. It is expected that mobile ecology will continue to generate cash flow in the future, provide funds for the company's smart cloud and smart driving business investment, and further consolidate and promote the company's future performance growth.

Basic set repair, online marketing revenue reached 18.7 billion yuan in the current quarter, Baidu's core revenue was 25.2 billion yuan, an increase of 2% over the same period last year. Of this total, online marketing revenue was 18.7 billion yuan, down 4% from the same period last year, but up 10% from the second quarter. Because macro has gradually improved since June. Revenue from non-online marketing was 6.5 billion yuan, up 25% from a year earlier, thanks to AI Cloud and other AI-driven businesses.

In response, Luo Rong, Baidu's chief financial officer, said, "Baidu's core operating profit (non-GAAP) increased 14% year-on-year to 6.7 billion yuan, which is due to our unremitting efforts to reduce costs and increase efficiency. Looking to the future, we will continue to focus on high-quality income growth. At the same time, we will continue to invest in technology and talent to promote our future development."

Since last year, the major domestic Internet companies have encountered a wave of downsizing and optimization, in which Baidu is also involved. With the gradual ebb of the tide of layoffs, the optimization effect of operation and management of major enterprises is gradually highlighted, and the toughness of enterprises is becoming more and more prominent, which is reflected in the financial statements, and the operational benefits are also gradually revealed.

As Baidu's most important cash cow business, Baidu Mobile Ecology Business still maintained an increase in operating profit this quarter compared with the same period last year. In addition, Baidu's App MAU reached 634 million in September, up 5 per cent from a year earlier. In the third quarter, the number of mobile search queries achieved double-digit growth compared with the same period last year, and the content distribution of Baidu App information stream increased by 23% compared with the same period last year. In the field of e-commerce, users' willingness to go to Baidu App for product search has been further enhanced, and product-related search queries continue to increase. In the third quarter, quarterly GMV driven by Baidu search grew 52 per cent year-on-year.

Baidu App is one of the few super App in China's mobile Internet industry, which is widely recognized and has a solid position. Search advertising is also a kind of advertising with the highest return on investment among many effective advertisements. In addition, China's mobile Internet industry is also maturing, the growth of users is slowing, and the competitive situation will not change as dramatically as before, and we believe that the company's market share in the field of online advertising is sustainable in the future. As the epidemic alleviates, advertising revenue will rebound. " Robin Li has great confidence in the steady development of Baidu mobile business.

The order of smart car is expected to reach 11.4 billion, can the new engine play a leading role? In addition to online marketing revenue, Baidu's non-online marketing revenue was 6.5 billion yuan in the quarter, up 25 per cent from a year earlier. The main contribution to this part of the revenue comes from AI-driven businesses such as intelligent cloud AI and self-driving.

In terms of smart cloud business, Baidu's smart cloud revenue grew by 24% in the third quarter compared with the same period last year, which is higher than the industry average. While expanding the scale of operation, Baidu Intelligent Cloud has achieved a month-on-month increase in operating profits compared with the same period last year. According to Baidu, this is due to the healthy growth mechanism gradually built by Baidu Smart Cloud, which is moving away from low-margin projects and is committed to promoting solution standardization.

Specifically, in the manufacturing, energy, transportation, government and other fast-growing vertical market, Baidu intelligent cloud occupied a favorable position in the early days. As the IDC report shows, Baidu Intelligent Cloud has won the first market share of China's industrial quality inspection solutions for three years in a row, and continues to lead China's AI industrial quality inspection market.

With the continuous improvement of Baidu Intelligent Cloud's intelligent closed-loop path of "chip-framework-big model-industry application", Baidu Intelligent Cloud's ability to help customers achieve digital and intelligent transformation will continue to be consolidated as Baidu Intelligent Cloud continues to deepen its understanding of industry-specific pain points in its long-term service to the vertical industry.

In the field of self-driving, Baidu deepened its partnership with one of China's largest automotive technology companies in the third quarter, using ANP (Apollo pilot-assisted driving), AVP (autonomous parking) and Gaojing Maps on one of its popular models. The operation scale of Baidu self-driving travel service platform radish fast running continues to expand. Radish fast running provides a total of 474,000 rides, an increase of 311% over the same period last year and 65% month-on-month growth, and the cumulative number of rides provided to the public reached 1.4 million. In addition, according to Baidu estimates, its cumulative fixed point and contract amount is expected to reach 11.4 billion yuan in the near future.

With the expansion of the business territory, radish fast run continues to learn and improve from new scenarios, through large-scale operations to promote technology iteration to achieve a virtuous circle. In addition, radish fast running's continued safety record on open roads will provide strong support for more cities to issue complete self-driving permits.

Overall, by controlling costs and optimizing efficiency, Baidu's cash flow stability has been improved, and the security of long-term investment in technology areas such as Baidu smart cloud and self-driving has been improved in the future. With the release of the large-scale capacity of artificial intelligence, Baidu's long-term sustainable development situation will gradually open.

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