Baidu’s Q1 revenue beat expectations supported by cloud, AI
Baidu’s Q1 revenue beat expectations supported by cloud, AI

Baidu’s Q1 revenue beat expectations supported by cloud, AI

 

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China’s search engine giant Baidu’s quarterly revenue beat expectations as COVID-19 outbreaks in China and epidemic control measures boosted demand for its cloud and artificial intelligence (AI) products.

Revenue for the three months to March 31 rose 1% to 28.41 billion yuan ($4.22 billion), the slowest growth in six quarters, but topped an analysts’ average estimate of 27.82 billion.

It booked a net loss of 885 million yuan in the quarter, or 2.87 yuan per American Depository Share (ADS), amid an economic downturn and pandemic resurgence in China. A year earlier it had posted a profit of 25.65 billion yuan, or 73.76 yuan per ADS.

Non-Gaap net profit reached 3.88 billion yuan, higher than expectations and compared to 4.3 billion yuan a year earlier. Adjusted EBITDA was 5.5 billion yuan in the quarter, compared to 3.37 billion yuan expected. Adjusted net profit per ADS was 11.22 yuan, compared to expected 5.17 yuan.

“Since mid-March, our business has been negatively impacted by the recent COVID-19 resurgence in China,” Robin Li, Baidu’s founder and chief executive, said in a statement, adding that challenges related to the virus will continue to pressure its operations in the near term.

Revenue for Baidu Core, which includes online ad sales and non-ad sales from its AI-powered products including AI cloud, rose 4% to 20.48 billion yuan. Its online ad revenue dropped 4% from a year earlier to 15.7 billion yuan.

The second quarter will be more challenging for the company, Baidu’s Chief Financial Officer Luo Rong said during a conference call. Sales from Baidu AI cloud, part of the non-ad revenue and one of its fastest-growing sectors, jumped 45%, according to Luo.