Baidu's Q2 Results: AI and Cloud Growth Offset by Advertising Decline

Baidu quarterly revenue falls as weak ads offset cloud growth

Aug 20 (Reuters) - Chinese search engine giant Baidu (9888.HK), opens new tab, on Wednesday reported a drop in second quarter revenue as its core advertising business struggled amid China's economic slowdown, offsetting strong growth in cloud services. The company reported total revenue of 32.71 billion yuan ($4.56 billion) during the three months ended June 30, down 4% from the same period a year earlier. Analysts on average estimated second quarter revenue at 32.76 billion yuan, according to data compiled by LSEG. On an adjusted basis, Baidu posted a profit of 13.58 yuan per American Depositary Share (ADS), beating expectations of 13.12 yuan. Baidu's U.S.-listed shares were up 1.3% in premarket trading. Hit by a property market downturn, weak employment rates and choppy consumer demand, companies in China, the world's second-largest economy, have reined in advertising spending to cut costs and protect their margins. The squeeze has spilled over into Baidu, which relies heavily on advertising in its search engine. Its core online advertising business, which typically makes up 60% of overall company revenue, saw revenue decrease 15% to 16.2 billion yuan during the April-June quarter. That eclipsed upbeat growth at the Beijing-based company's AI cloud segment, which drove a 34% increase in Baidu's non-online advertising business. Baidu has invested heavily in artificial intelligence in recent years. Last month, it launched a redesigned search interface that it called the biggest overhaul in a decade. It has also expanded AI services, recently launching MuseSteamer, an AI-powered video generator for businesses. It has also open-sourced a version of its flagship Ernie model as it competes with rivals including DeepSeek, which disrupted the global AI industry earlier this year with lower-cost models. ($1 = 7.1784 Chinese yuan renminbi) Reporting by Deborah Sophia in Bengaluru, Liam Mo in Beijing; Editing by Shilpi Majumdar and Kate Mayberry Our Standards: The Thomson Reuters Trust Principles., opens new tab

China's Baidu revenue drops as AI returns fail to offset ad decline

Aug 20 (Reuters) - Chinese search engine company Baidu (9888.HK), opens new tab, on Wednesday reported a drop in second quarter revenue as its core advertising business struggled amid China's economic slowdown, while returns from AI investments remained limited. The company reported total revenue of 32.71 billion yuan ($4.56 billion) during the three months ended June 30, down 4% from the same period a year earlier. Analysts on average estimated quarterly revenue at 32.76 billion yuan, according to data compiled by LSEG. On an adjusted basis, Baidu made a profit of 13.58 yuan per American Depositary Share, beating expectations of 13.12 yuan. Baidu's U.S.-listed shares were down 3% in early trading. Hit by a property market downturn, weak employment rates and choppy consumer demand, companies in China, the world's second-largest economy, have reined in advertising spending to cut costs and protect their margins. The squeeze has spilled over to affect Baidu, which relies heavily on advertising in its search engine. Its core online advertising business, which typically makes up 60% of overall company revenue, saw revenue decrease 15% to 16.2 billion yuan during the April-June quarter. Cloud business revenue grew 27% to 6.5 billion yuan, but failed to offset the advertising decline. "In the short term, AI will not fully offset advertising headwinds," said Eric Shen, analyst at consultancy Third Bridge. "While AI tools like Ernie Bot can slow the decline by retaining users, they have not yet translated into meaningful ad revenue." Baidu has invested heavily in artificial intelligence in recent years. Last month, it launched a redesigned search interface that it called the biggest overhaul in a decade. By July, 64% of mobile search result pages contained AI-generated content. Chief Executive Robin Li said on a post-earnings call that the company would take a prudent approach to monetising AI features, keeping user experience as its top priority. ($1 = 7.1784 Chinese yuan renminbi) Reporting by Deborah Sophia in Bengaluru, Liam Mo in Beijing. Editing by Kate Mayberry and Mark Potter Our Standards: The Thomson Reuters Trust Principles., opens new tab

Baidu's AI Cloud, Robotaxi Push Gain Speed Even As Ad Business Slows: Analyst - Baidu (NASDAQ:BIDU)

As the global tech landscape continues evolving, companies grapple with fluctuating advertising revenues and the challenges of integrating cutting-edge technology. Baidu Inc BIDU faces hurdles and opportunities in this shifting environment. Benchmark analyst Fawne Jiang maintained Baidu with a Buy and lowered the price target from $120 to $115. BIDU stock is moving in positive territory. See what is driving the movement here. Also Read: Baidu's AI Cloud And Robotaxis Become Growth Engines As Ad Business Slows Jiang cited ongoing ad weakness and delayed GenAI monetization. She projected fiscal 2025 and 2026 adjusted EPS of $7.09 and $9.14, down from prior estimates, reflecting margin pressure from soft advertising and heavy AI investment. Jiang noted that second-quarter 2025 revenues came in at 32.7 billion Chinese yuan (-4% Y/Y), in line with consensus, while Baidu Core fell 2% Y/Y due to a 15% decline in advertising. Non-advertising revenue, however, surged 34% Y/Y, now contributing ~40% of Baidu Core, driven by AI Cloud's +27% Y/Y growth and subscription-based revenue strength. Baidu posted EPS of 13.58 Chinese yuan ($1.90), slightly above expectations, with Baidu Core EBITDA margin at 24%, down 7.9 ppts Y/Y. For the second half, Jiang forecast Core ad revenue declines of 25% Y/Y in the third quarter and 15% in the fourth quarter, as GenAI monetization remains in its infancy. However, she highlighted potential upside from the upcoming launch of ERNIE 5.0, which will enhance multimodal search and digital human technology. Non-ad businesses remain Baidu's growth engine. Jiang modeled AI Cloud growth of 19% Y/Y in the second half of 2025, in line with management guidance, while Apollo Go delivered 2.2 million fully driverless rides in the second quarter (+148% Y/Y) and is scaling globally via partnerships with Uber and Lyft. She sees Apollo Go's right-hand-drive leadership as a strategic edge in international markets. Despite near-term earnings pressure, Jiang argued Baidu's $63 per share in net cash, ~5% annual buyback, AI Cloud momentum and Apollo Go scale-up provide downside support. She said upside depends on sustained AI Cloud strength and early traction in GenAI monetization, which could reshape Baidu into a more diversified, innovation-led company. BIDU Price Action: Baidu shares are trading higher by 1.33% to $87.01 at publication on Thursday. Read Next: Amazon Is This Analyst's 'Best Idea' As E-Commerce Market Share Nears 50% Photo: Shutterstock BIDUBaidu Inc$87.841.24%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentumN/AGrowth93.62Quality7.75Value95.51Price TrendShortMediumLongOverview This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Why Is Baidu Stock Gaining Wednesday? - Baidu (NASDAQ:BIDU)

Baidu (NASDAQ: BIDU) stock gained on Wednesday after it reported fiscal second-quarter results. The company reported quarterly revenue of $4.57 billion, a decline of 4% year-on-year (Y/Y), slightly missing analysts' consensus estimate of $4.60 billion. Despite the revenue shortfall, Baidu's adjusted earnings per American Depositary Share (ADS) came in at $1.90, exceeding the forecast of $1.32. Also Read: Alibaba's AI Momentum Builds As Qwen Coder Gains Market Share Baidu's core revenue fell 2% Y/Y to $3.66 billion. Online marketing revenue dropped 15% Y/Y to $2.27 billion. However, non-online marketing revenue posted a strong gain, increasing 34% Y/Y to $1.40 billion, driven largely by its AI Cloud business, which has become a critical growth engine. Revenue from Baidu's streaming platform, iQIYI IQ, was $925.3 million, falling short of the analyst consensus estimate of $1.00 billion, representing an 11% Y/Y decline. In terms of expenses, Baidu reported a 5% Y/Y increase in Selling, General, and Administrative (SG&A) expenses, totaling $832 million. This rise was largely attributed to higher spending on marketing and channel-related activities. Meanwhile, the company's Research & Development (R&D) expenses decreased by 13% Y/Y to $715 million. Baidu's adjusted EBITDA margin dropped 700 basis points to 20%, while its core adjusted EBITDA margin saw a more significant decline of 800 basis points, falling to 24%. As of June 30, 2025, Baidu maintained a solid cash position with $17.34 billion in cash and equivalents. However, free cash flow was a notable concern, posting an outflow of $653 million. Excluding the iQIYI business, Baidu's free cash flow outflow was slightly less, at $648 million. The negative cash flow was primarily driven by the company's ramped-up investment in its AI business. Robin Li, Co-founder and CEO of Baidu said the company's AI Cloud business delivered strong revenue growth in the second quarter, powered by its expanding full-stack AI capabilities and end-to-end solutions. He explained that this momentum eased short-term pressure on online marketing as Baidu accelerated the AI transformation of its search business to improve user experience and build long-term growth. Li added that Apollo Go advanced its global footprint and tested new business models, reinforcing Baidu's leadership in both left-hand and right-hand drive robotaxi markets worldwide. Baidu stock gained 6% year-to-date as it grappled with intense AI technology competition from Alibaba Group BABA. Price Action: BIDU shares are trading higher by 0.99% to $89.95 premarket at last check Wednesday. Read Next: Alibaba, Nio Lead Gains As US And China Extend Trade Truce Photo by Robert Way via Shutterstock BIDUBaidu Inc$89.730.74%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum34.90Growth93.55Quality8.17Value95.46Price TrendShortMediumLongOverviewBABAAlibaba Group Holding Ltd$120.400.34%IQiQIYI Inc$2.15-5.70%Market News and Data brought to you by Benzinga APIs

Why Baidu Stock Wilted on Wednesday | The Motley Fool

AI and next-generation vehicles are bringing in revenue but not enough for growth in the most recently completed quarter. Veteran Chinese tech giant Baidu (BIDU -2.58%) looked rather tired to equity investors on Wednesday. They didn't seem wowed by the company's latest earnings release and expressed this by collectively trading their American depositary shares (ADS) down by almost 3%. This was a steeper fall than the 0.2% endured by the bellwether S&P 500 index. Baidu's second-quarter results, published well before market open that day, revealed that the company's revenue slumped by 4% year over year to 32.7 billion yuan ($4.55 billion). That was slightly below the consensus analyst estimate of 32.9 billion yuan ($4.58 billion). The decline and miss might have been more pronounced had it not been for the company's artificial intelligence (AI)-boosted offerings. Baidu quoted CEO Robin Li as saying that its AI Cloud business "continued to deliver robust and healthy revenue growth, supported by our strengthening full-stack AI capabilities and comprehensive end-to-end AI products and solutions." It didn't help push the bottom line higher, however, as non-GAAP (adjusted) net income fell by 35% to just under 4.8 billion yuan ($668 million). On a per-ADS basis, the company's profitability was 13.58 yuan ($1.89). On the bright side, this was a bit higher than the average analyst estimate of 13.33 yuan ($1.86) per ADS. In its earnings release, Baidu pointed to AI as a potential engine of growth. On the subject of engines, it also clearly has high hopes for the robotaxis coming from its mobility unit, Apollo Go. It said that it is a leading company in robotaxi markets with both left- and right-hand drive regimes.

Baidu Revenue Slips on Weak Advertising Business

Chinese search-engine giant Baidu reported lower quarterly revenue amid a weaker performance in its core advertising business, though profit was better than expected. Revenue for the second quarter fell 3.6% from a year earlier to 32.71 billion yuan, equivalent to $4.55 billion, roughly in line with analysts' estimates. Net profit rose 33% to 7.32 billion yuan, beating the 3.66 billion yuan consensus estimate in a FactSet poll. The Beijing-based company said Wednesday that revenue from its main business segment declined 1.6%, weighed by a 15% drop in online marketing revenue during the quarter. Revenue from its iQIYI video-streaming service fell about 11%. Baidu Chief Executive Robin Li said the continued robust and healthy revenue growth of its AI cloud business helped mitigate the near-term pressure on its online marketing business. Ad business performance was pressured as the company "intensified the AI transformation of Baidu Search to elevate user experience and establish a stronger foundation for long-term growth," Li said. The Chinese tech company has been pursuing new growth drivers as its advertising business drags, diversifying into fields such as self-driving cars, cloud computing and artificial intelligence. Its Ernie Bot remains one of China's most popular ChatGPT-style chatbots.

Baidu Revenue Slips on Weak Advertising Business -- Update

Chinese search-engine giant Baidu reported lower quarterly revenue amid a weaker performance in its core advertising business, though profit was better than expected. Revenue for the second quarter fell 3.6% from a year earlier to 32.71 billion yuan, equivalent to $4.55 billion, the Beijing-based tech company said Wednesday, roughly in line with analysts' estimates. Chief Executive Robin Li highlighted the strength of Baidu's AI cloud business, which continued to deliver robust and healthy revenue growth. "This performance helped mitigate the near-term pressure on online marketing business, as we intensified the AI transformation of Baidu Search to elevate [the] user experience and establish a stronger foundation for long-term growth," he said. Revenue from its main business segment declined 1.6%, weighed by a 15% drop in online marketing revenue during the quarter. Revenue from its iQIYI video-streaming service fell about 11%. Citi analysts said the double-digit decline in Baidu Core's online marketing revenue was in line with its forecast, while the company's AI cloud business could have performed slightly better than expected. Net profit surprised on the upside, rising 33% to 7.32 billion yuan, which topped the FactSet consensus of 3.66 billion yuan. The results reflect the challenges Baidu faces as it pursues new growth drivers to counter the revenue drag from its advertising business. The tech company has diversified into fields such as self-driving cars, cloud computing and artificial intelligence, and its Ernie Bot remains one of China's most popular ChatGPT-style chatbots. In the coming months, the Chinese company expects to roll out a new version of its core foundation model, called Ernie 5.0. By the end of August, it plans to launch a new reasoning model capable of handling more complex tasks, The Wall Street Journal reported earlier this month. Baidu has also made inroads in the nascent robotaxi market. It is teaming up with Lyft to deploy its Apollo Go cars in Europe, beginning with Germany and the U.K. in 2026, and has joined forces with Uber to bring its driverless vehicles to Asia and the Middle East later this year. Prospects for Baidu's main revenue stream--advertising dollars--are less rosy. Analysts expect its advertising business to continue to face headwinds. Citi analysts said last month that the transformation of AI search could have a greater negative impact on ad revenue than previously expected. Baidu is exploring monetization strategies for new AI-generated search traffic, but a turnaround in advertising revenue might take some time, Deutsche Bank analyst Leo Chiang said in a recent note. The company's American depositary receipts were recently 1.0% lower in premarket trading.