Baidu Announces Fourth Quarter and Fiscal Year 2021 Results

BEIJING, March 1, 2022 /PRNewswire/ — Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888) (“Baidu” or the “Company”), a leading AI company with strong Internet foundation, today announced its unaudited financial results for the quarter and fiscal year ended December 31, 2021.

“Baidu concluded a solid 2021, evidenced by a strong growth in our non-advertising business, particularly the acceleration of Baidu AI Cloud. We brought our AI capabilities to China’s traditional industries and public service sector, to aid in the improvement of their efficiency and operational expansion. Furthermore, Apollo Go provided around 213,000 rides in the fourth quarter, almost doubling sequentially, reaffirming our leadership position in the global autonomous ride-hailing market,” said Robin Li, Co-founder and CEO of Baidu. “Our strategic commitments are closely geared with China’s endeavors in technology innovation and transition to a green economy.”

“Baidu Core achieved 21% revenue growth in 2021, with non-advertising revenues increasing by 71% from last year, which has been very encouraging,” said Rong Luo, CFO of Baidu. “Looking ahead, we remain committed to healthy and sustainable long-term growth as Baidu continues to improve its overall operational efficiency and execution capabilities.”

Fourth Quarter and Fiscal Year 2021 Financial Highlights^[1]

 

 

 

Other Highlights

Corporate

• Baidu returned US$615 million to shareholders under its 2020 Share Repurchase Program in the fourth quarter of 2021, bringing the cumulative repurchase to approximately US$1.2 billion in 2021. As of the end of 2021, the Company had returned approximately US$2.9 billion to shareholders under the 2020 Share Repurchase Program.
• Baidu’s ESG rankings were further improved in 2021. Our MSCI ESG rating was upgraded three times in two years to achieve BBB, and our Sustainalytics ESG risk rating was ranked Top 18 among 234 Internet Software and Services companies globally.

AI Cloud

• Baidu ACE smart transportation has been adopted by 35 cities, up from 14 cities a year ago, based on contract amounts of over RMB10 million, as of the end of 2021.
• Baidu was once again ranked the No. 1 AI cloud provider, according to IDC’s first half of 2021 report on China’s public cloud market.
• PaddlePaddle developer community has grown to 4.06 million and has served 157,000 businesses, as of the end of 2021. Developers have created 476,000 models on PaddlePaddle by the end of 2021.

Intelligent Driving

• Rides provided by Apollo Go almost doubled sequentially, and reached around 213,000 in the fourth quarter of 2021.
• Apollo Go, Baidu’s autonomous ride-hailing service, has begun to charge fees for the autonomous ride-hailing services on open roads on November 25, 2021, in Beijing;  February 18, 2022, in Chongqing; and February 27, 2022, in Yangquan.   
• Apollo Go expanded into Chongqing, Shenzhen and Yangquan, and is now available in eight cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Changsha, Cangzhou and Yangquan.
• Jidu Auto, an intelligent EV company established in partnership with Zhejiang Geely Holding Group, completed its Series A financing, raising nearly US$400 million.

Other Growth Initiatives

• Xiaodu ranked No.1 in smart display shipments globally and smart speaker shipments in China for the first nine months of 2021, according to Strategy Analytics, IDC and Canalys.

Mobile Ecosystem

• In December, Baidu App’s MAUs reached 622 million, up 14% year over year, and daily logged-in users reached 82%.
• Managed Page continued to account for over 40% of Baidu Core’s online marketing revenue in the fourth quarter of 2021.

iQIYI

• iQIYI subscribers reached 99 million in December 2021.

Fourth Quarter 2021 Financial Results

Total revenues were RMB 33.1 billion (US$5.19 billion), increasing 9% year over year.

• Revenue from Baidu Core was RMB 26.0 billion (US$4.08 billion), increasing 12% year over year; online marketing revenue was RMB 19.1 billion (US$3.00 billion), up 1% year over year, and non-online marketing revenue was RMB 6.9 billion (US$1.08 billion), up 63% year over year, driven by cloud and other AI-powered businesses.
• Revenue from iQIYI was RMB 7.4 billion (US$1.16 billion), decreasing 1% year over year.

Cost of revenues was RMB 17.3 billion (US$2.71 billion), increasing 19% year over year, primarily due to an increase in traffic acquisition costs, bandwidth costs, cost of goods sold and other costs related to new AI business.

Selling, general and administrative expenses were RMB 6.5 billion (US$1.01 billion), increasing 27% year over year, primarily due to an increase in channel spending, promotional marketing and personnel-related expenses.

Research and development expense was RMB 7.4 billion (US$1.16 billion), increasing 30% year over year, primarily due to an increase in personnel related expense.

Operating income was RMB 2.0 billion (US$307 million). Baidu Core operating income was RMB 3.0 billion (US$464 million), and Baidu Core operating margin was 11%. Non-GAAP operating income was RMB 4.3 billion (US$676 million). Non-GAAP Baidu Core operating income was RMB 4.8 billion (US$761 million), and non-GAAP Baidu Core operating margin was 19%.

Total other income, net was RMB 407 million (US$64 million), which mainly included a fair value gain of RMB 1.5 billion and an impairment loss of RMB 891 million from long-term investments. A significant portion of long-term investments, including but not limited to investments in equity securities of public and private companies, private equity funds and digital assets, is subject to quarterly fair value adjustments, which may contribute to net income volatility in future periods.

Income tax expense was RMB 1.3 billion (US$203 million), increasing 26% year over year.

Net income attributable to Baidu was RMB 1.7 billion (US$269 million), and diluted earnings per ADS was RMB 4.51 (US$0.71). Net income attributable to Baidu Core was RMB 2.7 billion (US$417 million), and net margin for Baidu Core was 10%. Non-GAAP net income attributable to Baidu was RMB 4.1 billion (US$641 million). Non-GAAP diluted earnings per ADS was RMB 11.60 (US$1.82). Non-GAAP net income attributable to Baidu Core was RMB 4.6 billion (US$726 million), and non-GAAP net margin for Baidu Core was 18%.

Adjusted EBITDA was RMB 5.8 billion (US$903 million) and adjusted EBITDA margin was 17%. Adjusted EBITDA for Baidu Core was RMB 6.2 billion (US$974 million) and adjusted EBITDA margin for Baidu Core was 24%. 

As of December 31, 2021, cash, cash equivalents, restricted cash and short-term investments were RMB 190.9 billion (US$29.96 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 186.5 billion (US$29.27 billion). Free cash flow was RMB 477 million (US$75 million), and free cash flow excluding iQIYI was RMB 1.6 billion (US$251 million).

Fiscal Year 2021 Results

Total revenues were RMB 124.5 billion (US$19.54 billion), increasing 16% year over year.

• Revenue from Baidu Core was RMB 95.2 billion (US$14.93 billion), increasing 21% year over year; online marketing revenue was RMB 74.0 billion (US$11.60 billion), increasing 12% year over year, and non-online marketing revenue was RMB 21.2 billion (US$3.33 billion), up 71% year over year, driven by cloud and other AI-powered businesses.
• Revenue from iQIYI was RMB 30.6 billion (US$4.80 billion), increasing 3% year over year.

Cost of revenues was RMB 64.3 billion (US$10.09 billion), increasing 17% year over year, primarily due to an increase in content costs, traffic acquisition costs, bandwidth costs, cost of goods sold and other costs related to new AI business.

Selling, general and administrative expenses were RMB 24.7 billion (US$3.88 billion), increasing 37% year over year, primarily due to an increase in channel spending, promotional marketing, personnel-related expenses and contingent loss pertaining to legal proceeding involving former advertising agencies.

Research and development expenses were RMB 24.9 billion (US$3.91 billion), increasing 28% year over year, primarily due to an increase in personnel related expenses.

Operating income was RMB 10.5 billion (US$1.65 billion). Baidu Core operating income was RMB 15.1 billion (US$2.38 billion), and Baidu Core operating margin was 16%. Non-GAAP operating income was RMB 19.0 billion (US$2.99 billion). Non-GAAP Baidu Core operating income was RMB 22.2 billion (US$3.48 billion), and non-GAAP Baidu Core operating margin was 23%.

Total other income, net was RMB 260 million (US$40 million), which mainly included a fair value gain of RMB 3.1 billion and an impairment loss of RMB 4.3 billion from long-term investments. A significant portion of long-term investments, including but not limited to investments in equity securities of public and private companies, private equity funds and digital assets, is subject to quarterly fair value adjustments, which may contribute to net income volatility in future periods. Total other income, net was RMB 8.8 billion for 2020, which included a fair value gain of RMB 11.6 billion and an impairment loss of RMB 2.6 billion from long-term investments.

Income tax expense was RMB 3.2 billion (US$500 million), decreasing 22% year over year, primarily due to an increase in deduction on certain expenses that were previously considered non-deductible.

Net income attributable to Baidu was RMB 10.2 billion (US$1.61 billion), and diluted earnings per ADS was RMB 28.07 (US$4.40). Net income attributable to Baidu Core was RMB 13.6 billion (US$2.13 billion), and net margin for Baidu Core was 14%. Non-GAAP net income attributable to Baidu was RMB 18.8 billion (US$2.96 billion), and non-GAAP diluted earnings per ADS amounted to RMB 53.53 (US$8.40). Non-GAAP net income attributable to Baidu Core was RMB 21.3 billion (US$3.34 billion), and non-GAAP net margin for Baidu Core was 22%.

Adjusted EBITDA was RMB 24.9 billion (US$3.91 billion) and adjusted EBITDA margin was 20%. Adjusted EBITDA to Baidu Core was RMB 27.7 billion (US$4.34 billion) and adjusted EBITDA margin for Baidu Core was 29%. 

Free cash flow was RMB 9.2 billion (US$1.45 billion), and free cash flow excluding iQIYI was RMB 15.4 billion (US$2.42 billion).

Conference Call Information

Baidu’s management will hold an earnings conference call at 7.30AM on March 1, 2022, U.S. Eastern Time (8.30PM on March 1, 2022, Beijing Time).

Please register in advance of the conference call using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID by email.

For pre-registration, please click
http://apac.directeventreg.com/registration/event/7885275

It will automatically direct you to the registration page of “Baidu Q4 2021 Earnings Conference Call”, where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter “7885275”.

In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), Direct Event passcode and unique registrant ID) provided in the confirmation email that you have received following your pre-registration.

Additionally, a live and archived webcast of this conference call will be available at http://ir.baidu.com.

A replay of the conference call may be accessed by phone at the following number until March 10, 2022:

About Baidu

Founded in 2000, Baidu’s mission is to make the complicated world simpler through technology. Baidu is a leading AI company with strong Internet foundation, trading on NASDAQ under “BIDU” and HKEX under “9888”. One Baidu ADS represents eight Class A ordinary shares.

Contacts

Investors Relations, Baidu, Inc.
Tel: +86-10-5992-8888
Email: ir@baidu.com

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, Baidu’s and other parties’ strategic and operational plans, contain forward-looking statements. Baidu may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in announcements made on the website of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Baidu’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Baidu’s growth strategies; its future business development, including development of new products and services; its ability to attract and retain users and customers; competition in the Chinese Internet search and newsfeed market; competition for online marketing customers; changes in the Company’s revenues and certain cost or expense items as a percentage of its revenues; the outcome of ongoing, or any future, litigation or arbitration, including those relating to intellectual property rights; the expected growth of the Chinese-language Internet search and newsfeed market and the number of Internet and broadband users in China; Chinese governmental policies relating to the Internet and Internet search providers, and general economic conditions in China and elsewhere. Further information regarding these and other risks is included in the Company’s annual report on Form 20-F and other documents filed with the Securities and Exchange Commission, and announcements on the website of the Hong Kong Stock Exchange. Baidu does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of the press release, and Baidu undertakes no duty to update such information, except as required under applicable law.

Non-GAAP Financial Measures

To supplement Baidu’s consolidated financial results presented in accordance with GAAP, Baidu uses the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to Baidu, non-GAAP net margin, non-GAAP diluted earnings per ADS, adjusted EBITDA, adjusted EBITDA margin and free cash flow. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Baidu believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain items that may not be indicative of its recurring core business operating results, such as operating performance excluding non-cash charges or non-operating in nature. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Baidu’s historical performance and liquidity. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Company’s results of operations. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data.

Non-GAAP operating income represents operating income excluding share-based compensation expenses, amortization and impairment of intangible assets resulting from business combinations and contingent loss pertaining to legal proceeding in relation to former advertising agencies and iQIYI’s non-recurring employee severance costs.

Non-GAAP net income attributable to Baidu represents net income attributable to Baidu excluding share-based compensation expenses, amortization and impairment of intangible assets resulting from business combinations, contingent loss pertaining to legal proceeding in relation to former advertising agencies, iQIYI’s non-recurring employee severance costs, disposal gain or loss, impairment of long-term investments, fair value change of long-term investments, charitable donation from Baidu, adjusted for related income tax effects. Baidu’s share of equity method investments for these non-GAAP reconciling items, amortization and impairment of intangible assets not on the investees’ books, accretion of their redeemable non-controlling interests, and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per shares, adjusted for related income tax effects, are also excluded.

Non-GAAP diluted earnings per ADS represents diluted earnings per ADS calculated by dividing non-GAAP net income attributable to Baidu, by the weighted average number of ordinary shares expressed in ADS. Adjusted EBITDA represents operating income excluding depreciation, amortization and impairment of intangible assets resulting from business combinations, contingent loss pertaining to legal proceeding in relation to former advertisingagencies, iQIYI’s non-recurring employee severance costs, and share-based compensation expenses.

For more information on non-GAAP financial measures, please see the tables captioned “Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measure.