Key Takeaways:
Baidu reported Q2 revenue of RMB 31.3 billion, down 4 percent year over year, as its AI-powered business grew to half of core revenue.
"The growing momentum in our core AI-powered Business reaffirms Baidu's transition from an internet-centric company to an AI-first company," Robin Li, co-founder and chief executive officer of Baidu, said.
Revenue from Baidu Core AI-powered Business reached RMB 12.5 billion, up 25 percent year over year and accounting for 50 percent of Baidu General Business revenue for a second consecutive quarter. AI Cloud Infra revenue rose 50 percent to RMB 7.3 billion, with GPU Cloud up 283 percent year over year, accelerating from 184 percent growth in the prior quarter. AI Applications revenue gained 3 percent to RMB 2.5 billion, while AI-native marketing services were roughly flat at RMB 2.6 billion. Online marketing revenue fell 19 percent to RMB 13.1 billion, and iQIYI contributed RMB 6.3 billion, down 5 percent.
Shares of Baidu, listed on Nasdaq and the Hong Kong exchange, fell 3.43 percent to $100.55. Operating cash flow was RMB 3.4 billion, positive for a fourth consecutive quarter, and total cash and investments stood at RMB 283.1 billion. Baidu returned US$259 million to shareholders through buybacks since the start of the first quarter.
Net income attributable to Baidu was RMB 2.3 billion, or RMB 5.74 per diluted ADS, with non-GAAP net income of RMB 2.6 billion and non-GAAP diluted EPS of RMB 7.22. Adjusted EBITDA was RMB 6.2 billion at a 20 percent margin. Cost of revenue rose 4 percent year over year to RMB 19.1 billion on higher AI Cloud costs, while selling, general and administrative expenses fell 23 percent to RMB 4.6 billion.
Apollo Go, Baidu's robotaxi unit, expanded to 28 cities with fleets covering more than 350 million autonomous kilometers, including over 240 million fully driverless kilometers. In London the service began open-road testing with Uber and Lyft, and in Dubai it launched fully driverless commercial operations. Baidu App monthly active users reached 644 million in June.
Baidu is pursuing a voluntary conversion to a dual-primary listing in Hong Kong, with an extraordinary general meeting of shareholders scheduled for Aug. 26 to seek approval. The conversion is expected to take effect within this year.
The results show Baidu's AI push now drives half of core revenue even as its legacy advertising business contracts, a shift that will be tested as the company invests heavily in AI applications and global robotaxi expansion. Investors will watch the earnings call and the Aug. 26 shareholder vote for updates on the Hong Kong listing and AI segment margins.
This article is for informational purposes only and does not constitute investment advice.
