BEIJING, May 16, 2024 /PRNewswire/ -- Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888 (HKD Counter) and 89888 (RMB Counter)), ("Baidu" or the "Company"), a leading AI company with strong Internet foundation, today announced its unaudited financial results for the first quarter ended March 31, 2024. "Baidu Core's online marketing revenue remained stable, while the end-to-end optimization of our AI technology stack continued to propel the growth of our AI Cloud revenue during the quarter," said Robin Li, Co-founder and CEO of Baidu. "As a new era of Gen-AI unfolds in China, foundation models like ERNIE will serve as the underlying infrastructure, infusing various facets of people's lives. We are making our ERNIE family of models increasingly affordable and efficient. This should provide Baidu with even greater opportunities ahead." "In the first quarter of 2024, Baidu Core's non-GAAP operating margin expanded both year-over-year and quarter-over-quarter to 23.5%. We have established a track record of consistently improving operational efficiency. In the coming quarters, we will execute on what is needed to optimize our operational efficiency in support of our AI enabled businesses and high-quality growth, and maintain a healthy non-GAAP operating margin," said Rong Luo, CFO of Baidu. First Quarter 2024 Financial Highlights[1] Baidu, Inc. (In millions except per Q1 Q4 Q1 ADS, unaudited) 2023 2023 2024 YOY QOQ RMB RMB RMB US$ Total revenues 31,144 34,951 31,513 4,365 1 % (10 %) Operating income 4,980 5,392 5,484 760 10 % 2 % Operating income (non-GAAP) [2] 6,428 7,075 6,673 924 4 % (6 %) Net income to Baidu 5,825 2,599 5,448 755 (6 %) 110 % Net income to Baidu (non-GAAP) [2] 5,727 7,755 7,011 971 22 % (10 %) Diluted earnings per ADS 15.92 6.77 14.91 2.07 (6 %) 120 % Diluted earnings per ADS (non-GAAP) [2]  16.10 21.86 19.91 2.76 24 % (9 %) Adjusted EBITDA [2] 8,145 9,057 8,244 1,142 1 % (9 %) Adjusted EBITDA margin 26 % 26 % 26 % 26 %   Baidu Core Q1 Q4 Q1 (In millions, unaudited) 2023 2023 2024 YOY QOQ RMB RMB RMB US$ Total revenues 22,998 27,488 23,803 3,297 4 % (13 %) Operating income 4,091 4,668 4,538 629 11 % (3 %) Operating income (non-GAAP) [2] 5,363 6,197 5,586 774 4 % (10 %) Net income to Baidu Core 5,513 2,440 5,150 713 (7 %) 111 % Net income to Baidu Core (non-GAAP) [2] 5,268 7,500 6,628 918 26 % (12 %) Adjusted EBITDA [2] 7,003 8,118 7,118 986 2 % (12 %) Adjusted EBITDA margin 30 % 30 % 30 % 30 %   [1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 7.2203 as of March 29, 2024, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations areprovided solely for the convenience of the reader.  [2] Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also "Reconciliations ofNon-GAAP Financial Measures to the Nearest Comparable GAAP Measures" for more details).  Operational Highlights  Corporate Baidu returned US$229 million to shareholders since the beginning of Q1 2024, bringing the cumulative repurchase to US$898 million under the 2023 share repurchase program. Baidu released its annual ESG Report on May 13, 2024, which details Baidu's latest ESG policies and sustainability initiatives. (http://esg.baidu.com/Uploads/Baidu_2023_ESG_Report.pdf). AI Cloud PaddlePaddle developer community grew to 13 million in mid-April, 2024. Baidu expanded the ERNIE family of models, by launching several lightweight large language models in Q1 2024, making ERNIE increasingly affordable. Baidu launched and improved the tools on its MaaS platform for enterprise customers in Q1 2024. These tools aim to facilitate the development of AI-native applications, AI agents, and the creation of customized models on Baidu's MaaS platform. Intelligent Driving Apollo Go, Baidu's autonomous ride-hailing service, provided about 826K rides in the first quarter of 2024, up 25% year over year. As of April 19, 2024, the cumulative rides provided to the public by Apollo Go surpassed 6 million. Mobile Ecosystem In March 2024, Baidu App's MAUs reached 676 million, up 3% year over year. Managed Page accounted for 50% of Baidu Core's online marketing revenue in the first quarter of 2024. First Quarter 2024 Financial Results Total revenues were RMB31.5 billion ($4.37 billion), increasing 1% year over year. Revenue from Baidu Core was RMB23.8 billion ($3.30 billion), increasing 4% year over year; online marketing revenue was RMB17.0 billion ($2.36 billion), up 3% year over year, and non-online marketing revenue was RMB6.8 billion ($935 million), up 6% year over year, mainly driven by AI Cloud business. Revenue from iQIYI was RMB7.9 billion ($1.10 billion), decreasing 5% year over year. Cost of revenues was RMB15.3 billion ($2.12 billion), increasing 1% year over year, primarily due to an increase in traffic acquisition costs and costs related to AI Cloud business, partially offset by the decrease in content costs. Selling, general and administrative expenses were RMB5.4 billion ($745 million), accounting for 17% of total revenues in the quarter, compared to 18% in the same period last year. Research and development expenses were RMB5.4 billion ($742 million), decreasing 1% year over year, primarily due to a decrease in personnel related expenses and other R&D expenditures, partially offset by the increase in server depreciation expenses and server custody fees which support Gen-AI research and development inputs. Operating income was RMB5.5 billion ($760 million). Baidu Core operating income was RMB4.5 billion ($629 million), and Baidu Core operating margin was 19%. Non-GAAP operating income was RMB6.7 billion ($924 million). Non-GAAP Baidu Core operating income was RMB5.6 billion ($774 million), and non-GAAP Baidu Core operating margin was 23%. Total other income, net was RMB1.2 billion ($173 million), decreasing 52% year over year, primarily due to a decrease in fair value gain from long-term investments, partially offset by the increase in net foreign exchange gain. Income tax expense was RMB883 million ($122 million), compared to RMB1.2 billion in the same period last year. Net income attributable to Baidu was RMB5.4 billion ($755 million), and diluted earnings per ADS was RMB14.91 ($2.07). Net income attributable to Baidu Core was RMB5.2 billion ($713 million), and net margin for Baidu Core was 22%. Non-GAAP net income attributable to Baidu was RMB7.0 billion ($971 million). Non-GAAP diluted earnings per ADS was RMB19.91 ($2.76). Non-GAAP net income attributable to Baidu Core was RMB6.6 billion ($918 million), and non-GAAP net margin for Baidu Core was 28%. Adjusted EBITDA was RMB8.2 billion ($1.14 billion) and adjusted EBITDA margin was 26%. Adjusted EBITDA for Baidu Core was RMB7.1 billion ($986 million) and adjusted EBITDA margin for Baidu Core was 30%. As of March 31, 2024, cash, cash equivalents, restricted cash and short-term investments were RMB191.8 billion ($26.56 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB185.8 billion ($25.73 billion). Free cash flow was RMB4.2 billion ($579 million), and free cash flow excluding iQIYI was RMB3.3 billion ($452 million). Conference Call Information Baidu's management will hold an earnings conference call at 8.00 AM on May 16, 2024, U.S. Eastern Time (8.00 PM on May 16, 2024, Beijing Time). Please register in advance of the conference call using the link provided below. It will automatically direct you to the registration page of "Baidu Inc. Q1 2024 Earnings Conference Call". Please follow the steps to enter your registration details, then click "Register". Upon registering, you will then be provided with the dial-in number, the passcode, and your unique access PIN. This information will also be emailed to you as a calendar invite. For pre-registration, please click:https://s1.c-conf.com/diamondpass/10038153-8wbttd.html   In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), the passcode and unique access PIN) provided in the calendar invite that you have received following your pre-registration. Additionally, a live and archived webcast of this conference call will be available at https://ir.baidu.com. 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. 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, and amortization and impairment of intangible assets resulting from business combinations. 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, disposal gain or loss, impairment of long-term investments, and fair value change of long-term investments, 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 share, 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, 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."     Baidu, Inc.  Condensed Consolidated Statements of  Income  (In millions except for per share (or ADS) information, unaudited) Three Months Ended March 31, December 31, March 31, March 31, 2023 2023 2024 2024 RMB RMB RMB US$(2) Revenues: Online marketing services 17,972 20,804 18,490 2,561 Others 13,172 14,147 13,023 1,804 Total revenues  31,144 34,951 31,513 4,365 Costs and expenses: Cost of revenues(1) 15,152 17,418 15,291 2,118 Selling, general and administrative(1) 5,589 5,854 5,375 745 Research and development(1) 5,423 6,287 5,363 742 Total costs and expenses 26,164 29,559 26,029 3,605 Operating income 4,980 5,392 5,484 760 Other income (loss): Interest income 1,915 2,064 2,091 290 Interest expense (804) (774) (766) (106) Foreign exchange (loss) gain, net (106) (449) 401 56 Share of losses from equity method investments (48) (2,970) (205) (28) Others, net 1,638 (398) (275) (39) Total other income (loss), net 2,595 (2,527) 1,246 173 Income before income taxes 7,575 2,865 6,730 933 Income tax expense (benefit) 1,193 (96) 883 122 Net income  6,382 2,961 5,847 811 Net income attributable to noncontrolling interests 557 362 399 56 Net income attributable to Baidu 5,825 2,599 5,448 755 Earnings per ADS (1 ADS representing 8 Class A ordinary shares):  -Basic 16.17 6.85 14.97 2.07  -Diluted 15.92 6.77 14.91 2.07 Earnings per share for Class A and Class B ordinary shares:  -Basic 2.02 0.86 1.87 0.26  -Diluted 1.99 0.85 1.86 0.26 Weighted average number of Class A and Class B ordinary shares outstanding (in millions):  -Basic  2,798 2,812 2,804 2,804  -Diluted 2,837 2,830 2,816 2,816 (1)  Includes share-based compensation expenses as follows:  Cost of revenues  98 159 108 15  Selling, general and administrative  463 411 417 58  Research and development  828 1,068 618 86  Total share-based compensation expenses  1,389 1,638 1,143 159 (2)  All translations from RMB to U.S. dollars are made at a rate of RMB7.2203 to US$1.00, the exchange rate in effect as of March 29, 2024 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.     Baidu, Inc.  Condensed Consolidated Balance Sheets (In millions, unaudited) December 31, March 31, March 31, 2023 2024 2024 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 25,231