Baidu posts 3% drop in third-quarter revenues, beating market expectations

BEIJING — Chinese language tech big Baidu on Thursday posted a 3% annual drop in third-quarter income, however beating market expectations amid AI cloud progress.

The income print got here in at $4.78 billion for the quarter ending on Sept. 30. Web earnings for the interval rose by 14% to $1.09 billion.

Baidu famous a 12% surge in its non-online advertising and marketing income to the equal of $1.1 billion, primarily pushed by its synthetic intelligence cloud enterprise.

The corporate’s U.S.-traded shares fell practically 4% in premarket buying and selling following the discharge of its outcomes.

Right here’s what analysts anticipated the corporate to report for the quarter, based on LSEG estimates:

• Income: $4.63 billion
• Web earnings: $857.17 million

Baidu had reported income of 34.45 billion yuan ($4.75 billion) and internet earnings of 6.68 billion yuan for the third quarter of 2023.

Beijing-based Baidu operates one of many main net browser search engines like google in China, together with a ceaselessly used maps app. The corporate additionally sells cloud computing companies. On-line advertising and marketing drives a good portion of the agency’s income.

The expansion within the AI cloud enterprise offset “ongoing weak point” in Baidu’s on-line advertising and marketing stream, CEO Robin Li mentioned within the earnings launch, additionally commenting on the efficiency of the corporate’s Ernie generative AI mannequin and chatbot.

“Our robust AI capabilities are gaining broader market recognition, as evidenced by growing adoption of Ernie,” he mentioned.

Baidu has promoted its Ernie chatbot as a neighborhood different to OpenAI’s ChatGPT, which isn’t obtainable in China. Ernie bot now has 430 million customers, and applications entry its underlying AI mannequin round 1.5 billion instances a day, greater than double the 600 million price in August, Baidu mentioned final week.

“Regardless of the near-term pressures, we stay steadfast in our AI-focused technique and are assured in our long-term trajectory,” Li mentioned Thursday. “As we additional scale AI, we’re emboldened to search out the way it can drive improvements and create worth for customers, enterprises and society at massive.”

The corporate this month additionally introduced that its Xiaodu AI Glasses will start gross sales within the first half of subsequent 12 months. The wearable has at the least one digital camera and makes use of Ernie’s AI capabilities and Baidu’s maps and search capabilities. Whereas Baidu hasn’t revealed a value, the product is broadly anticipated to be a Chinese language different to Meta’s standard Ray-Ban smart glasses.

Baidu introduced a administration rotation final month, with Junjie He, beforehand head of the cell ecosystem group, becoming the company’s interim Chief Financial Officer, whereas former CFO Rong Luo assumed management of the cell division.

“AI Cloud continued to point out wholesome and sustainable growth within the third quarter,” he mentioned within the earnings launch. “In the meantime, Apollo Go continued to make operational strides, underpinning our confidence within the validity of the absolutely autonomous experience hailing enterprise mannequin.”

Apollo Go, which operates Baidu’s robotaxi enterprise, reported a 20% year-on-year surge in rides within the third quarter. The common variety of rides a month rose to 329,333 through the third quarter, up from 287,500 within the first half of the 12 months, based on CNBC calculations.