Baidu Posts Record Revenue Amid Search for New Growth Engines — Update

By Sherry Qin

Chinese search-engine giant Baidu posted record quarterly revenue and higher adjusted profit, helped by higher ad spending and the rising profile of its ChatGPT-rival chatbot.

The Beijing-based company said Wednesday that revenue in the fourth quarter rose nearly 6% from a year earlier to 34.95 billion yuan ($4.86 billion) as it posted gains in its online marketing and non-online marketing segments. The top line was just below an estimate for CNY35.065 billion in a FactSet poll of analysts.

Net profit fell 48% to CNY2.60 billion, missing estimates for CNY4.96 billion in a FactSet poll, weighed by losses related to an equity method investment, Baidu said.

Operating profit, meanwhile, rose 17%, while non-GAAP income, which excludes share-based compensation expenses and fair-value changes to investments, among others, rose 44% to CNY7.76 billion.

Citigroup analysts said revenue was broadly in line with expectations, while operating profit and adjusted profit surprised to the upside, helped by lower non-GAAP administrative expenses and research and development spending that partially offset higher costs of goods sold.

The gains come after Baidu last year launched Ernie Bot, an artificial-intelligence-powered chatbot, hoping to gain first-mover advantage in China and to solidify the company's reputation as an AI leader.

Once seen as one of China's shiniest technology giants alongside Alibaba Group and Tencent, Baidu's standing took a hit after its core advertising revenue began to slow and the company reported a loss in 2019. The company has been seeking new sources of nonadvertising revenue, and pumped money into a wide range of technologies, including chip and software infrastructure for AI development, self-driving cars and cloud computing.

Chief Executive Robin Li said Wednesday that the company had made "significant strides" in advancing its chatbot through 2023, and in "reinventing our products and services."

"Our commitment to Gen-AI and foundation models remains unwavering," he said, "paving the way for the gradual creation of a new growth engine."

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

February 28, 2024 06:18 ET (11:18 GMT)

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