Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888)

Baidu reported total revenues of RMB32.5 billion ($4.47 billion) in Q1 2025, a 3% increase year over year. This growth was primarily driven by the strong performance of Baidu Core, which grew 7% year over year to RMB25.5 billion ($3.51 billion). The robust performance of Baidu Core was fueled by the accelerating momentum of the AI Cloud business, which surged 42% year over year.

Within Baidu Core, online marketing revenue decreased 6% year over year to RMB16.0 billion ($2.21 billion), while non-online marketing revenue grew significantly by 40% year over year to RMB9.4 billion ($1.30 billion), driven mainly by the AI Cloud business. Revenue from iQIYI decreased 9% year over year to RMB7.2 billion ($990 million).

Operating income was RMB4.5 billion ($621 million), decreasing 18% year over year. This decline was primarily attributable to increased costs related to AI Cloud business and traffic acquisition costs, as well as higher channel spending and promotional marketing expenses. Despite these increased investments, Baidu maintained strong profitability, with Baidu Core operating income of RMB4.2 billion ($574 million) and a Baidu Core operating margin of 16%.

Net income attributable to Baidu saw a significant increase of 42% year over year to RMB7.7 billion ($1.06 billion), and diluted earnings per ADS was RMB21.59 ($2.98), up 45% year over year. This increase was mainly due to a substantial rise in total other income, which grew 260% year over year to RMB4.5 billion ($618 million), primarily attributable to fair value gains and pickup of earnings from long-term investments.

Adjusted EBITDA was RMB7.2 billion ($993 million), representing a 13% decrease year over year, with an adjusted EBITDA margin of 22%. For Baidu Core, adjusted EBITDA was RMB6.7 billion ($925 million), with an adjusted EBITDA margin of 26%. As of March 31, 2025, Baidu maintained a strong financial position with cash, cash equivalents, restricted cash, and short-term investments of RMB142.0 billion ($19.57 billion).

Baidu Core achieved revenue growth of 7% year over year to RMB25.5 billion ($3.51 billion), showing the company's successful execution of its AI-first strategy. The segment's performance was driven by the following key components:

AI Cloud was the standout performer within Baidu Core, with revenue surging 42% year over year. This robust growth underscores the growing market recognition of Baidu's distinctive strength in providing full-stack AI products and solutions with a highly competitive price-performance advantage. During the quarter, Baidu upgraded its MaaS platform, Qianfan, with an expanded model library and more comprehensive toolkits, extending support for the training and fine-tuning of multimodal and reasoning models to further facilitate AI-native application development.

Mobile Ecosystem experienced some transformation during the quarter. While online marketing revenue decreased 6% year over year to RMB16.0 billion ($2.21 billion), the company continued to focus on accelerating the AI transformation across its mobile ecosystem. Baidu App's MAUs reached 724 million in March 2025, up 7% year over year, demonstrating the continued growth and engagement of its user base. Managed Page accounted for 47% of Baidu Core's online marketing revenue in Q1 2025, highlighting the success of this offering.

Intelligent Driving, particularly Apollo Go, Baidu's autonomous ride-hailing service, achieved significant milestones during the quarter. Apollo Go expanded internationally, entering Dubai and Abu Dhabi in March 2025, and in May, commenced open-road validation testing in Dubai. Additionally, Apollo Go provided over 1.4 million rides in Q1 2025, up 75% year over year, underscoring the accelerating momentum of its scaled operations. As of May 2025, the cumulative rides provided to the public by Apollo Go surpassed 11 million.

iQIYI reported revenue of RMB7.2 billion ($990 million), a 9% decrease year over year. Despite this decline, iQIYI contributed positively to Baidu's overall results, with operating income of RMB342 million ($47 million) in Q1 2025, up 20% quarter over quarter.

Baidu continued to strengthen its position as a leading AI company, with significant advancements across its product and technology portfolio:

Foundation Models & AI Technology

• ERNIE 4.5 & ERNIE X1: In March 2025, Baidu released ERNIE 4.5, its first flagship foundation model with multimodal capabilities, and ERNIE X1, its first reasoning model. Enhanced versions, ERNIE 4.5 Turbo and ERNIE X1 Turbo, were launched in April, delivering improved performance at significantly lower pricing.
• Qianfan Platform: Baidu upgraded its MaaS platform, Qianfan, with an expanded model library and more comprehensive toolkits, extending support for the training and fine-tuning of multimodal and reasoning models to further facilitate AI-native application development.
• PaddlePaddle: Baidu officially released version 3.0 of its deep learning framework, PaddlePaddle, in April 2025, enhancing its capabilities to support advanced AI applications.

Apollo Go & Autonomous Driving

• International Expansion: Apollo Go expanded into Dubai and Abu Dhabi in March 2025, marking a significant step in Baidu's global autonomous driving strategy. In May, Apollo Go commenced open-road validation testing in Dubai.
• Strategic Partnerships: Apollo Go entered into a long-term strategic partnership with CAR Inc., China's leading auto rental service provider, in May 2025 to launch fully autonomous vehicle rental services.
• Scale & Growth: Apollo Go provided over 1.4 million rides in Q1 2025, up 75% year over year. As of May 2025, the cumulative rides provided to the public surpassed 11 million.
• Market Recognition: Apollo Go received Gold in the Driverless Vehicles category at the 2025 Edison Awards, recognizing it as China's largest autonomous ride-hailing service.

Corporate Initiatives & Recognition

• AI Patent Portfolio: Baidu held China's largest portfolio of AI-related patents and patent applications across various areas, including foundation models and AI agents, as of December 31, 2024, according to a recent report by CICS-CERT, a research institute under the Ministry of Industry and Information Technology.
• Innovation Recognition: Baidu ranked second in Asia Pacific on Fast Company's 2025 Most Innovative Companies list, following DeepSeek, and was recognized for "deploying the world's largest autonomous driving experiment."
• Share Repurchase: Baidu returned US$445 million to shareholders since the beginning of Q1 2025, bringing the cumulative repurchase to US$2.1 billion under the 2023 share repurchase program.
• ESG Initiatives: Baidu released its annual ESG Report on April 28, 2025, detailing the company's latest ESG policies and sustainability initiatives.

These strategic initiatives demonstrate Baidu's commitment to its AI-first strategy and position the company to capture long-term growth opportunities in the AI era, particularly in foundation models, autonomous driving, and AI cloud services.

Baidu's operational performance in Q1 2025 showed strong momentum across its key business areas:

Mobile Ecosystem

• User Growth: Baidu App's MAUs reached 724 million in March 2025, up 7% year over year, demonstrating continued growth in user engagement.
• Managed Page: Managed Page accounted for 47% of Baidu Core's online marketing revenue in Q1 2025, highlighting its increasing importance in the company's revenue mix.
• AI Integration: The company continued to integrate AI capabilities into its mobile ecosystem, enhancing user experience and creating more opportunities for AI-powered content and services.

AI Cloud

• Revenue Growth: AI Cloud revenue surged 42% year over year, outperforming the broader cloud market and highlighting Baidu's competitive advantage in AI-powered cloud solutions.
• Platform Enhancement: The upgraded Qianfan platform with expanded model library and more comprehensive toolkits strengthened Baidu's position in the AI development platform market.
• Customer Adoption: Growing recognition of Baidu's distinctive strength in providing full-stack AI products and solutions with a highly competitive price-performance advantage drove customer adoption.

Apollo Go

• Ride Volume: Apollo Go provided over 1.4 million rides in Q1 2025, up 75% year over year, demonstrating the accelerating momentum of its scaled operations.
• Cumulative Milestone: As of May 2025, the cumulative rides provided to the public by Apollo Go surpassed 11 million, a significant milestone in the commercialization of autonomous driving technology.
• Global Expansion: Apollo Go expanded internationally by entering Dubai and Abu Dhabi in March 2025, reinforcing Baidu's commitment to bringing autonomous ride-hailing services to global markets.
• Regulatory Progress: Apollo Go obtained permission to conduct open-road testing with designated passengers in Hong Kong in April 2025, further expanding its operational footprint.

AI Model Advancement

• ERNIE Models: The release of ERNIE 4.5 with multimodal capabilities and ERNIE X1 with reasoning capabilities represented significant advancements in Baidu's foundation model portfolio.
• Commercial Deployment: Enhanced versions, ERNIE 4.5 Turbo and ERNIE X1 Turbo, launched in April with improved performance at significantly lower pricing, making advanced AI capabilities more accessible.
• Developer Ecosystem: The official release of PaddlePaddle 3.0 in April 2025 further strengthened Baidu's AI developer ecosystem, supporting the creation of more sophisticated AI applications.

These operational metrics highlight Baidu's successful execution of its AI-first strategy across mobile ecosystem, cloud services, autonomous driving, and foundation models, positioning the company for sustainable growth in the evolving AI landscape.