Chinese tech giant reports revenue beat

BEIJING — Chinese tech giant Baidu reported Tuesday third-quarter revenue that beat expectations, although growth was slower than during the previous three months.

The company’s U.S.-listed shares were up around 2% in pre-market trade at 5:00 a.m. ET. The stock is down almost 3% over the year so far.

Revenue grew by 6% year-on-year to 34.45 billion yuan ($4.72 billion) in the quarter that ended Sept. 30. That was slightly higher than analyst expectations of 34.33 billion yuan, according to Refinitiv.

Online marketing revenue at the search engine provider was up by 5% from a year ago, while non-online marketing revenue was 6% higher over the same period.

It comes after revenue in the previous quarter surged 15% from a year ago, with online and non-online marketing revenue growing by double digits.

“Baidu reported solid third-quarter financial results, demonstrating resilience in a challenging economic climate,” Robin Li, Baidu CEO and co-founder of Baidu, said in a release.

Adjusted earnings per American Depositary Share were 20.40 yuan in the third quarter, down from 22.55 yuan in the previous three months, but up from 16.87 yuan in the year-ago period.

Baidu reported net income of 6.68 billion yuan for the quarter ended Sept. 30, up from 5.21 billion yuan in the previous quarter.

The company said higher marketing spend contributed to an 11% year-on-year increase in selling, general and administrative expenses which came in at 5.8 billion yuan.

Research and development expenses rose by 6% to 6.1 billion year-on-year, partly due to increased server fees to support Ernie bot research, the company said. That’s a pickup from 1% growth in the second quarter from a year ago.

Ernie bot is Baidu’s version of the artificial intelligence-powered chatbot ChatGPT. Baidu only started charging for Ernie bot in November.

“Baidu Core maintained stable margins in the quarter,” Rong Luo, Baidu CFO, said in a release. “Our ongoing investments in AI have underpinned technological and product innovations. Moving forward, while we will continue prioritizing investments in AI, especially in generative AI and foundation models, we will do so with an unrelenting focus on efficiency and strategic resource allocation.”

The company said its Apollo Go robotaxi business operated 821,000 rides in the third quarter, up from 714,000 rides in the second three months of the year.

In September, the suburban Beijing city district of Yizhuang officially let local robotaxi operators charge fares for fully autonomous taxis, with no drivers inside.

Baidu also announced that Sandy Xu, former CFO of JD.com, would join the company as an independent director of the board starting Jan 1, 2024.