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Form 6-K Baidu, Inc. For: May 20

May 20, 2021 7:47 AM EDT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2021

Commission File Number: 000-51469

 

 

BAIDU, INC.

Baidu Campus

 

 

No. 10 Shangdi 10th Street

Haidian District, Beijing 100085

The People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


Exhibit 99.1 — Press Release


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

BAIDU, INC.
By :  

/s/ Herman Yu

Name :   Herman Yu
Title :   Chief Financial Officer

Date: May 20, 2021

Exhibit 99.1

Baidu Announces First Quarter 2021 Results

BEIJING, China, May 18, 2021 — Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888) (“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, 2021.

“We are delighted to bring innovation across many sectors, including marketing cloud, enterprise cloud, smart transportation, autonomous driving, smart assistant and AI chip, through our decade- long investment in AI,” said Robin Li, co-founder and CEO of Baidu. “With AI powering the next stage of technology growth, many Baidu alumni have rejoined us, and our employees are energized from working on intelligent computing that can improve daily life and make the complex world simpler.”

“Baidu Core delivered a strong first quarter with revenue growing 34% year over year, powered by non-advertising revenue growing 70% year over year,” said Herman Yu, CFO of Baidu. “We will continue to invest heavily in sales, R&D and operations to support the rapid growth of our AI- powered business.”

First Quarter 2021 Financial Highlights1

 

     Baidu, Inc.  
(In millions except per ADS, unaudited)    Q1 2020     Q4 2020     Q1 2021     YOY     QOQ  
     RMB     RMB     RMB     US$              

Total revenues

     22,545       30,263       28,134       4,294       25     (7 %) 

Operating (loss) income

     (437     4,977       2,789       426       —         (44 %) 

Operating income (non-GAAP)2

     1,437       7,055       4,362       666       204     (38 %) 

Net income to Baidu

     41       5,174       25,653       3,915       62,468     396

Net income to Baidu (non-GAAP)2

     3,082       6,868       4,297       656       39     (37 %) 

Diluted earnings per ADS

     0.02       15.05       73.76       11.26       368,700     390

Diluted earnings per ADS (non-GAAP)2

     8.84       20.08       12.38       1.89       40     (38 %) 

Adjusted EBITDA2

     2,852       8,564       5,900       901       107     (31 %) 

Adjusted EBITDA margin

     13     28     21     21    

 

1

Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB6.5518 as of March 31, 2021, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader.

2

Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details).

 

2


     Baidu Core  
(In millions, unaudited)    Q1 2020     Q4 2020     Q1 2021     YOY     QOQ  
     RMB     RMB     RMB     US$              

Total revenues

     15,268       23,111       20,483       3,126       34     (11 %) 

Operating income

     1,848       6,320       3,847       587       108     (39 %) 

Operating income (non-GAAP)2

     3,348       8,031       5,064       773       51     (37 %) 

Net income to Baidu Core

     1,698       6,036       26,354       4,022       1,452     337

Net income to Baidu Core (non-GAAP)2

     4,519       7,533       4,870       743       8     (35 %) 

Adjusted EBITDA2

     4,641       9,422       6,487       990       40     (31 %) 

Adjusted EBITDA margin

     30     41     32     32    

Other Highlights

Corporate

 

   

Baidu ranks Top 3 in cloud services and No.1 in the utilization of renewable energy for data centers, according to Greenpeace, a global environmental organization, based on its April 2021 report Clean Cloud: Tracking Renewable Energy Use in China’s Tech Industry.

 

   

Baidu released its annual ESG Report in February 2021, which details Baidu’s ESG policies and sustainability initiatives (http://esg.baidu.com/en/esg_download.html).

 

   

On March 23, 2021, Baidu listed on the HKEX (9888) through a global offering of 95,000,000 Class A ordinary shares, receiving $3.1 billion in net proceeds.

 

   

Baidu returned US$300 million to shareholders under the 2020 Share Repurchase Program this year, bringing the cumulative repurchase to $2.2 billion since 2020.

AI Cloud

 

   

Baidu EasyDL, a simple to use machine learning service, was rated No. 1 in terms of usage in China, per IDC in December 2020, topping the list for the second time.

 

   

Baidu deep learning framework PaddlePaddle, upgraded to v2.0 in March 2021, was ranked among the Top 3 globally in terms of usage based on pull request, according to Github.

 

   

A leading retail bank in China implemented Baidu’s AI PaaS, which has led to five follow-on purchases, including application to automate customer service and consumer loan approval, and the recent purchase of private cloud services.

 

3


   

Baidu partnered with the online arm of China’s largest TV network CCTV to implement Baidu AI PaaS with capabilities to automate video clip creation and tagging from live broadcasting and use smart assistant to quickly locate desired video content. During an important annual event, Baidu enabled CCTV.com to simultaneously interview congressional meeting participants with AI reporters, powered by Baidu Brain, and timely share these interviews on the Internet.

 

   

Chongqing, which implemented Apollo V2X last year, marking Baidu’s entry into western China, signed with Apollo to make its smart transportation infrastructure 5G enabled, to support robotaxi ride hailing operation.

 

   

Chengdu (Sichuan), a leader in science and technology development, signed with Apollo to implement V2X vehicle-to-road infrastructure.

Intelligent Driving

 

   

Apollo has accumulated 6.2 million miles of L4 autonomous driving testing on the road and 600 million miles of simulated testing since its founding in 2013.

 

   

Apollo received permit to test autonomous driving at night and under special weather conditions on public roads in Beijing. Apollo also received permits to pilot fully autonomous driving in Beijing, Cangzhou (Hebei), and Changsha (Hunan).

 

   

Apollo Go, China’s first fully autonomous ride-hailing, is now available at the Shougang Park, a Beijing 2022 Winter Olympics site.

 

   

Apollo Go begins to charge for robotaxi ride hailing in Cangzhou, based on the distance traveled starting with a minimum fare, similarly to regular ride hailing.

 

   

The total addressable market for robotaxi ride hailing will reach US$224 billion in China by 2025, according to China Insights Consultancy, a market research and consulting company.

 

   

Jidu Auto, an intelligent EV company established in partnership with Zhejiang Geely Holding Group, appointed Yiping Xia as its CEO. Mr. Xia previously served as CTO at Mobike and held positions at Fiat Chrysler and Ford.

 

   

Guangzhou Automobile Group joins Apollo’s network of over 10 leading automakers to install Apollo Self Driving (ASD) services in its new vehicles.

 

   

Guidehouse Insights (previously Navigant Research) has rated Baidu in the “leader” category for the second consecutive year, the only Chinese company honored among the four AI companies selected globally for this category. Apollo’s open platform, to empower Jidu and other automakers as well as Apollo Go robotaxi, puts Apollo in a unique position to be well funded and widely adopted.

 

4


   

DuerOS for Auto, powering infotainment, has been installed in over 1.5 million new vehicles, recorded Q1 2021 installation more than doubled from the prior year.

Other Growth Initiatives

 

   

DuerOS monthly voice queries reached 6.6 billion with first-party voice queries reaching 3.9 billion in March 2021.

 

   

Xiaodu ranked No. 1 in smart display shipments globally and No. 1 in smart speaker shipments in China for 2020, according to IDC, Strategy Analytics and Canalys.

 

   

Xiaodu S12 smart pad for the education market was introduced in March with an MSRP of 1,699.

 

   

Baidu Kunlun completed its first-round of funding at a post-money valuation of $2 billion in April 2021. Kunlun chips are designed to optimize AI workload and improve cloud cost structure.

Mobile Ecosystem

 

   

Baidu has strengthened its strong Internet foundation with Baidu App monthly active users (MAUs) reaching 558 million and daily logged in users reaching over 75% in March 2021.

 

   

Baidu’s AI building blocks are helping creators, service providers and merchants better engage with users and perform user life-time management:

 

   

BJH publisher accounts grew 40% year over year to reached 4.2 million.

 

   

Smart Mini Program MAUs reached 416 million, and the number of SMPs grew 74% from a year ago; and

 

   

Revenue from Managed Page accounted for 35% of Baidu Core’s online marketing revenue, up from 21% a year ago.

iQIYI

iQIYI subscribers reached 105.3 million as of March 31, 2021, serving as a strong foundation to support its over 50 in-house studios and produce entertainment blockbuster originals. iQIYI’s net loss narrowed to RMB1.3 billion in Q1 21, compared to RMB2.9 billion from a year ago.

First Quarter 2021 Results

Total revenues were RMB28.1 billion ($4.29 billion), increasing 25% year over year.

 

   

Revenue from Baidu Core was RMB20.5 billion ($3.13 billion), increasing 34% year over year. Online marketing revenue was RMB16.3 billion ($2.48 billion), up 27% year over year. Non-marketing revenue was RMB4.2 billion ($646 million), up 70% year over year, driven by cloud and other services.

 

5


   

Revenue from iQIYI was RMB8.0 billion ($1.22 billion), increasing 4% year over year.

Cost of revenues was RMB15.0 billion ($2.29 billion), increasing 2% year over year, primarily due to an increase in traffic acquisition costs and cost of goods sold, offset by a decrease in content costs and the amortization/impairment of intangible assets.

Selling, general and administrative expenses were RMB5.2 billion ($800 million), increasing 36% year over year, primarily due to an increase in channel spending and promotional expenses.

Research and development expense was RMB5.1 billion ($778 million), increasing 15% year over year, primarily related to personnel-related expenses.

Operating income was RMB2.8 billion ($426 million). Baidu Core operating income was RMB3.8 billion ($587 million), and Baidu Core operating margin was 19%. Non-GAAP operating income was RMB4.4 billion ($666 million). Non-GAAP Baidu Core operating income was RMB5.1 billion ($773 million), and non-GAAP Baidu Core operating margin was 25%.

Total other income, net was RMB23.8 billion ($3.63 billion), which included a fair value gain of RMB23.7 billion from long-term investments, mainly including a gain from the investment in Kuaishou Technology.

Income tax expense was RMB1.5 billion ($234 million), compared to RMB198 million last year, primarily due to the increase in profit before tax.

Net income attributable to Baidu was RMB25.7 billion ($3.92 billion), and diluted earnings per ADS was RMB73.76 ($11.26). Net income attributable to Baidu Core was RMB26.4 billion ($4.02 billion). Non-GAAP net income attributable to Baidu was RMB4.3 billion ($656 million), and non-GAAP diluted earnings per ADS was RMB12.38 ($1.89). Non-GAAP net income attributable to Baidu Core was RMB4.9 billion ($743 million).

Adjusted EBITDA was RMB5.9 billion ($901 million). Adjusted EBITDA for Baidu Core was RMB6.5 billion ($990 million) and adjusted EBITDA margin for Baidu Core was 32%.

As of March 31, 2021, cash, cash equivalents, restricted cash and short-term investments, net were RMB172.9 billion ($26.4 billion), and cash, cash equivalents, restricted cash and short- term investments excluding iQIYI were RMB159.6 billion ($24.37 billion). Free cash flow was RMB2.6 billion ($400 million), and free cash flow excluding iQIYI was RMB4.0 billion ($615 million).

Financial Guidance

For the second quarter of 2021, Baidu expects revenues to be between RMB29.7 billion ($4.5 billion) and RMB32.5 billion ($5.0 billion), representing a growth rate of 14% to 25% year over year, which assumes that Baidu Core revenue will grow between 20% and 33% year over year. This guidance does not include potential contribution from an acquisition of YY Live.

The above forecast reflects Baidu’s current and preliminary view, which is subject to substantial uncertainties.


Conference Call Information

Baidu’s management will hold an earnings conference call at 8:00 AM on May 18, 2021, U.S. Eastern Time (8:00 PM on May 18, 2021, Beijing Time).

Please register in advance of the conference call using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID by email.

For pre-registration, please click http://apac.directeventreg.com/registration/event/4696103. It will automatically direct you to the registration page of “Baidu Q1 2021 Earnings Conference Call”, where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter “ 4696103”.

In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), Direct Event passcode and unique registrant ID) provided in the confirmation email that you have received following your pre-registration.

Additionally, a live and archived webcast of this conference call will be available at http://ir.baidu.com.

A replay of the conference call may be accessed by phone at the following number until May 26 2021:

International:         +61 2 8199 0299

Conference ID:       4696103

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 the NASDAQ under “BIDU” and HKEX under “9888”. One Baidu ADS represents eight Class A ordinary shares.

Contacts

Investors Relations, Baidu, Inc.

Tel: +86-10-5992-8888

Email: [email protected]

 

7


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, the outlook for the second quarter of 2021, quotations from management in this announcement, as well as 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.

 

8


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, 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 shares, 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, which is adjusted for accretion for the redeemable non-controlling interests, 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 measures.”

 

9


Condensed Consolidated Statements of Income (Loss)

(In millions except for per share (or ADS) information, unaudited)

 

     Three Months Ended  
     March 31,     December 31,     March 31,     March 31,  
     2020     2020     2021     2021  
     RMB     RMB     RMB     US$(2)  

Revenues:

        

Online marketing services

     14,243       20,708       18,094       2,762  

Others

     8,302       9,555       10,040       1,532  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     22,545       30,263       28,134       4,294  
  

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

        

Cost of revenues(1)

     14,687       14,522       15,002       2,290  

Selling, general and administrative(1)

     3,852       5,094       5,245       800  

Research and development(1)

     4,443       5,670       5,098       778  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     22,982       25,286       25,345       3,868  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income

     (437     4,977       2,789       426  

Other income (loss):

        

Interest income

     1,441       1,308       1,233       187  

Interest expense

     (751     (777     (823     (126

Foreign exchange (loss) income, net

     (98     (346     156       24  

Share of income (loss) from equity method investments

     181       (151     (151     (23

Others, net

     (1,816     499       23,362       3,566  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other (loss) income, net

     (1,043     533       23,777       3,628  
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before income taxes

     (1,480     5,510       26,566       4,054  

Income tax expense

     198       1,026       1,534       234  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

     (1,678     4,484       25,032       3,820  

Net loss attributable to non-controlling interests

     (1,719     (690     (621     (95
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Baidu

     41       5,174       25,653       3,915  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

10


     Three Months Ended  
     March 31,      December 31,      March 31,      March 31,  
     2020      2020      2021      2021  
     RMB      RMB      RMB      US$(2)  

Earnings per ADS

           

(1 ADS representing 8

           

Class A ordinary shares):

           

— Basic

     0.05        15.28        76.10        11.62  

— Diluted

     0.02        15.05        73.76        11.26  

Earnings per share for Class A and Class B ordinary shares:

           

— Basic

     0.01        1.91        9.51        1.45  

— Diluted

     —          1.88        9.22        1.41  

Weighted average number of Class A and Class B ordinary shares outstanding (in millions):

           

— Basic

     2,766        2,696        2,692        2,692  

— Diluted

     2,781        2,736        2,777        2,777  

(1)   Includes share-based compensation expenses as follows:

    

        

Cost of revenues

     81        91        79        12  

Selling, general and administrative

     464        480        471        72  

Research and development

     945        1,408        949        146  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total share-based compensation expenses

     1,490        1,979        1,499        230  

 

(2)

All translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00, the exchange rate in effect as of March 31, 2021 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

 

11


Condensed Consolidated Balance Sheets

(In millions, unaudited)

 

     December 31,      March 31,      March 31,  
     2020      2021      2021  
     RMB      RMB      US$  

ASSETS

        

Current assets:

        

Cash and cash equivalents

     35,782        41,544        6,340  

Restricted cash

     758        10,607        1,618  

Short-term investments, net

     126,402        120,794        18,437  

Accounts receivable, net

     8,668        8,492        1,296  

Amounts due from related parties

     726        741        113  

Other current assets, net

     11,006        9,451        1,443  
  

 

 

    

 

 

    

 

 

 

Total current assets

     183,342        191,629        29,247  
  

 

 

    

 

 

    

 

 

 

Non-current assets:

        

Fixed assets, net

     17,508        17,681        2,699  

Licensed copyrights, net

     6,435        6,516        995  

Produced content, net

     6,556        7,281        1,111  

Intangible assets, net

     2,022        1,921        293  

Goodwill

     22,248        22,248        3,396  

Long-term investments, net

     76,233        101,771        15,533  

Amounts due from related parties

     3,438        3,440        525  

Deferred tax assets, net

     1,674        1,379        210  

Operating lease right-of-use assets

     9,804        9,655        1,474  

Other non-current assets

     3,448        15,827        2,417  
  

 

 

    

 

 

    

 

 

 

Total non-current assets

     149,366        187,719        28,653  
  

 

 

    

 

 

    

 

 

 

Total assets

     332,708        379,348        57,900  
  

 

 

    

 

 

    

 

 

 

 

12


     December 31,      March 31,      March 31,  
     2020      2021      2021  
     RMB      RMB      US$  

LIABILITIES AND EQUITY

        

Current liabilities:

        

Short-term loans

     3,016        2,230        340  

Accounts payable and accrued liabilities

     36,716        35,902        5,480  

Customer deposits and deferred revenue

     12,626        12,504        1,908  

Deferred income

     158        144        22  

Long-term loans, current portion

     7,427        7,457        1,138  

Convertible senior notes, current portion

     4,752        4,808        734  

Notes payable, current portion

     —          —          —    

Amounts due to related parties

     1,324        1,468        224  

Operating lease liabilities

     2,366        2,377        363  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     68,385        66,890        10,209  
  

 

 

    

 

 

    

 

 

 

Non-current liabilities:

        

Deferred income

     97        104        16  

Deferred revenue

     686        685        105  

Amounts due to related parties

     3,543        3,524        538  

Long-term loans

     —          —          —    

Notes payable

     48,408        48,601        7,418  

Convertible senior notes

     11,927        12,670        1,934  

Deferred tax liabilities

     3,067        3,171        484  

Operating lease liabilities

     4,693        4,535        692  

Other non-current liabilities

     59        53        8  
  

 

 

    

 

 

    

 

 

 

Total non-current liabilities

     72,480        73,343        11,195  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     140,865        140,233        21,404  
  

 

 

    

 

 

    

 

 

 

Redeemable noncontrolling interests

     3,102        3,340        510  

Equity

        

Total Baidu shareholders’ equity

     182,696        229,814        35,076  

Noncontrolling interests

     6,045        5,961        910  
  

 

 

    

 

 

    

 

 

 

Total equity

     188,741        235,775        35,986  
  

 

 

    

 

 

    

 

 

 

Total liabilities, redeemable noncontrolling interests, and equity

     332,708        379,348        57,900  
  

 

 

    

 

 

    

 

 

 

 

13


Selected Information

(In millions, unaudited)

 

   

Three months ended

   

Three months ended

   

Three months ended

   

Three months ended

 
    March 31, 2020 (RMB)     December 31, 2020 (RMB)     March 31, 2021 (RMB)     March 31, 2021 (US$)  
    Baidu           Elim &     Baidu,     Baidu           Elim &     Baidu,     Baidu           Elim &     Baidu,     Baidu           Elim &     Baidu,  
    Core     iQIYI     adj(2)     Inc.     Core     iQIYI     adj(2)     Inc.     Core     iQIYI     adj(2)     Inc.     Core     iQIYI     adj(2)     Inc.  

Total revenues

    15,268       7,650       (373     22,545       23,111       7,458       (306     30,263       20,483       7,968       (317     28,134       3,126       1,216       (48     4,294  

YOY

                    34     4       25        

QOQ

                    (11 %)      7       (7 %)         

Costs and expenses:

                               

Cost of revenues(1)

    7,088       7,903       (304     14,687       7,997       6,785       (260     14,522       8,162       7,109       (269     15,002       1,246       1,085       (41     2,290  

Selling, general and administrative(1)

    2,560       1,311       (19     3,852       3,787       1,317       (10     5,094       4,048       1,201       (4     5,245       618       183       (1     800  

Research and development(1)

    3,772       678       (7     4,443       5,007       663             5,670       4,426       672             5,098       675       103             778  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

    13,420       9,892       (330     22,982       16,791       8,765       (270     25,286       16,636       8,982       (273     25,345       2,539       1,371       (42     3,868  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

YOY

                               

Cost of revenues

                    15     (10 %)        2        

Selling, general and administrative

                    58     (8 %)        36        

Research and development

                    17     (1 %)        15        

Cost and expenses

                    24     (9 %)        10        

Operating income (loss)

    1,848       (2,242     (43     (437     6,320       (1,307     (36     4,977       3,847       (1,014     (44     2,789       587       (155     (6     426  

YOY

                    108     (55 %)                 

QOQ

                    (39 %)      (22 %)        (44 %)         

Operating margin

    12     (29 %)        (2 %)      27     (18 %)        16     19     (13 %)        10        

Add: total other (loss) income, net

    (414     (629           (1,043     774       (241           533       23,999       (222           23,777       3,662       (34           3,628  

Less: income tax expense

    193       5             198       1,042       (16           1,026       1,513       21             1,534       231       3             234  

Less: net (loss) income attributable to NCI

    (457     (1     (1,261 )(3)      (1,719     16       16       (722 )(3)      (690     (21     10       (610 )(3)      (621     (4     2       (93 )(3)      (95
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Baidu

    1,698       (2,875     1,218       41       6,036       (1,548     686       5,174       26,354       (1,267     566       25,653       4,022       (194     87       3,915  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

YOY

                    1,452     (56 %)        62,468        

QOQ

                    337     (18 %)        396        

Net margin

    11     (38 %)        0     26     (21 %)        17     129     (16 %)        91        

Non-GAAP financial measures:

                               

Operating income (loss) (non-GAAP)

    3,348       (1,868       1,437       8,031       (940       7,055       5,064       (658       4,362       773       (101       666  

 

14


   

Three months ended

   

Three months ended

   

Three months ended

   

Three months ended

 
    March 31, 2020 (RMB)     December 31, 2020 (RMB)     March 31, 2021 (RMB)     March 31, 2021 (US$)  
    Baidu           Elim &     Baidu,     Baidu           Elim &     Baidu,     Baidu           Elim &     Baidu,     Baidu           Elim &     Baidu,  
    Core     iQIYI     adj(2)     Inc.     Core     iQIYI     adj(2)     Inc.     Core     iQIYI     adj(2)     Inc.     Core     iQIYI     adj(2)     Inc.  

YOY

                    51     (65 %)        204        

QOQ

                    (37 %)      (30 %)        (38 %)         

Operating margin (non-GAAP)

    22     (24 %)        6     35     (13 %)        23     25     (8 %)        16        

Net income (loss) attributable to

                               

Baidu (non-GAAP)

    4,519       (2,482       3,082       7,533       (1,177       6,868       4,870       (1,021       4,297       743       (156       656  

YOY

                    8     (59 %)        39        

QOQ

                    (35 %)      (13 %)        (37 %)         

Net margin (non-GAAP)

    30     (32 %)        14     33     (16 %)        23     24     (13 %)        15        

Adjusted EBITDA

    4,641       (1,746       2,852       9,422       (822       8,564       6,487       (543       5,900       990       (83       901  

YOY

                    40     (69 %)        107        

QOQ

                    (31 %)      (34 %)        (31 %)         

Adjusted EBITDA margin

    30     (23 %)        13     41     (11 %)        28     32     (7 %)        21        

(1) Includes share-based compensation as follows:

 

             

Cost of revenues

    34       47         81       46       45         91       33       46         79       5       7         12  

Selling, general and administrative

    273       191         464       255       225         480       256       215         471       39       33         72  

Research and development

    877       68         945       1,329       79         1,408       866       83         949       133       13         146  
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

     

 

 

 

Total share-based compensation

    1,184       306         1,490       1,630       349         1,979       1,155       344         1,499       177       53         230  

 

(2)

Relates to intersegment eliminations and adjustments

(3)

Relates to the net loss attributable to iQIYI noncontrolling interests

 

15


Condensed Consolidated Statements of Cash Flows

(In millions, unaudited)

 

     Three months ended     Three months ended     Three months ended     Three months ended  
     March 31, 2020 (RMB)     December 31, 2020 (RMB)     March 31, 2021 (RMB)     March 31, 2021 (US$)  
     Baidu                 Baidu                 Baidu                 Baidu              
     excl.           Baidu,     excl.           Baidu,     excl.           Baidu,     excl.           Baidu,  
     iQIYI     iQIYI     Inc.     iQIYI     iQIYI     Inc.     iQIYI     iQIYI     Inc.     iQIYI     iQIYI     Inc.  

Net cash provided by (used in) operating activities

     2,801       (604     2,197       7,546       (1,519     6,027       5,467       (1,350     4,117       834       (206     628  

Net cash (used in) provided by investing activities

     (11,084     (1,610     (12,694     (1,196     281       (915     (4,579     (2,778     (7,357     (699     (424     (1,123

Net cash (used in) provided by financing activities

     (1,296     (79     (1,375     4,185       8,392       12,577       18,018       611       18,629       2,749       93       2,842  

Effect of exchange rate changes on cash, cash equivalents and restricted cash

     139       64       203       (209     (32     (241     251       (29     222       38       (4     34  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (decrease) increase in cash, cash equivalents and restricted cash

     (9,440     (2,229     (11,669     10,326       7,122       17,448       19,157       (3,546     15,611       2,922       (541     2,381  

Cash, cash equivalents and restricted cash

                        

At beginning of period

     27,529       6,910       34,439       15,273       3,819       19,092       25,599       10,941       36,540       3,907       1,670       5,577  

At end of period

     18,089       4,681       22,770       25,599       10,941       36,540       44,756       7,395       52,151       6,829       1,129       7,958  

Net cash provided by (used in) operating activities

     2,801       (604     2,197       7,546       (1,519     6,027       5,467       (1,350     4,117       834       (206     628  

Less: Capital expenditures

     (478     (67     (545     (2,151     (27     (2,178     (1,438     (61     (1,499     (219     (9     (228
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

     2,323       (671     1,652       5,395       (1,546     3,849       4,029       (1,411     2,618       615       (215     400  

Note: Baidu excl. iQIYI represents Baidu, Inc. minus iQIYI’s consolidated cash flows.

 

16


Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures

(In millions except for per ADS information, unaudited)

 

     Three months ended     Three months ended     Three months ended     Three months ended  
     March 31, 2020 (RMB)     December 31, 2020 (RMB)     March 31, 2021 (RMB)     March 31, 2021 (US$)  
     Baidu           Baidu,     Baidu           Baidu,     Baidu           Baidu,     Baidu           Baidu,  
     Core     iQIYI     Inc.     Core     iQIYI     Inc.     Core     iQIYI     Inc.     Core     iQIYI     Inc.  

Operating income (loss)

     1,848       (2,242     (437     6,320       (1,307     4,977       3,847       (1,014     2,789       587       (155     426  

Add: Share-based compensation expenses

     1,184       306       1,490       1,630       349       1,979       1,155       344       1,499       177       53       230  

Add: Amortization and impairment of intangible assets(1)

     316       68       384       81       18       99       62       12       74       9       1       10  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss) (non-GAAP)

     3,348       (1,868     1,437       8,031       (940     7,055       5,064       (658     4,362       773       (101     666  

Add: Depreciation of fixed assets

     1,293       122       1,415       1,391       118       1,509       1,423       115       1,538       217       18       235  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     4,641       (1,746     2,852       9,422       (822     8,564       6,487       (543     5,900       990       (83     901  

Net income (loss) attributable to Baidu

     1,698       (2,875     41       6,036       (1,548     5,174       26,354       (1,267     25,653       4,022       (194     3,915  

Add: Share-based compensation expenses

     1,177       306       1,348       1,618       349       1,802       1,146       344       1,325       175       53       203  

Add: Amortization and impairment of intangible assets(1)

     223       68       267       67       18       78       55       12       61       8       1       9  

Add: Disposal loss (gain)

     (252     —         (252     (28     —         (28     —         —         —         —         —         —    

Add: Impairment of long-term investments

     1,615       25       1,630       147       —         147       —         —         —         —         —         —    

Add: Fair value loss (gain) of long-term investments

     (89     —         (89     (380     (1     (380     (23,545     (88     (23,590     (3,594     (13     (3,601

Add: Reconciling items on equity method investments(2)

     450       10       456       250       9       256       593       (20     583       91       (3     89  

Add: Tax effects on non-GAAP adjustments(3)

     (303     (16     (319     (177     (4     (181     267       (2     265       41       —         41  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Baidu (non-GAAP)

     4,519       (2,482     3,082       7,533       (1,177     6,868       4,870       (1,021     4,297       743       (156     656  

 

17


     Three months ended      Three months ended      Three months ended     Three months ended  
     March 31, 2020 (RMB)      December 31, 2020 (RMB)      March 31, 2021 (RMB)     March 31, 2021 (US$)  
     Baidu             Baidu,      Baidu             Baidu,      Baidu             Baidu,     Baidu             Baidu,  
     Core      iQIYI      Inc.      Core      iQIYI      Inc.      Core      iQIYI      Inc.     Core      iQIYI      Inc.  

Diluted earnings per ADS

           0.02              15.05              73.76             11.26  

Add: Accretion of the redeemable noncontrolling interests

           0.07              0.08              0.14             0.02  

Add: Non-GAAP adjustments to earnings per ADS

           8.75              4.95              (61.52           (9.39
        

 

 

          

 

 

          

 

 

         

 

 

 

Diluted earnings per ADS (non-GAAP)

           8.84              20.08              12.38             1.89  

 

(1)

This represents amortization and impairment of intangible assets resulting from business combinations.

(2)

This represents Baidu’s share of equity method investments for other non-GAAP reconciling items, amortization and impairment of intangible assets not on the investee’s books, accretion of their redeemable noncontrolling 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 shares.

(3)

Tax impact of non-GAAP adjustments is separately presented from 2020Q4, with comparative periods retrospectively adjusted.

 

18



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