China-Based Baidu Burns $1.2 Billion To Fuel AI Cloud Growth

Baidu, Inc (NASDAQ: BIDU) stock gained on Wednesday after it reported fiscal first-quarter results. The quarterly revenue of $4.47 billion, up by 3% year-on-year, topping the analyst consensus estimate of $4.30 billion. 

Baidu’s adjusted earnings per ADS of $2.55 beat the analyst consensus estimate of $1.96.

Baidu’s Core revenue grew by 7% Y/Y to $3.51 billion; Online marketing revenue declined by 6% Y/Y to $2.21 billion.

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Non-online marketing revenue grew 40% Y/Y to $1.30 billion, driven by the AI Cloud business. AI Cloud business grew by 42% during the quarter.

Revenue from IQIYI, Inc (NASDAQ: IQ) was $990.3 million, beating the analyst consensus estimate of $973.7 million. This is a 9.97% decrease over sales of $1.10 billion in the same period last year.

Baidu’s SG&A expenses were $815 million, up 10% Y/Y, primarily due to an increase in channel spending and promotional marketing expenses. R&D expenses declined 15% Y/Y to $626 million.  

Baidu’s adjusted EBITDA margin declined by 400 bps to 22%, and its Core adjusted EBITDA margin decreased by 400 bps to 26%.

As of March 31, 2025, Baidu had $19.6 billion in cash and equivalents. Free cash flow was an outflow of $1.23 billion, and free cash flow excluding iQIYI was an outflow of $1.27 billion, mainly due to an increase of investment in AI business.

Baidu co-founder and CEO Robin Li said the performance of its AI Cloud business underscores the growing market recognition of full-stack AI products and solutions with a highly competitive price-performance advantage. It also achieved a pivotal milestone in its robotaxi business, as Apollo Go expanded internationally by entering Dubai and Abu Dhabi, Li added.

“AI Cloud continued its robust growth in the first quarter, which provides solid support to our overall revenue while we accelerate the AI transformation across our mobile ecosystem,” said Junjie He, Interim CFO of Baidu. “Looking ahead, we are strongly committed to investing in AI to translate our technological strengths into sustainable long-term growth,” he added.

Price Action: BIDU shares are trading higher by 2.42% to $91.50 premarket at last check Wednesday.

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