Chinese tech giant announces revenue increase

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

The company’s U.S.-listed shares were up about 2% in premarket trading as of 5 a.m. ET. The stock is down almost 3% for the year so far.

Revenue rose 6% year-on-year to 34.45 billion yuan ($4.72 billion) in the quarter ended September 30. This figure is slightly higher than analysts’ expectations of 34.33 billion yuan, according to Refinitiv.

Online marketing revenue at the search engine provider increased 5% from last year, while non-online marketing revenue increased 6% over the same period.

This comes after revenue in the previous quarter jumped 15% from last year, with both online and non-online marketing revenue growing by double digits.

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

American Depositary Share’s adjusted profit was 20.40 yuan in the third quarter, down from 22.55 yuan in the previous three months, but up from 16.87 yuan a year ago.

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

The company said increased marketing spending contributed to an 11% year-on-year increase in selling, general and administrative expenses, which amounted to 5.8 billion yuan.

Research and development spending rose 6% to $6.1 billion year-over-year, partly due to increased server fees to support research on the Ernie robot, the company said. This is a recovery from the 1% growth recorded in the second quarter a year ago.

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

“Baidu Core maintained stable margins during the quarter,” Rong Luo, Baidu’s chief financial officer, said in a statement. “Our continued investments in AI have supported technological and product innovations. Going forward, while we will continue to prioritize investments in AI, particularly in generative AI and core models, we will do so with a relentless focus on efficiency and strategic allocation of resources.

The company said its Apollo Go robotaxi business completed 821,000 trips in the third quarter, compared to 714,000 trips in the second quarter of the year.

In September, Yizhuang District, a suburb of Beijing, officially allowed local robotaxi operators to charge fares for fully autonomous taxis, with no drivers inside.

Baidu also announced that Sandy Xu, former CFO of JD.com, will join the company as an independent board director effective January 1, 2024.