Baidu, Inc.

Baidu reported total revenue of RMB 31.3 billion, down 2% quarter over quarter and 4% year over year. Baidu General Business revenue was RMB 25.2 billion, down 3% quarter over quarter and 4% year over year, and iQIYI revenue was RMB 6.3 billion, up 1% quarter over quarter and down 5% year over year. Operating income was RMB 3.0 billion with operating margin of 10%; non-GAAP operating income was RMB 3.8 billion with non-GAAP operating margin of 12%. Net income attributable to Baidu was RMB 2.3 billion, diluted EPS was RMB 5.74, non-GAAP net income was RMB 2.6 billion, and non-GAAP diluted EPS was RMB 7.22. AI Cloud Infra revenue grew about 50% year over year, and GPU Cloud revenue grew 283% year over year. Total cash and investments were RMB 283.1 billion, and operating cash flow was RMB 3.4 billion. For outlook, management said AI Cloud Infra revenue growth should remain strong in the second half with potential for further acceleration; advertising is expected to remain under pressure in the second half; and Apollo Go aims to restore ride-volume momentum, expand globally, scale fleets, and bring more cities to unit economics breakeven.

Robin Li framed Baidu as increasingly AI-first, emphasizing that AI-powered business now makes up half of Baidu General Business and that the company is building across its full AI stack from chips to cloud to models and applications. He highlighted broad momentum in Kunlunxin, AI Cloud Infra, Qianfan MaaS, digital humans, Miaoda, AI search, and Apollo Go, while stressing long-term investment, patience, and an application-driven approach for ERNIE. His tone was confident and strategic, but he also acknowledged competition in foundation models and the need to keep improving ERNIE through sustained investment and tighter product feedback loops.

Henry He emphasized that AI-powered business reached RMB 12.5 billion and continued to account for half of Baidu General Business revenue. He detailed the quarter’s financials, including total revenue of RMB 31.3 billion, operating income of RMB 3.0 billion, non-GAAP operating income of RMB 3.8 billion, net income attributable to Baidu of RMB 2.3 billion, and total cash and investments of RMB 283.1 billion. He also said the company will keep investing in AI with discipline, focusing on ROIC, operating efficiency and cash flow, while noting that stronger GPU Cloud mix, self-developed chips, better resource utilization, and growing AI applications should support margin expansion over time. He added that Baidu plans to convert its Hong Kong listing to dual primary status within this year, subject to approvals.

Analysts focused on ERNIE’s competitive position, AI Cloud growth and margins, operating margin trajectory, Kunlunxin’s listing and strategic role, the Hong Kong dual primary conversion, AI search monetization, and Apollo Go’s regulatory and expansion path. Management said foundation model leadership is still shifting rapidly, and Baidu is focusing ERNIE on the capabilities most relevant to its own products, using AI search and other applications as feedback loops to improve the model. On cloud, they said demand is strong across training and inference, GPU Cloud is growing much faster than the overall business, and margins can expand as mix shifts and MaaS scales. On Apollo Go, management said clearer regulation is positive, domestic and overseas markets are both important, and fully driverless expansion is already underway in Dubai, Hong Kong, London, and other cities.