Baidu reports Q2 earnings surpassing expectations

Chinese internet search giant Baidu Inc reported better-than-expected second-quarter financial results on Thursday, with total revenue increasing 20 percent year-on-year to 31.4 billion yuan ($4.86 billion), yielding a non-GAAP (generally accepted accounting principles) net profit of 5.4 billion yuan.

Baidu's core business delivered another strong quarter, with revenue growing 27 percent year-on-year to 24.0 billion yuan, boosted by the AI cloud sector posting 71 percent growth. The company continues to execute and lead on new AI business, including AI cloud, autonomous driving and smart assistant.

"Baidu Core delivered another strong quarter, powered by the fast growth of our new AI business. AI enables businesses and local governments to do more and serve more people," said Robin Li, co-founder and CEO of Baidu.

"We are excited about the opportunities to help different industries transform their business with AI and support our goal to become carbon-neutral by 2030," Li said.

For the second quarter, the company's cost of revenues was 15.9 billion yuan, an increase of 21 percent compared with the same period last year, primarily due to an increase in traffic acquisition costs and cost of goods sold related to new AI business. Its research and development expenses reached 6.3 billion yuan, an increase of 30 percent year-on-year, primarily related to personnel-related expenses.

Baidu was ranked the No 1 AI cloud provider again, according to IDC's 2020 China's public cloud market report. The Apollo L4 autonomous driving software accumulated 7.5 million test miles, up 152 percent year-over-year, with 278 autonomous driving permits received.

When it comes to the mobile ecosystem, the company said monthly active users reached 580 million and daily logged in users hit 77 percent in June.

For the third quarter of 2021, Baidu expects revenues to be between 30.6 and 33.5 billion yuan, representing a growth rate of 8 to 19 percent year-on-year.