Baidu (BIDU) investor relations material

Executive summary

• Total revenues for Q2 2025 were RMB32.7 billion, down 4% year over year, with Baidu Core revenue at RMB26.3 billion, down 2% year over year.

• AI cloud business grew 27% year over year to RMB6.5 billion, driving non-online marketing revenue up 34% year over year to RMB10 billion.

• Online marketing revenue declined 15% year over year to RMB16.2 billion, reflecting near-term headwinds.

• Strategic focus remains on AI innovation, foundation model development, and global expansion of autonomous driving services, including partnerships with Uber and Lyft.

• Over 50% of mobile search result pages now feature AI-generated content, reflecting rapid AI transformation.

Financial highlights

• Baidu Core's non-online marketing revenue exceeded RMB10 billion for the first time, up 34% year over year.

• AI cloud revenue reached RMB6.5 billion, up 27% year over year.

• Operating income was RMB3.3 billion; non-GAAP operating income was RMB4.4 billion.

• Net income attributed to Baidu was RMB7.3 billion; non-GAAP net income was RMB4.8 billion.

• Free cash flow was negative RMB4.7 billion, mainly due to increased AI investment.

Outlook and guidance

• AI search monetization is in early stages, with large-scale monetization yet to begin; near-term revenue and margins expected to remain under pressure.

• Margin improvement anticipated as advertising stabilizes and non-advertising businesses expand.

• Management remains focused on AI investments, advancing AI transformation across the Mobile Ecosystem, and expanding Apollo Go globally.

• Greater visibility into 2026 expected by year-end, with a focus on disciplined investment and efficiency.

• Strategic priorities are expected to drive significant long-term value despite near-term challenges.