Baidu Q1 FY26 earnings call BIDU

For the first time, Baidu Core AI-powered business exceeded 50% of Baidu General business revenue, reaching 52%, with revenue of RMB 13.6 billion, up 49% YoY. Management framed this as an important milestone confirming AI has become the majority of the revenue mix and the company's primary growth driver. Combined AI Cloud Infra and AI applications drove total AI cloud revenue to RMB 11.3 billion in Q1. The shift is being positioned as both a growth and a margin story as higher-quality revenue streams scale.

AI Cloud Infra revenue grew 79% YoY, well above the broader market, with GPU cloud revenue accelerating to 184% YoY from 143% the prior quarter. Management attributed momentum to surging demand across both training and inference workloads, with inference ramping especially fast, and to Baidu's full-stack advantage spanning proprietary infrastructure through applications. GPU cloud carries structurally higher margins than traditional CPU cloud due to technical complexity, tight high-quality supply, and pricing power, supporting a durable blended-margin improvement. New clients added this quarter include leading model companies, Unity, Honor, Opel, and Vivo.

Kunlunxin is among the first domestic AI chips to achieve large-scale commercial deployment in a single AI computing cluster of over 30,000 accelerators, with industry-leading cluster performance and stability. It has been optimized and validated across the latest ERNIE and mainstream foundation models, with inference support recently extended to DeepSeek V4, GLM 5.1, and MiniMax M2.7. Management positioned Kunlunxin as especially competitive in inference, where domestic chips are highly relevant, while acknowledging domestic chips still trail the most advanced global products in frontier training scenarios and face near-term capacity and supply-chain constraints.

In March, daily average token consumption from external customers grew to nearly 7x the year-ago level, with MaaS revenue scaling rapidly. The model library was expanded beyond ERNIE to include DeepSeek, Gemini, MiniMax and others. Baidu recently launched ERNIE 5.1, delivering stronger capabilities, a more compact model size, and enhanced reasoning; it ranks first among Chinese models on the LM Arena text leaderboard and topped the LM Arena search leaderboard among Chinese models (fourth globally). Management reaffirmed an application-driven iteration approach and noted organizational adjustments to its model teams.

Management highlighted multiple AI-native and transformed products: a productivity agent showcased at Baidu Create for autonomous multi-step workflows across PC and mobile; digital humans with ~80% cost reduction over the past two quarters and a new overseas platform supporting 24 languages; Miaoda vibe-coding platform with MAUs up ~70% QoQ in March and domestic paying-user rate ~3x end-of-last-year levels (Miaoda 3.0 launched with enterprise and mobile versions); and Famou agent 2.0 for enterprise scenarios, deployed at Qingdao Port. DuMate, a general-purpose consumer agent, was introduced as a new AI-native product form.

Apollo Go delivered 3.2 million fully driverless rides in Q1 with triple-digit YoY growth and over 22 million cumulative rides as of April. International expansion accelerated: on-track for open-road testing in Switzerland; first vehicles arrived in London for testing with Uber and Lyft; fully driverless operations across multiple zones in Dubai plus a standalone Apollo Go app launched there in late March; and a rental-model partnership in Hainan stationing driverless vehicles at an airport arrival level. Management cited unit-economics breakeven in Wuhan and more attractive overseas pricing as the profitability path.

Total Baidu revenue was RMB 32.1 billion, down 2% QoQ; Baidu General business revenue was RMB 26.0 billion, up 2% YoY and flat QoQ; online marketing (IT) revenue was RMB 6.2 billion, down 8% QoQ. Operating income was RMB 3.2 billion (10% margin); non-GAAP operating income RMB 3.8 billion (12% margin). Net income attributable to Baidu was RMB 3.4 billion (11% net margin), diluted EPS RMB 8.76 per ADS; non-GAAP net income RMB 4.3 billion, non-GAAP diluted EPS RMB 12.06 per ADS. Total cash and investments were RMB 279.3 billion, operating cash flow RMB 2.7 billion, and Baidu General business had approximately 28,000 employees as of March 31, 2026.