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    BIDU
    Earnings call· Dec 2024(Q4 FY24)

    Baidu Q4 FY24 earnings call BIDU

    Feb 18, 2025 Source

    Executive summary

    Baidu Q4 FY24 — AI Cloud Accelerates, ERNIE Adoption Surges, Robotaxi Expands

    Baidu's Q4 FY24 results highlight a strategic pivot towards AI, with strong acceleration in AI Cloud revenue and significant adoption of its ERNIE foundation model across enterprise and consumer products. While online marketing faced near-term pressures, the company is aggressively integrating GenAI into its core search experience and expanding its autonomous driving services, signaling a commitment to long-term AI-driven growth and efficiency.

    Highlights

    5
    • AI Cloud revenue growth accelerated to 26% year-over-year in Q4.

    • ERNIE API calls reached 1.65 billion daily in December, with external API calls growing 178% quarter-over-quarter.

    • Baidu Wenku's AI-enabled features monthly active users (MAU) reached 94 million, almost doubling quarter-over-quarter.

    • Apollo Go provided 1.1 million rides in Q4, up 36% year-over-year, and achieved 100% fully driverless operations nationwide.

    • Non-GAAP Baidu Core operating margin was 17% in Q4.

    Concerns

    3
    • Baidu Core total revenue saw only a slight year-over-year increase, reaching RMB 27.7 billion.

    • Online marketing revenue decreased 7% year-over-year to RMB 17.9 billion in Q4.

    • Operating income decreased to RMB 3.9 billion in Q4 from RMB 5.4 billion last year, due to RMB 1 billion in one-time losses (credit losses, inventory write-down).

    Guidance & targets

    4
    CategoryTargetConfidence
    Advertising business performance
    gradually improve with the first half of the year performing better than Q4 and the second half of the year showing further improvement over the first half
    high materiality
    Medium
    AI Cloud revenue growth and operating profit
    maintain strong momentum while continuing to generate positive operating profit
    high materiality
    High
    Apollo Go ride volumes and fleet size growth
    grow our fleet size and ride volumes faster than ever
    medium materiality
    High
    Share buyback program
    accelerate our buyback program
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Baidu Core
    Total revenue saw a slight year-over-year increase, with strong growth in non-online marketing, primarily AI Cloud, offsetting softness in online marketing. Operating income and margins were impacted by one-time losses.
    Online marketing revenue: RMB 17.9 billionOnline marketing revenue growth YoY: -7%Non-online marketing revenue: RMB 9.8 billionNon-online marketing revenue growth YoY: 18%Operating income: RMB 3.6 billionNon-GAAP Operating margin: 17%Net margin: 19%Non-GAAP Net margin: 24%
    RMB 27.7 billion1%13% (Operating margin)
    Baidu Core (Full Year)
    Full year revenue increased slightly, driven by non-online marketing. Operating income and margins reflect overall performance for the fiscal year.
    Online marketing revenue growth YoY: -3%Non-online marketing revenue growth YoY: 12%Operating income: RMB 19.5 billionNon-GAAP Operating margin: 23%Net margin: 22%Non-GAAP Net margin: 25%
    RMB 104.7 billion1%19% (Operating margin)
    iQIYI
    Revenue decreased year-over-year in Q4.
    RMB 6.6 billion-14%
    iQIYI (Full Year)
    Full year revenue decreased year-over-year.
    RMB 29.2 billion-8%
    AI Cloud
    Demonstrated robust momentum with accelerating revenue growth and expanding margins, driven by broad market recognition of AI capabilities and increasing demand for ERNIE and AI infrastructure.
    GenAI-related revenue growth YoY: nearly tripled (FY24)
    RMB 7.1 billion26%Expanding non-GAAP operating margins

    Operational metrics

    39
    ERNIE API calls
    1.65 billion
    daily in December

    ERNIE handled approximately 1.65 billion API costs daily.

    External ERNIE API calls growth
    178%QoQ
    Q4 FY24

    external API costs growing 178% quarter-over-quarter.

    Baidu Wenku subscription revenue growth
    21%YoY
    Q4 FY24

    Wenku's subscription revenue grew 21% year-over-year.

    Baidu Wenku AI-enabled features MAU
    94 millionalmost doubling QoQ
    December

    Wenku's monthly active user of AI-enabled features reached 94 million, almost doubling quarter-over-quarter.

    Search result pages with AI-generated content
    22%
    current

    Currently, 22% of our search result pages contain AI-generated content.

    Daily search queries per user growth
    2%YoY
    December

    daily search queries per user increased by 2% year-over-year in December.

    Advertisers using ERNIE agents daily
    27,000
    December

    over 27,000 advertisers have been generating ad spending through ERNIE agents on a daily basis.

    Apollo Go rides provided
    1.1 million36% YoY growth
    Q4 FY24

    Apollo Go provided approximately 1.1 million rides to the public nationwide, representing a year-over-year growth of 36%.

    Apollo Go cumulative rides
    9 millionexceeded
    January

    In January, the cumulative rides provided to the public exceeded 9 million.

    Apollo Go autonomous kilometers
    130 million
    to date

    Apollo Go feeds have accumulated more than 130 million autonomous kilometers.

    Unified GPU cluster scale
    doubled
    Q4 FY24

    we doubled the scale of our unified GPU cluster, yet still achieved a 99% valid training time.

    Unified GPU cluster valid training time
    99%
    Q4 FY24

    we doubled the scale of our unified GPU cluster, yet still achieved a 99% valid training time.

    Total revenues
    RMB 34.1 billiondecreasing 2% YoY
    Q4 FY24

    Total revenues in the fourth quarter were RMB 34.1 billion, decreasing 2% year-over-year.

    Total revenues
    RMB 133.1 billiondecreasing 1% YoY
    FY24

    Total revenues for the full year 2024 were RMB 133.1 billion, decreasing 1% year-over-year.

    Cost of revenues
    RMB 18 billionincreasing 3% YoY
    Q4 FY24

    Cost of revenues was RMB 18 billion in Q4, increasing 3% year-over-year, primarily due to an increase in traffic acquisition costs, costs related to AI business and a onetime write-down of inventories, partially offset by a decrease in personnel-related expenses and content costs.

    Cost of revenues
    RMB 66.1 billionincreasing 2% YoY
    FY24

    Cost of revenue was RMB 66.1 billion in 2024, increasing 2% year-over-year primarily due to an increase in traffic acquisition costs, bandwidth costs and server custody fees, partially offset by a decrease in personnel-related expenses and content costs.

    Operating expenses
    RMB 12.2 billionremained flat compared to the same period last year
    Q4 FY24

    Operating expenses were RMB 12.2 billion in Q4, which remained flat compared to the same period last year, primarily due to an increase in expected credit losses, server depreciation expenses and server custody fees, which support GenAI research and development inputs and the channel spending and promotional marketing expenses, partially offset by a decrease in personnel-related expenses.

    Operating expenses
    RMB 45.8 billiondecreasing 4% YoY
    FY24

    Operating expenses were RMB 45.8 billion in 2024, decreasing 4% year-over-year, primarily due to a decrease in personnel-related expenses.

    One-time losses
    RMB 1 billion
    Q4 FY24

    The decrease was due to onetime losses of RMB 1 billion, including accrual of credit losses, write-down of inventories and others.

    Non-GAAP operating income
    RMB 5 billion
    Q4 FY24

    Non-GAAP operating income was RMB 5 billion in Q4

    Non-GAAP operating income
    RMB 26.2 billion
    FY24

    Non-GAAP operating income was RMB 26.2 billion in '24.

    Total other income net
    RMB 2.7 billioncompared to total other loss net of RMB 2.5 billion for the same period last year
    Q4 FY24

    total other income net was RMB 2.7 billion, compared to total other loss net of RMB 2.5 billion for the same period last year, mainly due to increase in net foreign exchange gain arising from exchange rate fluctuation between renminbi and U.S. dollar, and a decrease in pickup of losses from equity method investment, which modified certain terms of its preferred shares and resulted in significant loss pickup in 2023.

    Total other income net
    RMB 7.4 billionincreasing 120% YoY
    FY24

    total other income net was RMB 7.4 billion, increasing 120% year-over-year, primarily due to a decrease in pickup of losses.

    Income tax expense
    RMB 1.6 billion
    Q4 FY24

    Income tax expense was RMB 1.6 billion.

    Income tax expense
    RMB 4.4 billion
    FY24

    Income tax expense was RMB 4.4 billion.

    Net income attributable to Baidu
    RMB 5.2 billion
    Q4 FY24

    net income attributable to Baidu was RMB 5.2 billion

    Net income attributable to Baidu
    RMB 23.8 billion
    FY24

    net income attributable to Baidu was 23.8 billion

    Diluted EPS
    RMB 14.26
    Q4 FY24

    diluted earnings per ADS was RMB 14.26. The transcript states 'RMB 14.26 billion' but context suggests 'RMB 14.26' per ADS is intended.

    Diluted EPS
    RMB 65.91
    FY24

    diluted earnings per ADS was RMB 65.91.

    Non-GAAP net income attributable to Baidu
    RMB 6.7 billion
    Q4 FY24

    Non-GAAP net income attributable to Baidu was RMB 6.7 billion.

    Non-GAAP net income attributable to Baidu
    RMB 27 billion
    FY24

    Non-GAAP net income attributable to Baidu was RMB 27 billion.

    Non-GAAP diluted EPS
    RMB 19.19
    Q4 FY24

    Non-GAAP diluted earnings per ADS was RMB 19.19.

    Non-GAAP diluted EPS
    RMB 76.85
    FY24

    Non-GAAP diluted earnings per ADS was RMB 76.85.

    Cash, cash equivalents, restricted cash and short-term investments
    RMB 139.1 billion
    as of December 31, 2024

    As of December 31, 2024, cash, cash equivalents, restricted cash and short-term investments were RMB 139.1 billion

    Cash, cash equivalents, restricted cash and short-term investments excluding iQIYI
    RMB 134.7 billion
    as of December 31, 2024

    cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 134.7 billion.

    Net cash position
    RMB 170.5 billion
    as of December 31, 2024

    As of December 31, 2024, net cash position for Baidu was RMB 170.5 billion.

    Baidu Core employees
    31,000
    as of December 31, 2024

    Baidu Core had approximately 31,000 employees as of December 31, 2024.

    Share buyback (since beginning of 2024)
    USD 1 billionsignificantly higher than our total buybacks in 2023
    since beginning of 2024

    We repurchased this over USD 1 billion since the beginning of 2024, which is significantly higher than our total buybacks in 2023.

    Share buyback (total under program)
    USD 1.7 billion
    to date

    In total, we have repurchased USD 1.7 billion under our $5 billion purchase program, which runs through December 2025.

    Industry KPIs

    6
    MetricValueDetails
    Family dap dau94 millionusers
    CAPEX compute commitmentsdoubledscale
    Advertising revenue by segmentRMB 17.9 billionRMB
    Share buyback capital returnedUSD 1 billionUSD
    Ai feature adoption monetization1.65 billionAPI calls
    Custom silicon ai infrastructure99%valid training time

    Product announcements

    3
    ProductTypeDetails
    ERNIE 4.5 seriesroadmap
    ERNIE botupdate
    Baidu Wenku Free Canvaslaunch

    Deals & partnerships

    5
    State Grid Corporation of Chinadeveloped a tailored AI solution based on ERNIE and our MaaS platform Qianfan

    developed comprehensive AI solutions that permeate key operational processes. From power dispatching and equipment condition diagnosis to procurement, safety supervision, marketing and office systems, our solutions have demonstrated remarkable effectiveness in boosting operational reliability.

    Zhaopinadopt ERNIE-powered outbound calling product for campus recruitment

    featuring highly humanlike voice with natural conversational abilities. The product enables sophisticated multi-round interactions. ERNIE's advanced capabilities ensured accurate gauging of candidates interest in job opportunities, while consistently keeping conversations on track.

    Xiaomiestablished deep partnerships with leading enterprises

    further highlighting the growing trust in Baidu AI Cloud

    Gehuaestablished deep partnerships with leading enterprises

    further highlighting the growing trust in Baidu AI Cloud

    DeepSeekoffers access to a selection of high-quality models across the globe with DeepSeek being one of our latest additions.

    Qianfan offers access to a wide range of high-quality third-party foundation models, including DeepSeek's V3 and R1 models.

    Risks & headwinds

    3
    Softness in online marketing businessQ4 FY24

    online marketing revenue decreased 7% year-over-year to RMB 17.9 billion in Q4

    Mitigation: AI Cloud demonstrated robust momentum with revenue growth accelerating to 26% year-over-year, offsetting the softness

    Near-term pressures in advertising businessnear-term

    haven't really seen any improvements in Q4 yet.

    Mitigation: efforts to transform search with financial models are progressing steadily... will help drive revenue growth and open new monetization opportunities in the long term.

    One-time losses impacting operating incomeQ4 FY24

    RMB 1 billion, including accrual of credit losses, write-down of inventories and others.

    What to watch in Q1 FY25

    5

    ERNIE 4.5 series launch

    next couple of months
    Currentupcoming
    Targetlaunched

    Why it matters

    The launch of ERNIE 4.5, especially with its open-source strategy, is critical for driving broader adoption and market awareness of Baidu's foundation model capabilities, impacting its competitive positioning.

    So stay tuned for ERNIE 4.5 in the next couple of months.

    Q&A highlights

    5

    Why open-source ERNIE 4.5 and make ERNIE bot free? How does Baidu plan to stay competitive in the foundation model market?

    Robin Li explained that open-sourcing helps adoption, as seen with DeepSeek. Baidu's decision is backed by confidence in its technology leadership from decade-long R&D. Making ERNIE bot free allows for apple-to-apple comparison. He emphasized that models are valuable when they solve real-world problems at scale, and Baidu focuses on an application-driven approach, iterating ERNIE for internal products (Search, Wenku) and external enterprise clients via Qianfan.

    No matter open source or close source, foundation models become truly valuable only when they can effectively address real-world problems at scale.

    asked by Alicia Yap · answered by Yanhong Li

    2 min read5 chapters

    Detailed Narrative

    01

    AI Transformation & ERNIE Adoption

    Baidu's Q4 FY24 results underscore its deep commitment to AI, with the ERNIE foundation model driving significant internal and external adoption. Daily ERNIE API calls surged to 1.65 billion in December, with external calls growing 178% QoQ, reflecting strong market demand across diverse sectors like education and e-commerce. The company's decision to open source ERNIE 4.5 and make ERNIE bot free aims to further expand market awareness and adoption, leveraging its full-stack AI capabilities.

    02

    AI Cloud Momentum & Profitability

    The AI Cloud business demonstrated robust performance, with revenue growth accelerating to 26% YoY in Q4 and a 17% full-year growth for 2024. GenAI-related revenue nearly tripled in 2024, driven by increasing demand for ERNIE and AI infrastructure. The segment achieved expanding non-GAAP operating margins in Q4 and is expected to maintain strong revenue growth and positive operating profit in 2025, supported by a growing customer base and competitive MaaS platform, Qianfan.

    03

    Search Reinvention with GenAI

    Baidu is aggressively transforming its core search product using ERNIE, with 22% of search result pages now containing AI-generated content. This integration expands content formats beyond text to include short videos, agents, and digital humans, enhancing quality, quantity, and diversity. User metrics show improved engagement, more search queries, higher retention, and longer time spent for users exposed to AI-generated results, with daily search queries per user increasing 2% YoY in December.

    04

    Apollo Go's Path to Profitability & Expansion

    The autonomous ride-hailing service, Apollo Go, delivered 1.1 million rides in Q4, a 36% YoY increase, and surpassed 9 million cumulative rides by January. It achieved 100% fully driverless operations nationwide, setting an industry benchmark. Following successful testing permits in Hong Kong (its first right-hand drive market), Apollo Go plans significant fleet and ride volume expansion in 2025, exploring asset-light models and partnerships to scale efficiently.

    05

    Capital Allocation & Shareholder Returns

    Baidu's capital allocation strategy prioritizes AI advancements, AI Cloud adoption, and autonomous driving initiatives, focusing on high-growth opportunities with strong ROI potential. The company repurchased over USD 1 billion in shares since early 2024, significantly more than in 2023, and plans to accelerate its buyback program under the existing USD 5 billion authorization, which runs through December 2025.

    AI-generated summary of the company’s earnings call. Not investment advice.