BEIJING, April 29, 2015 /PRNewswire/ -- Baidu, Inc.
(NASDAQ: BIDU) ("Baidu" or the "Company"), the leading Chinese
language Internet search provider, today announced its unaudited
financial results for the first quarter ended March 31, 2015[1].
"Mobile's tremendous momentum continued this quarter, with
mobile contributing 50% of total revenue," said Robin Li, chairman and CEO of Baidu. "Baidu is
redefining the search box by building an ecosystem to connect
people with services and drive closed loop transactions. Baidu's
platform is comprehensive and robust, and we plan to fully exploit
the huge growth potential ahead -- in mobile marketing, online to
offline, and key select verticals such as healthcare, education and
financial services -- by leveraging our solid mobile foundation,
exceptional technology advantage, and proven operational
experience."
"We continue to execute on our investment plan to capture the
vast growth opportunities ahead and fulfill our vision," said
Jennifer Li, chief financial officer
of Baidu. "We are very pleased with the strong traction we have
gained thus far and will continue to set our sights high for
greater future progress."
First Quarter 2015 Highlights
- Total revenues in the first quarter of 2015 were
RMB12.725 billion ($2.053 billion), a 34.0% increase from the
corresponding period in 2014. Mobile revenue represented 50% of
total revenue for the first quarter of 2015, up from 42% in the
fourth quarter of 2014.
- Operating profit in the first quarter of 2015 was
RMB2.155 billion ($347.7 million), a 9.2% decrease from the
corresponding period in 2014.
- Net income attributable to Baidu in the first quarter of
2015 was RMB2.449 billion
($395.1 million), a 3.4% decrease
from the corresponding period in 2014. Diluted earnings
attributable to Baidu per ADS for the first quarter of 2015
were RMB6.76 ($1.09); diluted earnings attributable to
Baidu per ADS excluding share-based compensation expenses
(non-GAAP) for the first quarter of 2015 were RMB7.58 ($1.22).
First Quarter 2015 Results
Baidu reported total revenues of RMB12.725 billion ($2.053
billion) for the first quarter of 2015, representing a 34.0%
increase from the corresponding period in 2014.
Online marketing revenues for the first quarter of 2015
were RMB12.519 billion ($2.019 billion), representing a 33.5% increase
from the corresponding period in 2014. Baidu had about 524,000
active online marketing customers[2] in the first quarter of
2015, representing a 17.5% increase from the corresponding period
in 2014 and flat from the fourth quarter of 2014. Revenue per
online marketing customer for the first quarter of 2015 was
approximately RMB23,800 ($3,839), a 13.9% increase from the corresponding
period in 2014 and a 9.8% decrease compared to the fourth quarter
of 2014.
Traffic acquisition costs as a component of cost of
revenues were RMB1.722 billion
($277.7 million), representing 13.5%
of total revenues, as compared to 12.4% in the corresponding period
in 2014 and 13.4% in the fourth quarter of 2014. The increase
mainly reflects increased contribution of contextual ads.
Bandwidth costs as a component of cost of revenues were
RMB849.6 million ($137.1 million), representing 6.7% of total
revenues, compared to 6.8% in the corresponding period in 2014.
Depreciation costs as a component of cost of revenues
were RMB582.4 million ($94.0 million), representing 4.6% of total
revenues, compared to 4.5% in the corresponding period in 2014.
Content costs as a component of cost of revenues were
RMB608.4 million ($98.1 million), representing 4.8% of total
revenues, compared to 4.1% in the corresponding period in 2014, and
4.2% in the fourth quarter of 2014. The increase was mainly due to
iQiyi.
Selling, general and administrative expenses were
RMB2.957 billion ($477.0 million), representing an increase of
47.2% from the corresponding period in 2014, and a decrease of
16.1% from the previous quarter. The year-over-year increase was
primarily due to the increased promotional spending for mobile
products and services.
Research and development expenses were RMB2.286 billion ($368.8
million), a 79.1% increase from the corresponding period in
2014,and an increase of 7.1% from the previous quarter, primarily
due to an increase in the number of research and development
personnel.
Share-based compensation expenses, which were allocated
to related operating costs and expense line items, were
RMB291.1 million ($47.0 million) in the first quarter of 2015,
compared to RMB169.0 million in the
corresponding period in 2014, and RMB339.0
million in the fourth quarter of 2014. The year-over-year
increase was a result of increased share grants to employees.
Operating profit was RMB2.155
billion ($347.7 million),
representing a 9.2% decrease from the corresponding period in 2014.
Operating profit excluding share-based compensation expenses
(non-GAAP) was RMB2.446 billion
($394.6 million), a 3.8% decrease
from the corresponding period in 2014.
Income tax expense was RMB541.0
million ($87.3 million),
compared to income tax expense of RMB430.3
million in the corresponding period in 2014. The effective
tax rate for the first quarter of 2015 was 20.7% as compared to
15.1% for the corresponding period in 2014. The higher effective
tax rate reflects that some loss-generating entities in the group
cannot be consolidated for tax purposes under PRC tax law and the
expiration of a preferential tax license for one of our
subsidiaries.
Net income attributable to Baidu was RMB2.449 billion ($395.1
million), representing a 3.4% decrease from the
corresponding period in 2014. Basic and diluted earnings per
ADS for the first quarter of 2015 amounted to RMB6.79 ($1.09) and
RMB6.76 ($1.09), respectively.
Net income attributable to Baidu excluding share-based
compensation expenses (non-GAAP) was RMB2.740 billion ($442.1
million), a 1.3% increase from the corresponding period in
2014. Basic and diluted earnings per ADS excluding share-based
compensation expenses (non-GAAP) for the first quarter of 2015
amounted to RMB7.62 ($1.23) and RMB7.58
($1.22), respectively.
As of March 31, 2015, the Company
had cash, cash equivalents and short-term investments of
RMB58.038 billion ($9.363 billion).
Net operating cash inflow for the first quarter of 2015
was RMB2.839 billion ($458.1 million). Capital expenditures for
the first quarter of 2015 were RMB1.021
billion ($164.8 million).
Adjusted EBITDA (non-GAAP), defined in this announcement
as earnings before interest, taxes, depreciation, amortization,
other non-operating income and share-based compensation expenses,
was RMB3.296 billion ($531.7 million) for the first quarter of 2015,
representing a 2.4% increase from the corresponding period in
2014.
Outlook for Second Quarter 2015
Baidu currently expects to generate total revenues in an amount
ranging from RMB16.365 billion
($2.640 billion) to RMB16.750 billion
($2.702 billion) for the second
quarter of 2015, representing a 36.5% to 39.7% year-over-year
increase. This forecast reflects Baidu's current and preliminary
view, which is subject to change.
Conference Call Information
Baidu's management will hold an earnings conference call at
8:00 PM on April 29, 2015, U.S. Eastern Time (8:00 AM on April 30,
2015, Beijing/Hong Kong
Time).
Dial-in details for the earnings conference call are as
follows:
International:
|
+65 67239381
|
China
|
4006208038
|
US:
|
+1 8456750437
|
UK:
|
+44-2030598139
|
Hong Kong:
|
+852 30186771
|
Passcode for all
regions:
|
24188456
|
A replay of the conference call may be accessed by phone at the
following number until May 7,
2015:
International:
|
+61-2-8199-0299
|
Passcode:
|
24188456
|
Additionally, a live and archived webcast of this conference
call will be available at http://ir.baidu.com.
About Baidu
Baidu, Inc. is the leading Chinese language Internet search
provider. As a technology-based media company, Baidu aims to
provide the best and most equitable way for people to find what
they're looking for. In addition to serving individual Internet
search users, Baidu provides an effective platform for businesses
to reach potential customers. Baidu's ADSs trade on the NASDAQ
Global Select Market under the symbol "BIDU". Currently, ten ADSs
represent one Class A ordinary share.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates," "confident" and similar statements. Among
other things, the outlook for the second quarter 2015 and
quotations from management in this announcement, as well as Baidu's
strategic and operational plans, contain forward-looking
statements. Baidu may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission, in its annual report to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Statements
that are not historical facts, including statements about Baidu's
beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking
statement, including but not limited to the following: our growth
strategies; our future business development, including development
of new products and services; our ability to attract and retain
users and customers; competition in the Chinese and other Internet
search markets; competition for online marketing customers; changes
in our revenues and certain cost or expense items as a percentage
of our revenues; the outcome of ongoing, or any future, litigation
or arbitration, including those relating to intellectual property
rights; the expected growth of the Chinese language Internet search
market and the number of Internet and broadband users in
China; Chinese governmental
policies relating to the Internet and Internet search providers and
general economic conditions in China, Japan
and elsewhere. Further information regarding these and other risks
is included in our annual report on Form 20-F and other documents
filed with the Securities and Exchange Commission. Baidu does not
undertake any obligation to update any forward-looking statement,
except as required under applicable law. All information provided
in this press release and in the attachments is as of the date of
the press release, and Baidu undertakes no duty to update such
information, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Baidu's consolidated financial results presented
in accordance with GAAP, Baidu uses the following measures defined
as non-GAAP financial measures by the SEC: adjusted EBITDA,
operating profit excluding share-based compensation expenses, net
income excluding share-based compensation expenses, and basic and
diluted earnings per ADS excluding share-based compensation
expenses. The presentation of these non-GAAP financial measures is
not intended to be considered in isolation or as a substitute for
the financial information prepared and presented in accordance with
GAAP. For more information on these non-GAAP financial measures,
please see the tables captioned "Reconciliations of non-GAAP
results of operations measures to the nearest comparable GAAP
measures" and "Reconciliation from net cash provided by operating
activities to adjusted EBITDA" set forth at the end of this
release.
Baidu believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance and
liquidity by excluding certain expenses, particularly share-based
compensation expenses, that may not be indicative of its operating
performance or financial condition from a cash perspective. We
believe that both management and investors benefit from referring
to these non-GAAP financial measures in assessing our performance
and when planning and forecasting future periods. These non-GAAP
financial measures also facilitate management's internal
comparisons to Baidu's historical performance and liquidity. Baidu
has computed its non-GAAP financial measures using the same
consistent method from quarter to quarter since April 1, 2006. We believe these non-GAAP
financial measures are useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision making. A
limitation of using these non-GAAP financial measures is that these
non-GAAP measures exclude share-based compensation charge that has
been and will continue to be for the foreseeable future a
significant recurring expense in our results of operations. A
limitation of using non-GAAP adjusted EBITDA is that it does not
include all items that impact our net income for the period.
Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from each non-GAAP
measure. The accompanying tables have more details on the
reconciliations between GAAP financial measures that are most
directly comparable to the non-GAAP financial measures.
[1]
|
This announcement
contains translations of certain RMB amounts into U.S. dollars at
specified rates solely for the convenience of the reader. Unless
otherwise noted, all translations from RMB to U.S. dollars are made
at a rate of RMB6.1990 to US$1.00, the effective noon buying rate
as of March 31, 2015, in The City of New York for cable transfers
of RMB as certified for customs purposes by the Federal Reserve
Bank of New York.
|
|
|
[2]
|
The number of active
online marketing customers and revenue per online active customer
exclude our group-buying related businesses for consistency with
previous reporting.
|
For investor and media inquiries, please contact:
China
Sharon Ng
Baidu, Inc.
Tel: +86-10-5992-4958
Email: ir@baidu.com
Baidu,
Inc.
|
|
|
|
|
|
Condensed
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
March
31,
|
December
31,
|
(In RMB thousands
except for share, per share (or ADS) information)
|
|
|
2015
|
2014
|
2014
|
|
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Revenues:
|
|
|
|
|
|
Online
marketing services
|
|
|
12,518,757
|
9,378,318
|
13,844,607
|
Other
services
|
|
|
205,859
|
118,234
|
205,622
|
Total
revenues
|
|
|
12,724,616
|
9,496,552
|
14,050,229
|
|
|
|
|
|
|
Operating costs
and expenses:
|
|
|
|
|
|
Cost of
revenues (note 1, 2)
|
|
|
(5,326,103)
|
(3,837,340)
|
(5,438,351)
|
Selling,
general and administrative (note 2)
|
|
|
(2,956,867)
|
(2,008,890)
|
(3,524,371)
|
Research and
development (note 2)
|
|
|
(2,286,333)
|
(1,276,650)
|
(2,135,506)
|
Total
operating costs and expenses
|
|
|
(10,569,303)
|
(7,122,880)
|
(11,098,228)
|
|
|
|
|
|
|
Operating
profit
|
|
|
2,155,313
|
2,373,672
|
2,952,001
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
Interest
income
|
|
|
561,213
|
419,495
|
573,154
|
Interest
expense
|
|
|
(199,128)
|
(121,784)
|
(183,575)
|
Foreign
exchange income, net
|
|
|
8,992
|
97,302
|
22,873
|
Loss from
equity method investments
|
|
|
(7,979)
|
(5,603)
|
(5,867)
|
Other income,
net
|
|
|
90,875
|
77,526
|
93,200
|
Total other
income
|
|
|
453,973
|
466,936
|
499,785
|
|
|
|
|
|
|
Income
before income taxes
|
|
|
2,609,286
|
2,840,608
|
3,451,786
|
|
|
|
|
|
|
Income
taxes
|
|
|
(541,000)
|
(430,296)
|
(538,493)
|
|
|
|
|
|
|
Net
income
|
|
|
2,068,286
|
2,410,312
|
2,913,293
|
Less: net
loss attributable to noncontrolling interests
|
|
|
(380,994)
|
(124,880)
|
(315,776)
|
Net income
attributable to Baidu, Inc.
|
|
|
2,449,280
|
2,535,192
|
3,229,069
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
for Class A and Class B ordinary shares:
|
|
|
|
|
|
Net income
attributable to Baidu, Inc.-Basic
|
|
|
67.86
|
72.36
|
90.51
|
Net income
attributable to Baidu, Inc.-Diluted
|
|
|
67.57
|
72.14
|
90.06
|
|
|
|
|
|
|
Earnings per ADS (1
Class A ordinary share equals 10 ADSs ):
|
|
|
|
|
|
Net income
attributable to Baidu, Inc.-Basic
|
|
|
6.79
|
7.24
|
9.05
|
Net income
attributable to Baidu, Inc.-Diluted
|
|
|
6.76
|
7.21
|
9.01
|
|
|
|
|
|
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
|
|
Basic
|
|
|
35,112,842
|
35,035,287
|
35,093,674
|
Diluted
|
|
|
35,267,371
|
35,143,937
|
35,269,030
|
|
|
|
|
|
|
(1) Cost of
revenues are detailed as follows:
|
|
|
|
|
|
Sales tax and
surcharges
|
|
|
(948,209)
|
(699,370)
|
(1,029,267)
|
Traffic
acquisition costs
|
|
|
(1,721,629)
|
(1,181,803)
|
(1,887,301)
|
Bandwidth
costs
|
|
|
(849,628)
|
(646,087)
|
(748,604)
|
Depreciation
costs
|
|
|
(582,437)
|
(430,497)
|
(553,572)
|
Operational
costs
|
|
|
(607,068)
|
(479,542)
|
(616,228)
|
Content
costs
|
|
|
(608,420)
|
(393,639)
|
(592,008)
|
Share-based
compensation expenses
|
|
|
(8,712)
|
(6,402)
|
(11,371)
|
Total cost of
revenues
|
|
|
(5,326,103)
|
(3,837,340)
|
(5,438,351)
|
|
|
|
|
|
|
(2) Includes
share-based compensation expenses as follows:
|
|
|
|
|
|
Cost of
revenues
|
|
|
(8,712)
|
(6,402)
|
(11,371)
|
Selling,
general and administrative
|
|
|
(117,855)
|
(76,947)
|
(149,395)
|
Research and
development
|
|
|
(164,509)
|
(85,618)
|
(178,261)
|
Total
share-based compensation expenses
|
|
|
(291,076)
|
(168,967)
|
(339,027)
|
|
|
|
|
|
|
Baidu,
Inc.
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
March
31
|
December
31
|
(In RMB thousands
except for number of shares and per share data)
|
2015
|
2014
|
|
|
Unaudited
|
Audited
|
|
|
|
|
ASSETS
|
|
|
|
Current assets:
|
|
|
|
Cash and cash
equivalents
|
|
13,218,042
|
13,852,725
|
Restricted
cash
|
|
530,975
|
413,010
|
Short-term
investments
|
|
44,820,229
|
43,818,037
|
Accounts
receivable, net
|
|
3,534,577
|
3,664,447
|
Amounts due
from related parties
|
|
50
|
50
|
Deferred tax
assets, net
|
|
826,494
|
684,952
|
Other assets,
current
|
|
3,554,575
|
3,407,427
|
Total current assets
|
|
66,484,942
|
65,840,648
|
|
|
|
|
Non-current assets:
|
|
|
|
Fixed assets,
net
|
|
9,153,791
|
8,705,364
|
Intangible
assets, net
|
|
3,547,426
|
3,574,359
|
Goodwill
|
|
17,435,437
|
17,418,895
|
Long-term
investments, net
|
|
4,713,572
|
2,878,922
|
Deferred tax
assets, net
|
|
257,928
|
259,127
|
Other assets,
non-current
|
|
1,149,242
|
984,193
|
Total non-current assets
|
|
36,257,396
|
33,820,860
|
|
|
|
|
Total
assets
|
|
102,742,338
|
99,661,508
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current liabilities:
|
|
|
|
Short-term
loans
|
|
95,461
|
93,000
|
Accounts payable and
accrued liabilities
|
|
13,460,619
|
12,964,893
|
Customer advances and
deposits
|
|
4,139,866
|
4,296,440
|
Deferred
revenue
|
|
165,731
|
164,809
|
Deferred
income
|
|
519,543
|
518,543
|
Long-term loans,
current portion
|
|
2,167,543
|
2,167,405
|
Capital lease
obligation
|
|
53,039
|
57,346
|
Due to Related
Parties, Current
|
|
4,029
|
8,385
|
Total current liabilities
|
|
20,605,831
|
20,270,821
|
|
|
|
|
Non-current liabilities:
|
|
|
|
Deferred
income
|
|
37,994
|
39,626
|
Long-term
loans
|
|
1,859,220
|
1,860,000
|
Notes
payable
|
|
21,640,730
|
21,647,023
|
Amounts due to
related parties
|
|
-
|
8
|
Deferred tax
liabilities
|
|
1,111,038
|
1,143,821
|
Capital lease
obligation
|
|
38,749
|
50,079
|
Other Non Current
Liabilities
|
|
167,690
|
144,542
|
Total non-current liabilities
|
|
24,855,421
|
24,885,099
|
|
|
|
|
Total
liabilities
|
|
45,461,252
|
45,155,920
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
1,960,106
|
1,894,502
|
|
|
|
|
Equity
|
|
|
|
Class A Ordinary
Shares, par value US$0.00005 per share,
825,000,000 shares authorized, and 27,613,315 shares
and
27,630,090 shares issued and outstanding as at December
31, 2014 and March 31, 2015
|
|
12
|
12
|
Class B Ordinary
Shares, par value US$0.00005 per share,
35,400,000 shares authorized, and 7,492,921 shares
and
7,492,921 shares issued and outstanding as at December
31, 2014 and March 31, 2015
|
|
3
|
3
|
Additional paid-in
capital
|
|
3,924,639
|
3,633,919
|
Retained
earnings
|
|
50,042,654
|
47,659,772
|
Accumulated other
comprehensive income (loss)
|
|
593,479
|
231,923
|
Total Baidu, Inc. shareholders' equity
|
|
54,560,787
|
51,525,629
|
Noncontrolling interests
|
|
760,193
|
1,085,457
|
Total
equity
|
|
55,320,980
|
52,611,086
|
|
|
|
|
Total liabilities,
redeemable noncontrolling interests, and equity
|
|
102,742,338
|
99,661,508
|
|
|
|
|
Reconciliations of
non-GAAP results of operations measures to the nearest comparable
GAAP measures (*) (in RMB thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2014
|
Three months ended
December 31, 2014
|
Three months ended
March 31, 2015
|
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
Operating
profit
|
2,373,672
|
168,967
|
2,542,639
|
2,952,001
|
339,027
|
3,291,028
|
2,155,313
|
291,076
|
2,446,389
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2014
|
Three months ended
December 31, 2014
|
Three months ended
March 31, 2015
|
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
Net income
attributable to Baidu, Inc.
|
2,535,192
|
168,967
|
2,704,159
|
3,229,069
|
339,027
|
3,568,096
|
2,449,280
|
291,076
|
2,740,356
|
|
|
|
|
|
|
|
|
|
|
(*) The adjustment is
only for share-based compensation.
|
|
|
|
|
|
|
Reconciliation
from net cash provided by operating activities to free cash flow
(in RMB thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
As a % of
|
Three months
ended
|
As a % of
|
Three months
ended
|
As a % of
|
|
March 31,
2014
|
total
revenues
|
December 31,
2014
|
total
revenues
|
March 31,
2015
|
total
revenues
|
Net cash provided
by operating activities
|
3,612,458
|
38%
|
5,342,027
|
38%
|
2,839,481
|
22%
|
|
|
|
|
|
|
|
Less: Capital
expenditures
|
(1,042,924)
|
-11%
|
(1,540,483)
|
-11%
|
(1,021,341)
|
-8%
|
|
|
|
|
|
|
|
Free cash
flow
|
2,569,534
|
27%
|
3,801,544
|
27%
|
1,818,140
|
14%
|
|
|
|
|
|
|
|
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SOURCE Baidu, Inc.