BEIJING, July 27, 2015 /PRNewswire/ -- Baidu, Inc.
(NASDAQ: BIDU), the leading Chinese language Internet search
provider, today announced its unaudited financial results for the
second quarter ended June 30,
2015[1].
"With Baidu's cornerstone search business delivering solid
growth and enjoying ample runway ahead, and with powerful mobile
gateways to leverage, we are ideally positioned to capture the O2O
e-commerce opportunity and build the 'Next Baidu'," said
Robin Li, chairman and CEO of Baidu.
"As we continue to connect people with services and enable closed
loop transactions, we are creating a transactional business model
as Baidu grows and evolves in the age of mobile."
"We delivered solid financial results in the second quarter of
2015, with our core search business exhibiting strong growth and
attractive profitability," said Jennifer
Li, CFO of Baidu. "With the solid base of our core search
business, coupled with upward momentum of our O2O e-commerce
initiatives, we continue to invest decisively in the 'Next Baidu'.
We are delighted by the progress we have achieved and are confident
that these investments will generate long term shareholder value.
Going forward, we will report the financial impact of the new
initiatives, namely O2O & Other[2] and iQiyi."
Second Quarter 2015 Operational Highlights
- Mobile search monthly active users (MAUs) were 629
million for the month of June 2015,
an increase of 24% year-over-year
- Mobile maps MAUs were 304 million for the month of
June 2015, an increase of 48%
year-over-year
- Gross merchandise value[3] (GMV) for O2O services
totaled RMB40.5 billion ($6.5 billion) for the second quarter of 2015, an
increase of 109% year-over-year
Second Quarter 2015 Financial Highlights
- Total revenues in the second quarter of 2015 were
RMB16.575 billion ($2.673 billion), a 38.3% increase from the
corresponding period in 2014. Mobile revenue represented 50% of
total revenues for the second quarter of 2015, flat from the first
quarter of 2015.
- Operating profit in the second quarter of 2015 was
RMB3.470 billion ($559.6 million), a 2.5% decrease from the
corresponding period in 2014. O2O & Other reduced
operating margins by 25.3 percentage points and iQiyi
reduced operating margins by 5.1 percentage points.
- Net income attributable to Baidu in the second quarter
of 2015 was RMB3.662 billion
($590.6 million), a 3.3% increase
from the corresponding period in 2014. Diluted earnings
attributable to Baidu per ADS for the second quarter of 2015
were RMB10.19 ($1.64); diluted earnings attributable to
Baidu per ADS excluding share-based compensation expenses
(non-GAAP) for the second quarter of 2015 were RMB11.19 ($1.81).
Second Quarter 2015 Results
Baidu reported total revenues of RMB16.575 billion ($2.673
billion) for the second quarter of 2015, representing a
38.3% increase from the corresponding period in 2014.
Online marketing revenues for the second quarter of 2015
were RMB16.227 billion ($2.617 billion), representing a 37.1% increase
from the corresponding period in 2014. Baidu had about 590,000
active online marketing customers[4] in the second quarter
of 2015, representing a 20.9% increase from the corresponding
period in 2014 and a 12.6% increase from the first quarter of 2015.
Revenue per online marketing customer for the second quarter
was approximately RMB27,400
($4,419), a 13.2% increase from the
corresponding period in 2014 and a 15.1% increase compared to the
first quarter of 2015.
Traffic acquisition cost as a component of cost of
revenues was RMB2.112 billion
($340.6 million), representing 12.7%
of total revenues, flat from the corresponding period in 2014 and
compared to 13.5% in the first quarter of 2015.
Bandwidth costs as a component of cost of revenues were
RMB896.2 million ($144.5 million), representing 5.4% of total
revenues, compared to 5.8% in the corresponding period in 2014.
Depreciation costs as a component of cost of revenues were
RMB616.1 million ($99.4 million), representing 3.7% of total
revenues, compared to 3.9% in the corresponding period in 2014.
Content costs as a component of cost of revenues were
RMB840.2 million ($135.5 million), representing 5.1% of total
revenues, compared to 3.0% in the corresponding period in 2014 and
4.8% in the previous quarter. The year-over-year increase was
mainly due to iQiyi's increased content costs.
Selling, general and administrative expenses were
RMB3.890 billion ($627.4 million), representing an increase of
81.0% from the corresponding period in 2014, primarily due to an
increase in promotional spending for O2O.
Research and development expenses were RMB2.713 billion ($437.5
million), a 56.2% increase from the corresponding period in
2014. The increase was 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
RMB354.7 million ($57.2 million) in the second quarter of 2015,
compared to RMB220.6 million in the
corresponding period in 2014 and RMB291.1
million in the first quarter of 2015. The increase from the
corresponding period was a result of increased share grants to
employees.
Operating profit was RMB3.470
billion ($559.6 million),
representing a 2.5% decrease from the corresponding period in 2014.
Operating profit excluding share-based compensation expenses
(non-GAAP) was RMB3.824 billion
($616.8 million), a 1.2% increase
from the corresponding period in 2014.
Income tax expense was RMB763.0
million ($123.1 million),
compared to an income tax expense of RMB605.6 million in the corresponding period in
2014. The effective tax rate for the second quarter of 2015 was
19.0% compared to 15.4% for the corresponding period in 2014 and
20.7% in the first quarter of 2015.
Net income attributable to Baidu was RMB3.662 billion ($590.6
million), representing a 3.3% increase from the
corresponding period in 2014. Basic and diluted earnings per
ADS for the second quarter of 2015 amounted to RMB10.22 ($1.65)
and RMB10.19 ($1.64), respectively.
Net income attributable to Baidu excluding share-based
compensation expenses (non-GAAP) was RMB4.017 billion ($647.9
million), a 6.6% increase from the corresponding period in
2014. Basic and diluted earnings per ADS excluding share-based
compensation expenses (non-GAAP) for the second quarter of 2015
amounted to RMB11.23 ($1.81) and RMB11.19 ($1.81),
respectively.
As of June 30, 2015, the Company
had cash, cash equivalents and short-term investments of
RMB74.959 billion ($12.090 billion). Net operating cash
inflow for the second quarter of 2015 was RMB5.727 billion ($923.8
million). Capital expenditures for the second quarter
of 2015 were RMB923.1 million
($148.9 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 RMB4.707 billion ($759.1 million) for the second quarter of 2015,
representing a 4.7% increase from the corresponding period in
2014.
Outlook for Third Quarter 2015
Baidu currently expects to generate total revenues in an amount
ranging from RMB18.170 billion
($2.931 billion) to RMB18.580 billion
($2.997 billion) for the third
quarter of 2015, representing a 34.4% to 37.4% 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 July 27, 2015, U.S. Eastern Time (8:00
AM on July 28, 2015, Beijing/Hong Kong Time).
Dial-in details for the earnings conference call are as
follows:
International:
|
+65 67135090
|
China
|
4006208038
|
|
|
US:
|
+1 8456750437
|
UK:
|
+44 2030598139
|
Hong Kong:
|
+852 30186771
|
|
|
Passcode for all
regions:
|
79830113
|
A replay of the conference call may be accessed by phone at the
following number until August 4, 2015:
International:
|
+61 2 8199 0299
|
|
|
Passcode:
|
79830113
|
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 way for people to find information. 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 third 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 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.
For investor and media inquiries, please contact:
Sharon Ng
Baidu, Inc.
Tel: +86-10-5992-4958
Email: ir@baidu.com
[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 RMB6.2000 to US$1.00, the effective noon buying rate
as of June 30, 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]
|
O2O (online to
offline) & Other includes Qunar, Baidu Nuomi, Baidu Takeout
Delivery, Baidu Maps, Baidu Connect, Baidu Wallet and other
products.
|
[3]
|
Gross merchandise
value (GMV) for O2O services is defined as GMV generated by Qunar,
Baidu Nuomi and Baidu Takeout Delivery. GMV generated by Qunar is
defined as the value of confirmed orders of products and services,
excluding cancellations. GMV generated by Baidu Nuomi and Baidu
Takeout Delivery is defined as the value of confirmed orders of
products and services, regardless of whether the service has been
consumed or delivered.
|
[4]
|
The number of active
online marketing customers and revenue per online active customer
exclude those associated with our group-buying and takeout delivery
related businesses for consistency with previous
reporting.
|
Baidu,
Inc.
|
Condensed
Consolidated Statements of Income
|
|
|
|
Three Months
Ended
|
|
|
|
June
30,
|
June
30,
|
March
31,
|
(In RMB thousands
except for share, per share (or ADS) information)
|
|
|
2015
|
2014
|
2015
|
|
|
|
Unaudited
|
Unaudited
|
Unaudited
|
Revenues:
|
|
|
|
|
|
Online
marketing services
|
|
|
16,227,496
|
11,836,858
|
12,518,757
|
Other
services
|
|
|
347,742
|
148,924
|
205,859
|
Total
revenues
|
|
|
16,575,238
|
11,985,782
|
12,724,616
|
|
|
|
|
|
|
Operating costs
and expenses:
|
|
|
|
|
|
Cost of
revenues (note 1, 2)
|
|
|
(6,503,020)
|
(4,541,422)
|
(5,326,103)
|
Selling,
general and administrative (note 2)
|
|
|
(3,889,844)
|
(2,148,874)
|
(2,956,867)
|
Research and
development (note 2)
|
|
|
(2,712,681)
|
(1,737,216)
|
(2,286,333)
|
Total
operating costs and expenses
|
|
|
(13,105,545)
|
(8,427,512)
|
(10,569,303)
|
|
|
|
|
|
|
Operating
profit
|
|
|
3,469,693
|
3,558,270
|
2,155,313
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
Interest
income
|
|
|
612,523
|
463,802
|
561,213
|
Interest
expense
|
|
|
(213,522)
|
(146,045)
|
(199,128)
|
Foreign
exchange income, net
|
|
|
5,396
|
81
|
8,992
|
Loss from
equity method investments
|
|
|
(2,417)
|
(5,501)
|
(7,979)
|
Other income,
net
|
|
|
142,382
|
66,888
|
90,875
|
Total other
income
|
|
|
544,362
|
379,225
|
453,973
|
|
|
|
|
|
|
Income
before income taxes
|
|
|
4,014,055
|
3,937,495
|
2,609,286
|
|
|
|
|
|
|
Income
taxes
|
|
|
(762,951)
|
(605,614)
|
(541,000)
|
|
|
|
|
|
|
Net
income
|
|
|
3,251,104
|
3,331,881
|
2,068,286
|
Less: net
loss attributable to noncontrolling interests
|
|
|
(410,909)
|
(214,815)
|
(380,994)
|
Net income
attributable to Baidu, Inc.
|
|
|
3,662,013
|
3,546,696
|
2,449,280
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
for Class A and Class B ordinary shares:
|
|
|
|
|
|
Net income
attributable to Baidu, Inc.-Basic
|
|
|
102.23
|
101.19
|
67.86
|
Net income
attributable to Baidu, Inc.-Diluted
|
|
|
101.86
|
100.91
|
67.57
|
|
|
|
|
|
|
Earnings per ADS (1
Class A ordinary share equals 10 ADSs):
|
|
|
|
|
|
Net income
attributable to Baidu, Inc.-Basic
|
|
|
10.22
|
10.12
|
6.79
|
Net income
attributable to Baidu, Inc.-Diluted
|
|
|
10.19
|
10.09
|
6.76
|
|
|
|
|
|
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
|
|
Basic
|
|
|
35,141,734
|
35,050,662
|
35,112,842
|
Diluted
|
|
|
35,268,366
|
35,148,579
|
35,267,371
|
|
|
|
|
|
|
(1) Cost of
revenues are detailed as follows:
|
|
|
|
|
|
Sales tax and
surcharges
|
|
|
(1,175,617)
|
(872,086)
|
(948,209)
|
Traffic
acquisition costs
|
|
|
(2,111,734)
|
(1,517,128)
|
(1,721,629)
|
Bandwidth
costs
|
|
|
(896,156)
|
(700,473)
|
(849,628)
|
Depreciation
costs
|
|
|
(616,072)
|
(461,927)
|
(582,437)
|
Operational
costs
|
|
|
(850,503)
|
(627,052)
|
(607,068)
|
Content
costs
|
|
|
(840,223)
|
(354,294)
|
(608,420)
|
Share-based
compensation expenses
|
|
|
(12,715)
|
(8,462)
|
(8,712)
|
Total cost of
revenues
|
|
|
(6,503,020)
|
(4,541,422)
|
(5,326,103)
|
|
|
|
|
|
|
(2) Includes
share-based compensation expenses as follows:
|
|
|
|
|
|
Cost of
revenues
|
|
|
(12,715)
|
(8,462)
|
(8,712)
|
Selling,
general and administrative
|
|
|
(130,418)
|
(97,030)
|
(117,855)
|
Research and
development
|
|
|
(211,592)
|
(115,060)
|
(164,509)
|
Total
share-based compensation expenses
|
|
|
(354,725)
|
(220,552)
|
(291,076)
|
|
|
|
|
|
|
Baidu,
Inc.
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
|
|
June
30
|
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
|
|
21,296,827
|
13,852,725
|
Restricted
cash
|
|
646,400
|
413,010
|
Short-term
investments
|
|
53,661,977
|
43,818,037
|
Accounts
receivable, net
|
|
3,804,167
|
3,664,447
|
Amounts due
from related parties
|
|
50
|
50
|
Deferred tax
assets, net
|
|
985,126
|
684,952
|
Other assets,
current
|
|
4,053,862
|
3,407,427
|
Total current assets
|
|
84,448,409
|
65,840,648
|
|
|
|
|
Non-current assets:
|
|
|
|
Fixed assets,
net
|
|
9,863,213
|
8,705,364
|
Intangible
assets, net
|
|
3,633,241
|
3,574,359
|
Goodwill
|
|
17,727,971
|
17,418,895
|
Long-term
investments, net
|
|
5,582,952
|
2,878,922
|
Deferred tax
assets, net
|
|
258,011
|
259,127
|
Other assets,
non-current
|
|
1,197,292
|
893,952
|
Total non-current assets
|
|
38,262,680
|
33,730,619
|
|
|
|
|
Total
assets
|
|
122,711,089
|
99,571,267
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current liabilities:
|
|
|
|
Short-term
loans
|
|
49,650
|
93,000
|
Accounts payable and
accrued liabilities
|
|
16,057,112
|
12,964,893
|
Customer advances and
deposits
|
|
4,691,757
|
4,296,440
|
Deferred
revenue
|
|
313,442
|
164,809
|
Deferred
income
|
|
522,625
|
518,543
|
Long-term loans,
current portion
|
|
2,171,870
|
2,167,405
|
Capital lease
obligation
|
|
48,768
|
57,346
|
Due to Related
Parties, Current
|
|
1,521
|
8,385
|
Total current liabilities
|
|
23,856,745
|
20,270,821
|
|
|
|
|
Non-current liabilities:
|
|
|
|
Deferred
income
|
|
42,413
|
39,626
|
Long-term
loans
|
|
1,861,890
|
1,860,000
|
Notes
payable
|
|
31,795,845
|
21,556,782
|
Amounts due to
related parties
|
|
-
|
8
|
Deferred tax
liabilities
|
|
1,107,326
|
1,143,821
|
Capital lease
obligation
|
|
27,159
|
50,079
|
Other Non Current
Liabilities
|
|
170,337
|
144,542
|
Total non-current liabilities
|
|
35,004,970
|
24,794,858
|
|
|
|
|
Total
liabilities
|
|
58,861,715
|
45,065,679
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
2,032,524
|
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
27,657,626 shares
issued and outstanding as at December
31, 2014 and June 30,
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 June 30,
2015
|
|
3
|
3
|
Additional paid-in
capital
|
|
5,497,383
|
3,633,919
|
Retained
earnings
|
|
53,619,055
|
47,659,772
|
Accumulated other
comprehensive income (loss)
|
|
1,028,775
|
231,923
|
Total Baidu, Inc. shareholders' equity
|
|
60,145,228
|
51,525,629
|
Noncontrolling interests
|
|
1,671,622
|
1,085,457
|
Total
equity
|
|
61,816,850
|
52,611,086
|
|
|
|
|
Total liabilities,
redeemable noncontrolling interests, and equity
|
|
122,711,089
|
99,571,267
|
|
|
|
|
Reconciliations of
non-GAAP results of operations measures to the nearest comparable
GAAP measures (*) (in RMB thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2014
|
Three months ended
March 31, 2015
|
Three months ended
June 30, 2015
|
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
GAAP
Result
|
Adjustment
|
Non-GAAP
Results
|
Operating
profit
|
3,558,270
|
220,552
|
3,778,822
|
2,155,313
|
291,076
|
2,446,389
|
3,469,693
|
354,725
|
3,824,418
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2014
|
Three months ended
March 31, 2015
|
Three months ended
June 30, 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.
|
3,546,696
|
220,552
|
3,767,248
|
2,449,280
|
291,076
|
2,740,356
|
3,662,013
|
354,725
|
4,016,738
|
|
|
|
|
|
|
|
|
|
|
(*) 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
|
|
June 30,
2014
|
total
revenues
|
March 31,
2015
|
total
revenues
|
June 30,
2015
|
total
revenues
|
Net cash provided
by operating activities
|
4,127,577
|
34%
|
2,839,481
|
22%
|
5,727,404
|
35%
|
|
|
|
|
|
|
|
Less: Capital
expenditures
|
(863,717)
|
-7%
|
(1,021,341)
|
-8%
|
(923,146)
|
-6%
|
|
|
|
|
|
|
|
Free cash
flow
|
3,263,860
|
27%
|
1,818,140
|
14%
|
4,804,258
|
29%
|
|
|
|
|
|
|
|
Logo - http://photos.prnewswire.com/prnh/20081103/BAIDULOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/baidu-announces-second-quarter-2015-results-300119097.html
SOURCE Baidu, Inc.