Baidu announces fourth quarter and fiscal year 2020 results

Baidu, Inc. (NASDAQ: BIDU) ("Baidu" or the "Company"), a leading AI company with strong Internet foundation, today announced unaudited financial results[1] for the fourth quarter and fiscal year ended December 31, 2020.

"Baidu ended 2020 on a solid note with our business benefiting from improving macroeconomic environment and the digitalization of industrial Internet. Our focus on innovation through technology is paying off with Baidu Core non-marketing revenue growing 52% year over year in the fourth quarter," said Robin Li, Co-founder and CEO of Baidu. "As we enter 2021, Baidu is well positioned as a leading AI company with strong Internet foundation to seize the huge market opportunities in cloud services, autonomous driving, smart transportation, and other AI opportunities. We also hope to capitalize on our huge Internet reach with more non-marketing services."

"Baidu revenue reached US$16.4 billion with adjusted EBITDA reaching US$4.2 billion in 2020. Despite an unprecedented year, our business returned to growth and our profits were solid in the fourth quarter," said Herman Yu, CFO of Baidu. "Through years of investment in research, AI chip design, developer community, patents and talent development, we are turning AI into innovative use cases. For example, Baidu AI cloud differentiating with AI solutions grew 67% year over year in Q4, reaching an annualized run rate of US$2.0 billion. We will continue to invest heavily in technology to optimize Baidu's long-term growth and pursue our mission to make the world simpler through technology."

Fourth Quarter and Fiscal Year 2020 Financial Highlights

Other Highlights

Corporate

The developer community on Baidu Open AI Platform has reached 2.65 million, making it the largest among Chinese Companies, based on a commissioned research. Having a large developer community helps Baidu improve our AI capabilities and better understand the AI usage trend for the industries that Baidu serves.

Baidu holds the largest portfolio of AI patents and patent applications in China, according to CICS-CERT, a research arm of the Ministry of Industry and Information Technology.

Baidu recently released four series of ESG report, detailing its policy on anti-corruption, non-discrimination, privacy protection, data security, talent empowerment and low carbon emission commitment (for more information, please see http://esg.baidu.com/en/index.html).

Baidu's efforts in smart transportation and autonomous driving, including enabling electric vehicles and robotaxis, decrease carbon emission and improve traffic efficiency, road safety and air pollution, which support green energy and environment.

Baidu will hold an extraordinary general meeting on March 1, 2021 (for more information, please see https://ir.baidu.com/ir-calendar for more information).

Baidu returned US$581 million to shareholders in Q4 2020, increasing the 2020 share repurchase to US$1.9 billion, compared to US$0.7 billion in 2019. In December, the Company upsized its 2020 Share Repurchase Program to US$4.5 billion, of which US$2.8 billion remains available for repurchase through December 31, 2022.

AI Cloud

Baidu has been ranked No. 1 in China's AI public cloud market, according to the latest IDC report for 1H 2020, marking the third time that Baidu has topped the list.

Baidu AI call center solution, powered by Baidu Brain to handle large-scale customer calls with conversational AI, is becoming an industry standard to improve call service quality and operational efficiency. Its first key customer, a major telecom operator, has made two repeat purchases of the AI solution, and the AI solution is being adopted by customers across multiple industries, including airline, financial services, energy and automobile.

Baidu has completed Phase I of the smart transportation project in Guangzhou, which includes the deployment of Apollo V2X smart road infrastructure and Apollo Mobility as a Service (MaaS). The smart transportation project covers 102 intersections in the Huangpu district of Guangzhou, and commercial vehicles entering the vicinity are installing DuerOS powered rearview mirrors, to enable traffic violation enforcement, even if the license plate of a violating vehicle is covered by mud. Apollo MaaS allows local commuters to order Apollo robotaxi and robobus from Baidu App and Baidu Maps (as public transportation) and enables traffic authorities to monitor and prioritize the city's transport services.

Apollo's strategic partnerships in smart transportation with Beijing, Guangzhou, Shanghai and Chongqing, to name a few, are becoming an important milestone for modern cities, serving as the "transportation brain" to enable traffic authorities to better manage and improve traffic efficiency, road safety and air pollution.

At the 2020 Annual ABC Summit, Baidu announced its plan to begin mass production of Kunlun II AI chip later this year, for use in search, industrial AI and smart transportation.

Intelligent Driving

Apollo robotaxi and robobus fleets have serviced over 210,000 rides as of December 2020.

Baidu receives the first driverless testing permit in China and becomes the first Chinese company to receive driverless testing permit both in California and China, bringing Apollo's total autonomous driving licenses in China to 199, reflecting the geographic reach of Apollo's testing scenarios.

Apollo has been named the top Chinese autonomous driving company, leading its peers across all testing categories for the third consecutive year, according to the 2020 Beijing Autonomous Vehicles Road Test Report.

Apollo Self Driving (ASD) is gaining momentum, having signed strategic partnerships with 10 leading local and multinational automakers on services, such as high definition (HD) Maps and automated valet parking (AVP), to power their new passenger vehicles. Apollo autonomous navigation pilot (ANP) has recently began accepting orders, which comes timely with MIIT, China's transportation agency, recently releasing draft regulation to allow highway testing of autonomous driving.

Baidu plans to form an electric vehicle company and use its intelligent driving capabilities to power next generation passenger vehicles. Baidu has entered into a strategic partnership with leading automaker Zhejiang Geely Holding Group, owner of the Volvo and Geely Auto brands, to contribute its expertise in automobile design and manufacturing.

Smart Assistant

DuerOS monthly voice queries reached 6.2 billion and voice queries on Xiaodu devices reached 3.7 billion in December 2020, up 66% year over year.

DuerOS skills store now offers over 4,400 skills in wide ranging genres, and its developer community has reached 47,000.

Xiaodu Smart Display ranked No.1 in smart display shipments globally in Q3 2020, according to market research firms IDC, Strategy Analytics and Canalys.

Mobile Ecosystem

Baidu has strengthened its strong Internet foundation with Baidu App monthly active users (MAUs) reaching 544 million and daily logged in users reaching over 70%, up 18 points from a year ago, in December 2020.

Baidu's AI building blocks are helping creators, publishers and service providers better engage with users and perform user life-time management:

BJH publisher accounts grew 48% to reached 3.8 million and creators on BJH almost tripled from a year ago. Average daily live streaming sessions on knowledge-centric topics grew 3.5 folds sequentially in December 2020;

Smart Mini Program MAUs reached 414 million, while the number of SMPs grew 124% year over year in December 2020; and

Revenue from Managed Page reached 1/3 of Baidu Core's online marketing revenue, up from under 24% a year ago. Over 300,000 Managed Page customers have adopted Baidu marketing cloud, to improve user engagement and conversion.

iQIYI

iQIYI subscribers reached 101.7 million in December 2020, further strengthening iQIYI's foundation to produce entertainment blockbuster originals.