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].

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"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,                    12           12
    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

    Class B Ordinary Shares, par value US$0.00005 per share,                     3            3
    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

    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                                                            2,535,192                                 168,967                                        2,704,159             3,229,069            339,027                  3,568,096             2,449,280            291,076                  2,740,356
    attributable to Baidu, Inc.


    (*) 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.