Baidu Announces First Quarter 2022 Results

Author: Baidu, Inc. / 2023-07-24 00:26 / Source: Baidu, Inc.

Baidu Announces First Quarter 2022 Results

BEIJING,May 26,2022 --Baidu,Inc. (NASDAQ: BIDU and HKEX: 9888) ("Baidu" or the "Company"),a leading AI company with strong Internet foundation,today announced its unaudited financial results for the first quarter ended March 31,2022.

"Baidu delivered solid first quarter results,especially with regard to our cloud and intelligent driving businesses. Baidu AI Cloud reported another quarter of strong revenue growth and Apollo Go was granted the first permit in China to provide driverless ride-hailing services on public roads in Beijing," said Robin Li,Co-founder and CEO of Baidu. "Since mid-March,our business has been negatively impacted by the recent COVID-19 resurgence in China. Although challenges related to the virus continue to pressure our near term business operations,we remain confident that our new AI businesses will boost the long-term growth of Baidu and contribute to China's innovation-driven economy and sustainable development."

"Revenues from Baidu Core remained healthy with non-ad revenues increasing by 35% year over year,driven by Baidu AI Cloud,which grew 45% year over year in the quarter," said Rong Luo,CFO of Baidu. "Looking ahead,we remain committed to quality revenue growth and an enduring business model. In addition,we will further enhance our overall operational efficiency to drive long-term growth."

First Quarter 2022 Financial Highlights[1]

Baidu,Inc.

(In millions except per

ADS,unaudited)

2021

2022

YOY

QOQ

RMB

US$

Total revenues

28,134

33,088

28,411

4,482

(14%)

Operating income

2,789

1,958

2,601

410

(7%)

33%

Operating income (non-GAAP) [2]

4,362

4,307

3,996

630

(8%)

(7%)

Net income (loss) to Baidu

25,653

1,715

(885)

(140)

Net income to Baidu (non-GAAP) [2]

4,297

4,084

3,879

612

(10%)

(5%)

Diluted earnings (loss) per ADS

73.76

4.51

(2.87)

(0.45)

Diluted earnings per ADS (non-GAAP) [2]

12.38

11.60

11.22

1.77

(9%)

(3%)

Adjusted EBITDA [2]

5,900

5,757

5,499

867

(7%)

(4%)

Adjusted EBITDA margin

21%

17%

19%

Baidu Core

(In millions,unaudited)

2021

2022

YOY

QOQ

RMB

US$

Total revenues

20,483

25,978

21,378

3,372

(18%)

Operating income

3,847

2,524

398

(34%)

(15%)

Operating income (non-GAAP) [2]

5,064

4,847

3,686

581

(27%)

(24%)

Net income (loss) to Baidu Core

26,354

2,656

(963)

(152)

Net income to Baidu Core (non-GAAP) [2]

4,870

4,625

3,804

600

(22%)

(18%)

Adjusted EBITDA [2]

6,487

6,210

5,106

805

(21%)

(18%)

Adjusted EBITDA margin

32%

24%

[1] Unless otherwise noted,RMB to USD was converted at an exchange rate of RMB6.3393 as of March 31,2022,as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader.

[2] Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also "Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures" for more details).

Operational Highlights

Corporate

Baidu released its annual ESG Report in May 2022,which details Baidu's ESG policies and sustainability initiatives (http://esg.baidu.com/en/esg_download.html).

AI Cloud

PaddlePaddle developer community has grown to 4.77 million and has served 180,000 businesses and created 560,000 models,as of May 20,2022.

Baidu ACE smart transportation has been adopted by 41 cities,up from 16 cities a year ago,based on contract value of over RMB10 million,as of the end of the first quarter of 2022.

Intelligent Driving

Baidu received a nomination letter from Dongfeng Motor,a Top 3 domestic automaker,in April 2022,indicating that Dongfeng Motor intends to adopt Apollo Self Driving (ANP,AVP,HD Map) in one of its popular models. This followed the nomination letter from BYD earlier this year.

On April 28th 2022,Apollo Go was granted the permits to provide driverless ride hailing services on public roads of the Yizhuang region of Beijing. Apollo also received the first permits in Chongqing to conduct driverless testing on May 20th,2022.

Apollo Go provided 196K rides in the first quarter of 2022.

Apollo Go is now available in ten cities,including Beijing,Shanghai,Guangzhou,Shenzhen,Chongqing,Changsha,Cangzhou,Yangquan,Wuzhen Water Town in Jiaxing and Wuhan. Apollo Go expanded into Wuzhen Water Town in Jiaxing on March 26,2022 and Wuhan on May 10,2022.

Other Growth Initiatives

Xiaodu again ranked No.1 in smart display shipments globally for 2021,according to Strategy Analytics and Canalys. Xiaodu continues to be ranked No.1 in smart speaker shipments in China for 2021,according to Strategy Analytics,IDC and Canalys.

Mobile Ecosystem

In March,Baidu App's MAUs reached 632 million,up 13% year over year,and daily logged in users reached 83%.

In March,Baidu Smart Mini Program ("SMPs") MAUs reached 508 million,up 22% year over year,and the number of SMPs grew by 26% year over year.

Revenue from Managed Page grew by 31% and reached 47% of Baidu Core's online marketing revenue in the first quarter of 2022.

iQIYI

iQIYI's average daily number of total subscribing members for the quarter was 101 million,compared to 105 million for the first quarter of 2021 and 97 million for the fourth quarter of 2021.

First Quarter 2022 Financial Results

Total revenues were RMB 28.4 billion ($4.48 billion),increasing 1% year over year.

Revenue from Baidu Core was RMB 21.4 billion ($3.37 billion),increasing 4% year over year; online marketing revenue was RMB 15.7 billion ($2.47 billion),decreasing 4% year over year,and non-online marketing revenue was RMB 5.7 billion ($903 million),up 35% year over year,driven by cloud and other AI-powered businesses.

Revenue from iQIYI was RMB 7.3 billion ($1.15 billion),decreasing 9% year over year.

Cost of revenues was RMB 15.5 billion ($2.45 billion),increasing 4% year over year,primarily due to an increase in cost of goods sold,traffic acquisition costs,bandwidth costs,and other costs related to new AI business,offset by a decrease in content costs.

Selling,general and administrative expenses were RMB 4.7 billion ($735 million),decreasing 11% year over year,primarily due to a decrease in channel spending,promotional marketing and expected credit losses.

Research and development expense was RMB 5.6 billion ($885 million),increasing 10% year over year,primarily due to an increase in personnel related expense.

Operating income was RMB 2.6 billion ($410 million). Baidu Core operating income was RMB 2.5 billion ($398 million),and Baidu Core operating margin was 12%. Non-GAAP operating income was RMB 4.0 billion ($630 million). Non-GAAP Baidu Core operating income was RMB 3.7 billion ($581 million),and non-GAAP Baidu Core operating margin was 17%.

Total other loss,net was RMB 3.0 billion ($466 million),which mainly included a fair value loss of RMB 3.0 billion from long-term investments. A significant portion of long-term investments,including but not limited to investments in equity securities of public and private companies,private equity funds and digital assets,is subject to quarterly fair value adjustments,which may contribute to net income volatility in future periods.

Income tax expense was RMB 391 million ($62 million),decreasing 75% year over year,primarily due to a decrease in profit before tax and an increase in deduction on certain expenses that were previously considered non-deductible.

Net loss attributable to Baidu was RMB 885 million ($140 million),and diluted loss per ADS was RMB 2.87 ($0.45). Net loss attributable to Baidu Core was RMB 963 million ($152 million). Non-GAAP net income attributable to Baidu was RMB 3.9 billion ($612 million). Non-GAAP diluted earnings per ADS was RMB 11.22 ($1.77). Non-GAAP net income attributable to Baidu Core was RMB 3.8 billion ($600 million),and non-GAAP net margin for Baidu Core was 18%.

Adjusted EBITDA was RMB 5.5 billion ($867 million) and adjusted EBITDA margin was 19%. Adjusted EBITDA for Baidu Core was RMB 5.1 billion ($805 million) and adjusted EBITDA margin for Baidu Core was 24%.

As of March 31,cash,cash equivalents,restricted cash and short-term investments were RMB 191.0 billion ($30.13 billion),and cash,restricted cash and short-term investments excluding iQIYI were RMB 185.8 billion ($29.31 billion). Free cash flow was negative RMB 107 million ($17 million),and free cash flow excluding iQIYI was RMB 1.1 billion ($175 million).

Conference Call Information

Baidu'smanagement will hold an earnings conference call at 8.00AM on May 26,U.S. Eastern Time (8.00PM on May 26,Beijing Time).

Please register in advance of the conference call using the link provided below. Upon registering,you will be provided with participant dial-in numbers,Direct Event passcode and unique registrant ID by email.

For pre-registration,please click

http://apac.directeventreg.com/registration/event/3917105

It will automatically direct you to the registration page of "Baidu Q1 2022 Earnings Conference Call",where you may fill in your details for RSVP. If it requires you to enter a participant conference ID,please enter " 3917105".

In the 10 minutes prior to the call start time,you may use the conference access information (including dial-in number(s),Direct Event passcode and unique registrant ID) provided in the confirmation email that you have received following your pre-registration.

Additionally,a live and archived webcast of this conference call will be available athttp://ir.baidu.com.

About Baidu

Founded in 2000,Baidu's mission is to make the complicated world simpler through technology. Baidu is a leading AI company with strong Internet foundation,trading on NASDAQ under "BIDU" and HKEX under "9888". One Baidu ADS represents eight Class A ordinary shares.

Contacts

Investors Relations,Baidu,Inc.

Tel: +86-10-5992-8888

Email:ir@baidu.com

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,Baidu's and other parties' 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 announcements made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"),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 but not limited to 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: Baidu's growth strategies; its future business development,including development of new products and services; its ability to attract and retain users and customers; competition in the Chinese Internet search and newsfeed market; competition for online marketing customers; changes in the Company's revenues and certain cost or expense items as a percentage of its 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 and newsfeed 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 the Company's annual report on Form 20-F and other documents filed with the Securities and Exchange Commission,and announcements on the website of the Hong Kong Stock Exchange. 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.

Non-GAAP Financial Measures

To supplement Baidu's consolidated financial results presented in accordance with GAAP,Baidu uses the following non-GAAP financial measures: non-GAAP operating income (loss),non-GAAP operating margin,non-GAAP net income (loss) attributable to Baidu,non-GAAP net margin,non-GAAP diluted earnings per ADS,adjusted EBITDA,adjusted EBITDA margin and free cash flow. 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.

Baidu believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain items that may not be indicative of its recurring core business operating results,such as operating performance excluding non-cash charges or non-operating in nature. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its 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. The Company believes 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 certain items that have been and will continue to be for the foreseeable future a significant component in the Company's results of operations.These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently,limiting their usefulness as comparative measures to the Company's data.

Non-GAAP operating income represents operating income excluding share-based compensation expenses,amortization and impairment of intangible assets resulting from business combinations and contingent loss pertaining to legal proceeding in relation to former advertising agencies and iQIYI's non-recurring employee severance costs.

Non-GAAP net income attributable to Baidu represents net income attributable to Baidu excluding share-based compensation expenses,amortization and impairment of intangible assets resulting from business combinations,contingent loss pertaining to legal proceeding in relation to former advertising agencies,iQIYI's non-recurring employee severance costs,disposal gain or loss,impairment of long-term investments,fair value change of long-term investments,charitable donation from Baidu,adjusted for related income tax effects. Baidu's share of equity method investments for these non-GAAP reconciling items,amortization and impairment of intangible assets not on the investees' books,accretion of their redeemable non-controlling interests,and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per shares,adjusted for related income tax effects,are also excluded.

Non-GAAP diluted earnings per ADS represents diluted earnings per ADS calculated by dividing non-GAAP net income attributable to Baidu,by the weighted average number of ordinary shares expressed in ADS. Adjusted EBITDA represents operating income excluding depreciation,and share-based compensation expenses.

For more information on non-GAAP financial measures,please see the tables captioned "Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measure.

Baidu,Inc.

Condensed Consolidated Statements of Income (Loss)

(In millions except for per share (or ADS) information,unaudited)

Three Months Ended

March 31,

December 31,

March 31,

2021

2022

RMB

US$(2)

Revenues:

Online marketing services

18,094

20,723

16,929

2,670

Others

10,040

12,365

11,482

1,812

Total revenues

28,134

33,088

28,411

4,482

Costs and expenses:

Cost of revenues(1)

15,002

17,289

15,546

2,452

Selling,general and administrative(1)

5,245

6,451

4,656

735

Research and development(1)

5,098

7,390

5,608

885

Total costs and expenses

25,345

31,130

25,810

4,072

Operating income

2,789

1,958

2,601

410

Other income (loss):

Interest income

1,233

1,514

1,454

229

Interest expense

(823)

(873)

(710)

(112)

Foreign exchange income (loss),net

156

(27)

(11)

(2)

Share of losses from equity method investments

(151)

(773)

(408)

(64)

Others,net

23,362

566

(3,286)

(517)

Total other income (loss),net

23,777

407

(2,961)

(466)

Income (loss) before income taxes

26,566

2,365

(360)

(56)

Income tax expense

1,534

1,295

391

Net income (loss)

25,032

1,070

(751)

(118)

Net (loss) income attributable to noncontrolling interests

(621)

(645)

134

Net income (loss) attributable to Baidu

25,653

1,715

(885)

(140)

Earnings (loss) per ADS (1 ADS representing 8 Class A ordinary shares):

-Basic

76.10

4.57

(2.87)

(0.45)

-Diluted

73.76

4.51

(2.87)

(0.45)

Earnings (loss) per share for Class A and Class B ordinary shares:

-Basic

9.51

0.57

(0.36)

(0.06)

-Diluted

9.22

0.56

(0.36)

(0.06)

Weighted average number of Class A and Class B ordinary shares outstanding (in millions):

-Basic

2,692

2,780

2,767

-Diluted

2,777

2,816

2,767

(1) Includes share-based compensation expenses as follows:

Cost of revenues

134

Selling,general and administrative

471

533

377

Research and development

949

1,426

864

136

Total share-based compensation expenses

1,499

2,093

1,323

209

(2) All translations from RMB to U.S. dollars are made at a rate of RMB 6.3393 to US$1.00,the exchange rate in effect as of March 31,

2022 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

Baidu,Inc.

Condensed Consolidated Balance Sheets

(In millions,unaudited)

December 31,

2021

2022

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

36,850

36,832

5,810

Restricted cash

10,821

10,975

1,731

Short-term investments,net

143,243

143,172

22,585

Accounts receivable,net

9,981

9,671

1,526

Amounts due from related parties

1,368

903

142

Other current assets,net

11,052

9,950

1,569

Total current assets

213,315

211,503

33,363

Non-current assets:

Fixed assets,027

23,133

3,649

Licensed copyrights,net

7,258

7,096

1,119

Produced content,net

10,951

12,032

1,898

Intangible assets,net

1,689

1,556

245

Goodwill

22,605

3,566

Long-term investments,net

67,332

64,247

10,135

Amounts due from related parties

3,487

3,471

548

Deferred tax assets,net

2,372

2,670

421

Operating lease right-of-use assets

12,065

10,769

1,699

Other non-current assets

15,933

16,551

2,611

Total non-current assets

166,719

164,891

Total assets

380,034

375,633

59,254

LIABILITIES,REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

Current liabilities:

Short-term loans

4,168

4,442

701

Accounts payable and accrued liabilities

41,384

35,693

5,630

Customer deposits and deferred revenue

13,706

13,153

2,075

Deferred income

Long-term loans,current portion

Notes payable,current portion

10,505

10,457

1,650

Amounts due to related parties

1,764

1,553

245

Operating lease liabilities

2,862

2,804

442

Total current liabilities

74,488

68,189

10,757

Non-current liabilities:

Deferred income

129

147

Deferred revenue

223

234

Amounts due to related parties

3,268

3,243

512

Long-term loans

12,629

12,573

1,983

Notes payable

43,120

42,917

6,770

Convertible senior notes

12,652

13,238

2,088

Deferred tax liabilities

3,286

3,006

474

Operating lease liabilities

5,569

5,149

812

Other non-current liabilities

718

1,707

269

Total non-current liabilities

81,594

82,214

12,968

Total liabilities

156,082

150,403

23,725

Redeemable noncontrolling interests

7,148

6,872

1,084

Equity

Total Baidu shareholders' equity

211,459

212,170

33,469

Noncontrolling interests

5,345

6,188

976

Total equity

216,804

218,358

34,445

Total liabilities,redeemable noncontrolling interests,and equity

380,254

Baidu,Inc.

Selected Information

(In millions,unaudited)

Three months ended

March 31,2021 (RMB)

Three months ended

December 31,2021 (RMB)

Three months ended

March 31,2022 (RMB)

Three months ended

March 31,2022 (US$)

Baidu

Core

iQIYI

Elim &

adj(2)

Baidu,

Inc.

Baidu

Core

iQIYI

Elim &

adj(2)

Baidu,

Inc.

Total revenues

20,483

7,968

(317)

28,134

25,978

7,389

(279)

33,088

21,378

7,277

(244)

28,411

3,372

1,148

(38)

4,482

YOY

(9%)

QOQ

(18%)

(2%)

(14%)

Costs and expenses:

Cost of revenues (1)

8,162

7,109

(269)

15,002

11,017

6,507

(235)

17,289

9,807

5,964

(225)

15,546

1,547

941

(36)

2,452

Selling,general and administrative (1)

4,048

1,201

(4)

5,245

5,377

1,093

(19)

6,451

3,913

745

(2)

4,656

617

118

735

Research and development (1)

4,426

672

5,098

6,626

764

7,134

474

5,608

810

885

Total costs and expenses

16,636

8,982

(273)

25,345

23,020

8,364

(254)

31,130

18,854

7,183

(227)

25,810

2,974

1,134

(36)

4,072

YOY

Cost of revenues

20%

(16%)

Selling,general and administrative

(3%)

(38%)

(11%)

Research and development

16%

(29%)

10%

Cost and expenses

13%

(20%)

Operating income (loss)

3,847

(1,014)

(44)

2,789

2,958

(975)

(25)

1,524

(17)

2,601

398

(2)

410

YOY

(34%)

(7%)

QOQ

(15%)

33%

Operating margin

19%

(13%)

10%

11%

(13%)

12%

Add: total other income (loss),999

(222)

23,777

1,161

(754)

407

(3,058)

(2,961)

(481)

(466)

Less: income tax expense

1,513

1,258

1,295

374

391

Less: net (loss) income attributable to NCI

(21)

(610)

(3)

(621)

205

(860)

(3)

(645)

(3)

134

(3)

Net income (loss) attributable to Baidu

26,354

(1,267)

566

25,653

2,656

(1,776)

835

1,715

(963)

169

(91)

(885)

(152)

(13)

(140)

YOY

QOQ

Net margin

129%

(16%)

91%

10%

(24%)

(5%)

(3%)

Non-GAAP financial measures:

Operating income (loss) (non-GAAP)

5,064

(658)

4,362

4,847

(515)

4,307

3,686

327

3,996

581

630

YOY

(27%)

(8%)

QOQ

(24%)

(7%)

Operating margin (non-GAAP)

25%

(8%)

16%

19%

(7%)

13%

17%

14%

Net income (loss) attributable to Baidu (non-

GAAP)

4,870

(1,021)

4,297

4,625

(1,001)

4,084

3,804

162

3,879

600

612

YOY

(22%)

(10%)

QOQ

(18%)

(5%)

Net margin (non-GAAP)

24%

(13%)

15%

18%

(14%)

12%

18%

14%

Adjusted EBITDA

6,487

(543)

5,900

6,210

(428)

5,757

5,106

410

5,499

805

867

YOY

(21%)

(7%)

QOQ

(18%)

(4%)

Adjusted EBITDA margin

32%

(7%)

21%

24%

(6%)

17%

24%

19%

(1) Includes share-based compensation as follows:

Cost of revenues

134

Selling,general and administrative

256

215

471

396

137

533

257

120

377

Research and development

866

949

1,343

1,426

804

864

127

136

Total share-based compensation

1,155

344

1,499

1,829

264

2,106

217

1,323

175

209

(2) Relates to intersegment eliminations and adjustments

(3) Relates to the net (loss) income attributable to iQIYI noncontrolling interests

Baidu,Inc.

Condensed Consolidated Statements of Cash Flows

(In millions,unaudited)

Three months ended

March 31,2021 (RMB)

December 31,2021 (RMB)

March 31,2022 (RMB)

March 31,2022 (US$)

Baidu

excl.

iQIYI

Baidu,

Inc.

Baidu

excl.

iQIYI

Baidu,

Inc.

Baidu excl.

iQIYI

Baidu,

Inc.

Net cash provided by (used in) operating

activities

5,467

(1,350)

4,117

5,809

(1,095)

4,714

3,039

(1,167)

1,872

479

(184)

295

Net cash (used in) provided by investing activities

(4,579)

(2,778)

(7,357)

(50)

2,097

2,047

(2,884)

(67)

(2,951)

(455)

(11)

(466)

Net cash provided by (used in) financing activities

18,018

611

18,629

(4,662)

(5,239)

(9,901)

(644)

2,046

1,402

(102)

323

221

Effect of exchange rate changes on cash,cash

equivalents and restricted cash

251

(29)

222

(589)

(74)

(663)

(183)

(4)

(187)

(28)

(1)

(29)

Net increase (decrease) in cash,cash

equivalents and restricted cash

19,157

(3,546)

15,611

508

(4,311)

(3,803)

(672)

808

136

(106)

127

Cash,cash equivalents and restricted cash

At beginning of period

25,599

10,941

36,540

44,088

7,386

51,474

44,596

3,075

47,671

7,035

485

7,520

At end of period

44,756

7,395

52,151

44,671

43,924

3,883

47,807

6,929

612

7,541

Net cash provided by (used in) operating

activities

5,872

479

(184)

295

Less: Capital expenditures

(1,438)

(61)

(1,499)

(4,213)

(24)

(4,237)

(1,928)

(51)

(1,979)

(304)

(8)

(312)

Free cash flow

4,029

(1,411)

2,618

1,596

(1,119)

477

1,111

(1,218)

(107)

175

(192)

(17)

Note: Baidu excl. iQIYI represents Baidu,Inc. minus iQIYI's consolidated cash flows.

Baidu,Inc.

Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures

(In millions except for per ADS information,2022 (US$)

Baidu

Core

iQIYI

Baidu,

Inc.

Baidu

Core

iQIYI

Baidu,

Inc.

Operating income (loss)

3,014)

2,958

(975)

1,524

2,601

398

410

Add: Share-based compensation expenses

1,155

344

1,829

264

2,106

217

1,323

175

209

Add: Amortization and impairment of intangible assets(1)

Add: iQIYI non-recurring employee severance costs(4)

179

Operating income (loss) (non-GAAP)

5,064

(658)

4,847

(515)

4,686

327

3,996

581

630

Add: Depreciation of fixed assets

1,423

115

1,538

1,363

1,450

1,420

1,503

224

237

Adjusted EBITDA

6,487

(543)

5,210

(428)

5,106

410

5,499

805

867

Net income (loss) attributable to Baidu

26,267)

25,776)

1,715

(963)

169

(885)

(152)

(140)

Add: Share-based compensation expenses

1,146

344

1,325

1,805

264

1,941

1,101

217

1,210

175

191

Add: Amortization and impairment of intangible assets(1)

Add: Disposal (gain) loss

(430)

(216)

(68)

(34)

Add: Impairment of long-term investments

752

139

824

598

183

690

109

Add: Fair value (gain) loss of long-term investments

(23,545)

(88)

(23,590)

(1,339)

(1,337)

3,037

(1)

3,037

479

Add: Reconciling items on equity method investments(2)

593

(20)

583

430

177

521

456

462

Add: Charitable donation from Baidu(3)

Add: iQIYI non-recurring employee severance costs(4)

179

Add: Tax effects on non-GAAP adjustments

267

(2)

265

216

(3)

213

(475)

(3)

(478)

(75)

Net income (loss) attributable to Baidu (non-GAAP)

4,021)

4,001)

4,804

162

3,879

600

612

Diluted earnings (loss) per ADS

73.76

4.51

(2.87)

(0.45)

Add: Accretion of the redeemable noncontrolling interests

0.14

0.36

0.31

0.05

Add: Non-GAAP adjustments to earnings per ADS

(61.52)

6.73

13.78

2.17

Diluted earnings per ADS (non-GAAP)

12.38

11.60

11.22

1.77

(1) This represents amortization and impairment of intangible assets resulting from business combinations.

(2) This represents Baidu's share of equity method investments for other non-GAAP reconciling items,amortization and impairment of intangible assets not on the investee's books,accretion of their redeemable noncontrolling

interests,and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per shares.

(3) This represents non-recurring charitable donation to discrete events.

(4) This represents non-recurring employee severance costs in relation to the iQIYI employee optimization program incurred in 2021.