Baidu narrows revenue drop in second quarter, CEO optimistic on second half despite headwinds
- For the third quarter, Baidu said its revenues could drop by up to 6 per cent year on year owing to ‘very limited’ business visibility
- Baidu saw an 8 per cent year-on-year drop in online marketing revenue to US$2.5 billion in the June quarter, versus a 19 per cent decline in the previous quarter
Baidu has warned of headwinds in the second half of the year from geopolitical tensions and the Covid-19 pandemic as the Chinese search engine and artificial intelligence giant narrowed a decline in revenue in the April to June quarter.
“With Covid-19 becoming more manageable in China, Baidu's business is steadily rebounding,” said co-founder and CEO Robin Li. “We are pleased that in-app revenue grew in the second quarter, despite a challenging macro environment.”
Baidu reported total revenue of 26.03 billion yuan (US$3.75 billion) in the June quarter, down 1 per cent year on year, versus a forecast of 25.7 billion yuan. Revenue in the first quarter was down 7 per cent year on year to 22.5 billion yuan..
Baidu said it posted 3.58 billion yuan in profits for the quarter versus a projection of 2 billion yuan.
However, Li said he was still “cautiously optimistic” about the business climate in the second half despite the geopolitical tensions and “other phenomenon plaguing the economy that may continue to cause hiccups”.
Baidu has sought to diversify its revenue mix with a 500 million yuan investment announced in May to boost its live-streaming services after its traditional online marketing revenue was hammered by the rise of short-video platforms like ByteDance’s Douyin and Tencent-backed Kuaishou.