Baidu (BIDU) 6-K Baidu Announces First Quarter 2021 Results

Exhibit 99.1

Baidu Announces First Quarter 2021 Results

BEIJING, China, May 18, 2021 — 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, 2021.

“We are delighted to bring innovation across many sectors, including marketing cloud, enterprise cloud, smart transportation, autonomous driving, smart assistant and AI chip, through our decade- long investment in AI,” said Robin Li, co-founder and CEO of Baidu. “With AI powering the next stage of technology growth, many Baidu alumni have rejoined us, and our employees are energized from working on intelligent computing that can improve daily life and make the complex world simpler.”

“Baidu Core delivered a strong first quarter with revenue growing 34% year over year, powered by non-advertising revenue growing 70% year over year,” said Herman Yu, CFO of Baidu. “We will continue to invest heavily in sales, R&D and operations to support the rapid growth of our AI- powered business.”

First Quarter 2021 Financial Highlights¹

	Baidu, Inc.
(In millions except per ADS, unaudited)	Q1 2020			Q4 2020			Q1 2021						YOY			QOQ
	RMB			RMB			RMB			US$
Total revenues		22,545			30,263			28,134			4,294			25	%		(7	%)
Operating (loss) income		(437	)		4,977			2,789			426			—			(44	%)
Operating income (non-GAAP)2		1,437			7,055			4,362			666			204	%		(38	%)
Net income to Baidu		41			5,174			25,653			3,915			62,468	%		396	%
Net income to Baidu (non-GAAP)2		3,082			6,868			4,297			656			39	%		(37	%)
Diluted earnings per ADS		0.02			15.05			73.76			11.26			368,700	%		390	%
Diluted earnings per ADS (non-GAAP)2		8.84			20.08			12.38			1.89			40	%		(38	%)
Adjusted EBITDA2		2,852			8,564			5,900			901			107	%		(31	%)
Adjusted EBITDA margin		13	%		28	%		21	%		21	%

1 Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB6.5518 as of March 31, 2021, 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).

2

	Baidu Core
(In millions, unaudited)	Q1 2020			Q4 2020			Q1 2021						YOY			QOQ
	RMB			RMB			RMB			US$
Total revenues		15,268			23,111			20,483			3,126			34	%		(11	%)
Operating income		1,848			6,320			3,847			587			108	%		(39	%)
Operating income (non-GAAP)2		3,348			8,031			5,064			773			51	%		(37	%)
Net income to Baidu Core		1,698			6,036			26,354			4,022			1,452	%		337	%
Net income to Baidu Core (non-GAAP)2		4,519			7,533			4,870			743			8	%		(35	%)
Adjusted EBITDA2		4,641			9,422			6,487			990			40	%		(31	%)
Adjusted EBITDA margin		30	%		41	%		32	%		32	%

Other Highlights

Corporate

• Baidu ranks Top 3 in cloud services and No.1 in the utilization of renewable energy for data centers, according to Greenpeace, a global environmental organization, based on its April 2021 report Clean Cloud: Tracking Renewable Energy Use in China’s Tech Industry.

• Baidu released its annual ESG Report in February 2021, which details Baidu’s ESG policies and sustainability initiatives (http://esg.baidu.com/en/esg_download.html).

• On March 23, 2021, Baidu listed on the HKEX (9888) through a global offering of 95,000,000 Class A ordinary shares, receiving $3.1 billion in net proceeds.

• Baidu returned US$300 million to shareholders under the 2020 Share Repurchase Program this year, bringing the cumulative repurchase to $2.2 billion since 2020.

AI Cloud

• Baidu EasyDL, a simple to use machine learning service, was rated No. 1 in terms of usage in China, per IDC in December 2020, topping the list for the second time.

• Baidu deep learning framework PaddlePaddle, upgraded to v2.0 in March 2021, was ranked among the Top 3 globally in terms of usage based on pull request, according to Github.

• A leading retail bank in China implemented Baidu’s AI PaaS, which has led to five follow-on purchases, including application to automate customer service and consumer loan approval, and the recent purchase of private cloud services.

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• Baidu partnered with the online arm of China’s largest TV network CCTV to implement Baidu AI PaaS with capabilities to automate video clip creation and tagging from live broadcasting and use smart assistant to quickly locate desired video content. During an important annual event, Baidu enabled CCTV.com to simultaneously interview congressional meeting participants with AI reporters, powered by Baidu Brain, and timely share these interviews on the Internet.

• Chongqing, which implemented Apollo V2X last year, marking Baidu’s entry into western China, signed with Apollo to make its smart transportation infrastructure 5G enabled, to support robotaxi ride hailing operation.

• Chengdu (Sichuan), a leader in science and technology development, signed with Apollo to implement V2X vehicle-to-road infrastructure.

Intelligent Driving

• Apollo has accumulated 6.2 million miles of L4 autonomous driving testing on the road and 600 million miles of simulated testing since its founding in 2013.

• Apollo received permit to test autonomous driving at night and under special weather conditions on public roads in Beijing. Apollo also received permits to pilot fully autonomous driving in Beijing, Cangzhou (Hebei), and Changsha (Hunan).

• Apollo Go, China’s first fully autonomous ride-hailing, is now available at the Shougang Park, a Beijing 2022 Winter Olympics site.

• Apollo Go begins to charge for robotaxi ride hailing in Cangzhou, based on the distance traveled starting with a minimum fare, similarly to regular ride hailing.

• The total addressable market for robotaxi ride hailing will reach US$224 billion in China by 2025, according to China Insights Consultancy, a market research and consulting company.

• Jidu Auto, an intelligent EV company established in partnership with Zhejiang Geely Holding Group, appointed Yiping Xia as its CEO. Mr. Xia previously served as CTO at Mobike and held positions at Fiat Chrysler and Ford.

• Guangzhou Automobile Group joins Apollo’s network of over 10 leading automakers to install Apollo Self Driving (ASD) services in its new vehicles.

• Guidehouse Insights (previously Navigant Research) has rated Baidu in the “leader” category for the second consecutive year, the only Chinese company honored among the four AI companies selected globally for this category. Apollo’s open platform, to empower Jidu and other automakers as well as Apollo Go robotaxi, puts Apollo in a unique position to be well funded and widely adopted.

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• DuerOS for Auto, powering infotainment, has been installed in over 1.5 million new vehicles, recorded Q1 2021 installation more than doubled from the prior year.

Other Growth Initiatives

• DuerOS monthly voice queries reached 6.6 billion with first-party voice queries reaching 3.9 billion in March 2021.

• Xiaodu ranked No. 1 in smart display shipments globally and No. 1 in smart speaker shipments in China for 2020, according to IDC, Strategy Analytics and Canalys.

• Xiaodu S12 smart pad for the education market was introduced in March with an MSRP of 1,699.

• Baidu Kunlun completed its first-round of funding at a post-money valuation of $2 billion in April 2021. Kunlun chips are designed to optimize AI workload and improve cloud cost structure.

Mobile Ecosystem

• Baidu has strengthened its strong Internet foundation with Baidu App monthly active users (MAUs) reaching 558 million and daily logged in users reaching over 75% in March 2021.

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

• BJH publisher accounts grew 40% year over year to reached 4.2 million.

• Smart Mini Program MAUs reached 416 million, and the number of SMPs grew 74% from a year ago; and

• Revenue from Managed Page accounted for 35% of Baidu Core’s online marketing revenue, up from 21% a year ago.

iQIYI

iQIYI subscribers reached 105.3 million as of March 31, 2021, serving as a strong foundation to support its over 50 in-house studios and produce entertainment blockbuster originals. iQIYI’s net loss narrowed to RMB1.3 billion in Q1 21, compared to RMB2.9 billion from a year ago.

First Quarter 2021 Results

Total revenues were RMB28.1 billion ($4.29 billion), increasing 25% year over year.

• Revenue from Baidu Core was RMB20.5 billion ($3.13 billion), increasing 34% year over year. Online marketing revenue was RMB16.3 billion ($2.48 billion), up 27% year over year. Non-marketing revenue was RMB4.2 billion ($646 million), up 70% year over year, driven by cloud and other services.

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• Revenue from iQIYI was RMB8.0 billion ($1.22 billion), increasing 4% year over year.

Cost of revenues was RMB15.0 billion ($2.29 billion), increasing 2% year over year, primarily due to an increase in traffic acquisition costs and cost of goods sold, offset by a decrease in content costs and the amortization/impairment of intangible assets.

Selling, general and administrative expenses were RMB5.2 billion ($800 million), increasing 36% year over year, primarily due to an increase in channel spending and promotional expenses.

Research and development expense was RMB5.1 billion ($778 million), increasing 15% year over year, primarily related to personnel-related expenses.

Operating income was RMB2.8 billion ($426 million). Baidu Core operating income was RMB3.8 billion ($587 million), and Baidu Core operating margin was 19%. Non-GAAP operating income was RMB4.4 billion ($666 million). Non-GAAP Baidu Core operating income was RMB5.1 billion ($773 million), and non-GAAP Baidu Core operating margin was 25%.

Total other income, net was RMB23.8 billion ($3.63 billion), which included a fair value gain of RMB23.7 billion from long-term investments, mainly including a gain from the investment in Kuaishou Technology.

Income tax expense was RMB1.5 billion ($234 million), compared to RMB198 million last year, primarily due to the increase in profit before tax.

Net income attributable to Baidu was RMB25.7 billion ($3.92 billion), and diluted earnings per ADS was RMB73.76 ($11.26). Net income attributable to Baidu Core was RMB26.4 billion ($4.02 billion). Non-GAAP net income attributable to Baidu was RMB4.3 billion ($656 million), and non-GAAP diluted earnings per ADS was RMB12.38 ($1.89). Non-GAAP net income attributable to Baidu Core was RMB4.9 billion ($743 million).

Adjusted EBITDA was RMB5.9 billion ($901 million). Adjusted EBITDA for Baidu Core was RMB6.5 billion ($990 million) and adjusted EBITDA margin for Baidu Core was 32%.

As of March 31, 2021, cash, cash equivalents, restricted cash and short-term investments, net were RMB172.9 billion ($26.4 billion), and cash, cash equivalents, restricted cash and short- term investments excluding iQIYI were RMB159.6 billion ($24.37 billion). Free cash flow was RMB2.6 billion ($400 million), and free cash flow excluding iQIYI was RMB4.0 billion ($615 million).

Financial Guidance

For the second quarter of 2021, Baidu expects revenues to be between RMB29.7 billion ($4.5 billion) and RMB32.5 billion ($5.0 billion), representing a growth rate of 14% to 25% year over year, which assumes that Baidu Core revenue will grow between 20% and 33% year over year. This guidance does not include potential contribution from an acquisition of YY Live.

The above forecast reflects Baidu’s current and preliminary view, which is subject to substantial uncertainties.

Conference Call Information

Baidu’s management will hold an earnings conference call at 8:00 AM on May 18, 2021, U.S. Eastern Time (8:00 PM on May 18, 2021, 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/4696103. It will automatically direct you to the registration page of “Baidu Q1 2021 Earnings Conference Call”, where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter “ 4696103”.

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 at http://ir.baidu.com.

A replay of the conference call may be accessed by phone at the following number until May 26 2021:

International:         +61 2 8199 0299

Conference ID:       4696103

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 the 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

7

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 of 2021, quotations from management in this announcement, as well as 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.

8

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 and amortization and impairment of intangible assets resulting from business combinations.

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, disposal gain or loss, impairment of long-term investments, fair value change of long-term investments, 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, which is adjusted for accretion for the redeemable non-controlling interests, by the weighted average number of ordinary shares expressed in ADS. Adjusted EBITDA represents operating income excluding depreciation, amortization and impairment of intangible assets resulting from business combinations, 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 measures.”

9

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,			March 31,
	2020			2020			2021			2021
	RMB			RMB			RMB			US$(2)
Revenues:
Online marketing services		14,243			20,708			18,094			2,762
Others		8,302			9,555			10,040			1,532
Total revenues		22,545			30,263			28,134			4,294
Costs and expenses:
Cost of revenues(1)		14,687			14,522			15,002			2,290
Selling, general and administrative(1)		3,852			5,094			5,245			800
Research and development(1)		4,443			5,670			5,098			778
Total costs and expenses		22,982			25,286			25,345			3,868
Operating (loss) income		(437	)		4,977			2,789			426
Other income (loss):
Interest income		1,441			1,308			1,233			187
Interest expense		(751	)		(777	)		(823	)		(126	)
Foreign exchange (loss) income, net		(98	)		(346	)		156			24
Share of income (loss) from equity method investments		181			(151	)		(151	)		(23	)
Others, net		(1,816	)		499			23,362			3,566
Total other (loss) income, net		(1,043	)		533			23,777			3,628
(Loss) income before income taxes		(1,480	)		5,510			26,566			4,054
Income tax expense		198			1,026			1,534			234
Net (loss) income		(1,678	)		4,484			25,032			3,820
Net loss attributable to non-controlling interests		(1,719	)		(690	)		(621	)		(95	)
Net income attributable to Baidu		41			5,174			25,653			3,915

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	Three Months Ended
	March 31,			December 31,		March 31,		March 31,
	2020			2020		2021		2021
	RMB			RMB		RMB		US$(2)
Earnings per ADS
(1 ADS representing 8
Class A ordinary shares):
— Basic		0.05			15.28		76.10		11.62
— Diluted		0.02			15.05		73.76		11.26
Earnings per share for Class A and Class B ordinary shares:
— Basic		0.01			1.91		9.51		1.45
— Diluted		—			1.88		9.22		1.41
Weighted average number of Class A and Class B ordinary shares outstanding (in millions):
— Basic		2,766			2,696		2,692		2,692
— Diluted		2,781			2,736		2,777		2,777
(1)   Includes share-based compensation expenses as follows:
Cost of revenues		81			91		79		12
Selling, general and administrative		464			480		471		72
Research and development		945			1,408		949		146
Total share-based compensation expenses		1,490			1,979		1,499		230

(2) All translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00, the exchange rate in effect as of March 31, 2021 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

11

Condensed Consolidated Balance Sheets

(In millions, unaudited)

	December 31,		March 31,		March 31,
	2020		2021		2021
	RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents		35,782		41,544		6,340
Restricted cash		758		10,607		1,618
Short-term investments, net		126,402		120,794		18,437
Accounts receivable, net		8,668		8,492		1,296
Amounts due from related parties		726		741		113
Other current assets, net		11,006		9,451		1,443
Total current assets		183,342		191,629		29,247
Non-current assets:
Fixed assets, net		17,508		17,681		2,699
Licensed copyrights, net		6,435		6,516		995
Produced content, net		6,556		7,281		1,111
Intangible assets, net		2,022		1,921		293
Goodwill		22,248		22,248		3,396
Long-term investments, net		76,233		101,771		15,533
Amounts due from related parties		3,438		3,440		525
Deferred tax assets, net		1,674		1,379		210
Operating lease right-of-use assets		9,804		9,655		1,474
Other non-current assets		3,448		15,827		2,417
Total non-current assets		149,366		187,719		28,653
Total assets		332,708		379,348		57,900

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	December 31,		March 31,		March 31,
	2020		2021		2021
	RMB		RMB		US$
LIABILITIES AND EQUITY
Current liabilities:
Short-term loans		3,016		2,230		340
Accounts payable and accrued liabilities		36,716		35,902		5,480
Customer deposits and deferred revenue		12,626		12,504		1,908
Deferred income		158		144		22
Long-term loans, current portion		7,427		7,457		1,138
Convertible senior notes, current portion		4,752		4,808		734
Notes payable, current portion		—		—		—
Amounts due to related parties		1,324		1,468		224
Operating lease liabilities		2,366		2,377		363
Total current liabilities		68,385		66,890		10,209
Non-current liabilities:
Deferred income		97		104		16
Deferred revenue		686		685		105
Amounts due to related parties		3,543		3,524		538
Long-term loans		—		—		—
Notes payable		48,408		48,601		7,418
Convertible senior notes		11,927		12,670		1,934
Deferred tax liabilities		3,067		3,171		484
Operating lease liabilities		4,693		4,535		692
Other non-current liabilities		59		53		8
Total non-current liabilities		72,480		73,343		11,195
Total liabilities		140,865		140,233		21,404
Redeemable noncontrolling interests		3,102		3,340		510
Equity
Total Baidu shareholders’ equity		182,696		229,814		35,076
Noncontrolling interests		6,045		5,961		910
Total equity		188,741		235,775		35,986
Total liabilities, redeemable noncontrolling interests, and equity		332,708		379,348		57,900

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Selected Information

(In millions, unaudited)

	Three months ended												Three months ended												Three months ended												Three months ended
	March 31, 2020 (RMB)												December 31, 2020 (RMB)												March 31, 2021 (RMB)												March 31, 2021 (US$)
	Baidu						Elim &			Baidu,			Baidu						Elim &			Baidu,			Baidu						Elim &			Baidu,			Baidu						Elim &			Baidu,
	Core			iQIYI			adj(2)			Inc.			Core			iQIYI			adj(2)			Inc.			Core			iQIYI			adj(2)			Inc.			Core			iQIYI			adj(2)			Inc.
Total revenues		15,268			7,650			(373	)		22,545			23,111			7,458			(306	)		30,263			20,483			7,968			(317	)		28,134			3,126			1,216			(48	)		4,294
YOY																										34	%		4	%					25	%
QOQ																										(11	%)		7	%					(7	%)
Costs and expenses:
Cost of revenues(1)		7,088			7,903			(304	)		14,687			7,997			6,785			(260	)		14,522			8,162			7,109			(269	)		15,002			1,246			1,085			(41	)		2,290
Selling, general and administrative(1)		2,560			1,311			(19	)		3,852			3,787			1,317			(10	)		5,094			4,048			1,201			(4	)		5,245			618			183			(1	)		800
Research and development(1)		3,772			678			(7	)		4,443			5,007			663			—			5,670			4,426			672			—			5,098			675			103			—			778
Total costs and expenses		13,420			9,892			(330	)		22,982			16,791			8,765			(270	)		25,286			16,636			8,982			(273	)		25,345			2,539			1,371			(42	)		3,868
YOY
Cost of revenues																										15	%		(10	%)					2	%
Selling, general and administrative																										58	%		(8	%)					36	%
Research and development																										17	%		(1	%)					15	%
Cost and expenses																										24	%		(9	%)					10	%
Operating income (loss)		1,848			(2,242	)		(43	)		(437	)		6,320			(1,307	)		(36	)		4,977			3,847			(1,014	)		(44	)		2,789			587			(155	)		(6	)		426
YOY																										108	%		(55	%)					—
QOQ																										(39	%)		(22	%)					(44	%)
Operating margin		12	%		(29	%)					(2	%)		27	%		(18	%)					16	%		19	%		(13	%)					10	%
Add: total other (loss) income, net		(414	)		(629	)		—			(1,043	)		774			(241	)		—			533			23,999			(222	)		—			23,777			3,662			(34	)		—			3,628
Less: income tax expense		193			5			—			198			1,042			(16	)		—			1,026			1,513			21			—			1,534			231			3			—			234
Less: net (loss) income attributable to NCI		(457	)		(1	)		(1,261	)(3)		(1,719	)		16			16			(722	)(3)		(690	)		(21	)		10			(610	)(3)		(621	)		(4	)		2			(93	)(3)		(95	)
Net income (loss) attributable to Baidu		1,698			(2,875	)		1,218			41			6,036			(1,548	)		686			5,174			26,354			(1,267	)		566			25,653			4,022			(194	)		87			3,915
YOY																										1,452	%		(56	%)					62,468	%
QOQ																										337	%		(18	%)					396	%
Net margin		11	%		(38	%)					0	%		26	%		(21	%)					17	%		129	%		(16	%)					91	%
Non-GAAP financial measures:
Operating income (loss) (non-GAAP)		3,348			(1,868	)					1,437			8,031			(940	)					7,055			5,064			(658	)					4,362			773			(101	)					666

14

	Three months ended										Three months ended										Three months ended										Three months ended
	March 31, 2020 (RMB)										December 31, 2020 (RMB)										March 31, 2021 (RMB)										March 31, 2021 (US$)
	Baidu						Elim &	Baidu,			Baidu						Elim &	Baidu,			Baidu						Elim &	Baidu,			Baidu					Elim &	Baidu,
	Core			iQIYI			adj(2)	Inc.			Core			iQIYI			adj(2)	Inc.			Core			iQIYI			adj(2)	Inc.			Core		iQIYI			adj(2)	Inc.
YOY																						51	%		(65	%)			204	%
QOQ																						(37	%)		(30	%)			(38	%)
Operating margin (non-GAAP)		22	%		(24	%)			6	%		35	%		(13	%)			23	%		25	%		(8	%)			16	%
Net income (loss) attributable to
Baidu (non-GAAP)		4,519			(2,482	)			3,082			7,533			(1,177	)			6,868			4,870			(1,021	)			4,297			743		(156	)			656
YOY																						8	%		(59	%)			39	%
QOQ																						(35	%)		(13	%)			(37	%)
Net margin (non-GAAP)		30	%		(32	%)			14	%		33	%		(16	%)			23	%		24	%		(13	%)			15	%
Adjusted EBITDA		4,641			(1,746	)			2,852			9,422			(822	)			8,564			6,487			(543	)			5,900			990		(83	)			901
YOY																						40	%		(69	%)			107	%
QOQ																						(31	%)		(34	%)			(31	%)
Adjusted EBITDA margin		30	%		(23	%)			13	%		41	%		(11	%)			28	%		32	%		(7	%)			21	%
(1) Includes share-based compensation as follows:
Cost of revenues		34			47				81			46			45				91			33			46				79			5		7				12
Selling, general and administrative		273			191				464			255			225				480			256			215				471			39		33				72
Research and development		877			68				945			1,329			79				1,408			866			83				949			133		13				146
Total share-based compensation		1,184			306				1,490			1,630			349				1,979			1,155			344				1,499			177		53				230

(2) Relates to intersegment eliminations and adjustments

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

15

Condensed Consolidated Statements of Cash Flows

(In millions, unaudited)

	Three months ended									Three months ended									Three months ended									Three months ended
	March 31, 2020 (RMB)									December 31, 2020 (RMB)									March 31, 2021 (RMB)									March 31, 2021 (US$)
	Baidu									Baidu									Baidu									Baidu
	excl.						Baidu,			excl.						Baidu,			excl.						Baidu,			excl.						Baidu,
	iQIYI			iQIYI			Inc.			iQIYI			iQIYI			Inc.			iQIYI			iQIYI			Inc.			iQIYI			iQIYI			Inc.
Net cash provided by (used in) operating activities		2,801			(604	)		2,197			7,546			(1,519	)		6,027			5,467			(1,350	)		4,117			834			(206	)		628
Net cash (used in) provided by investing activities		(11,084	)		(1,610	)		(12,694	)		(1,196	)		281			(915	)		(4,579	)		(2,778	)		(7,357	)		(699	)		(424	)		(1,123	)
Net cash (used in) provided by financing activities		(1,296	)		(79	)		(1,375	)		4,185			8,392			12,577			18,018			611			18,629			2,749			93			2,842
Effect of exchange rate changes on cash, cash equivalents and restricted cash		139			64			203			(209	)		(32	)		(241	)		251			(29	)		222			38			(4	)		34
Net (decrease) increase in cash, cash equivalents and restricted cash		(9,440	)		(2,229	)		(11,669	)		10,326			7,122			17,448			19,157			(3,546	)		15,611			2,922			(541	)		2,381
Cash, cash equivalents and restricted cash
At beginning of period		27,529			6,910			34,439			15,273			3,819			19,092			25,599			10,941			36,540			3,907			1,670			5,577
At end of period		18,089			4,681			22,770			25,599			10,941			36,540			44,756			7,395			52,151			6,829			1,129			7,958
Net cash provided by (used in) operating activities		2,801			(604	)		2,197			7,546			(1,519	)		6,027			5,467			(1,350	)		4,117			834			(206	)		628
Less: Capital expenditures		(478	)		(67	)		(545	)		(2,151	)		(27	)		(2,178	)		(1,438	)		(61	)		(1,499	)		(219	)		(9	)		(228	)
Free cash flow		2,323			(671	)		1,652			5,395			(1,546	)		3,849			4,029			(1,411	)		2,618			615			(215	)		400

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

16

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

(In millions except for per ADS information, unaudited)

	Three months ended									Three months ended									Three months ended									Three months ended
	March 31, 2020 (RMB)									December 31, 2020 (RMB)									March 31, 2021 (RMB)									March 31, 2021 (US$)
	Baidu						Baidu,			Baidu						Baidu,			Baidu						Baidu,			Baidu						Baidu,
	Core			iQIYI			Inc.			Core			iQIYI			Inc.			Core			iQIYI			Inc.			Core			iQIYI			Inc.
Operating income (loss)		1,848			(2,242	)		(437	)		6,320			(1,307	)		4,977			3,847			(1,014	)		2,789			587			(155	)		426
Add: Share-based compensation expenses		1,184			306			1,490			1,630			349			1,979			1,155			344			1,499			177			53			230
Add: Amortization and impairment of intangible assets(1)		316			68			384			81			18			99			62			12			74			9			1			10
Operating income (loss) (non-GAAP)		3,348			(1,868	)		1,437			8,031			(940	)		7,055			5,064			(658	)		4,362			773			(101	)		666
Add: Depreciation of fixed assets		1,293			122			1,415			1,391			118			1,509			1,423			115			1,538			217			18			235
Adjusted EBITDA		4,641			(1,746	)		2,852			9,422			(822	)		8,564			6,487			(543	)		5,900			990			(83	)		901
Net income (loss) attributable to Baidu		1,698			(2,875	)		41			6,036			(1,548	)		5,174			26,354			(1,267	)		25,653			4,022			(194	)		3,915
Add: Share-based compensation expenses		1,177			306			1,348			1,618			349			1,802			1,146			344			1,325			175			53			203
Add: Amortization and impairment of intangible assets(1)		223			68			267			67			18			78			55			12			61			8			1			9
Add: Disposal loss (gain)		(252	)		—			(252	)		(28	)		—			(28	)		—			—			—			—			—			—
Add: Impairment of long-term investments		1,615			25			1,630			147			—			147			—			—			—			—			—			—
Add: Fair value loss (gain) of long-term investments		(89	)		—			(89	)		(380	)		(1	)		(380	)		(23,545	)		(88	)		(23,590	)		(3,594	)		(13	)		(3,601	)
Add: Reconciling items on equity method investments(2)		450			10			456			250			9			256			593			(20	)		583			91			(3	)		89
Add: Tax effects on non-GAAP adjustments(3)		(303	)		(16	)		(319	)		(177	)		(4	)		(181	)		267			(2	)		265			41			—			41
Net income (loss) attributable to Baidu (non-GAAP)		4,519			(2,482	)		3,082			7,533			(1,177	)		6,868			4,870			(1,021	)		4,297			743			(156	)		656

17

Three months ended

Three months ended

Three months ended

Three months ended

March 31, 2020 (RMB)

December 31, 2020 (RMB)

March 31, 2021 (RMB)

March 31, 2021 (US$)

Baidu

Baidu,

Baidu

Baidu,

Baidu

Baidu,

Baidu

Baidu,

Core

iQIYI

Inc.

Core

iQIYI

Inc.

Core

iQIYI

Inc.

Core

iQIYI

Inc.

Diluted earnings per ADS

0.02

15.05

73.76

11.26

Add: Accretion of the redeemable noncontrolling interests

0.07

0.08

0.14

0.02

Add: Non-GAAP adjustments to earnings per ADS

8.75

4.95

(61.52

)

(9.39

)

Diluted earnings per ADS (non-GAAP)

8.84

20.08

12.38

1.89

(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) Tax impact of non-GAAP adjustments is separately presented from 2020Q4, with comparative periods retrospectively adjusted.

18