Baidu (BIDU) 6-K Baidu Announces Fourth Quarter and Fiscal Year 2021 Results

Exhibit 99.1

Baidu Announces Fourth Quarter and Fiscal Year 2021 Results

BEIJING, China, March 1, 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 quarter and fiscal year ended December 31, 2021.

“Baidu concluded a solid 2021, evidenced by a strong growth in our non-advertising business, particularly the acceleration of Baidu AI Cloud. We brought our AI capabilities to China’s traditional industries and public service sector, to aid in the improvement of their efficiency and operational expansion. Furthermore, Apollo Go provided around 213,000 rides in the fourth quarter, almost doubling sequentially, reaffirming our leadership position in the global autonomous ride-hailing market,” said Robin Li, Co-founder and CEO of Baidu. “Our strategic commitments are closely geared with China’s endeavors in technology innovation and transition to a green economy.”

“Baidu Core achieved 21% revenue growth in 2021, with non-advertising revenues increasing by 71% from last year, which has been very encouraging,” said Rong Luo, CFO of Baidu. “Looking ahead, we remain committed to healthy and sustainable long-term growth as Baidu continues to improve its overall operational efficiency and execution capabilities.”

Fourth Quarter and Fiscal Year 2021 Financial Highlights¹

	Baidu, Inc.
(In millions except per	Q4			Q3			Q4									FY			FY
ADS, unaudited)	2020			2021			2021						YOY			2020			2021						YOY
	RMB			RMB			RMB			US$						RMB			RMB			US$
Total revenues		30,263			31,921			33,088			5,192			9	%		107,074			124,493			19,536			16	%
Operating income		4,977			2,308			1,958			307			(61	%)		14,340			10,518			1,651			(27	%)
Operating income (non-GAAP) 2		7,055			4,708			4,307			676			(39	%)		21,732			19,030			2,986			(12	%)
Net income (loss) to Baidu		5,174			(16,559	)		1,715			269			(67	%)		22,472			10,226			1,605			(54	%)
Net income to Baidu (non-GAAP) 2		6,868			5,090			4,084			641			(41	%)		22,020			18,830			2,955			(14	%)
Diluted earnings (loss) per ADS		15.05			(48.18	)		4.51			0.71			(70	%)		64.98			28.07			4.40			(57	%)
Diluted earnings per ADS (non-GAAP) 2		20.08			14.66			11.60			1.82			(42	%)		63.93			53.53			8.40			(16	%)
Adjusted EBITDA 2		8,564			5,962			5,757			903			(33	%)		27,503			24,914			3,910			(9	%)
Adjusted EBITDA margin		28	%		19	%		17	%		17	%					26	%		20	%		20	%

¹ Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 6.3726 as of December 30, 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).

1

	Baidu Core
	Q4			Q3			Q4									FY			FY
(In millions, unaudited)	2020			2021			2021						YOY			2020			2021						YOY
	RMB			RMB			RMB			US$						RMB			RMB			US$
Total revenues		23,111			24,661			25,978			4,077			12	%		78,684			95,163			14,933			21	%
Operating income		6,320			3,718			2,958			464			(53	%)		20,538			15,142			2,376			(26	%)
Operating income (non-GAAP) 2		8,031			5,823			4,847			761			(40	%)		26,366			22,201			3,484			(16	%)
Net income (loss) to Baidu Core		6,036			(15,625	)		2,656			417			(56	%)		26,524			13,557			2,127			(49	%)
Net income to Baidu Core (non-GAAP) 2		7,533			5,855			4,625			726			(39	%)		25,192			21,292			3,341			(15	%)
Adjusted EBITDA2		9,422			6,994			6,210			974			(34	%)		31,656			27,682			4,344			(13	%)
Adjusted EBITDA margin		41	%		28	%		24	%		24	%					40	%		29	%		29	%

Other Highlights

Corporate

• Baidu returned US$615 million to shareholders under its 2020 Share Repurchase Program in the fourth quarter of 2021, bringing the cumulative repurchase to approximately US$1.2 billion in 2021. As of the end of 2021, the Company had returned approximately US$2.9 billion to shareholders under the 2020 Share Repurchase Program.

• Baidu’s ESG rankings were further improved in 2021. Our MSCI ESG rating was upgraded three times in two years to achieve BBB, and our Sustainalytics ESG risk rating was ranked Top 18 among 234 Internet Software and Services companies globally.

AI Cloud

• Baidu ACE smart transportation has been adopted by 35 cities, up from 14 cities a year ago, based on contract amounts of over RMB10 million, as of the end of 2021.

• Baidu was once again ranked the No. 1 AI cloud provider, according to IDC’s first half of 2021 report on China’s public cloud market.

• PaddlePaddle developer community has grown to 4.06 million and has served 157,000 businesses, as of the end of 2021. Developers have created 476,000 models on PaddlePaddle by the end of 2021.

2

Intelligent Driving

• Rides provided by Apollo Go almost doubled sequentially, and reached around 213,000 in the fourth quarter of 2021.

• Apollo Go, Baidu’s autonomous ride-hailing service, has begun to charge fees for the autonomous ride-hailing services on open roads on November 25, 2021, in Beijing; February 18, 2022, in Chongqing; and February 27, 2022, in Yangquan.

• Apollo Go expanded into Chongqing, Shenzhen and Yangquan, and is now available in eight cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Changsha, Cangzhou and Yangquan.

• Jidu Auto, an intelligent EV company established in partnership with Zhejiang Geely Holding Group, completed its Series A financing, raising nearly US$400 million.

Other Growth Initiatives

• Xiaodu ranked No.1 in smart display shipments globally and smart speaker shipments in China for the first nine months of 2021, according to Strategy Analytics, IDC and Canalys.

Mobile Ecosystem

• In December, Baidu App’s MAUs reached 622 million, up 14% year over year, and daily logged-in users reached 82%.

• Managed Page continued to account for over 40% of Baidu Core’s online marketing revenue in the fourth quarter of 2021.

iQIYI

• iQIYI subscribers reached 99 million in December 2021.

Fourth Quarter 2021 Financial Results

Total revenues were RMB 33.1 billion (US$5.19 billion), increasing 9% year over year.

• Revenue from Baidu Core was RMB 26.0 billion (US$4.08 billion), increasing 12% year over year; online marketing revenue was RMB 19.1 billion (US$3.00 billion), up 1% year over year, and non-online marketing revenue was RMB 6.9 billion (US$1.08 billion), up 63% year over year, driven by cloud and other AI-powered businesses.

• Revenue from iQIYI was RMB 7.4 billion (US$1.16 billion), decreasing 1% year over year.

Cost of revenues was RMB 17.3 billion (US$2.71 billion), increasing 19% year over year, primarily due to an increase in traffic acquisition costs, bandwidth costs, cost of goods sold and other costs related to new AI business.

Selling, general and administrative expenses were RMB 6.5 billion (US$1.01 billion), increasing 27% year over year, primarily due to an increase in channel spending, promotional marketing and personnel-related expenses.

3

Research and development expense was RMB 7.4 billion (US$1.16 billion), increasing 30% year over year, primarily due to an increase in personnel related expense.

Operating income was RMB 2.0 billion (US$307 million). Baidu Core operating income was RMB 3.0 billion (US$464 million), and Baidu Core operating margin was 11%. Non-GAAP operating income was RMB 4.3 billion (US$676 million). Non-GAAP Baidu Core operating income was RMB 4.8 billion (US$761 million), and non-GAAP Baidu Core operating margin was 19%.

Total other income, net was RMB 407 million (US$64 million), which mainly included a fair value gain of RMB 1.5 billion and an impairment loss of RMB 891 million 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 1.3 billion (US$203 million), increasing 26% year over year.

Net income attributable to Baidu was RMB 1.7 billion (US$269 million), and diluted earnings per ADS was RMB 4.51 (US$0.71). Net income attributable to Baidu Core was RMB 2.7 billion (US$417 million), and net margin for Baidu Core was 10%. Non-GAAP net income attributable to Baidu was RMB 4.1 billion (US$641 million). Non-GAAP diluted earnings per ADS was RMB 11.60 (US$1.82). Non-GAAP net income attributable to Baidu Core was RMB 4.6 billion (US$726 million), and non-GAAP net margin for Baidu Core was 18%.

Adjusted EBITDA was RMB 5.8 billion (US$903 million) and adjusted EBITDA margin was 17%. Adjusted EBITDA for Baidu Core was RMB 6.2 billion (US$974 million) and adjusted EBITDA margin for Baidu Core was 24%.

As of December 31, 2021, cash, cash equivalents, restricted cash and short-term investments were RMB 190.9 billion (US$29.96 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 186.5 billion (US$29.27 billion). Free cash flow was RMB 477 million (US$75 million), and free cash flow excluding iQIYI was RMB 1.6 billion (US$251 million).

Fiscal Year 2021 Results

Total revenues were RMB 124.5 billion (US$19.54 billion), increasing 16% year over year.

• Revenue from Baidu Core was RMB 95.2 billion (US$14.93 billion), increasing 21% year over year; online marketing revenue was RMB 74.0 billion (US$11.60 billion), increasing 12% year over year, and non-online marketing revenue was RMB 21.2 billion (US$3.33 billion), up 71% year over year, driven by cloud and other AI-powered businesses.

4

• Revenue from iQIYI was RMB 30.6 billion (US$4.80 billion), increasing 3% year over year.

Cost of revenues was RMB 64.3 billion (US$10.09 billion), increasing 17% year over year, primarily due to an increase in content costs, traffic acquisition costs, bandwidth costs, cost of goods sold and other costs related to new AI business.

Selling, general and administrative expenses were RMB 24.7 billion (US$3.88 billion), increasing 37% year over year, primarily due to an increase in channel spending, promotional marketing, personnel-related expenses and contingent loss pertaining to legal proceeding involving former advertising agencies.

Research and development expenses were RMB 24.9 billion (US$3.91 billion), increasing 28% year over year, primarily due to an increase in personnel related expenses.

Operating income was RMB 10.5 billion (US$1.65 billion). Baidu Core operating income was RMB 15.1 billion (US$2.38 billion), and Baidu Core operating margin was 16%. Non-GAAP operating income was RMB 19.0 billion (US$2.99 billion). Non-GAAP Baidu Core operating income was RMB 22.2 billion (US$3.48 billion), and non-GAAP Baidu Core operating margin was 23%.

Total other income, net was RMB 260 million (US$40 million), which mainly included a fair value gain of RMB 3.1 billion and an impairment loss of RMB 4.3 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. Total other income, net was RMB 8.8 billion for 2020, which included a fair value gain of RMB 11.6 billion and an impairment loss of RMB 2.6 billion from long-term investments.

Income tax expense was RMB 3.2 billion (US$500 million), decreasing 22% year over year, primarily due to an increase in deduction on certain expenses that were previously considered non-deductible.

Net income attributable to Baidu was RMB 10.2 billion (US$1.61 billion), and diluted earnings per ADS was RMB 28.07 (US$4.40). Net income attributable to Baidu Core was RMB 13.6 billion (US$2.13 billion), and net margin for Baidu Core was 14%. Non-GAAP net income attributable to Baidu was RMB 18.8 billion (US$2.96 billion), and non-GAAP diluted earnings per ADS amounted to RMB 53.53 (US$8.40). Non-GAAP net income attributable to Baidu Core was RMB 21.3 billion (US$3.34 billion), and non-GAAP net margin for Baidu Core was 22%.

5

Adjusted EBITDA was RMB 24.9 billion (US$3.91 billion) and adjusted EBITDA margin was 20%. Adjusted EBITDA to Baidu Core was RMB 27.7 billion (US$4.34 billion) and adjusted EBITDA margin for Baidu Core was 29%.

Free cash flow was RMB 9.2 billion (US$1.45 billion), and free cash flow excluding iQIYI was RMB 15.4 billion (US$2.42 billion).

Conference Call Information

Baidu’s management will hold an earnings conference call at 7.30AM on March 1, 2022, U.S. Eastern Time (8.30PM on March 1, 2022, 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/7885275

It will automatically direct you to the registration page of “Baidu Q4 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 “7885275”.

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 March 10, 2022:

International:	+61 2 8199 0299
Conference ID:	7885275

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

6

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.

7

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, amortization and impairment of intangible assets resulting from business combinations, contingent loss pertaining to legal proceeding in relation to former advertisingagencies, iQIYI’s non-recurring employee severance costs, and share-based compensation expenses.

8

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.

9

Baidu, Inc.

Condensed Consolidated Statements of Income (Loss)

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

	Three Months Ended												Twelve Months Ended
	December 31, 2020			September 30, 2021			December 31, 2021			December 31, 2021			December 31, 2020			December 31, 2021			December 31, 2021
	RMB			RMB			RMB			US$(2)			RMB			RMB			US$(2)
Revenues:
Online marketing services		20,708			21,050			20,723			3,252			72,840			80,695			12,663
Others		9,555			10,871			12,365			1,940			34,234			43,798			6,873
Total revenues		30,263			31,921			33,088			5,192			107,074			124,493			19,536
Costs and expenses:
Cost of revenues(1)		14,522			16,126			17,289			2,713			55,158			64,314			10,092
Selling, general and administrative(1)		5,094			7,320			6,451			1,012			18,063			24,723			3,879
Research and development(1)		5,670			6,167			7,390			1,160			19,513			24,938			3,914
Total costs and expenses		25,286			29,613			31,130			4,885			92,734			113,975			17,885
Operating income		4,977			2,308			1,958			307			14,340			10,518			1,651
Other income (loss):
Interest income		1,308			1,462			1,514			238			5,358			5,551			871
Interest expense		(777	)		(880	)		(873	)		(137	)		(3,103	)		(3,421	)		(537	)
Foreign exchange (loss) income, net		(346	)		7			(27	)		(4	)		(660	)		100			16
Share of losses from equity method investments		(151	)		(4	)		(773	)		(121	)		(2,248	)		(932	)		(146	)
Others, net		499			(22,079	)		566			88			9,403			(1,038	)		(164	)
Total other income (loss), net		533			(21,494	)		407			64			8,750			260			40
Income (loss) before income taxes		5,510			(19,186	)		2,365			371			23,090			10,778			1,691
Income tax expense (benefit)		1,026			(1,839	)		1,295			203			4,064			3,187			500
Net income (loss)		4,484			(17,347	)		1,070			168			19,026			7,591			1,191
Net loss attributable to noncontrolling interests		(690	)		(788	)		(645	)		(101	)		(3,446	)		(2,635	)		(414	)
Net income (loss) attributable to Baidu		5,174			(16,559	)		1,715			269			22,472			10,226			1,605
Earnings (loss) per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic		15.28			(48.18	)		4.57			0.72			65.54			28.64			4.49
-Diluted		15.05			(48.18	)		4.51			0.71			64.98			28.07			4.40
Earnings (loss) per share for Class A and Class B ordinary shares:
-Basic		1.91			(6.02	)		0.57			0.09			8.19			3.58			0.56
-Diluted		1.88			(6.02	)		0.56			0.09			8.12			3.51			0.55
Weighted average number of Class A and Class B ordinary shares outstanding (in millions):
-Basic		2,695			2,778			2,780			2,780			2,732			2,758			2,758
-Diluted		2,735			2,778			2,816			2,816			2,756			2,814			2,814
(1)   Includes share-based compensation expenses as follows:
Cost of revenues		91			74			134			21			360			399			62
Selling, general and administrative		480			353			533			83			1,897			1,840			289
Research and development		1,408			921			1,426			224			4,471			4,817			756
Total share-based compensation expenses		1,979			1,348			2,093			328			6,728			7,056			1,107

(2) All translations from RMB to U.S. dollars are made at a rate of RMB 6.3726 to US$1.00, the exchange rate in effect as of December 30, 2021 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

10

Baidu, Inc.

Condensed Consolidated Balance Sheets

(In millions, unaudited)

	December 31, 2020		December 31, 2021		December 31, 2021
	RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents		35,782		36,850		5,783
Restricted cash		758		10,821		1,697
Short-term investments, net		126,402		143,243		22,478
Accounts receivable, net		8,668		9,981		1,566
Amounts due from related parties		726		1,368		215
Other current assets, net		11,006		11,052		1,735
Total current assets		183,342		213,315		33,474
Non-current assets:
Fixed assets, net		17,508		23,027		3,613
Licensed copyrights, net		6,435		7,258		1,139
Produced content, net		6,556		10,951		1,718
Intangible assets, net		2,022		1,689		265
Goodwill		22,248		22,605		3,547
Long-term investments, net		76,233		67,332		10,566
Amounts due from related parties		3,438		3,487		547
Deferred tax assets, net		1,674		2,372		372
Operating lease right-of-use assets		9,804		12,065		1,894
Other non-current assets		3,448		15,933		2,501
Total non-current assets		149,366		166,719		26,162
Total assets		332,708		380,034		59,636
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans		3,016		4,168		654
Accounts payable and accrued liabilities		36,716		41,384		6,494
Customer deposits and deferred revenue		12,626		13,706		2,151
Deferred income		158		97		15
Long-term loans, current portion		7,427		2		—
Convertible senior notes, current portion		4,752		—		—
Notes payable, current portion		—		10,505		1,648
Amounts due to related parties		1,324		1,764		277
Operating lease liabilities		2,366		2,862		450
Total current liabilities		68,385		74,488		11,689
Non-current liabilities:
Deferred income		97		129		20
Deferred revenue		686		223		35
Amounts due to related parties		3,543		3,268		513
Long-term loans		—		12,629		1,982
Notes payable		48,408		43,120		6,766
Convertible senior notes		11,927		12,652		1,985
Deferred tax liabilities		3,067		3,286		516
Operating lease liabilities		4,693		5,569		874
Other non-current liabilities		59		718		112
Total non-current liabilities		72,480		81,594		12,803
Total liabilities		140,865		156,082		24,492
Redeemable noncontrolling interests		3,102		7,148		1,122
Equity
Total Baidu shareholders’ equity		182,696		211,459		33,183
Noncontrolling interests		6,045		5,345		839
Total equity		188,741		216,804		34,022
Total liabilities, redeemable noncontrolling interests, and equity		332,708		380,034		59,636

11

Baidu, Inc.

Selected Information

(In millions, unaudited)

	Three months ended December 31, 2020 (RMB)												Three months ended September 30, 2021 (RMB)												Three months ended December 31, 2021 (RMB)												Three months ended December 31, 2021 (US$)
	Baidu Core			iQIYI			Elim & adj(2)			Baidu, Inc.			Baidu Core			iQIYI			Elim & adj(2)			Baidu, Inc.			Baidu Core			iQIYI			Elim & adj(2)			Baidu, Inc.			Baidu Core		iQIYI			Elim & adj(2)			Baidu, Inc.
Total revenues		23,111			7,458			(306	)		30,263			24,661			7,589			(329	)		31,921			25,978			7,389			(279	)		33,088			4,077		1,159			(44	)		5,192
YOY																										12	%		(1	%)					9	%
QOQ																										5	%		(3	%)					4	%
Costs and expenses:
Cost of revenues (1)		7,997			6,785			(260	)		14,522			9,370			7,028			(272	)		16,126			11,017			6,507			(235	)		17,289			1,729		1,021			(37	)		2,713
Selling, general and administrative (1)		3,787			1,317			(10	)		5,094			6,089			1,246			(15	)		7,320			5,377			1,093			(19	)		6,451			844		172			(4	)		1,012
Research and development (1)		5,007			663			—			5,670			5,484			683			—			6,167			6,626			764			—			7,390			1,040		120			—			1,160
Total costs and expenses		16,791			8,765			(270	)		25,286			20,943			8,957			(287	)		29,613			23,020			8,364			(254	)		31,130			3,613		1,313			(41	)		4,885
YOY
Cost of revenues																										38	%		(4	%)					19	%
Selling, general and administrative																										42	%		(17	%)					27	%
Research and development																										32	%		15	%					30	%
Cost and expenses																										37	%		(5	%)					23	%
Operating income (loss)		6,320			(1,307	)		(36	)		4,977			3,718			(1,368	)		(42	)		2,308			2,958			(975	)		(25	)		1,958			464		(154	)		(3	)		307
YOY																										(53	%)		(25	%)					(61	%)
QOQ																										(20	%)		(29	%)					(15	%)
Operating margin		27	%		(18	%)					16	%		15	%		(18	%)					7	%		11	%		(13	%)					6	%
Add: total other income (loss), net		774			(241	)		—			533			(21,163	)		(331	)		—			(21,494	)		1,161			(754	)		—			407			182		(118	)		—			64
Less: income tax expense (benefit)		1,042			(16	)		—			1,026			(1,848	)		9			—			(1,839	)		1,258			37			—			1,295			197		6			—			203
Less: net income (loss) attributable to NCI		16			16			(722	)(3)		(690	)		28			22			(838	)(3)		(788	)		205			10			(860	)(3)		(645	)		32		2			(135	)(3)		(101	)
Net income (loss) attributable to Baidu		6,036			(1,548	)		686			5,174			(15,625	)		(1,730	)		796			(16,559	)		2,656			(1,776	)		835			1,715			417		(280	)		132			269
YOY																										(56	%)		15	%					(67	%)
QOQ																										—			3	%					—
Net margin		26	%		(21	%)					17	%		(63	%)		(23	%)					(52	%)		10	%		(24	%)					5	%
Non-GAAP financial measures:
Operating income (loss) (non-GAAP)		8,031			(940	)					7,055			5,823			(1,073	)					4,708			4,847			(515	)					4,307			761		(82	)					676
YOY																										(40	%)		(45	%)					(39	%)
QOQ																										(17	%)		(52	%)					(9	%)
Operating margin (non-GAAP)		35	%		(13	%)					23	%		24	%		(14	%)					15	%		19	%		(7	%)					13	%
Net income (loss) attributable to Baidu (non-GAAP)		7,533			(1,177	)					6,868			5,855			(1,400	)					5,090			4,625			(1,001	)					4,084			726		(158	)					641
YOY																										(39	%)		(15	%)					(41	%)
QOQ																										(21	%)		(29	%)					(20	%)
Net margin (non-GAAP)		33	%		(16	%)					23	%		24	%		(18	%)					16	%		18	%		(14	%)					12	%
Adjusted EBITDA		9,422			(822	)					8,564			6,994			(990	)					5,962			6,210			(428	)					5,757			974		(68	)					903
YOY																										(34	%)		(48	%)					(33	%)
QOQ																										(11	%)		(57	%)					(3	%)
Adjusted EBITDA margin		41	%		(11	%)					28	%		28	%		(13	%)					19	%		24	%		(6	%)					17	%
(1)   Includes share-based compensation as follows:
Cost of revenues		46			45						91			34			40						74			90			44						134			14		7						21
Selling, general and administrative		255			225						480			196			157						353			396			137						533			62		21						83
Research and development		1,329			79						1,408			837			84						921			1,343			83						1,426			211		13						224
Total share-based compensation		1,630			349						1,979			1,067			281						1,348			1,829			264						2,093			287		41						328

(2) Relates to intersegment eliminations and adjustments

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

12

Baidu, Inc.

Selected Information

(In millions except for per ADS information, unaudited)

	Twelve months ended December 31, 2020 (RMB)												Twelve months ended December 31, 2021 (RMB)												Twelve months ended December 31, 2021 (US$)
	Baidu Core			iQIYI			Elim & adj(2)			Baidu, Inc.			Baidu Core			iQIYI			Elim & adj(2)			Baidu, Inc.			Baidu Core		iQIYI			Elim & adj(2)			Baidu, Inc.
Total revenues		78,684			29,707			(1,317	)		107,074			95,163			30,554			(1,224	)		124,493			14,933		4,795			(192	)		19,536
YOY														21	%		3	%					16	%
Costs and expenses:
Cost of revenues (1)		28,368			27,884			(1,094	)		55,158			37,838			27,513			(1,037	)		64,314			5,937		4,317			(162	)		10,092
Selling, general and administrative (1)		12,931			5,188			(56	)		18,063			20,040			4,725			(42	)		24,723			3,145		742			(8	)		3,879
Research and development (1)		16,847			2,676			(10	)		19,513			22,143			2,795			—			24,938			3,475		439			—			3,914
Total costs and expenses		58,146			35,748			(1,160	)		92,734			80,021			35,033			(1,079	)		113,975			12,557		5,498			(170	)		17,885
YOY
Cost of revenues														33	%		(1	%)					17	%
Selling, general and administrative														55	%		(9	%)					37	%
Research and development														31	%		4	%					28	%
Cost and expenses														38	%		(2	%)					23	%
Operating income (loss)		20,538			(6,041	)		(157	)		14,340			15,142			(4,479	)		(145	)		10,518			2,376		(703	)		(22	)		1,651
YOY														(26	%)		(26	%)					(27	%)
Operating margin		26	%		(20	%)					13	%		16	%		(15	%)					8	%
Add: total other income (loss), net		9,693			(943	)		—			8,750			1,793			(1,533	)		—			260			281		(241	)		—			40
Less: income tax expense		4,041			23			—			4,064			3,090			97			—			3,187			485		15			—			500
Less: net (loss) income attributable to NCI		(334	)		31			(3,143	)(3)		(3,446	)		288			61			(2,984	)(3)		(2,635	)		45		10			(469	)(3)		(414	)
Net income (loss) attributable to Baidu		26,524			(7,038	)		2,986			22,472			13,557			(6,170	)		2,839			10,226			2,127		(969	)		447			1,605
YOY														(49	%)		(12	%)					(54	%)
Net margin		34	%		(24	%)					21	%		14	%		(20	%)					8	%
Non-GAAP financial measures:
Operating income (loss) (non-GAAP)		26,366			(4,477	)					21,732			22,201			(3,026	)					19,030			3,484		(476	)					2,986
YOY														(16	%)		(32	%)					(12	%)
Operating margin (non-GAAP)		34	%		(15	%)					20	%		23	%		(10	%)					15	%
Net income (loss) attributable to Baidu (non-GAAP)		25,192			(5,444	)					22,020			21,292			(4,487	)					18,830			3,341		(705	)					2,955
YOY														(15	%)		(18	%)					(14	%)
Net margin (non-GAAP)		32	%		(18	%)					21	%		22	%		(15	%)					15	%
Adjusted EBITDA		31,656			(3,996	)					27,503			27,682			(2,623	)					24,914			4,344		(412	)					3,910
YOY														(13	%)		(34	%)					(9	%)
Adjusted EBITDA margin		40	%		(13	%)					26	%		29	%		(9	%)					20	%
(1)   Includes share-based compensation as follows:
Cost of revenues		158			202						360			226			173						399			35		27						62
Selling, general and administrative		1,046			851						1,897			1,122			718						1,840			176		113						289
Research and development		4,154			317						4,471			4,489			328						4,817			705		51						756
Total share-based compensation		5,358			1,370						6,728			5,837			1,219						7,056			916		191						1,107

(2) Relates to intersegment eliminations and adjustments

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

13

Baidu, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions, unaudited)

	Three months ended									Three months ended									Three months ended									Three months ended
	December 31, 2020 (RMB)									September 30, 2021 (RMB)									December 31, 2021 (RMB)									December 31, 2021 (US$)
	Baidu excl. iQIYI			iQIYI			Baidu, Inc.			Baidu excl. iQIYI			iQIYI			Baidu, Inc.			Baidu excl. iQIYI			iQIYI			Baidu, Inc.			Baidu excl. iQIYI			iQIYI			Baidu, Inc.
Net cash provided by (used in) operating activities		7,546			(1,519	)		6,027			5,436			(2,081	)		3,355			5,809			(1,095	)		4,714			912			(172	)		740
Net cash (used in) provided by investing activities		(1,196	)		281			(915	)		(15,857	)		1,885			(13,972	)		(50	)		2,097			2,047			(8	)		329			321
Net cash provided (used in) by financing activities		4,185			8,392			12,577			7,744			867			8,611			(4,662	)		(5,239	)		(9,901	)		(732	)		(822	)		(1,554	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(209	)		(32	)		(241	)		(47	)		(21	)		(68	)		(589	)		(74	)		(663	)		(92	)		(12	)		(104	)
Net increase (decrease) in cash, cash equivalents and restricted cash		10,326			7,122			17,448			(2,724	)		650			(2,074	)		508			(4,311	)		(3,803	)		80			(677	)		(597	)
Cash, cash equivalents and restricted cash
At beginning of period		15,273			3,819			19,092			46,812			6,736			53,548			44,088			7,386			51,474			6,918			1,159			8,077
At end of period		25,599			10,941			36,540			44,088			7,386			51,474			44,596			3,075			47,671			6,998			482			7,480
Net cash provided by (used in) operating activities		7,546			(1,519	)		6,027			5,436			(2,081	)		3,355			5,809			(1,095	)		4,714			912			(172	)		740
Less: Capital expenditures		(2,151	)		(27	)		(2,178	)		(2,548	)		(116	)		(2,664	)		(4,213	)		(24	)		(4,237	)		(661	)		(4	)		(665	)
Free cash flow		5,395			(1,546	)		3,849			2,888			(2,197	)		691			1,596			(1,119	)		477			251			(176	)		75

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

14

Baidu, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions,unaudited)

	Twelve months ended									Twelve months ended									Twelve months ended
	December 31, 2020 (RMB)									December 31, 2021 (RMB)									December 31, 2021 (US$)
	Baidu excl. iQIYI			iQIYI			Baidu, Inc.			Baidu excl. iQIYI			iQIYI			Baidu, Inc.			Baidu excl. iQIYI			iQIYI			Baidu, Inc.
Net cash provided by (used in) operating activities		29,611			(5,411	)		24,200			26,074			(5,952	)		20,122			4,092			(934	)		3,158
Net cash (used in) provided by investing activities		(27,711	)		159			(27,552	)		(32,706	)		1,262			(31,444	)		(5,132	)		198			(4,934	)
Net cash (used in) provided by financing activities		(3,709	)		9,374			5,665			26,355			(2,959	)		23,396			4,135			(464	)		3,671
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(121	)		(91	)		(212	)		(726	)		(217	)		(943	)		(114	)		(34	)		(148	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(1,930	)		4,031			2,101			18,997			(7,866	)		11,131			2,981			(1,234	)		1,747
Cash, cash equivalents and restricted cash
At beginning of period		27,529			6,910			34,439			25,599			10,941			36,540			4,017			1,716			5,733
At end of period		25,599			10,941			36,540			44,596			3,075			47,671			6,998			482			7,480
Net cash provided by (used in) operating activities		29,611			(5,411	)		24,200			26,074			(5,952	)		20,122			4,092			(934	)		3,158
Less: Capital expenditures		(4,843	)		(241	)		(5,084	)		(10,634	)		(262	)		(10,896	)		(1,669	)		(41	)		(1,710	)
Free cash flow		24,768			(5,652	)		19,116			15,440			(6,214	)		9,226			2,423			(975	)		1,448

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

15

Baidu, Inc.

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
	December 31, 2020 (RMB)									September 30, 2021 (RMB)									December 31, 2021 (RMB)									December 31, 2021 (US$)
	Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.
Operating income (loss)		6,320			(1,307	)		4,977			3,718			(1,368	)		2,308			2,958			(975	)		1,958			464			(154	)		307
Add: Share-based compensation expenses		1,630			349			1,979			1,067			281			1,348			1,829			264			2,093			287			41			328
Add: Amortization and impairment of intangible assets(1)		81			18			99			62			14			76			60			17			77			10			3			13
Add: Contingent loss(5)		—			—			—			976			—			976			—			—			—			—			—			—
Add: iQIYI’s non-recurring employee severance costs(6)		—			—			—			—			—			—			—			179			179			—			28			28
Operating income (loss) (non-GAAP)		8,031			(940	)		7,055			5,823			(1,073	)		4,708			4,847			(515	)		4,307			761			(82	)		676
Add: Depreciation of fixed assets		1,391			118			1,509			1,171			83			1,254			1,363			87			1,450			213			14			227
Adjusted EBITDA		9,422			(822	)		8,564			6,994			(990	)		5,962			6,210			(428	)		5,757			974			(68	)		903
Net income (loss) attributable to Baidu		6,036			(1,548	)		5,174			(15,625	)		(1,730	)		(16,559	)		2,656			(1,776	)		1,715			417			(280	)		269
Add: Share-based compensation expenses		1,618			349			1,802			1,086			281			1,231			1,805			264			1,941			284			41			305
Add: Amortization and impairment of intangible assets(1)		67			18			78			55			14			63			55			17			65			10			3			10
Add: Disposal (gain) loss		(28	)		—			(28	)		—			—			—			—			—			—			—			—			—
Add: Impairment of long-term investments		147			—			147			3,187			29			3,202			752			139			824			117			22			129
Add: Fair value (gain) loss of long-term investments		(380	)		(1	)		(380	)		18,970			8			18,974			(1,339	)		2			(1,337	)		(210	)		—			(210	)
Add: Reconciling items on equity method investments(2)		250			9			256			36			3			38			430			177			521			67			28			83
Add: Charitable donation from Baidu(4)		—			—			—			90			—			90			50			—			50			8			—			8
Add: Contingent loss(5)		—			—			—			976			—			976			—			—			—			—			—			—
Add: iQIYI’s non-recurring employee severance costs(6)		—			—			—			—			—			—			—			179			92			—			28			14
Add: Tax effects on non-GAAP adjustments(3)		(177	)		(4	)		(181	)		(2,920	)		(5	)		(2,925	)		216			(3	)		213			33			—			33
Net income (loss) attributable to Baidu (non-GAAP)		7,533			(1,177	)		6,868			5,855			(1,400	)		5,090			4,625			(1,001	)		4,084			726			(158	)		641
Diluted earnings (loss) per ADS								15.05									(48.18	)								4.51									0.71
Add: Accretion of the redeemable noncontrolling interests								0.08									0.49									0.36									0.06
Add: Non-GAAP adjustments to earnings per ADS								4.95									62.35									6.73									1.05
Diluted earnings per ADS (non-GAAP)								20.08									14.66									11.60									1.82

(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.

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

(5) This represents contingent loss pertaining to legal proceeding involving former advertising agency.

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

16

Baidu, Inc.     

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

(In millions except for ADS and per ADS information, unaudited)    

	Twelve months ended									Twelve months ended									Twelve months ended
	December 31, 2020 (RMB)									December 31, 2021 (RMB)									December 31, 2021 (US$)
	Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.
Operating income (loss)		20,538			(6,041	)		14,340			15,142			(4,479	)		10,518			2,376			(703	)		1,651
Add: Share-based compensation expenses		5,358			1,370			6,728			5,837			1,219			7,056			916			191			1,107
Add: Amortization and impairment of intangible assets(1)		470			194			664			246			55			301			39			8			47
Add: Contingent loss(5)		—			—			—			976			—			976			153			—			153
Add: iQIYI’s non-recurring employee severance costs(6)		—			—			—			—			179			179			—			28			28
Operating income (loss) (non-GAAP)		26,366			(4,477	)		21,732			22,201			(3,026	)		19,030			3,484			(476	)		2,986
Add: Depreciation of fixed assets		5,290			481			5,771			5,481			403			5,884			860			64			924
Adjusted EBITDA		31,656			(3,996	)		27,503			27,682			(2,623	)		24,914			4,344			(412	)		3,910
Net income (loss) attributable to Baidu		26,524			(7,038	)		22,472			13,557			(6,170	)		10,226			2,127			(969	)		1,605
Add: Share-based compensation expenses		5,324			1,370			6,078			5,814			1,219			6,444			912			191			1,011
Add: Amortization and impairment of intangible assets(1)		355			194			479			220			55			251			35			9			39
Add: Disposal loss (gain)		210			—			210			—			(45	)		(28	)		—			(7	)		(4	)
Add: Impairment of long-term investments		2,534			74			2,577			4,144			170			4,232			650			27			664
Add: Fair value gain of long-term investments		(12,078	)		(40	)		(12,103	)		(2,734	)		(87	)		(2,778	)		(429	)		(14	)		(436	)
Add: Reconciling items on equity method investments(2)		2,447			32			2,467			1,249			192			1,349			196			30			212
Add: Charitable donation from Baidu(4)		—			—			—			140			—			140			22			—			22
Add: Contingent loss(5)		—			—			—			976			—			976			153			—			153
Add: iQIYI’s non-recurring employee severance costs(6)		—			—			—			—			179			92			—			28			14
Add: Tax effects on non-GAAP adjustments(3)		(124	)		(36	)		(160	)		(2,074	)		—			(2,074	)		(325	)		—			(325	)
Net income (loss) attributable to Baidu (non-GAAP)		25,192			(5,444	)		22,020			21,292			(4,487	)		18,830			3,341			(705	)		2,955
Diluted earnings per ADS								64.98									28.07									4.40
Add: Accretion of the redeemable noncontrolling interests								0.26									1.00									0.16
Add: Non-GAAP adjustments to earnings per ADS								(1.31	)								24.46									3.84
Diluted earnings per ADS (non-GAAP)								63.93									53.53									8.40

(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, adjusted for related income tax effects.    

(3) This represents tax impact of all non-GAAP adjustments    

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

(5) This represents contingent loss pertaining to legal proceeding involving former advertising agency.    

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

17