Baidu (BIDU) 6-K Baidu Announces First Quarter 2022 Results

Exhibit 99.1

Baidu Announces First Quarter 2022 Results

BEIJING, China, 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 Highlights¹

	Baidu, Inc.
(In millions except per ADS, unaudited)	Q1 2021			Q4 2021			Q1 2022						YOY			QOQ
	RMB			RMB			RMB			US$
Total revenues		28,134			33,088			28,411			4,482			1	%		(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 EBITDA2		5,900			5,757			5,499			867			(7	%)		(4	%)
Adjusted EBITDA margin		21	%		17	%		19	%		19	%

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).

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	Baidu Core
(In millions, unaudited)	Q1 2021			Q4 2021			Q1 2022						YOY			QOQ
	RMB			RMB			RMB			US$
Total revenues		20,483			25,978			21,378			3,372			4	%		(18	%)
Operating income		3,847			2,958			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 EBITDA2		6,487			6,210			5,106			805			(21	%)		(18	%)
Adjusted EBITDA margin		32	%		24	%		24	%		24	%

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.

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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 RMB28.4 billion ($4.48 billion), increasing 1% year over year.

• Revenue from Baidu Core was RMB21.4 billion ($3.37 billion), increasing 4% year over year; online marketing revenue was RMB15.7 billion ($2.47 billion), decreasing 4% year over year, and non-online marketing revenue was RMB5.7 billion ($903 million), up 35% year over year, driven by cloud and other AI-powered businesses.

• Revenue from iQIYI was RMB7.3 billion ($1.15 billion), decreasing 9% year over year.

Cost of revenues was RMB15.5 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 RMB4.7 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 RMB5.6 billion ($885 million), increasing 10% year over year, primarily due to an increase in personnel related expense.

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Operating income was RMB2.6 billion ($410 million). Baidu Core operating income was RMB2.5 billion ($398 million), and Baidu Core operating margin was 12%. Non-GAAP operating income was RMB4.0 billion ($630 million). Non-GAAP Baidu Core operating income was RMB3.7 billion ($581 million), and non-GAAP Baidu Core operating margin was 17%.

Total other loss, net was RMB3.0 billion ($466 million), which mainly included a fair value loss of RMB3.0 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 RMB391 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 RMB885 million ($140 million), and diluted loss per ADS was RMB2.87 ($0.45). Net loss attributable to Baidu Core was RMB963 million ($152 million). Non- GAAP net income attributable to Baidu was RMB3.9 billion ($612 million). Non-GAAP diluted earnings per ADS was RMB11.22 ($1.77). Non-GAAP net income attributable to Baidu Core was RMB3.8 billion ($600 million), and non-GAAP net margin for Baidu Core was 18%.

Adjusted EBITDA was RMB5.5 billion ($867 million) and adjusted EBITDA margin was 19%. Adjusted EBITDA for Baidu Core was RMB5.1 billion ($805 million) and adjusted EBITDA margin for Baidu Core was 24%.

As of March 31, 2022, cash, cash equivalents, restricted cash and short-term investments were RMB191.0 billion ($30.13 billion), and cash, cash equivalents, restricted cash and short- term investments excluding iQIYI were RMB185.8 billion ($29.31 billion). Free cash flow was negative RMB107 million ($17 million), and free cash flow excluding iQIYI was RMB1.1 billion ($175 million).

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Conference Call Information

Baidu’s management will hold an earnings conference call at 8.00AM on May 26, 2022, U.S. Eastern Time (8.00PM on May 26, 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/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 at http://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

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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.

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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 advertising agencies, iQIYI’s non-recurring employee severance costs, 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”.

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Baidu, Inc.

Condensed Consolidated Statements of Income (Loss)

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

	Three Months Ended
	March 31, 2021			December 31, 2021			March 31, 2022			March 31, 2022
	RMB			RMB			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			62
Net income (loss)		25,032			1,070			(751	)		(118	)
Net (loss) income attributable to noncontrolling interests		(621	)		(645	)		134			22
Net income (loss) attributable to Baidu		25,653			1,715			(885	)		(140	)

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	Three Months Ended
	March 31, 2021		December 31, 2021		March 31, 2022			March 31, 2022
	RMB		RMB		RMB			US$(2)
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			2,767
— Diluted		2,777		2,816		2,767			2,767
(1)   Includes share-based compensation expenses as follows:
Cost of revenues		79		134		82			13
Selling, general and administrative		471		533		377			60
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 RMB6.3393 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.

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Baidu, Inc.

Condensed Consolidated Balance Sheets

(In millions, unaudited)

	December 31, 2021		March 31, 2022		March 31, 2022
	RMB		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, net		23,027		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		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		164,130		25,891
Total assets		380,034		375,633		59,254

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	December 31, 2021		March 31, 2022		March 31, 2022
	RMB		RMB		US$
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		97		87		14
Long-term loans, current portion		2		—		—
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		23
Deferred revenue		223		234		37
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		380,034		375,633		59,254

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Baidu, Inc.

Selected Information

(In millions, unaudited)

	Three months ended												Three months ended												Three months ended												Three months ended
	March 31, 2021 (RMB)												December 31, 2021 (RMB)												March 31, 2022 (RMB)												March 31, 2022 (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		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																										4	%		(9	%)					1	%
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			—			7,390			5,134			474			—			5,608			810			75		—			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	%)					4	%
Selling, general and administrative																										(3	%)		(38	%)					(11	%)
Research and development																										16	%		(29	%)					10	%
Cost and expenses																										13	%		(20	%)					2	%
Operating income (loss)		3,847			(1,014	)		(44	)		2,789			2,958			(975	)		(25	)		1,958			2,524			94			(17	)		2,601			398			14		(2	)		410
YOY																										(34	%)		—						(7	%)
QOQ																										(15	%)		—						33	%
Operating margin		19	%		(13	%)					10	%		11	%		(13	%)					6	%		12	%		1	%					9	%
Add: total other income (loss), net		23,999			(222	)		—			23,777			1,161			(754	)		—			407			(3,058	)		97			—			(2,961	)		(481	)		15		—			(466	)
Less: income tax expense		1,513			21			—			1,534			1,258			37			—			1,295			374			17			—			391			59			3		—			62
Less: net (loss) income attributable to NCI		(21	)		10			(610	)(3)		(621	)		205			10			(860	)(3)		(645	)		55			5			74	(3)		134			10			1		11	(3)		22
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	)		25		(13	)		(140	)
YOY																										—			—						—
QOQ																										—			—						—
Net margin		129	%		(16	%)					91	%		10	%		(24	%)					5	%		(5	%)		2	%					(3	%)

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	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.			Baidu Core			iQIYI			Elim & adj(2)	Baidu, Inc.			Baidu Core		iQIYI		Elim & adj(2)	Baidu, Inc.
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		51			630
YOY																						(27	%)		—				(8	%)
QOQ																						(24	%)		—				(7	%)
Operating margin (non-GAAP)		25	%		(8	%)			16	%		19	%		(7	%)			13	%		17	%		4	%			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		25			612
YOY																						(22	%)		—				(10	%)
QOQ																						(18	%)		—				(5	%)
Net margin (non-GAAP)		24	%		(13	%)			15	%		18	%		(14	%)			12	%		18	%		2	%			14	%
Adjusted EBITDA		6,487			(543	)			5,900			6,210			(428	)			5,757			5,106			410				5,499			805		64			867
YOY																						(21	%)		—				(7	%)
QOQ																						(18	%)		—				(4	%)
Adjusted EBITDA margin		32	%		(7	%)			21	%		24	%		(6	%)			17	%		24	%		6	%			19	%
(1) Includes share-based compensation as follows:
Cost of revenues		33			46				79			90			44				134			45			37				82			7		6			13
Selling, general and administrative		256			215				471			396			137				533			257			120				377			41		19			60
Research and development		866			83				949			1,343			83				1,426			804			60				864			127		9			136
Total share-based compensation		1,155			344				1,499			1,829			264				2,093			1,106			217				1,323			175		34			209

(2) Relates to intersegment eliminations and adjustments

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

13

Baidu, Inc.

Condensed Consolidated Statements of Cash Flows

(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 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		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			21
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			44,596			3,075			47,671			43,924			3,883			47,807			6,929			612			7,541
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
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.

14

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
	March 31, 2021 (RMB)									December 31, 2021 (RMB)									March 31, 2022 (RMB)									March 31, 2022 (US$)
	Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.
Operating income (loss)		3,847			(1,014	)		2,789			2,958			(975	)		1,958			2,524			94			2,601			398			14			410
Add: Share-based compensation expenses		1,155			344			1,499			1,829			264			2,093			1,106			217			1,323			175			34			209
Add: Amortization and impairment of intangible assets(1)		62			12			74			60			17			77			56			16			72			8			3			11
Add: iQIYI non-recurring employee severance costs(4)		—			—			—			—			179			179			—			—			—			—			—			—
Operating income (loss) (non-GAAP)		5,064			(658	)		4,362			4,847			(515	)		4,307			3,686			327			3,996			581			51			630
Add: Depreciation of fixed assets		1,423			115			1,538			1,363			87			1,450			1,420			83			1,503			224			13			237
Adjusted EBITDA		6,487			(543	)		5,900			6,210			(428	)		5,757			5,106			410			5,499			805			64			867
Net income (loss) attributable to Baidu		26,354			(1,267	)		25,653			2,656			(1,776	)		1,715			(963	)		169			(885	)		(152	)		25			(140	)
Add: Share-based compensation expenses		1,146			344			1,325			1,805			264			1,941			1,101			217			1,210			175			34			191
Add: Amortization and impairment of intangible assets(1)		55			12			61			55			17			65			50			16			59			8			3			9
Add: Disposal (gain) loss		—			—			—			—			—			—			—			(430	)		(216	)		—			(68	)		(34	)
Add: Impairment of long-term investments		—			—			—			752			139			824			598			183			690			93			29			109
Add: Fair value (gain) loss of long-term investments		(23,545	)		(88	)		(23,590	)		(1,339	)		2			(1,337	)		3,037			(1	)		3,037			479			—			479
Add: Reconciling items on equity method investments(2)		593			(20	)		583			430			177			521			456			11			462			72			2			73
Add: Charitable donation from Baidu(3)		—			—			—			50			—			50			—			—			—			—			—			—
Add: iQIYI non-recurring employee severance costs(4)		—			—			—			—			179			92			—			—			—			—			—			—
Add: Tax effects on non-GAAP adjustments		267			(2	)		265			216			(3	)		213			(475	)		(3	)		(478	)		(75	)		—			(75	)
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			25			612

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	Three months ended					Three months ended				Three months ended					Three months ended
	March 31, 2021 (RMB)					December 31, 2021 (RMB)				March 31, 2022 (RMB)					March 31, 2022 (US$)
	Baidu Core	iQIYI	Baidu, Inc.			Baidu Core	iQIYI	Baidu, Inc.		Baidu Core	iQIYI	Baidu, Inc.			Baidu Core	iQIYI	Baidu, Inc.
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.

16