Baidu (BIDU) 6-K Baidu Announces Fourth Quarter and Fiscal Year 2022 Results

Exhibit 99.1

Baidu Announces Fourth Quarter and Fiscal Year 2022 Results

BEIJING, China, February 22, 2023 –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, 2022.

“2022 was a challenging year, but we used this period to prepare the company for better times. In 2023, we believe we have a clear path to reaccelerate our revenue growth, and we are now well positioned to make use of the opportunities that China’s economic recovery offers us,” said Robin Li, Co-founder and CEO of Baidu. “With our long-term investments in AI, we are poised to capitalize on the imminent inflection point in AI, unlocking exciting new opportunities across our entire business portfolio—from mobile ecosystem to AI Cloud, autonomous driving, smart devices, and beyond.”

“We initiated our efforts towards cost optimization and business efficiency at an early stage in the pandemic, creating a stronger, leaner company. In the second half of 2022, Baidu Core non-GAAP operating profit grew 14% year over year. We believe a more streamlined operation will support the sustainable development of our company over the long term,” said Rong Luo, CFO of Baidu.

Fourth Quarter and Fiscal Year 2022 Financial Highlights¹

	Baidu, Inc.
(In millions except per	Q4			Q3			Q4									FY			FY
ADS, unaudited)	2021			2022			2022						YOY			2021			2022						YOY
	RMB			RMB			RMB			US$						RMB			RMB			US$
Total revenues		33,088			32,540			33,077			4,796			0	%		124,493			123,675			17,931			(1	%)
Operating income		1,958			5,317			4,593			666			135	%		10,518			15,911			2,307			51	%
Operating income (non-GAAP)2		4,307			7,200			6,497			942			51	%		19,030			23,186			3,362			22	%
Net income (loss) to Baidu		1,715			(146	)		4,953			718			189	%		10,226			7,559			1,096			(26	%)
Net income to Baidu (non-GAAP) 2		4,084			5,889			5,371			779			32	%		18,830			20,680			2,998			10	%
Diluted earnings (loss) per ADS		4.51			(0.87	)		13.59			1.97			201	%		28.07			19.85			2.88			(29	%)
Diluted earnings per ADS (non-GAAP) 2		11.60			16.87			15.25			2.21			31	%		53.53			58.93			8.54			10	%
Adjusted EBITDA 2		5,757			8,879			8,231			1,193			43	%		24,914			29,663			4,301			19	%
Adjusted EBITDA margin		17	%		27	%		25	%		25	%					20	%		24	%		24	%

¹  Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB 6.8972 as of December 30, 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).

1/16

	Baidu Core
	Q4			Q3			Q4									FY			FY
(In millions, unaudited)	2021			2022			2022						YOY			2021			2022						YOY
	RMB			RMB			RMB			US$						RMB			RMB			US$
Total revenues		25,978			25,239			25,654			3,719			(1	%)		95,163			95,431			13,836			0	%
Operating income		2,958			4,982			3,782			548			28	%		15,142			14,534			2,107			(4	%)
Operating income (non-GAAP) 2		4,847			6,650			5,491			796			13	%		22,201			20,948			3,037			(6	%)
Net income to Baidu Core		2,656			25			4,773			692			80	%		13,557			7,551			1,095			(44	%)
Net income to Baidu Core (non-GAAP) 2		4,625			5,767			4,915			713			6	%		21,292			19,935			2,890			(6	%)
Adjusted EBITDA2		6,210			8,239			7,146			1,036			15	%		27,682			27,088			3,927			(2	%)
Adjusted EBITDA margin		24	%		33	%		28	%		28	%					29	%		28	%		28	%

Operational Highlights

Corporate

• Baidu’s board of directors has authorized a new share repurchase program under which the Company may repurchase up to US$5 billion of its shares, effective through December 31, 2025.

• Baidu received a B rating at the latest CDP climate change scores, making a significant improvement from its D rating in 2021. CDP is a non-profit organization that runs the global disclosure system for investors, companies, cities, states, and regions to manage their environmental impacts.

AI Cloud

• Baidu ACE smart transportation has been adopted by 69 cities, up from 35 cities a year ago, based on contract amounts of over RMB10 million, as of the end of 2022.

• Baidu was once again ranked the No. 1 AI Cloud provider, according to IDC’s first half of 2022 report on China’s public cloud market for the fourth consecutive year.

• PaddlePaddle developer community has grown to 5.35 million and has served 200,000 businesses, as of the end of 2022. Developers have created 670,000 models on PaddlePaddle by the end of 2022.

Intelligent Driving

• Apollo Go, Baidu’s autonomous ride-hailing service, provided 561K rides in the fourth quarter of 2022, up 162% year over year. The cumulative rides provided to the public by Apollo Go exceeded 2 million by the end of January 2023.

• Apollo Go received Beijing’s first license to test vehicles with no driver or safety operator in the car on December 30, 2022, taking Baidu one step closer to providing fully driverless ride-hailing service on public roads in the capital city.

2/16

Other Growth Initiatives

• Xiaodu ranked No.1 in smart display shipments and smart speaker shipments in China for the first nine months of 2022, according to IDC, Strategy Analytics, and Canalys.

Mobile Ecosystem

• In December, Baidu App’s MAUs reached 648 million, up 4% year over year.

• Managed Page accounted for 45% of Baidu Core’s online marketing revenue in the fourth quarter of 2022. In 2022, revenues from Managed Page accounted for 48% of total online marketing revenue, up from about 40% a year ago.

iQIYI

• iQIYI’s average daily number of total subscribing members for the quarter was 111.6 million, compared to 97.0 million for the fourth quarter of 2021 and 101.0 million for the third quarter of 2022.

Fourth Quarter 2022 Financial Results

Total revenues were RMB 33.1 billion ($4.80 billion), which is basically flat from last year.

• Revenue from Baidu Core was RMB 25.7 billion ($3.72 billion), decreasing 1% year over year; online marketing revenue was RMB 18.1 billion ($2.62 billion), down 6% year over year primarily due to the resurgence of Covid-19 in certain cities in China, and non-online marketing revenue was RMB 7.6 billion ($1.10 billion), up 11% year over year, mainly driven by other AI-powered businesses and cloud business.

• Revenue from iQIYI was RMB 7.6 billion ($1.10 billion), increasing 3% year over year.

Cost of revenues was RMB 16.9 billion ($2.46 billion), decreasing 2% year over year, primarily due to the reduction in content costs, cost of goods sold and other costs related to new AI business, partially offset by the increase in traffic acquisition costs.

Selling, general and administrative expenses were RMB 5.9 billion ($853 million), decreasing 9% year over year, primarily due to the decrease in personnel-related expenses.

Research and development expense was RMB 5.7 billion ($820 million), decreasing 23% year over year, primarily due to the decrease in personnel-related expense.

Operating income was RMB 4.6 billion ($666 million). Baidu Core operating income was RMB 3.8 billion ($548 million), and Baidu Core operating margin was 15%. Non-GAAP operating income was RMB 6.5 billion ($942 million). Non-GAAP Baidu Core operating income was RMB 5.5 billion ($796 million), and non-GAAP Baidu Core operating margin was 21%.

3/16

Total other income, net was RMB 1.8 billion ($258 million), which mainly included a fair value gain of RMB 1.6 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 and private equity funds, is subject to quarterly fair value adjustments, which may contribute to net income volatility in future periods. Total other income, net was RMB 407 million for the same period last year, which mainly included a fair value gain of RMB 1.5 billion and an impairment loss of RMB 891 million from long-term investments.

Income tax expense was RMB 1.3 billion ($181 million), decreasing 3% year over year.

Net income attributable to Baidu was RMB 5.0 billion ($718 million), and diluted earnings per ADS was RMB 13.59 ($1.97). Net income attributable to Baidu Core was RMB 4.8 billion ($692 million), and net margin for Baidu Core was 19%. Non-GAAP net income attributable to Baidu was RMB 5.4 billion ($779 million). Non-GAAP diluted earnings per ADS was RMB 15.25 ($2.21). Non-GAAP net income attributable to Baidu Core was RMB 4.9 billion ($713 million), and non-GAAP net margin for Baidu Core was 19%.

Adjusted EBITDA was RMB 8.2 billion ($1.19 billion) and adjusted EBITDA margin was 25%. Adjusted EBITDA for Baidu Core was RMB 7.1 billion ($1.04 billion) and adjusted EBITDA margin for Baidu Core was 28%.

As of December 31, 2022, cash, cash equivalents, restricted cash and short-term investments were RMB 185.3 billion ($26.87 billion), and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 177.4 billion ($25.72 billion). Free cash flow was RMB 5.9 billion ($859 million), and free cash flow excluding iQIYI was RMB 5.1 billion ($736 million).

Fiscal Year 2022 Results

Total revenues were RMB 123.7 billion ($17.93 billion), decreasing 1% year over year.

• Revenue from Baidu Core was RMB 95.4 billion ($13.84 billion), which is basically flat from last year; online marketing revenue was RMB 69.5 billion ($10.08 billion), decreasing 6% year over year, and non-online marketing revenue was RMB 25.9 billion ($3.76 billion), up 22% year over year, mainly driven by cloud and other AI-powered businesses.

• Revenue from iQIYI was RMB 29.0 billion ($4.20 billion), decreasing 5% year over year.

Cost of revenues was RMB 63.9 billion ($9.27 billion), decreasing 1% year over year, which is basically flat from last year, primarily due to the increase in traffic acquisition costs, bandwidth costs, cost of goods sold and other costs related to new AI business, offset by the decrease in content costs.

4/16

Selling, general and administrative expenses were RMB 20.5 billion ($2.98 billion), decreasing 17% year over year, primarily due to the decrease in channel spending, promotional marketing and personnel-related expenses.

Research and development expenses were RMB 23.3 billion ($3.38 billion), decreasing 7% year over year, primarily due to the decrease in personnel-related expenses.

Operating income was RMB 15.9 billion ($2.31 billion). Baidu Core operating income was RMB 14.5 billion ($2.11 billion), and Baidu Core operating margin was 15%. Non-GAAP operating income was RMB 23.2 billion ($3.36 billion). Non-GAAP Baidu Core operating income was RMB 20.9 billion ($3.04 billion), and non-GAAP Baidu Core operating margin was 22%.

Total other loss, net was RMB 5.8 billion ($841 million), which mainly included a fair value loss of RMB 3.9 billion and an impairment loss of RMB 3.0 billion from long-term investments. A significant portion of long-term investments, including but not limited to investments in equity securities of public and private companies and private equity funds, is subject to quarterly fair value adjustments, which may contribute to net income volatility in future periods. Total other income, net was RMB 260 million for 2021, 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.

Income tax expense was RMB 2.6 billion ($374 million), decreasing 19% year over year, primarily due to deferred tax benefit recognized on fair value loss of long-term investments in 2022 whereas the Company had deferred tax expense recognized on fair value gain of long-term investments in 2021.

Net income attributable to Baidu was RMB 7.6 billion ($1.10 billion), and diluted earnings per ADS was RMB 19.85 ($2.88). Net income attributable to Baidu Core was RMB 7.6 billion ($1.10 billion), and net margin for Baidu Core was 8%. Non-GAAP net income attributable to Baidu was RMB 20.7 billion ($3.00 billion), and non-GAAP diluted earnings per ADS amounted to RMB 58.93 ($8.54). Non-GAAP net income attributable to Baidu Core was RMB 19.9 billion ($2.89 billion), and non-GAAP net margin for Baidu Core was 21%.

Adjusted EBITDA was RMB 29.7 billion ($4.30 billion) and adjusted EBITDA margin was 24%. Adjusted EBITDA to Baidu Core was RMB 27.1 billion ($3.93 billion) and adjusted EBITDA margin for Baidu Core was 28%.

Free cash flow was RMB 17.9 billion ($2.59 billion), and free cash flow excluding iQIYI was RMB 18.1 billion ($2.63 billion).

5/16

Conference Call Information

Baidu’s management will hold an earnings conference call at 7.30AM on February 22, 2023, U.S. Eastern Time (8.30PM on February 22, 2023, Beijing Time).

Please register in advance of the conference call using the link provided below. It will automatically direct you to the registration page of “Baidu Inc. Q4 2022 Earnings Conference Call”. Please follow the steps to enter your registration details, then click “Register”. Upon registering, you will then be provided with the dial-in number, the passcode, and your unique access PIN. This information will also be emailed to you as a calendar invite.

For pre-registration, please click

https://s1.c-conf.com/diamondpass/10028709-re5fs4.html

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

Additionally, a live and archived webcast of this conference call will be available at https://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

6/16

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, non-GAAP operating margin, non-GAAP net income attributable to Baidu, non-GAAP net margin, non-GAAP diluted earnings per ADS, adjusted EBITDA, adjusted EBITDA margin and free cash flow. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Baidu believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain items that may not be indicative of its recurring core business operating results, such as operating performance excluding non-cash charges or non-operating in nature. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Baidu’s historical performance and liquidity. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Company’s results of operations. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data.

7/16

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.

8/16

Baidu, Inc.

Condensed Consolidated Statements of (Loss) Income

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

		Three Months Ended												Twelve Months Ended
		December 31,			September 30,			December 31,			December 31,			December 31,			December 31,			December 31,
		2021			2022			2022			2022			2021			2022			2022
		RMB			RMB			RMB			US$(2)			RMB			RMB			US$(2)
Revenues:
Online marketing services			20,723			19,943			19,571			2,838			80,695			74,711			10,832
Others			12,365			12,597			13,506			1,958			43,798			48,964			7,099
Total revenues			33,088			32,540			33,077			4,796			124,493			123,675			17,931
Costs and expenses:
Cost of revenues(1)			17,289			16,273			16,945			2,457			64,314			63,935			9,269
Selling, general and administrative(1)			6,451			5,193			5,881			853			24,723			20,514			2,975
Research and development(1)			7,390			5,757			5,658			820			24,938			23,315			3,380
Total costs and expenses			31,130			27,223			28,484			4,130			113,975			107,764			15,624
																					��
Operating income			1,958			5,317			4,593			666			10,518			15,911			2,307
Other income (loss):
Interest income			1,514			1,619			1,647			239			5,551			6,245			905
Interest expense			(873	)		(724	)		(738	)		(107	)		(3,421	)		(2,913	)		(422	)
Foreign exchange (loss) gain, net			(27	)		(806	)		(338	)		(49	)		100			(1,484	)		(215	)
Share of losses from equity method investments			(773	)		(376	)		(523	)		(76	)		(932	)		(1,910	)		(277	)
Others, net			566			(4,483	)		1,733			251			(1,038	)		(5,737	)		(832	)
Total other income (loss), net			407			(4,770	)		1,781			258			260			(5,799	)		(841	)
Income before income taxes			2,365			547			6,374			924			10,778			10,112			1,466
Income tax expense			1,295			908			1,254			181			3,187			2,578			374
Net income (loss)			1,070			(361	)		5,120			743			7,591			7,534			1,092
Net (loss) income attributable to noncontrolling interests			(645	)		(215	)		167			25			(2,635	)		(25	)		(4	)
Net income (loss) attributable to Baidu			1,715			(146	)		4,953			718			10,226			7,559			1,096
Earnings (loss) per ADS (1 ADS representing 8 Class A ordinary shares):
-Basic			4.57			(0.87	)		13.73			1.99			28.64			20.02			2.90
-Diluted	��		4.51			(0.87	)		13.59			1.97			28.07			19.85			2.88
Earnings (loss) per share for Class A and Class B ordinary shares:
-Basic			0.57			(0.11	)		1.72			0.25			3.58			2.50			0.36
-Diluted			0.56			(0.11	)		1.70			0.25			3.51			2.48			0.36
Weighted average number of Class A and Class B ordinary shares outstanding (in millions):
-Basic			2,780			2,790			2,789			2,789			2,758			2,782			2,782
-Diluted			2,816			2,790			2,801			2,801			2,814			2,809			2,809
(1)   Includes share-based compensation expenses as follows:
Cost of revenues			134			84			158			23			399			409			59
Selling, general and administrative			533			480			450			65			1,840			1,750			253
Research and development			1,426			1,039			1,233			179			4,817			4,629			672
Total share-based compensation expenses			2,093			1,603			1,841			267			7,056			6,788			984

(2) All translations from RMB to U.S. dollars are made at a rate of RMB 6.8972 to US$1.00, the exchange rate in effect as of December 30, 2022 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

9/16

Baidu, Inc.     

Condensed Consolidated Balance Sheets    

(In millions, unaudited)    

	December 31,		December 31,		December 31,
	2021		2022		2022
	RMB		RMB		US$
ASSETS
Current assets:
Cash and cash equivalents		36,850		53,156		7,707
Restricted cash		10,821		11,330		1,643
Short-term investments, net		143,243		120,839		17,520
Accounts receivable, net		9,981		11,733		1,701
Amounts due from related parties		1,368		5,432		788
Other current assets, net		11,052		10,360		1,501
Total current assets		213,315		212,850		30,860
Non-current assets:
Fixed assets, net		23,027		23,973		3,476
Licensed copyrights, net		7,258		6,841		992
Produced content, net		10,951		13,002		1,885
Intangible assets, net		1,689		1,254		182
Goodwill		22,605		22,477		3,259
Long-term investments, net		59,418		55,297		8,017
Long-term time deposits and held-to-maturity investments		7,914		23,629		3,426
Amounts due from related parties		3,487		60		9
Deferred tax assets, net		2,372		2,129		309
Operating lease right-of-use assets		12,065		10,365		1,503
Other non-current assets		15,933		19,096		2,768
Total non-current assets		166,719		178,123		25,826
Total assets		380,034		390,973		56,686
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Short-term loans		4,168		5,343		775
Accounts payable and accrued liabilities		41,384		38,014		5,512
Customer deposits and deferred revenue		13,706		13,116		1,902
Deferred income		97		72		10
Long-term loans, current portion		2		—		—
Convertible senior notes, current portion		—		8,305		1,204
Notes payable, current portion		10,505		6,904		1,001
Amounts due to related parties		1,764		5,067		735
Operating lease liabilities		2,862		2,809		407
Total current liabilities		74,488		79,630		11,546
Non-current liabilities:
Deferred income		129		159		23
Deferred revenue		223		331		48
Amounts due to related parties		3,268		99		14
Long-term loans		12,629		13,722		1,990
Notes payable		43,120		39,893		5,784
Convertible senior notes		12,652		9,568		1,387
Deferred tax liabilities		3,286		2,898		420
Operating lease liabilities		5,569		4,810		697
Other non-current liabilities		718		2,058		299
Total non-current liabilities		81,594		73,538		10,662
Total liabilities		156,082		153,168		22,208
Redeemable noncontrolling interests		7,148		8,393		1,217
Equity
Total Baidu shareholders’ equity		211,459		223,478		32,401
Noncontrolling interests		5,345		5,934		860
Total equity		216,804		229,412		33,261
Total liabilities, redeemable noncontrolling interests, and equity		380,034		390,973		56,686

10/16

Baidu, Inc.

Selected Information

(In millions, unaudited)

	Three months ended December 31, 2021 (RMB)												Three months ended September 30, 2022 (RMB)												Three months ended December 31, 2022 (RMB)												Three months ended December 31, 2022, 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.
Total revenues		25,978			7,389			(279	)		33,088			25,239			7,471			(170	)		32,540			25,654			7,593			(170	)		33,077			3,719		1,101			(24	)		4,796
YOY																										(1	%)		3	%					(0	%)
QOQ																										2	%		2	%					2	%
Costs and expenses:
Cost of revenues (1)		11,017			6,507			(235	)		17,289			10,745			5,705			(177	)		16,273			11,712			5,405			(172	)		16,945			1,699		784			(26	)		2,457
Selling, general and administrative (1)		5,377			1,093			(19	)		6,451			4,231			980			(18	)		5,193			4,969			939			(27	)		5,881			720		136			(3	)		853
Research and development (1)		6,626			764			—			7,390			5,281			476			—			5,757			5,191			467			—			5,658			752		68			—			820
Total costs and expenses		23,020			8,364			(254	)		31,130			20,257			7,161			(195	)		27,223			21,872			6,811			(199	)		28,484			3,171		988			(29	)		4,130
YOY
Cost of revenues																										6	%		(17	%)					(2	%)
Selling, general and administrative																										(8	%)		(14	%)					(9	%)
Research and development																										(22	%)		(39	%)					(23	%)
Cost and expenses																										(5	%)		(19	%)					(8	%)
Operating income (loss)		2,958			(975	)		(25	)		1,958			4,982			310			25			5,317			3,782			782			29			4,593			548		113			5			666
YOY																										28	%		—						135	%
QOQ																										(24	%)		152	%					(14	%)
Operating margin		11	%		(13	%)					6	%		20	%		4	%					16	%		15	%		10	%					14	%
Add: total other income (loss), net		1,161			(754	)		—			407			(4,108	)		(662	)		—			(4,770	)		2,271			(490	)		—			1,781			329		(71	)		—			258
Less: income tax expense (benefit)		1,258			37			—			1,295			866			42			—			908			1,265			(11	)		—			1,254			183		(2	)		—			181
Less: net income (loss) attributable to NCI		205			10			(860	)(3)		(645	)		(17	)		1			(199	)(3)		(215	)		15			(1	)		153	(3)		167			2		—			23	(3)		25
Net income (loss) attributable to Baidu		2,656			(1,776	)		835			1,715			25			(395	)		224			(146	)		4,773			304			(124	)		4,953			692		44			(18	)		718
YOY																										80	%		—						189	%
QOQ																										18992	%		—						—
Net margin		10	%		(24	%)					5	%		0	%		(5	%)					(0	%)		19	%		4	%					15	%
Non-GAAP financial measures:
Operating income (loss) (non-GAAP)		4,847			(515	)					4,307			6,650			525						7,200			5,491			977						6,497			796		141						942
YOY																										13	%		—						51	%
QOQ																										(17	%)		86	%					(10	%)
Operating margin (non-GAAP)		19	%		(7	%)					13	%		26	%		7	%					22	%		21	%		13	%					20	%
Net income (loss) attributable to Baidu (non-GAAP)		4,625			(1,001	)					4,084			5,767			187						5,889			4,915			856						5,371			713		124						779
YOY																										6	%		—						32	%
QOQ																										(15	%)		358	%					(9	%)
Net margin (non-GAAP)		18	%		(14	%)					12	%		23	%		3	%					18	%		19	%		11	%					16	%
Adjusted EBITDA		6,210			(428	)					5,757			8,239			615						8,879			7,146			1,056						8,231			1,036		152						1,193
YOY																										15	%		—						43	%
QOQ																										(13	%)		72	%					(7	%)
Adjusted EBITDA margin		24	%		(6	%)					17	%		33	%		8	%					27	%		28	%		14	%					25	%
(1)   Includes share-based compensation as follows:
Cost of revenues		90			44						134			45			39						84			122			36						158			18		5						23
Selling, general and administrative		396			137						533			375			105						480			355			95						450			51		14						65
Research and development		1,343			83						1,426			978			61						1,039			1,177			56						1,233			171		8						179
Total share-based compensation		1,829			264						2,093			1,398			205						1,603			1,654			187						1,841			240		27						267

(2) Relates to intersegment eliminations and adjustments

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

11/16

Baidu, Inc.

Selected Information

(In millions except for per ADS information, unaudited)

	Twelve months ended December 31, 2021 (RMB)												Twelve months ended December 31, 2022 (RMB)												Twelve months ended December 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.
Total revenues		95,163			30,554			(1,224	)		124,493			95,431			28,998			(754	)		123,675			13,836			4,204			(109	)		17,931
YOY														0	%		(5	%)					(1	%)
Costs and expenses:
Cost of revenues (1)		37,838			27,513			(1,037	)		64,314			42,378			22,321			(764	)		63,935			6,144			3,236			(111	)		9,269
Selling, general and administrative (1)		20,040			4,725			(42	)		24,723			17,103			3,466			(55	)		20,514			2,480			503			(8	)		2,975
Research and development (1)		22,143			2,795			—			24,938			21,416			1,899			—			23,315			3,105			275			—			3,380
Total costs and expenses		80,021			35,033			(1,079)			113,975			80,897			27,686			(819	)		107,764			11,729			4,014			(119	)		15,624
YOY
Cost of revenues														12	%		(19	%)					(1	%)
Selling, general and administrative														(15	%)		(27	%)					(17	%)
Research and development														(3	%)		(32	%)					(7	%)
Cost and expenses														1	%		(21	%)					(5	%)
Operating income (loss)		15,142			(4,479	)		(145	)		10,518			14,534			1,312			65			15,911			2,107			190			10			2,307
YOY														(4	%)		(129	%)					51	%
Operating margin		16	%		(15	%)					8	%		15	%		5	%					13	%
Add: total other income (loss),net		1,793			(1,533	)		—			260			(4,453	)		(1,346	)		—			(5,799	)		(646	)		(195	)		—			(841	)
Less: income tax expense		3,090			97			—			3,187			2,494			84			—			2,578			362			12			—			374
Less: net income (loss) attributable to NCI		288			61			(2,984	)(3)		(2,635	)		36			18			(79	)(3)		(25	)		4			3			(11	)(3)		(4	)
Net income (loss) attributable to Baidu		13,557			(6,170	)		2,839			10,226			7,551			(136	)		144			7,559			1,095			(20	)		21			1,096
YOY														(44	%)		(98	%)					(26	%)
Net margin		14	%		(20	%)					8	%		8	%		(0	%)					6	%
Non-GAAP financial measures:
Operating income (loss) (non-GAAP)		22,201			(3,026	)					19,030			20,948			2,173						23,186			3,037			315						3,362
YOY														(6	%)		—						22	%
Operating margin (non-GAAP)		23	%		(10	%)					15	%		22	%		7	%					19	%
Net income (loss) attributable to Baidu (non-GAAP)		21,292			(4,487	)					18,830			19,935			1,284						20,680			2,890			186						2,998
YOY														(6	%)		—						10	%
Net margin (non-GAAP)		22	%		(15	%)					15	%		21	%		4	%					17	%
Adjusted EBITDA		27,682			(2,623	)					24,914			27,088			2,510						29,663			3,927			364						4,301
YOY														(2	%)		—						19	%
Adjusted EBITDA margin		29	%		(9	%)					20	%		28	%		9	%					24	%
(1)   Includes share-based compensation as follows:
Cost of revenues		226			173						399			261			148						409			38			21						59
Selling, general and administrative		1,122			718						1,840			1,326			424						1,750			192			61						253
Research and development		4,489			328						4,817			4,390			239						4,629			637			35						672
Total share-based compensation		5,837			1,219						7,056			5,977			811						6,788			867			117						984

(2) Relates to intersegment eliminations and adjustments

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

12/16

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, 2021 (RMB)									September 30, 2022 (RMB)									December 31, 2022 (RMB)									December 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		5,809			(1,095	)		4,714			8,543			196			8,739			6,999			854			7,853			1,015			124			1,139
Net cash (used in) provided by investing activities		(50	)		2,097			2,047			7,603			407			8,010			(5,902	)		579			(5,323	)		(856	)		84			(772	)
Net cash (used in) provided by financing activities		(4,662	)		(5,239	)		(9,901	)		(5,967	)		(106	)		(6,073	)		(5,124	)		2,862			(2,262	)		(743	)		415			(328	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(589	)		(74	)		(663	)		1,980			60			2,040			(1,420	)		(9	)		(1,429	)		(206	)		(1	)		(207	)
Net increase (decrease) in cash, cash equivalents and restricted cash		508			(4,311	)		(3,803	)		12,159			557			12,716			(5,447	)		4,286			(1,161	)		(790	)		622			(168	)
Cash, cash equivalents and restricted cash
At beginning of period		44,088			7,386			51,474			50,662			3,019			53,681			62,821			3,576			66,397			9,109			518			9,627
At end of period		44,596			3,075			47,671			62,821			3,576			66,397			57,374			7,862			65,236			8,319			1,140			9,459
Net cash provided by (used in) operating activities		5,809			(1,095	)		4,714			8,543			196			8,739			6,999			854			7,853			1,015			124			1,139
Less: Capital expenditures		(4,213	)		(24	)		(4,237	)		(2,140	)		(48	)		(2,188	)		(1,920	)		(9	)		(1,929	)		(279	)		(1	)		(280	)
Free cash flow		1,596			(1,119	)		477			6,403			148			6,551			5,079			845			5,924			736			123			859

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

13/16

Baidu, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions,unaudited)

	Twelve months ended									Twelve months ended									Twelve months ended
	December 31, 2021 (RMB)									December 31, 2022 (RMB)									December 31, 2022 (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		26,074			(5,952	)		20,122			26,241			(71	)		26,170			3,804			(10	)		3,794
Net cash (used in) provided by investing activities		(32,706	)		1,262			(31,444	)		(4,210	)		266			(3,944	)		(611	)		39			(572	)
Net cash provided by (used in) financing activities		26,355			(2,959	)		23,396			(10,859	)		4,469			(6,390	)		(1,574	)		648			(926	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(726	)		(217	)		(943	)		1,606			123			1,729			233			18			251
Net increase (decrease) in cash, cash equivalents and restricted cash		18,997			(7,866	)		11,131			12,778			4,787			17,565			1,852			695			2,547
Cash, cash equivalents and restricted cash
At beginning of period		25,599			10,941			36,540			44,596			3,075			47,671			6,466			446			6,912
At end of period		44,596			3,075			47,671			57,374			7,862			65,236			8,318			1,141			9,459
Net cash provided by (used in) operating activities		26,074			(5,952	)		20,122			26,241			(71	)		26,170			3,804			(10	)		3,794
Less: Capital expenditures		(10,634	)		(262	)		(10,896	)		(8,112	)		(174	)		(8,286	)		(1,176	)		(25	)		(1,201	)
Free cash flow		15,440			(6,214	)		9,226			18,129			(245	)		17,884			2,628			(35	)		2,593

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

14/16

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, 2021 (RMB)									September 30, 2022 (RMB)									December 31, 2022 (RMB)									December 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)		2,958			(975	)		1,958			4,982			310			5,317			3,782			782			4,593			548			113		666
Add: Share-based compensation expenses		1,829			264			2,093			1,398			205			1,603			1,654			187			1,841			240			27		267
Add: Amortization and impairment of intangible assets(1)		60			17			77			56			10			66			55			8			63			8			1		9
Add: Contingent loss(5)		—			—			—			214			—			214			—			—			—			—			—		—
Add: iQIYI non-recurring employee severance costs(6)		—			179			179			—			—			—			—			—			—			—			—		—
Operating income (loss) (non-GAAP)		4,847			(515	)		4,307			6,650			525			7,200			5,491			977			6,497			796			141		942
Add: Depreciation of fixed assets		1,363			87			1,450			1,589			90			1,679			1,655			79			1,734			240			11		251
Adjusted EBITDA		6,210			(428	)		5,757			8,239			615			8,879			7,146			1,056			8,231			1,036			152		1,193
Net income (loss) attributable to Baidu		2,656			(1,776	)		1,715			25			(395	)		(146	)		4,773			304			4,953			692			44		718
Add: Share-based compensation expenses		1,805			264			1,941			1,394			205			1,497			1,654			187			1,748			240			27		253
Add: Amortization and impairment of intangible assets(1)		55			17			65			50			10			56			50			8			55			7			1		8
Add: Disposal (gain) loss		—			—			—			(6	)		—			(6	)		(484	)		62			(453	)		(70	)		9		(66	)
Add: Impairment of long-term investments		752			139			824			1,042			376			1,230			318			271			453			46			39		66
Add: Fair value (gain) loss of long-term investments		(1,339	)		2			(1,337	)		3,149			(27	)		3,135			(1,662	)		8			(1,658	)		(241	)		1		(240	)
Add: Reconciling items on equity method investments(2)		430			177			521			237			16			245			377			18			386			55			3		56
Add: Charitable donation from Baidu(4)		50			—			50			—			—			—			—			—			—			—			—		—
Add: Contingent loss(5)		—			—			—			214			—			214			—			—			—			—			—		—
Add: iQIYI non-recurring employee severance costs(6)		—			179			92			—			—			—			—			—			—			—			—		—
Add: Tax effects on non-GAAP adjustments(3)		216			(3	)		213			(338	)		2			(336	)		(111	)		(2	)		(113	)		(16	)		—		(16	)
Net income (loss) attributable to Baidu (non-GAAP)		4,625			(1,001	)		4,084			5,767			187			5,889			4,915			856			5,371			713			124		779
Diluted earnings (loss) per ADS								4.51									(0.87	)								13.59								1.97
Add: Accretion of the redeemable noncontrolling interests								0.36									0.45									0.46								0.07
Add: Non-GAAP adjustments to earnings per ADS								6.73									17.29									1.20								0.17
Diluted earnings per ADS (non-GAAP)								11.60									16.87									15.25								2.21

(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 tax impact of all non-GAAP adjustments.

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

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

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

15/16

Baidu, Inc.

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

(In millions except for per ADS information, unaudited)

	Twelve months ended									Twelve months ended									Twelve months ended
	December 31, 2021 (RMB)									December 31, 2022 (RMB)									December 31, 2022 (US$)
	Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.			Baidu Core			iQIYI			Baidu, Inc.
Operating income (loss)		15,142			(4,479	)		10,518			14,534			1,312			15,911			2,107			190			2,307
Add: Share-based compensation expenses		5,837			1,219			7,056			5,977			811			6,788			867			117			984
Add: Amortization and impairment of intangible assets(1)		246			55			301			223			50			273			32			8			40
Add: Contingent loss(5)		976			—			976			214			—			214			31			—			31
Add: iQIYI non-recurring employee severance costs(6)		—			179			179			—			—			—			—			—			—
Operating income (loss) (non-GAAP)		22,201			(3,026	)		19,030			20,948			2,173			23,186			3,037			315			3,362
Add: Depreciation of fixed assets		5,481			403			5,884			6,140			337			6,477			890			49			939
Adjusted EBITDA		27,682			(2,623	)		24,914			27,088			2,510			29,663			3,927			364			4,301
Net income (loss) attributable to Baidu		13,557			(6,170	)		10,226			7,551			(136	)		7,559			1,095			(20	)		1,096
Add: Share-based compensation expenses		5,814			1,219			6,444			5,964			811			6,371			865			118			924
Add: Amortization and impairment of intangible assets(1)		220			55			251			200			50			229			29			7			33
Add: Disposal (gain)		—			(45	)		(28	)		(515	)		(368	)		(700	)		(76	)		(53	)		(101	)
Add: Impairment of long-term investments		4,144			170			4,232			2,180			841			2,601			316			122			377
Add: Fair value (gain) loss of long-term investments		(2,734	)		(87	)		(2,778	)		3,977			(18	)		3,968			577			(3	)		575
Add: Reconciling items on equity method investments(2)		1,249			192			1,349			1,473			105			1,548			214			15			224
Add: Charitable donation from Baidu(4)		140			—			140			136			—			136			20			—			20
Add: Contingent loss(5)		976			—			976			214			—			214			31			—			31
Add: iQIYI non-recurring employee severance costs(6)		—			179			92			—			—			—			—			—			—
Add: Tax effects on non-GAAP adjustments(3)		(2,074	)		—			(2,074	)		(1,245	)		(1	)		(1,246	)		(181	)		—			(181	)
Net income (loss) attributable to Baidu (non-GAAP)		21,292			(4,487	)		18,830			19,935			1,284			20,680			2,890			186			2,998
Diluted earnings per ADS								28.07									19.85									2.88
Add: Accretion of the redeemable noncontrolling interests								1.00									1.68									0.24
Add: Non-GAAP adjustments to earnings per ADS								24.46									37.40									5.42
Diluted earnings per ADS (non-GAAP)								53.53									58.93									8.54

(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 tax impact of all non-GAAP adjustments.

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

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

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

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