BIDU - Earnings call transcript Q2 2021

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Operator

Hello and thank you for standing by for Baidu's Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a Question-and-Answer session. Today's conference is being recorded.

If you have any objections, you may disconnect at this time. turn Mr. over to for your like conference today's now the to meeting host I'd Baidu's of Lin, Juan Director Investor Relations.

Juan Lin

and was Hello, second-quarter everyone, as earlier well release Newswire our XXXX Baidu's find today, distributed Earnings conference as copy and call. Baidu's website, welcome on you can to services. a on Earnings

Please today, our Robin our session. XXXX. Li, call the Dou Shen, that prepared Reform and a Litigation CFO, we note our Co-Founder host and Act the provisions Private U.S. today forward-looking On After discussion our we have EVP. remarks, will of Securities the of Yu, will CEO, made statements the Herman Safe Q&A be Harbor under

differ to and cause are surely that subject our statements Forward-looking current risks expectations. results uncertainties may on to the actual

of undertake risks our certain except forward-looking to with release of the statements, unaudited please refer discussions law. Earnings discussions report other Exchange. detailed non-GAAP and Kong any and as not Hong press this required uncertainties, these Baidu documents call, to and measures. and does financial obligation ICC filed [Indiscernable] annual the latest any For update and

release measures, IR press it's comparable the directly unaudited on contains GAAP measures un-audited patients, most financial Our non-GAAP our ir.baidu.com. website to at available and the

recorded. reminder, this conference As a is being

In on our to CEO, will call Baidu's webcast now addition, available the a call over Robin. of also IR will be this conference turn website. I

Robin Li

XX% year-over-year. year-over-year non-advertising Hello, everyone. by in growing quarter. We delivered with Accelerated second revenues another solid this quarter growing the AI quarter revenues, Cloud XX% Baidu

cities to improved the deployment China's to powerful. where mobility. is more from we a and industrial tight And are upgrade entering era benefiting technology We urban technology new competitiveness due are of becoming

environment rests to build the we we're our to of that want that growth, the upon safe to operating strategy business China plans need next with and in, future stage the As the us for align our with recognize it stakeholders.

carbon-neutrality by support humanity data of means. aims Baidu green the by highlight to achieve centers, pledge shared year neutrality future use reach other China's a buildings, to see will the of carbon XXXX, non-office a to You through XXXX and

a in In Transportation [Indiscernable] addition, emissions In in per Apollo flow Smart rapid the Robotaxi Smart inclusiveness efficiency Leveraging vehicles, flow cost we areas a for that June, ride-hailing. to the our become more the and switch of through striding our much hope investment growth to for urban advancement mile. which technology lower the pace cheaper Robotaxi [Indiscernable] achieve across and accelerate XX% population China's to to carbon of It's of China, a living. than larger plan. example accessible. fifth we'll Apollo In of driver serve broader math introduced build-out to improvement. XXX another traffic once for expanding a and make a with coming resources metropolitan Baidu part [Indiscernable] much Robotaxi technology improved higher cost improve we to for again years, of is robotaxi generation saw population is Health Apollo stands and the Moon, ride-hailing

prescription, we Mini online inclusiveness. technology by specialties, use their free resources our treatments. up hospitals great critical for to delivery search are leveraging and telehealth, enabling We and AI-powered match treatment Concurrently, to We with advance home patients closed-loop, are and that illnesses buying Smart opportunities see to specific helping hospital Program. sustainability

belief As technology build in business business AI-powered how other with examples we you aligned using better world. due is in part our will to of through see our to our This naturally is highlights, a go goals. quarterly

Turning to operational QX highlights.

Baidu in Cloud one public AI their Our AI cloud. again, AI Cloud IDC growth. provider number continued Cloud on XXXX strong once see in the China to report the grant

to applications discussed foundation one-stop-shop media with market, with the differentiating utilities, Cloud been decade, provide upgrades. and as a past that business repeat financial become AI living and implement with industry-specific and the AI solutions, solve the which By solutions growth a driver we empowering China's the for sets past, to has across provide strong sectors Over problems up we services, other AI. selling opportunity Internet have expanded services. assets In and urban

give example AI you an me our empowered of the sector. Let how auto file

and AI We Geely's multi-year their X, manufacturer solution which automotive deployed manufacturing X, environment. Geely is business IOV are as security leveraging setting capabilities, helping Cloud a multi-faceted onto management; infrastructure; their plan, risk X, to such up Geely, Cloud; enabling develop moving Cloud a customers. to suppliers and high-tech Geely's into and AI a leading private digitization advance X, Baidu to entails: Baidu to automotive provide services

X Fujin, Chengdu, treatment million, of to Baidu with implemented another city example, added solution a population plant. a AI For

Our X%. developed by different to water electricity was model cutting Smart replacing provide early of pipelines, of water equipment, usage the a predict monitoring needs protection to customized was malfunction used and the patroling, and dynamically labor-intensive adjusted pressure machine learning capability water

Google's. a natural indirectly Our pride when clinics resource According leading This we rapid is the Baidu surpassing in used expanded XX in widely platform over XXXX In Cloud, year-over-year to Learning retained IDC's the managed XXX% like into resulting CB sustainability most for provinces. hospitals growth XXX provinces first solution optimally care primary employees XX in and feel our Deep is over June have the revenue sense assets, China, Healthcare at of advanced. in the half. and report,

million up XXX,XXX PaddlePaddle adopted helped community And technologies. developer year-over-year. AI Learning development businesses. by tools our Machine models X.X XX% and initialize our it's improve reached community large and Baidu's Our

contract and cities a Apollo June, with based Smart Smart XX a of Smart on above. RMB of try Transportation. up XX ACE cities Transportation, ACE cities amount their year Moving with next ACE onto million from renewed out also Transportation, of ago to to agreements the X phase roll has Apollo signed as X

maintaining, accessed signed terminals. conditions, travelers, the road and Dolch to hiring VXX cities closure deploy weather Koubei identify roads, who to highway, for need urban Apollo the poor Beyond identify tall with for smart remotely ZIan and enabling

Apollo million monetization. to scenarios received has XX,XXX rating X.X. QX, Level drive. public the for see operation, and and kilometers XXX has public, Apollo strong been geographic reflecting momentum. provided AD up user XXX% of Go into test on a the under high permits rides of our autonomous road ride-hailing in Apollo to Customer Go out or continued for reached city miles. dispersed testing Cangzhou, expanded has to AD with region In Xth are million piloting XX a Apollo X Apollo of X.X Turning sequentially. satisfaction wide-ranging X.X

As in innovate ASD, drop throughout in XXX% On will average roll We out continues year. GM, later the and per Xiaodu for Parking to to device XX DuerOS, over market. newer an installed of likes cities X mile become year-on-year. Toyota, of in pointed OEM, fifth-generation cost with SmartHome to compared XX% AV first to [Indiscernable] ride-hailing Motors vehicles. Apollo the this plans Valet the to vehicles another latest Apollo the saw Wall XX Go signed generations out X installed Hyundai be SUV of auto in [Indiscernable] On OS XX% vehicles, auto installation infotainment, for for in announce been Great out plan the earlier, our automaker X million other years. up the robotaxi Ford, ASD. has across flagship Automated X.X DuerOS next decrease have

conversational in home their AI. Assistant commonly conveniently clock slated a order to through seconds displays matter [Indiscernable] delivery DuerOS through health companionship Xiaodu flowers on OS serve monitor and and one the example, XXX elderly with AI, improving population to while immediate life to one's members of loved and other as used allows senior fresh is connect around of exceed China's safety virtual allowing smart remote. a elders the Smart community For conversational from their quality assistance million. family

customer price on units points, like input such new XX high smart Education festival, product with JD.com. in the and category, Smart higher Path leading display, respective June sales e-commerce innovative lines, modalities e-commerce volume list topping and the Xiaodu Xiaodu sold. AI, is hardware be receiving as the During Xiaodu their Market on satisfaction, topped how list well differentiated and for services. can Demonstrating standing platforms

reached Mobile Ecosystem, million, in X% June, to daily And MAU Baidu reached logged-in XXX XX%. Turning up users App year-on-year.

topics. instant various the open offers As an on in-app app users Baidu search app, replies

surpassed Baidu For XX% X example, year-on-year. consultation on daily Quarter, million up Second the in Health pending health

information reflecting spanning merchants, of service, In such than other Baidu now on search experts Search to reply seeks AI instantaneously Baidu, storefronts through their as to Managed X,XXX to able are as addition, opening building specific sites. a industry verticals, user operating a accounts advertising, advantage. opposed XX% our distant for XX Page faction own user legal, more Core When finance, inquiries Baidu and of has blocks.

doubled merchant, orders third its its Page, moving able Through Managed cite users the pay schedule Shenshi to For with safety. with daily move, a Baidu. adoption. five deposit, And monitors AI activities on example, Page interact changed also Baidu local services, merchants' Managed Company, weeks a a are all personnel to for landing Managed Page. and added its page seamlessly browse after Moving, on

coming entails a strangers moving to service house. example, your For

a congratulate and the CFO turn we Herman Herman, Strategy act more on as I on he I'd afterward. will Before his top-line as call to time find to him qualified strategy role Chief to Officer until continue like Baidu. spend will divestments replacement, new of

over markets, business, business and leading, has mostly Over helped our AI. from the through I'm a to the Herman We've let call the Baidu chart of Company. in confident our sense years, our leadership, course Herman me past age capital long-term and the highlights. a for Herman's holistic success growth of With that, help in keen demonstrated transform view to a to a a of turn financial Company go X Search ability AI to diversified

Herman Yu

amounts XX% Good billion, revenue stated is used to $XX.X acceleration Core call. by to XX% year-over-year, you, Quarter revenue. quarter. Second or driven was -- Baidu's the X.X Non-advertising renminbi X unless year-over-year. morning, growth the revenue, billion which Second Baidu otherwise. revenue growth Quarter Quarter XXXX Quarter's Welcome discussion XX XX% Baidu was Baidu's $X.X Cloud my Thank was billion reached All everyone. Robin. of from AI of in billion XX% Baidu's reached are in last year-over-year, $X.X or Core for up Second The up or billion, Baidu XX% which an up monetary

the position. benefiting customers Cloud to enterprise is industry their demand the strengthen and transform leadership AI of Our to growth looking from use

Transportation as a our from than business. overall Transportation media, market, of and Internet their from For digitize part sectors. to such services, speech leader are computer faster Cloud network. Driving to in AI and product enter adopt Cloud on in other the growth, Intelligent with price benefiting our smaller the Smart and manufacturing grow product of as foundation, features market AI smart take competing growth serving speakers a has SmartHome Internet Apollo Cloud LP initiatives, showing ASP ACE points. financial we being modernize to by devices the equipped urban the and much cities display XXXX, recognition solutions Xiaodu fast lines. Home the strong sub-XXX catalyst for shipments. example, with to from seeking from globally also capabilities, our transportation Xiaodu from We're advantage higher customers be based and and Baidu energy, Smart continue in leveraging development vision can so become AI in on device

our For such year. karaoke membership Xiaodu key services five-fold features XXXX. TIAN last grown has revenue, XX-inch Through MSRP and with advertising we as at example, innovation, in May, an smart a introduced XX, TIAN, from of display Xiaodu

speaker DuerOS operating X/XX is Xiaodu s. powered selling system by vehicle from is accounting selling operating industry and a for leadership market for over an has Smart be hardware services. features Now, Smart The and Apollo 's opportunity of vehicle. transforming to to the revenue system to its leverage AI-powered tons-driving much infotainment market. automotive enable the in the passenger every larger a Xiaodu to

channels the intelligence Baidu's computing as to capabilities, industry. and transform Apollo OEM and to Just the existing Xiaodu device automated transformed hopes market, home ASD, boost leverage

Sales well. XX% ad marketing. to Moving growth of solid, revenue X.X in an resulting revenue reached associated billion for X.X advertising non-GAAP AI XX% and and Cash billion or online was margin iQIYI XXX for as or entertainment promotional which approximately with increase adjusted production XXth, primarily income June business. marketing Driving for million in Core up top quarter was large EBITDA QX June in to billion cash particularly year-over-year, EBITDA Core by year-over-year. Baidu and growth, and next XXX.X of In-app, months billion, $X.X XX,XXX for Adjusted saw for standing slow marketing. billion CPM XX% well we U.S. up increase our was subscribers also had Free of the billion, up of was as last up XX% PC Baidu Baidu XXth, or due were ad grow billion to iQIYI Core sales up XX%. X.X year-over-year. Most revenues. for employees channel activities, and cost excluding XX% verticals for Baidu in-app for growing Baidu XXXX perform Baidu offset as year. XX online was operating XX and especially to business. blockbusters. double-digit XX%. mobile investments the was U.S. online short-term XX.X of for revenue continue primarily of June, Operating $XX full-time billion our XX% and year-over-year. was flow up was supports billion our iQIYI increase for The XX cost $X.X from tax Cloud billion Baidu partially as X X% year-over-year, Intelligent expenses X from was the SG&A lookout operating in-house of new billion, Core hiring, Core to an in margin Non-GAAP billion, the as $X Core an was Baidu was

guidance. QX to Turning

Baidu to expects and of consideration rate billion, uncertainty. limited. XX% evolving year-over-year view, to COVID-XX situation The quarter, visibility that billion China, current be their to year-over-year. X% into is which our improvement forecast is The XX% reflects between a forecast is which grow current the and X% above substantial Core third above subject Baidu takes year-over-year, in which the and business revenues growth XX.X XX.X will For revenue representing between assumes

Before year-over-year Second Four to Quarter, revenue call the within XX% Ecosystem Second summarize Quarter continues to and results. I Core AI. user million to Ecosystem me and App Marketing Baidu XX%. Baidu in we committed Baidu year-over-year our turn strengthening back let years Mobile log-in of growing be online marketing the strong. Mobile was Operator, was X% be ago, the that XX% daily up MAU year-over-year. our reached with XXX revenue

quite Our stronger has searching Blocks and growing Cloud, non-marketing become now fast. AI with and Building is and Marketing sizable

competition when our have enquired the is favor and investors U.S. We execution. low Many of for landscape. Internet We about Search delivered generally the this see recent across is fair our and very Governments being goals on team penetrated. have their fundamentally open. in maybe, regulatory so, proud mobile strong and play we're Europe even

more each allow the Internet will is exclusivity which exist, As useful. search and make for this forbidden choices largest players, sector to more players more consumers gives in

government monetization growth areas. benefits incentives city government. VXX, industries to be these older certain autonomous new that believe Some the direction been Plan. special if of the overall incentives investors Thus, will growth while have driving, it this And gradually and sectors, decades. support we We asked new the the about has for government adjusted economy government Consumer Internet, as China promoting country elevate and X see China's such new Development tax incentives. decrease also not policy be the treatment. surprising for industrial It's will from Internet of important to is in

business new sectors second devices such driving, in In the economy, I'm well-positioned shareholders to $XXX will AI program return the sorry the year. cloud, smart AI as share Baidu this autonomous AI Smart -- is quarter, new million Transportation, of in our Our repurchase under XXXX chips.

time business durable us latest billion at to about and thinking a repurchase Baidu's witness excited now truly CFO initiatives the about August support Operator Cloud of we Please smart of solutions, to while to using on exclusiveness. to lastly, growth. advancing the accelerate Baidu on to search to spend new follow be privilege serve Baidu Baidu our open X/X let's expand and And opportunities. X:XX will development. solutions, Baidu's and as Smart as CCTV. future, our into new AM Beijing that, developed On Transportation, XXth, X.X excited time, the growth our self-driving Baidu's been more call role the growth last allow excited it's AI me hosting like from and World steady and will cumulative which During I'm search product to CFO, starting join about with questions. our U.S. business. fee about technology devices profitability sustainability Dollars. my We're year business, Core China's and AI

Operator

will session. and Ladies we the Instructions]. you. [Operator begin gentlemen, now Thank question-and-answer

Our Citigroup. line question Alicia first from Yap Please the of comes from your question. ask

Alicia Yap

the actually brief follow you service, Hi. Robotaxi Thank this taking coming [Indiscernable] data Olympics Robin, you. quickly, in driverless high-on-high upcoming new And up -- Herman, your security. need for the Olympics security and think my the the provide Winter this we even usage do latest by things the very in event terms the remarks with update as for to any Thank evening, enhance Good or you. have just Xst that Baidu's about finished Herman, or for commercial CFO. Gwen. question could car and then To questions. as regulation, compliance need do, Do this more impact Baidu, we law? the can What the winter Thanks we big the Robobus you game? September expectations I of Summer could Congratulation, up, service your role on a your ensure demand branding? draw changes on question commercialization that any these leverage on be to this and to some to data

Robin Li

improved over have committee. Alicia. management and the the Hi, us the we our Company. of that whole system privacy data is cases few crack data past the management a on oversees of years, security internal to we team that have Data our very consistently security important among

to year-end industry our best also on systems and that of with active assisting dialogues in share practices. and are setting are of others with we We industry-standard ensure we top the

data to compared leading highest protection privacy, at is data the the highs, amongst our you If Baidu and look peers. on is

So of be cope we I'm to quite with terms regulatory the privacy. well, data in security confident able new will user and involvement

do something yes, during with do just our Robotaxi important launched But this to the is what's which plan On fourth Olympics. Robotaxi Winter Olympics Guangzhou. city operation, of side, is that we the we

as to XX,XXX will very the that first quanta are year. rollout our And that scale and continue That's having this during customers. quickly rides XX optimistic learn different We technology. all to over the quickly. in we we regions, X kinds our of think our very I remarks, and in mentioned, cities in improve I'm services Robotaxi delivered we quickly, commercially cases for the Robotaxi providing, will than grown number rides the many cities, be prepared able will different growth more all of quarter XXX% grow will that believe of years. be quite we to X available I

Herman Yu

to just add a just what And Yeah. from Robin I wanted say. point

You Winter specifically Olympics. asked about

world, you Sagan in If you have where Beijing, someone atoms we car the Company the second in at the driver's in at driving we're actually today Park look only seat. driving without a car believe

of So shows that. atoms for a while. testing It that can start that car of That's driving. operations doing I years for think just that deployment shows also the driving get the in actually we've doing been we've the number fact experience been and why we

So it's open to the public.

at without are driving to seat. and come guys the someone driver's free being is how You at done atoms look

Operator

All right. Thank you.

of from question Sachs. Piyush Mubayi Goldman from Please go ahead. the line next Our comes

Piyush Mubayi

but a driver that is be at expanding, running you'll I ride-hailing a in. cost Thank help way to you, of factor I your can't soon think the business Robin, business When the without Herman. look

to of profitability it the could separately just what you'll revenue the spill it you getting point XX as to about out talk at cities, all? us evolve of see take and you the that to get through it does time line If Thanks. math

Robin Li

Yeah.

will technology. vehicle. all vehicles. down work cost I Robotaxi of current fifth-generation after taking has from which to to projection, around quantitative in running hard the for the man-vehicle lower XXXX, ride-hailing larger drive our than payment be the Robotaxi more down today. be much very think and report learn we just that ride-hailing. miles we think It that, I scale able of come the time, And XX% Based of that orders the on are We quickly line. total testing by able to and means to is should meantime, will line, And the it continue improve the our cross year we our than And grow more to cost will think I be kinds that

Herman Yu

per And from Robin the mile. look economics, add how generation, Xth that reduced to generation you to Yeah. talks if we XX% [Indiscernable] by just to Xth cost at about in

If average generations, X you XX%. look around the prior at we

look around look time, So labor to seeing we've doesn't time. a consistently competing that ride-hailing down decreasing X Robin but generations drivers at person for XXXX, a said, -- we're economics just you're at throughout up, last in the the what if And the each concept with only been XX% is you and of costs what it goes with after technology. over costs go in

the to more have, we competing You're continue this that miles the with that the have, our thing that will fact we that experience go operation down. more data

XXXX, if what So we generations. I look on if section first have have cost years, a X lot, beyond drive think based internally, the you business of the next at X more lot we seen that this look what that's we in you down model, can the

technology, labor once cost. pass have XXXX, will So, to be you operational efficiency, thing very you compared sure improvements this interesting

Operator

And Please you. your Yao next question ask Thank JP Morgan. comes question. from from Alex

Alex Yao

to a follow-up Piyush's have question question. I

Thank safer than take? you. then conditions for does it two Is something reach the [Indiscernable] cumulative or than to to cheaper is I in to expect level got mileage CPM could of so the solution for do it Apollo XXXX, a think a be is, you've to -- your what And follow-up the Apollo certain driver. human materialize, you driver? So it solution ratio when else? the these the human your be question My

Robin Li

good seriously. Yeah, question. very that's XX a We take

more XX for been million we've think than kilometers. I testing

a had haven't serious injury, yet. We

times will level loss that a that once than demonstrates certain bar be the That us that to the decide the But it's a the than confidence without drivers. service rates? So services Robotaxi we clear really assured. be absolutely ride-saving that operate my? safety safer have of for part higher quite minimum That driver. declaration we human benefit drivers. ten for out has should and second services, human the roll question? we is a human to What's

Alex Yao

for would conditions Second out? what take it play two part these we is Are -- to

Robin Li

Yes, yes. That's right.

Alex Yao

-- cheaper. and that would be

Robin Li

million in of the vary carefully roads roles that greatly. road's approach we one. taking That's conditions that We why be very kilometers China. XXX have are saying operated can And pacing human confidence The is you're ourselves. without we're choose a drivers. There Right. high gradual that we were

areas are that carefully confidence We that we Robotaxi. picking we and high operate brought can have this so

Operator

you. Thank

question Gary Stanley. Morgan next question. Our Please from from comes Yu ask your

Gary Yu

you, up an a follow the two which actually questions. both Thank question. ask questions, management for of previous are have opportunity I on to

there Or say, data. Is system? data first question of to also about on security is second related is full we that's fully venture, traffic the private Company full own any How So in us government related on private a appreciate hand tech issue? this like piracy. Company to to our the security. discussion data is access on regulation. a or that our data the formation on having first management of control companies? My anything from level the The about have -- comments if to are Have where joint of sensitive these regulator Company comfortable I the question data Robotaxi. heard for roads officials potential

mobility the we penetration, will seems cars? do XXXX, scenario think or by in after of even reason I penetration, we to cost like cars a certain is, this -- share opportunity, project am should mobility locations. served the safe driverless with how about question The are currently, terms specific be it revenue asking still So driverless penetration longer-term, limited How that we talk or

So we how Thank forward? you. should at going penetration look

Robin Li

standards. regulation the sometimes industry the I participated with that mentioned maintain on the in the we as Yes, dialogue regulator -- the in a setting we with security, data constant of

an impact say So -- standard I a to that's adverse adverse haven't we that's or going that on very we very our would operation have heard anything abrupt high and have yet.

road is of I we're approach. the Right. a a taking penetration that Robotaxi. suitable On There Robotaxi. Like certain gradual for is mentioned,

that for We Robotaxi. roads certain have not suitable are

looked selecting We what the operate careful like you think ride-hailing, half overall in XX per if million probably are But at day. road market, the on. I orders to

become the -- been As cost. can for cost there's of current X/X the

that the get orders of number think I could double. easily

improve huge how a depends technology to it's and just we our market. our So It services. still can up on fast

Operator

Thank you. right. All

Jerry ask next the comes UBS. Our question from Please from Liu, question.

Jerry Liu

Hi. taking my resurgent's Maybe will potential about advertising business. Thanks for I COVID-XX Yeah. some a Third we ask question. if me Mainly, talk of the the guidance, let at about the look Quarter question impact.

ask, potential or to all, we're seeing, want secondarily, just of more then I something So in sectors first different this And across is regulatory also preempted? the some is whole we're it already or impact seeing COVID industry.

further education, the Thank So other the moment? you. at a I online example, We've eCommerce, verticals. wanted different of the weaknesses for and seen impact, to get sense of the verticals strengths or

Herman Yu

for question, Thanks Jerry. the Okay.

right. You're

trend, the those COVID-XX certainly, see even especially for quickly. it it's impact very So dropped the in QX, though we COVID-XX already for trends, actually, That that for pretty dropped travel, early the weeks and QX. good, the few because of we're

hand, and on identification those good did [Indiscernable] other the verticals. media progress the On we and pretty in vocational the

talking about see So regulation, on we and verticals. revisions the kick-out so far some other or the adaptation

that are expecting quarreling the X, [Indiscernable] quotation we for potential Number current So bigger second about good on [Indiscernable] [Indiscernable] because along XX the out the more the more our bores, also in innovation, vertical the is and And but And itself venue. now QXX adaptation were is themes. see because X optimistic two pretty forces for that us, it we one, we I pretty know.

good, allocation, vocational resources to our moving leap, strong vertical a edge some [Indiscernable] So or the of which is very pretty

Operator

you. Thank

question next Bank question. of Our Lao ask your Lynch. Please from Eddie Merrill from America comes

Eddie Leung

growth, your by pieces. all. I strong the to seems potentially driven Cloud evening this like couple of It a quarters was Good would question about have projects. like new

clients So usage more Cloud get just project. your into existing of a Thank timeline from I than upgrading that the buying the when some wondering, could clients existing the -- give stage more we and the rough more us chosen like of pieces growth development of your kind then services up that you. new rather you could by opening

Herman Yu

Yeah.

As still a Cloud are growing very a that our high at know rate. wins you double-digit high growth rate,

that lot very by customer that new a we expand that I you're from will have a improving say base. there customers. we give as -- they maintain large and If -- them are our it's very you percentage of can businesses. And of customer back new So our what also decide new retention spoke new to been and want a has we is projects it's high rate, get nature, inevitable of More I good on projects. right us growth

So existing this stage, our wouldn't I of or manage new percentage customers. at customers the

try to our that us it's will AI-driven or as cloud to an can. if Yes. opportunities to me solution. solution as much that. grab do That we a sent try the is are presented We add And let to to

and for them just two example, then you Look, seeing over contracts think four When X you're about we're million, didn't one repeat things for And is, XX% to you're talked are them, then have other seeing us relying summarizes building going cannot and phase Robin look do. that Number in plan, What talked private on I that actually clearly about, three-year we're that getting we part that our for pretty talked you drivers. be We XX look about Transportation. steps. at, talked But well. we was at the Robin cities, example, those renewed. if if Smart XX growing are the talked you X we you of about year-over-year, we've first driver. at Geely, about -- solutions.

to not AI actually for about. going Basically, then the one for for Pass, they applications. right? that's different AI where AI is We're talking solution call our for we've want Join one-time, I'm a repeat And Baidu So solution, add a clearly model to many back And come served different different the that that's see World. our is industries. do us to on what they would solutions things, phases if engine. you'll

VXX, applications the is expand our that engine to similar back the those they of will Transportation that. can on see to to that Very come Cloud, at Smart So applications to us, because you different add and original can VXX. on Baidu is

repeat see, different with enabled X up QX, billion business can the look we to industries, have. we kind do we same QX annualized the business. growing growth that us in of if our different U.S. At our is we Look, keep we add don't revenue don't for expand time, cannot you at XX%. base to model if the at our customers, So and

really So our continue accelerate from robust have products business adding and wanted to some exciting a you you different of very through have to and from customers. growth, industries that

Operator

you. Thank

Lee, next Our Mizuho. question comes from James from go ahead. Please

James Lee

taking Thanks questions. for Great. my

And you talk on follow can that? understand why in Cloud. on your us of give we're make U.S. Can guys Just you you AI an you help scalable? standardized in I the also secondly, Maybe in U.S. last smaller Eddie's a out want much to much the to machine-learning making slower Can solutions clients. Cloud adoption are question faster us on guys offering you developing more seeing that or and April, the think system their to cycle Thanks. layered in quarter, third-party integrators is up about and update improvements talked the China? I for customize developers, adoption about

Robin Li

Right.

On more our or more to the we serve customers, able solutions. and we we do Cloud projects less are as solution, standardize more

in that are our adoption tends per-share solution on that income they that the different layer easily I able are parts to a demonstrates in this Total beginning or that At to of the players and of separate are But Solution have seeing U.S. providers. or of our Mainly in standard can more standardized past, kinds China that of a difference gets vertically those can lot improve our large those of at to get more the is cases continue we see projects. the other large product learning, who solution all So integrator to you -- industries. the to only packages deals, integrated between take but the the more U.S. China, all That and capability fashion. we and system part of provide at hard that in role stage, the each vision integrators, a system people have to the who you think of

more Cloud, summarizing naturally solution, a an can by not for and the for example, city Machine AI, -- things, are role. to better. Transportation better on customers mean, we through standard customer to improve and And more innovate served, actually solutions integrate software, from a efficiency Baidu, you important are really of of providing if all much serve designs Learning, For that doesn't Therefore, lot of end-to-end the and customer. when cities. can to hardware, a vertically customer city we it's provide Smart integrate, and a lot lot -- for or things. the kinds actually plays and vertically That's But -- will by that similar quite from

Herman Yu

give lights. And you started trying Robin more let When granularity the at, Transportation, right? We for project synchronize posted we VXX, said. me just (ph). Upoldin You're Smart just of in what traffic example, with look back to

city, secondly, from lot are to where you're if So forth, to a up to And system connect that will you're in with so get obviously, going built a certain and set of that got number trying up. But cities You the legacy that a a it so tools X understand you're different product their we to work. once to system going make lot into to you want you've we've to legacy to China, deal had and the same systems that operational experience. and have system, proceeds of tools as and forth, times then the

lights scalability. we've about to for years, doing high very us our think specifically seeing synchronize you're traffic done several VXX when because So actually you this

You're so seeing better been because this. we've and actually doing forth, margins,

see into we're predict Same as different margins call as on enterprises highways, based centers. where into expanding going past what So, example, will right? technical that these now you our would buy For start is improve scenarios, And and environment. automated thing more experience our into us forth. so we math, I into we talked about

Machine the and first now once model a Learning the you running with and of a have to you you a specific customers. because same, put server, And into you've the just We the inertia. you're all for into get call all then so client. start very industries, profitable, buy sudden familiar already software X they to repeating that expanding throughout going centers expanding another in of backend are all you with there, different different then doing, things the unit country, trained we're the system. you're a The or and up one converse start lot get X leading Again,

think But environment I whenever Solution the and the a the It forth U.S. into takes getting AI solutions So, new that software, to have, time to system get is into they customer. is new initial the legacy industry, a very so once similar in enterprise very after and connecting phases that. familiar, you're you

Operator

Thank right. All you.

from comes question ahead. next International. Haitong Our go Wu from Please Natalie

Natalie Wu

headcount. Good Hi. expanding my out as year, you a Thanks giving this from the your recently noticed community taking question. candidate's recruitment [Indiscernable] evening. for release We press are of

if of that in margin and wondering that simply with Baidu can us see if [Indiscernable] at look this just behind should just now advancement alone. we marketing-related of So how Also, management Baidu what's profile segment you. business the the chance Core, Thank ahead? we Core share at wondering margin point expansion

Robin Li

the additions. Yeah, lot of growth, Cloud, kind solution industry if at very of of high. look you requires growth headcount a our rate headcount this our it's on And

compare high. industry that I reasonable. some you we Baidu, need to actually And it's If think headcount with our peers, services. to It's come lot for not other up a more that do people quite our to the deliver cloud use

Herman Yu

for looking non-GAAP at And Yeah. we're margins Baidu the a on then basis. Core,

of maybe sequential look to our sales to billion we're increase billion OPEX, RMB right probably going at X.X a You X be, basis. estimate plus would on QX, my now the cost

I this. So will the guys trend. at at quarters, I that's you look Baidu a last then And non-GAAP have Core, the you clear for look and guys have how think two I very

Operator

Thank you.

Hou ahead. question next Tian comes Capital. from Our T.H. go Please from

Tian Hou

Hi, Robin, AI to your Herman. The related Cloud. question is

and AI So there are are Clouds. normal Clouds there

financial So clients that need difference? I can kind we AI So kind can first Cloud these if I a Clouds, Cloud? the two X. So types treat of wonder, from question. so say view, What as that's AI a point is number a margin? a of clients need higher merged much regular That's I of Cloud? of What

second a of is increased the has bigger already portion online Page The to marketing. one Managed

you. forward? So what's going the outlook for this Managed Thank Page

Robin Li

the margin The for app. more higher, AI higher Cloud is significantly the Yeah. especially than cloud, general

solve of and our But quickly. technology, very need say much in will that know very and customer's strength enough We app provide It's all and that AI but that CDN have our solutions. AI they integrating are do our very lower technology gaining large and growing job. we to generally advanced do a market AI market problems, in Services. to solutions AI And really is share need the general kinds by we Cloud just is we very clients we are that general all find cloud, better I you attractive I a think able think I margin, and are it's space. this it's Cloud large,

Herman Yu

just me let add. And

who about AI. needs asked You

at have Media specific. media example, the all set, government lot media, example, it a some for for sectors, Internet One of at, you is, different they look look Transportation, very is data-heavy. example, several we forth, our at a you have our right? of our datasets. you for customer of at, link, If for manufacturing, so Smart see datasets. when look you When When industrial the But areas utilities, look example, of a lot and energy, has you Companies

you you data So if of are sets. customer, said, a our have AI basically lot a solution,

can we is models that had them computing. do go operational you Are there improve Learning We automate you. in things faster Brain. to when AI of need efficiencies can to and before, do so that, You lot help can you A with forth. Baidu we Machine manually much

or industries lot datasets, we companies have a that So of can automate.

whole example, on improving can and ratios that rather someone examples you have customer. Baidu than automate computing than the million of we manually look services financial the numbers and X different we all where customers, having Brain just compute all particular rather ask computation, you every at that loan, For

very are in helpful, China's users especially that economy. see can you So

Robin Li

take one. Yeah, Tian, I second will the

You're not few Including right. been for Cloud easy Actually and of merchants, accounts discussing Managed them is campaigns XX% the tools of We now to them the so Baidu. alone. it to have treated Managed the part Core marketing run to and provide Managed a times, the we Page Baidu right, Page for make like that we advertising. Page also on

Ecosystem. of So with they always Programs, all Actually, between building blocks even the increases -- engagement work Baidu by together so for user the and the which with provide Page Mini NYSE the more together thickness experience, can as the app. side, the Mobile an Yahall and we close-to-loop Smart with Managed (ph) we the because

Building can see or before. to as That's result, Blocks -- much outbreaks QX can due wait. COVID-XX The converting we in a then we than so last So higher see now why year.

it grows rebounded -- then as is we XX for actually last are business in marketing online blocks quarters. year-over-year. impression X much it X the inconsistently So of The marketing because and the building impact as

Page will keep will the we either experience s it capability. Managed because monetization that's improve the So on working and also user

Operator

Great. Thank much. you very

the question have and answers the ladies gentlemen, of and So, session. end reached we

our very conclude today. for Thank for conference much So participating. you with that, we

all may You disconnect.

Baidu (BIDU) 12 Aug 212021 Q2 Earnings call transcript