Results of the strategic transformation of China’s largest search engine company
On August 30, 2022, Baidu Group announced its financial results for the second quarter of 2022. We summarized four points accordingly, for you to better understand and understand the development of Baidu’s current situation and future trends.
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1. More and more users
First, Baidu’s monthly active users reached 628 million, up 8% year-over-year.
Baidu (Nasdaq:BIDU) earnings report shows that in June 2022, the MAU (monthly active users) of Baidu App reached 628 million, up 8% year-on-year. Daily logged-in users reached 84%.
2. Diverse and growing revenues
Second, Baidu’s intelligent cloud revenue jumped 31% year-over-year in Q2, and non-internet marketing revenue was RMB 6.1 billion, up 22% year-over-year.
Baidu Group achieved operating revenue of RMB 29,647 million in Q2 2022, up 4.35% YoY. Q2 was not an ideal period due to Internet regulation, macro economy and strict anti-epidemic measures, and Baidu’s revenue still managed to grow YoY for the same period, which has exceeded market expectations.
Baidu’s revenue is composed of two parts, online marketing services and others; including two segments, Baidu Core and iQIYI (video platform). Among them, Baidu Core contains online marketing services, intelligent cloud services and other specific businesses, although which advertising business revenue is still the bulk, but it is easy to see that the cloud business has emerged strongly and become the new driving force of Baidu’s performance growth.
In 2022Q2, which was severely hit by the epidemic, non-advertising revenue in Baidu’s Core, mainly from the cloud business, was 6.1 billion yuan, achieving a 22% year-on-year growth. This is extremely rare, after all, the cloud business in areas such as industry and government is very sensitive to the macro environment of the market.
Among them, Baidu Intelligent Cloud relies on core technology and a deep understanding of industry needs and pain points to provide quality services for the needs of key industries such as manufacturing, water, energy, transportation, and public utilities.
Baidu Intelligent Cloud Q2 revenue grew 31% year-on-year and 10% sequentially, accounting for a further increase in Baidu’s revenue ratio. In the AI public cloud field, Baidu Smart Cloud continues to lead and ranks first in the Chinese AI market as an AI cloud service vendor.
This proves that Baidu is working hard to hold on to its traditional business while focusing on high-tech industries such as AI and cloud business, and the strategic transformation is taking effect.
3. Apollo GO : Baidu’s autonous car
hird, Apollo Go firmly in the world’s largest self-driving travel service provider: Q2 order volume of nearly 300,000, an increase of 500% year-on-year.
What concerns investors most in Baidu’s earnings report is undoubtedly the bright operational data of Apollo Go.
What is Apollo Go ?
Apollo Go is gradually landing pilots in more than a dozen cities, including Beijing, Shanghai, Guangzhou, Shenzhen and Chongqing, where passengers can experience Baidu’s driverless services through the Apollo Go platform. According to the company’s financial report, Apollo Go provided 287,000 rides to the public, an increase of nearly 500% year-over-year. As of July 20, 2022, the cumulative order volume of Apollo Go reached 1 million orders, making it the world’s largest self-driving mobility service provider.
At this year’s Baidu World Congress, Baidu unveiled the Apollo RT6, a sixth-generation steering wheel-less unmanned vehicle with a targeted mass production cost of only 250,000 RMB, bringing the cost of unmanned vehicles into the price range of mass-market electric vehicles for the first time in China. The reduction in vehicle costs will drive the accelerated expansion of Apollo Go. At the same time, large-scale operations will help Baidu further improve its autonomous driving technology, identify problems that were not visible during the testing phase, and lay the foundation for Baidu to achieve true “driverlessness” (now that the Apollo Go still has a safety officer).
4. Baidu’s core and three pillars
Fourth, “hosting page” revenue grew 10% year-on-year, accounting for 49% of the “Baidu core” Q2 online marketing revenue.
Baidu has built a mobile ecological layout with Baidu APP as the core and Bajia number, smart applet and hosting page as the three pillars.
Baidu Hosting Page is a hosting solution for website owners that allows them to maintain their web pages without paying for website infrastructure (e.g. servers, software and bandwidth). Through this service, merchants no longer need to use their own servers to build websites, but only need to call on the various components and modules provided by Baidu.
Among the three pillars, Baidu plays the role of creating a traffic pool with original content, the small program is the main operating position for merchants, and the hosting page is a set of mobile business solutions for merchants – where merchants can quickly build websites, marketing, content display, merchandising, customer management and other business actions.
As the epidemic raged in the second quarter of 2022, advertisers tended to be conservative in their spending, but even so, hosted page revenue in Baidu’s Internet advertising business grew by 10%, raising its share to 49%.
Baidu as China’s largest search engine, its traffic advantages need not be said, not only has a large number of users, huge amount of search content also in the data accumulation to form an advantage.
5. Conclusion : the economic health of Baidu
In the face of the momentum of other Internet leaders, now Baidu big data advantage, bet on artificial intelligence, in recent years has always maintained a high intensity of research and development, and gradually realized the strategic transformation from “advertising company” to “technology company”.
Therefore, we are very optimistic about the overall development of Baidu Group, especially its high-tech business such as intelligent cloud and intelligent driving.
If you want to know more about Baidu, contact STAiiRS!
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