Beijing (PingWest)- Chinese search engine and artificial intelligent giant Baidu reported third-quarter earnings that beat analyst estimates for revenue and profit as China’s economy continue to recover following the coronavirus pandemic.
Baidu reported a total revenue of CNY28.2 billion in the third quarter, beating market estimates.
The company’s third quarter revenue was contributed mainly by advertising sales on its core search platform. Advertising spending declined earlier this year during Covid-19 lockdowns but it has bounced back from the low point as enterprise advertising spending to gradually pick up.
“Our revenue growth turned positive in the third quarter with many advertising verticals turning around, including healthcare, education, auto, lifestyle and software. As the Chinese economy continues to recover, we are in a good position to further benefit from such improvement in both macro-and microenvironment,” said Chief Executive Robin Li in an earnings briefing.
In the third quarter, Baidu saw 14% revenue growth in its non-online marketing revenue from Baidu Core, which it attributed primarily to its cloud services business.
Baidu also benefited from a 7% year-on-year increase in membership revenue at streaming affiliate iQIYI , where subscriber numbers reached 104.8 million in September.
The number of daily active user using Baidu’s mobile app reached 206 million and its monthly active users reached 544 million in September.
“Over the last few years, we have focused on strengthening Baidu's mobile ecosystem by increasing log-in users, aggregating content and services on Baidu's platform and adding social engagement to our platform. Such strengthening of our mobile ecosystem has not only improved the search user experience, it has also allowed users to do more on Baidu,” Robin Li said.
The company swung to a net profit of CNY13.68 billion from a loss of CNY6.37 billion the same quarter last year.
Looking ahead, Baidu said it expects revenues to be between CNY28.6 billion and CNY31.3 billion for the fourth quarter, representing a growth rate of -1% to 8% year over year.
In a separate announcement, Baidu also announced it will buy streaming platform YY live from social media firm JOYY Inc for about USD3.6 billion to help diversify revenue sources.
“To accelerate our efforts in growing non-advertising businesses, we announced today our intention to acquire YY Live, a leading video-based live streaming platform in China. Adding YY Live to our portfolio will allow Baidu to gain immediate operational experience and know-how on building a large live video community,” Robin li commented on the deal in a statement, which translated by The Motley Fool.
"As a result of the transaction, YY Live will be able to access Baidu's massive user traffic and achieve a more diversified monetization model," Xueling Li, co-founder and CEO of JOYY, said in a separate conference call.