1 / 10 Baidu Announces Fourth Quarter and Fiscal Year 2020 Results BEIJING, China, February 17, 2021 – Baidu, Inc. (NASDAQ: BIDU) (“Baidu” or the “Company”), a leading AI company with strong Internet foundation, today announced unaudited financial results 1 for the fourth quarter and fiscal year ended December 31, 2020. “Baidu ended 2020 on a solid note with our business benefiting from improving macroeconomic environment and the digitalization of industrial Internet. Our focus on innovation through technology is paying off with Baidu Core non-marketing revenue growing 52% year over year in the fourth quarter,” said Robin Li, Co-founder and CEO of Baidu. “As we enter 2021, Baidu is well positioned as a leading AI company with strong Internet foundation to seize the huge market opportunities in cloud services, autonomous driving, smart transportation, and other AI opportunities. We also hope to capitalize on our huge Internet reach with more non-marketing services.” “Baidu revenue reached US$16.4 billion with adjusted EBITDA reaching US$4.2 billion in 2020. Despite an unprecedented year, our business returned to growth and our profits were solid in the fourth quarter,” said Herman Yu, CFO of Baidu. “Through years of investment in research, AI chip design, developer community, patents and talent development, we are turning AI into innovative use cases. For example, Baidu AI cloud differentiating with AI solutions grew 67% year over year in Q4, reaching an annualized run rate of US$2.0 billion. We will continue to invest heavily in technology to optimize Baidu’s long-term growth and pursue our mission to make the world simpler through technology.” Fourth Quarter and Fiscal Year 2020 Financial Highlights Baidu, Inc. (In millions except per Q4 Q3 Q4 FY FY ADS, unaudited) 2019 2020 2020 YOY 2019 2020 YOY RMB RMB RMB US$ RMB RMB US$ Total revenues 28,884 28,232 30,263 4,638 5% 107,413 107,074 16,410 (0%) Operating income 4,655 6,156 4,977 763 7% 6,307 14,340 2,198 127% Operating income (non- GAAP) 2 6,753 7,636 7,055 1,081 4% 12,800 21,732 3,331 70% Net income to Baidu 6,345 13,678 5,174 794 (18%) 2,057 22,472 3,444 992% Net income to Baidu (non- GAAP) 2 9,193 6,988 6,868 1,053 (25%) 18,182 22,020 3,375 21% 1 Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB6.5250 as of December 31, 2020, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader. 2 Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non- GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details).
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Baidu Announces Fourth Quarter and Fiscal Year 2020 Results
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Baidu Announces Fourth Quarter and Fiscal Year 2020 Results
BEIJING, China, February 17, 2021 – Baidu, Inc. (NASDAQ: BIDU) (“Baidu” or the
“Company”), a leading AI company with strong Internet foundation, today announced
unaudited financial results1 for the fourth quarter and fiscal year ended December 31, 2020.
“Baidu ended 2020 on a solid note with our business benefiting from improving
macroeconomic environment and the digitalization of industrial Internet. Our focus on
innovation through technology is paying off with Baidu Core non-marketing revenue growing
52% year over year in the fourth quarter,” said Robin Li, Co-founder and CEO of Baidu. “As
we enter 2021, Baidu is well positioned as a leading AI company with strong Internet
foundation to seize the huge market opportunities in cloud services, autonomous driving,
smart transportation, and other AI opportunities. We also hope to capitalize on our huge
Internet reach with more non-marketing services.”
“Baidu revenue reached US$16.4 billion with adjusted EBITDA reaching US$4.2 billion in
2020. Despite an unprecedented year, our business returned to growth and our profits were
solid in the fourth quarter,” said Herman Yu, CFO of Baidu. “Through years of investment in
research, AI chip design, developer community, patents and talent development, we are
turning AI into innovative use cases. For example, Baidu AI cloud differentiating with AI
solutions grew 67% year over year in Q4, reaching an annualized run rate of US$2.0 billion.
We will continue to invest heavily in technology to optimize Baidu’s long-term growth and
pursue our mission to make the world simpler through technology.”
Fourth Quarter and Fiscal Year 2020 Financial Highlights
1 Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB6.5250 as of December 31, 2020, 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).
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. Baidu
does not undertake any obligation to update any forward-looking statement, except as
required under applicable law. All information provided in this press release and in the
attachments is as of the date of the press release, and Baidu undertakes no duty to update
such information, except as required under applicable law.
Non-GAAP Financial Measures
To supplement Baidu’s consolidated financial results presented in accordance with GAAP,
Baidu uses the following non-GAAP financial measures: non-GAAP operating income (loss),
non-GAAP operating margin, non-GAAP net income (loss) attributable to Baidu, non-GAAP
net margin, non-GAAP diluted earnings per ADS, adjusted EBITDA, adjusted EBITDA margin
and free cash flow. The presentation of these non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for the financial information prepared and
presented in accordance with GAAP.
Baidu believes that these non-GAAP financial measures provide meaningful supplemental
information regarding its performance and liquidity by excluding certain items that may not be
indicative of its recurring core business operating results, such as operating performance
excluding non-cash charges or non-operating in nature. The Company believes that both
management and investors benefit from referring to these non-GAAP financial measures in
assessing its performance and when planning and forecasting future periods. These non-
GAAP financial measures also facilitate management’s internal comparisons to Baidu’s
historical performance and liquidity. The Company believes these non-GAAP financial
measures are useful to investors in allowing for greater transparency with respect to
supplemental information used by management in its financial and operational decision
making. A limitation of using these non-GAAP financial measures is that these non-GAAP
measures exclude certain items that have been and will continue to be for the foreseeable
future a significant component in the Company’s results of operations. These non-GAAP
financial measures presented here may not be comparable to similarly titled measures
presented by other companies. Other companies may calculate similarly titled measures
differently, limiting their usefulness as comparative measures to the Company’s data.
Non-GAAP operating income represents operating income excluding share-based
compensation expenses and amortization and impairment of intangible assets resulting from
business combinations.
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, disposal gain or loss, impairment of long-term
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investments, fair value change of long-term investments, 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, which is adjusted for accretion for the
redeemable non-controlling interests, 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, and
share-based compensation expenses.
Free cash flow represents net cash provided by operating activities less capital expenditures.
In accordance with the new accounting standard, beginning on January 1, 2020, Baidu
adopted ASU 2019-02 Improvements to Accounting for Costs of Films and License
Agreements for Program Materials, which reclassifies cash outflows for costs incurred to
acquire licensed contents from investing activities to operating activities. To increase
comparability, fiscal 2019 free cash flow has been retrospectively adjusted to include cash
outflows of acquisition of licensed copyrights, which is presented on the same basis as fiscal
2020 and going forward.
For more information on non-GAAP financial measures, please see the tables captioned
“Reconciliations of non-GAAP financial measures to the nearest comparable GAAP
measures.”
Baidu, Inc. Condensed Consolidated Balance Sheets(In millions except for share information, unaudited)
December 31, December 31, December 31,2019 2020 2020RMB RMB US$
ASSETS Current assets:
Cash and cash equivalents 33,443 35,782 5,484 Restricted cash 996 758 117 Short-term investments 112,924 126,402 19,372 Accounts receivable, net 7,416 8,668 1,328 Amounts due from related parties 1,594 726 111 Other current assets, net 9,189 11,006 1,687
Total current assets 165,562 183,342 28,099
Non-current assets: Fixed assets, net 18,311 17,508 2,683 Licensed copyrights, net 6,287 6,435 986 Produced content, net 4,355 6,556 1,005 Intangible assets, net 1,600 2,022 310 Goodwill 18,250 22,248 3,410 Long-term investments, net 69,410 76,233 11,683 Amounts due from related parties 3,564 3,438 527 Deferred tax assets, net 2,193 1,674 257 Operating lease right-of-use assets 7,332 9,804 1,503 Other non-current assets 4,452 3,448 527
Total non-current assets 135,754 149,366 22,891
Total assets 301,316 332,708 50,990
LIABILITIES AND EQUITY Current liabilities: Short-term loans 2,618 3,016 462
Accounts payable and accrued liabilities 32,701 36,716 5,627 Customer deposits and deferred revenue 11,062 12,626 1,935 Deferred income 529 158 24 Long-term loans, current portion 737 7,427 1,138 Convertible notes, current portion - 4,752 728 Notes payable, current portion 5,219 - - Amounts due to related parties 2,231 1,324 203 Operating lease liabilities 2,283 2,366 364
Foreign exchange income (loss), net 35 (271) (346) (53) (33) (660) (101)
Share of losses from equity methiod investments (94) (546) (151) (23) (1,254) (2,248) (345)
Others, net (664) 9,169 499 76 (8,460) 9,403 1,441
Total other income (loss), net 699 8,894 533 82 (6,647) 8,750 1,341
Income (loss) before income taxes 5,354 15,050 5,510 845 (340) 23,090 3,539
Income tax expense 304 1,618 1,026 158 1,948 4,064 623
Net income (loss) 5,050 13,432 4,484 687 (2,288) 19,026 2,916
Net loss attributable to noncontrolling interests (1,295) (246) (690) (107) (4,345) (3,446) (528) Net income attributable to Baidu 6,345 13,678 5,174 794 2,057 22,472 3,444
Earnings per ADS (1 Class A ordinary share equals 10 ADSs):
-Basic 18.28 40.21 15.28 2.34 5.68 65.54 10.04
-Diluted 18.25 39.79 15.05 2.31 5.60 64.98 9.96
Earnings per share for Class A and Class B ordinary shares:
(2) All translations from RMB to U.S. dollars are made at a rate of RMB 6.5250 to US$1.00, the exchange rate in effect as of December 30, 2020 as set forth in the H.10 statistical release of The Board of
Governors of the Federal Reserve System.
Three Months Ended Twelve Months Ended
Baidu, Inc.
Selected Information
(In millions except for per ADS information, unaudited)
(1) Starting from January 1, 2020, Baidu adopted ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials, which reclassifies cash outflows for costs incurred to
acquire licensed contents from investing activities to operating activities. To increase comparability, 2019 non-GAAP measure of free cash flow has been retrospectively adjusted to include cash outflows of acquisition
of licensed copyrights, which is presented on the same basis as 2020 and going forward.
Three months ended Three months ended Three months ended Three months ended December 31, 2019 (RMB) September 30, 2020 (RMB) December 31, 2020 (RMB) December 31, 2020 (US$)
Baidu, Inc. Condensed Consolidated Statements of Cash Flows(In millions,unaudited)
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 24,552 3,906 28,458 29,611 (5,411) 24,200 4,538 (829) 3,709
Net cash (used in) provided by investing activities (8,225) (11,749) (19,974) (27,711) 159 (27,552) (4,247) 24 (4,223)
Net cash (used in) provided by financing activities (11,753) 7,880 (3,873) (3,709) 9,374 5,665 (568) 1,437 869
(1) Starting from January 1, 2020, Baidu adopted ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials, which
reclassifies cash outflows for costs incurred to acquire licensed contents from investing activities to operating activities. To increase comparability, 2019 non-GAAP measure of
free cash flow has been retrospectively adjusted to include cash outflows of acquisition of licensed copyrights, which is presented on the same basis as 2020 and going forward.
December 31, 2019 (RMB) December 31, 2020 (RMB) December 31, 2020 (US$)
Baidu, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures
(In millions except for ADS and per ADS information, unaudited)
Baidu iQIYI Baidu, Inc. Baidu iQIYI Baidu, Inc. Baidu iQIYI Baidu, Inc. Baidu iQIYI Baidu, Inc.
Net income (loss) attributable to Baidu (non-GAAP) 9,950 (1,901) 9,193 7,486 (830) 6,988 7,533 (1,177) 6,868 1,154 (181) 1,053
Diluted earnings per ADS 18.25 39.79 15.05 2.31
Add: Accretion of the redeemable noncontrolling interests 0.06 0.04 0.08 0.01
Add: Non-GAAP adjustments to earnings per ADS 8.23 (19.48) 4.95 0.76
Diluted earnings per ADS (non-GAAP) 26.54 20.35 20.08 3.08
Three months ended Three months ended Three months ended Three months ended
December 31, 2019 (RMB) September 30, 2020 (RMB) December 31, 2020 (RMB) December 31, 2020 (US$)
(4) Includes re-measurement gain or loss of previously held equity interest in a business acquisition
(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
Baidu, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures
(In millions except for ADS and per ADS information, unaudited)
Baidu iQIYI Baidu, Inc. Baidu iQIYI Baidu, Inc. Baidu iQIYI Baidu, Inc.
Net income (loss) attributable to Baidu (non-GAAP) 22,824 (8,765) 18,182 25,192 (5,444) 22,020 3,861 (835) 3,375
Diluted earnings per ADS 5.60 64.98 9.96
Add: Accretion of the redeemable noncontrolling interests 0.22 0.26 0.04
Add: Non-GAAP adjustments to earnings per ADS 46.22 (1.31) (0.20)
Diluted earnings per ADS (non-GAAP) 52.04 63.93 9.80
(4) Includes re-measurement gain or loss of previously held equity interest in a business acquisition
(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