|Baidu Announces Second Quarter 2011 Results|
|Jul 25, 2011|
BEIJING, July 25, 2011 /PRNewswire via COMTEX/ --
Baidu, Inc. (NASDAQ: BIDU), the leading Chinese language Internet search provider, today announced its unaudited financial results for the second quarter ended June 30, 2011(1).
"Baidu had another excellent quarter, as we benefited from strong traffic growth and improved monetization," said Robin Li, chairman and chief executive officer of Baidu. "We were especially encouraged with the strong spending from large customers, highlighting the increased value they saw from their marketing spend on Baidu."
"We continued to see strong momentum and product integration from our Box Computing open data and application platforms during the quarter," Mr. Li continued. "Our position at the center of China's Internet ecosystem enables Baidu to benefit from key trends such as the growth of e-commerce. Looking ahead, I am confident that Baidu's emphasis on innovation and execution will help us continue to attract and retain users and customers."
Jennifer Li, Baidu's chief financial officer, commented, "Our top and bottom line results grew strongly again this quarter, with healthy increases in overall traffic and paid click growth. We will continue to accelerate our investments in strategic areas, R&D, network infrastructure and bringing new talents on board to drive long term growth."
Second Quarter 2011 Results
Baidu reported total revenues of RMB3.415 billion ($528.4 million) for the second quarter of 2011, representing a 78.4% increase from the corresponding period in 2010.
Online marketing revenues for the second quarter of 2011 were RMB3.414 billion ($528.3 million), representing a 78.4% increase from the corresponding period in 2010. Baidu had approximately 298,000 active online marketing customers in the second quarter of 2011, representing a 17.3% increase from the corresponding period in 2010 and an 8.8% increase from the previous quarter. Revenue per online marketing customer for the second quarter was approximately RMB11,500($1,779), a 53.3% increase from the corresponding period in 2010 and a 29.2% increase from the previous quarter.
Traffic acquisition cost (TAC) as a component of cost of revenues was RMB269.1 million ($41.6 million), representing 7.9% of total revenues, as compared to 9.7% in the corresponding period in 2010 and 8.2% in the first quarter of 2011.
Bandwidth costs as a component of cost of revenues were RMB146.7 million ($22.7 million), representing 4.3% of total revenues, compared to 3.5% in the corresponding period in 2010. Depreciation costs as a component of cost of revenues were RMB143.2 million ($22.2 million), representing 4.2% of total revenues, compared to 4.4% in the corresponding period in 2010.
Selling, general and administrative expenses were RMB377.5 million ($58.4 million), representing an increase of 42.5% from the corresponding period in 2010, primarily due to increased personnel costs and marketing expenses.
Research and development expenses were RMB298.7 million ($46.2 million), an 87.5% increase from the corresponding period in 2010. The increase was primarily due to increased R&D headcount.
Share-based compensation expenses, which were allocated to related operating costs and expense line items, were RMB34.7 million ($5.4 million) in the second quarter of 2011, compared to RMB21.6 million in the corresponding period in 2010 and RMB31.3 million in the previous quarter.
Operating profit was RMB1.858 billion ($287.5 million), representing a 91.2% increase from the corresponding period in 2010. Operating profit excluding share-based compensation expenses (non-GAAP) was RMB1.893 billion ($292.9 million), a 90.6% increase from the corresponding period in 2010.
Income tax expense was RMB285.5 million ($44.2 million), compared to an income tax expense of RMB140.5 million in the corresponding period in 2010. The effective tax rate for the second quarter of 2011 was 14.9%, compared to 14.4% for the corresponding period in 2010 and 14.5% in the previous quarter.
Net income was RMB1.633 billion ($252.6 million), representing a 95.0% increase from the corresponding period in 2010. Basic and diluted earnings per ADS for the second quarter of 2011 amounted to RMB4.68($0.72) and RMB4.67($0.72), respectively.
Net income excluding share-based compensation expenses (non-GAAP) was RMB1.667 billion ($258.0 million), a 94.1% increase from the corresponding period in 2010. Basic and diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) for the second quarter of 2011 amounted to RMB4.78($0.74) and RMB4.77($0.74), respectively.
As of June 30, 2011, Baidu had cash, cash equivalents and short-term investments of RMB10.274 billion ($1.590 billion). Net operating cash inflow and capital expenditures for the second quarter of 2011 were RMB2.08 billion ($322.2 million) and RMB383.7 million ($59.4 million), respectively.
Adjusted EBITDA (non-GAAP), defined in this announcement as earnings before interest, taxes, depreciation, amortization, other non-operating income and share-based compensation expenses, was RMB2.077 billion ($321.4 million) for the second quarter of 2011, representing an 88.1% increase from the corresponding period in 2010.
Outlook for Third Quarter 2011
Baidu currently expects to generate total revenues in an amount ranging from RMB3.950 billion($611.1 million) to RMB4.050 billion ($626.6 million) for the third quarter of 2011, representing a 75.1% to 79.5% year-over-year increase. This forecast reflects Baidu's current and preliminary view, which is subject to change.
Conference Call Information
Baidu's management will hold an earnings conference call at 8:00 PM on July 25, 2011, U.S. Eastern Daylight Time (8:00 AM on July 26, 2011, Beijing/Hong Kong time).
Dial-in details for the earnings conference call are as follows:
A replay of the conference call may be accessed by phone at the following number until August 1, 2011:
Additionally, a live and archived webcast of this conference call will be available at http://ir.baidu.com.
Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving individual Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu's ADSs trade on the NASDAQ Global Select Market under the symbol "BIDU". Each of Baidu's Class A ordinary shares is represented by 10 ADSs.
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, the outlook for the third quarter 2011 and quotations from management in this announcement, as well as Baidu's 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 its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Statements that are not historical facts, including 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: our growth strategies; our future business development, including development of new products and services; our ability to attract and retain users and customers; competition in the Chinese and Japanese language Internet search markets; competition for online marketing customers; changes in our revenues and certain cost or expense items as a percentage of our 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 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, Japan and elsewhere. Further information regarding these and other risks is included in our 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.
About Non-GAAP Financial Measures
To supplement Baidu's consolidated financial results presented in accordance with U.S. GAAP, Baidu uses the following measures defined as non-GAAP financial measures by the SEC: adjusted EBITDA, operating profit excluding share-based compensation expenses, net income excluding share-based compensation expenses, and basic and diluted earnings per ADS excluding share-based compensation expenses. 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 U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures" and "Reconciliation from net cash provided by operating activities to adjusted EBITDA" set forth at the end of this release.
Baidu believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain expenses, particularly share-based compensation expenses that may not be indicative of its operating performance or financial condition from a cash perspective. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our 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. Baidu has computed its non-GAAP financial measures using the same consistent method from quarter to quarter since April 1, 2006. We believe 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 share-based compensation charge that has been and will continue to be for the foreseeable future a significant recurring expense in our results of operations. A limitation of using non-GAAP adjusted EBITDA is that it does not include all items that impact our net income for the period. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures.
SOURCE Baidu, Inc.