Baidu's net profit in the two quarter increased by 45% compared to the same period last year, and the L4 level of the unmanned vehicle has been mass-produced.


Baidu's net profit in the two quarter increased by 45% compared to the same period last year, and the L4 level of the unmanned vehicle has been mass-produced.

Liu Jia

[Baidu's R & D investment in the two quarter was 3 billion 300 million yuan, an increase of 24% over the same period last year. In the past four quarters, Baidu has invested 13.5 billion yuan in R&D, accounting for 14.4% of its total revenue in the past four quarters. ]

On Aug. 1 (July 31, Eastern Time), Baidu released its unaudited financial results for the second quarter of fiscal year 2018.

The data showed that Baidu's revenue was 26 billion yuan (about $3 billion 930 million) in the quarter, up 32% and a net profit of 6 billion 400 million yuan (about $967 million), an increase of 45% and 77% on the mobile end, higher than 72% in the same period last year, with a net profit of 7 billion 400 million yuan (about 1 billion 120 million US dollars) under non US general accounting standards. It increased 57% over the same period.

Baidu CFO Yu Zhengjun once again referred to the non core business of stripping Baidu. He said Baidu continued to increase investment in AI driven business with strong synergy, while gradually stripping off non core businesses. This strategy pushed Baidu to accelerate its revenue growth, and by stripping off its non-core business, Baidu gained more capital and increased capital returns. This year, Baidu has split Baidu's international business and Internet banking business.

Mobile revenue accounts for 77%

Since January 1st this year, Baidu has adopted a new accounting standard (ASC606), and the most important impact will be the reclassification of value-added tax from income to net income.

Baidu regards "search + information flow" as a dual engine to promote business growth. Robin Li, chairman of Baidu, said that search business revenue grew significantly through AI - driven liquidity, information flow and commercial growth.

The report showed that Baidu's second quarter mobile revenue accounted for 77% of total revenue, compared with 72% in the same period last year; the second quarter revenue of "Baidu core" (BaiduCore, the combination of search services and trading services) was 20 billion yuan (about $3 billion 30 million), up 28% from the same year.

Baidu also disclosed that the average daily active user number of Baidu App in June reached 148 million, compared with 137 million last quarter.

In R & D investment, the results showed that Baidu's R & D investment in the two quarter was 3 billion 300 million yuan, up 24% over the same period last year. In the past four quarters, Baidu has invested 13.5 billion yuan in R&D, accounting for 14.4% of its total revenue in the past four quarters.

In the non-core business divestiture, in April 2018, Baidu reached the final agreement to divest its financial services business.

Since June 30, 2018, 38 billion 100 million yuan (about $5 billion 760 million) and RMB 27 billion 300 million yuan (about $4 billion 130 million) have been reclassified as assets and debts held in the consolidated balance sheet. Transactions under the final agreement are subject to specific transaction conditions and are currently expected to be completed in the second half of 2018.

As of June 30, 2018, the total value of cash, cash equivalents and short-term investments held by Baidu was RMB 128.3 billion ($19.38 billion).

AI commercialization progress

What is the future of Baidu's AI business?

In the two quarter, a group of AI related data was disclosed: in the intelligent voice interaction system DuerOS, the DuerOS intelligent device was activated by 90 million in June, up 80% compared with the beginning of the year, while the uerOS voice wake-up was over 400 million times, 2 times that of March. Relying on Baidu's brain, the average daily voice request for Baidu's input method grew by nearly 150% in June from a year earlier, to 335 million in the last week of July.

In terms of application, Baidu's AI products are making efforts to the B end market, and cooperate with hotels, automobile companies and so on. This is because the intelligent voice interaction of artificial intelligence has reached the inflection point, not only to find more application scenarios not only have business expansion, commercial landing, but also be closely related to the need to learn data, exercise and adjust the algorithm model in different scenarios.

However, in the post - financial analyst telephone conference, Robin Li also said: "the Baidu AI project is at a very early stage, so it will not make a significant contribution to the company's revenue in the next few quarters."

According to IDC, by 2020, 27% of smart homes will have intelligent voice devices, 51% smart cars and 68% smart phones and smart wearable devices also have voice dialogue.

According to Li Yanhong, Baidu and Jinlong cooperated in July this year to achieve the L4 class automatic bus Apollo production. The L4 Apollo has no hardware, no steering wheel, no driver's seat, no throttle, no brake pedal... In other words, Apollo can operate automatically in a specific area without human driver participation and assistance. The unmanned vehicle will be commercialized in Beijing, Xiong an, Shenzhen, Pingtan and Wuhan.

Compared with "Apollo" for public use, at the B side, Baidu cooperated with the Beijing sanitation group to build a small and medium scale sweeper at the scale of mass production, and realized the industrial chain from production to operation in 2019. Micro sweepers and mini logistics vehicles built with Apollo Unmanned Cars will be mass produced by 2018. Apollo will also cooperate with Suning Logistics Joint Logistics Auto-Driving Operation to realize the auto-driving distribution of urban terminal logistics by 2020.

"As we have said before, DuerOS and Apollo are the most advanced in the industry, so if there is a company's AI project that can make a significant revenue contribution to them, then Baidu will be the first company to achieve this goal." Robin Li said.

In the third quarter of 2018, Baidu's revenue is expected to be between 27 billion 370 million yuan (about $4 billion 20 million) and 28 billion 770 million yuan (about $4 billion 230 million) in the third quarter of 2018, with a year-on-year increase of 23% to 30%.

If Baidu removes the impact of Baidu's international business and full resolution, Baidu expects revenue to fall between 26 billion 560 million yuan (about $3 billion 910 million) to 27 billion 920 million yuan (about $4 billion 110 million) in the next quarter, up 26% to 33% from the same period. The outlook only represents the preliminary forecast based on the current situation, and does not exclude the possibility of future adjustment.


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