Baidu's annual performance exceeded expectations.
On February 28th, Baidu (Nasdaq: BIDU, 09888. HK) released its financial reports for the fourth quarter and full year of 2023, with a total revenue of 134.598 billion yuan, a year-on-year increase of 9%; The net profit attributable to Baidu (non GAAP) was 28.7 billion yuan, with a year-on-year growth rate of 39%; The fourth quarter revenue was 34.951 billion yuan, a year-on-year increase of 6%, and the net profit attributable to Baidu (non GAAP) was 7.755 billion yuan, a significant increase of 44% year-on-year. In 2023, Baidu's annual revenue and profit exceeded market expectations.
AI has become a new driving force for Baidu's growth. The financial report shows that in 2023, Baidu Core's revenue (a combination of search and transaction services) was 103.465 billion yuan, and the net profit attributable to Baidu Core (non GAAP) was 27.4 billion yuan, a year-on-year increase of 38%.
Robin Lee, founder, chairman and CEO of Baidu, said: "In 2023, we will make significant progress in iterating Wenxin's big model and ERNIE Bot's one word, restructuring products and services, and commercialization. At the same time, Baidu's core business will remain resilient and healthy. Looking ahead, we will continue to firmly invest in generative AI and basic models, laying the foundation for creating new growth engines."
According to the financial report, Baidu's research and development expenditure last year was 24.2 billion yuan, an increase of 4% compared to 2022. Baidu stated in its financial report that this is mainly due to increased depreciation expenses and server rack fees for servers supporting generative AI research and development investment.
Baidu said that in 2023, the usage of ERNIE Bot and the API calls of Wenxin's big model will maintain a rapid growth. Public data shows that by the end of December 2023, the number of ERNIE Bot users has exceeded 100 million. In the fourth quarter, top Chinese companies such as Samsung, Honor, and Autohome have all reached cooperation with Baidu. Taking Samsung as an example, its latest flagship phone, the Galaxy S24 series, integrates multiple capabilities of the Wenxin model, including communication, translation, intelligence, and more.
In addition, thanks to the layered optimization of Baidu's unique four layer AI architecture, the inference cost of the Wenxin model continues to decrease, and training efficiency continues to improve. Robin Lee previously disclosed in the event that from March 2023 to the end of December 2023, Wenxin has basically reduced the reasoning cost to 1% of the original.
In terms of business segments, in terms of Baidu AI Cloud, by the end of 2023, the developer community of Baidu PaddlePaddle has grown to 10.7 million people, providing services for 235000 enterprises, and developers have created 860000 models on PaddlePaddle.
In terms of intelligent driving, Apollo Go provided 839000 rides in the fourth quarter of 2023, a year-on-year increase of 49%. As of January 2, 2024, Apollo Go has accumulated over 5 million rides. In the fourth quarter of 2023, the proportion of autonomous driving orders in Wuhan's overall order portfolio reached 45%, which is higher than the 40% in the third quarter of 2023.
In terms of mobile ecosystem, in December 2023, the MAU (monthly active users) of Baidu App reached 667 million, a year-on-year increase of 3%. In the fourth quarter, the revenue from managed pages accounted for 51% of Baidu's core online marketing revenue.
Baidu stated in its financial report that starting from the fourth quarter of 2023, the company's share repurchase amount was 318 million US dollars, and the cumulative repurchase amount under the 2023 share repurchase plan reached 669 million US dollars.
As of the close, Baidu's Hong Kong stock market fell 1.75% to HKD 106.600 per share, with a total market value of HKD 298.1 billion. After the financial report was released, Baidu's US stock market rose by over 3% before trading, and as of press release, Baidu fell by 1.39% before trading.