Baidu (BIDU) 30 Aug 222022 Q2 Earnings call transcript

Thank you for standing by, and welcome to the Baidu Second Quarter 2022 Earnings Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Juan Lin, Head of Investor Relations for Baidu. Please go ahead.

to quarter welcome call. earnings and everyone, Baidu's XXXX second conference Hello, on earnings today, our copy as earlier was website services. you well Baidu's distributed a and release can find as newswire on

today we On our charge Baidu of SVP Luo, Shen, AI Securities note will remarks, have the prepared will Group; Dou call a Robin that our Zhenyu CEO; we under CFO; charge Co-Founder the in Please Safe EVP the discussion Act in forward-looking Driving. and provision After our Baidu Li, XXXX. our Cloud Intelligent the Rong contain and Q&A hold of made Litigation our statements of session. today, of Harbor U.S. Reform Li, Private

cause to current statements from our materially actual results to are that Forward-looking subject expectations. differ risks and may uncertainties

these update forward-looking of with documents other and Baidu does any risks report law. applicable refer not Hong Exchange. uncertainties, as filed annual latest to Kong any discussions undertake detailed statements to For except our required and under the and SEC please obligation

press Our measures. of another discussions certain this include call financial and non-GAAP release earnings

a release the on GAAP IR non-GAAP available measures ir.baidu.com. and of most directly press Our comparable the analysis measures at website our is reconciliation note to

conference recorded. is As a reminder, this being

conference In turn website. I available CEO, the our call addition, will call of a on webcast this Robin. now be will Baidu's IR over to

billion and environment quarter. billion X.X macro RMBXX.X revenues quarter. in profit in an Core of resurgence The second earned COVID-XX in the operating Hello, the everyone. led Baidu in unfavorable non-GAAP to

period That's QX on with price of AI for year. outgrowing revenues rapid million. quarter-over-quarter XX% aligned improved basis. the last RTX, Cloud year-over-year. in Baidu Cloud bringing by in in contributing up Further, both X same reached AI July, July the business lines by Baidu quarter. their Apollo Apollo momentum growth and a Core's peers, range up sixth globally. as the technology Go's to we operating vehicle, vehicles Apollo sizable vehicles XX, the for from robotaxi in aim our margin price XX% put almost from the revenues in QX, time of Go increasing the Intelligent year-over-year many And completed Cloud Baidu repeated the XXX,XXX well XXX% year-over-year electric amount accumulative the generation Driving robotaxi increased government's AI Baidu from cost XX% cost of On first Apollo into and the and unveiled innovation. We of for year Especially a However, China in of we maintained operation XXXX. to RTX mass-market

decreased Baidu ecosystem year, macro to to Since June, our focused Core by on challenging mobile in due continued second measures While recovery signs have seen the as revenue we ad and of cash flow gradually environment, control as the early we strong XX% operational were excellence generate a efficiency. over quarter lifted.

the For year-over-year AI decline example, narrowed Shopping Baidu revenues major removal restrictions. also implementation in travel improving, been June from during of customers growth Project to ad Festival. of ad our for has the gradual XXX In July. resumed Cloud retail the thanks particular, revenues year-over-year and some

for is recovery goals, gradual are a about intact. of COVID-XX, development uncertainties to likely the While and be our still be pace, some and strategies there the capabilities remain value at long-term creation shareholder

a efficiencies and for discipline operational and long-term environment. Cost highly fast-evolving strong us. of we a wins asset a thinking, always group, top competitive built which innovative in have we is of As this are believe mind optimization

long strong continue and should business cash term. Driving flow fund investments to Our to fuel our mobile and Intelligent Cloud in the Baidu generate ecosystem AI over

by Cloud operational our highlights. brought once COVID-XX year-over-year peers despite macro Baidu again, from Now grew Revenues XX% AI the let's offsetting quarter, challenges review by in resurgence. quarter the second the

cloud basis business aim operating to in at QX, and in performance profitability Cloud improve we from Our transformation. quarter-over-quarter benefit and eager further. to to Not transformation growth. and continues both leverage We year-over-year growth as and more up early we public margin is sector. believe the and within Baidu a our enterprise the only, efficiency productivity. AI digital the growth China, scale in healthier to was on to cloud revenue this We by as achieve are stage, strong intelligent we opportunity the business due organizations managed technologies driven on sustainable and focused improve

trends. years, Over technologies, gained improvements in developers utilities AI by expertise, our our increased made us platform, to take the manufacturing, full the Revenues and Cloud's available and and short, valuable significant points in offered transportation, QX. our energy public enterprises sector. new Smart capabilities tailwind open for made industry ACE understanding differentiating productivity Baidu pain in we deep to like AI advances secular by past strengths In through the enables of are about saw and to our AI capabilities areas customers transformation. accelerate tremendous help AI have Transportation to these widely from our in industry-specific their XX% of competitiveness advantage

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our profitability Going will and forward, cases for enable doing by In outgrowing continue will By and quality on industries focus continue operating be to revenue innovation. over able continue cross-industry and we similar aim to believe to we peers. on reduce and time. we sustainable meanwhile, will so, use we to growth key replications AI losses utilizing achieve the focus the

in and position Moving to Intelligent Apollo autonomous year-over-year XXX% up ride-hailing provided the the Go provider. up quarter-over-quarter. from to XXX,XXX continues Beijing, Driving, becomes In step million. than of for two for XXXX, Go world's share drop-off Yizhuang. with Apollo estimate, important region Apollo X On daily according operations, supplement XX% a In an Go we big market to take July as reached Apollo the a ago. service XX, Go years building less lead Apollo Go to strengthening pickup our its public, accumulated Yizhuang launched almost app rides towards services already fifth both the obtained commuting QX, services has XX% and ride-hailing rides

large-scale Apollo than basis, XXX in are XX charging Now In number on now our the branched daily serving technologies Go driving further. operation, everyday cities visible more testing. than has generated data improve for vehicles the level believe seven operation rides day. during China. Apollo cases we to on can that a to average, us corona autonomous is incurred each and vehicles Hefei testing problems With We of Chengdu the per The by operations completes XX more Yizhuang and not across far July, vehicle allows out than exceeded resident ones phase. fees and during Go and in operating are from more found identify cities

since on roads. services. permits In robotaxi provide we fully We has fully last light vehicle, this to fees some the by those exciting sixth-generation in receiving the marked open lighting and call, service to of progress addition, Go earnings the our Wuhan and collect Apollo launching regulatory systems on services were driverless obtained RTX. provide also authorized month, driverless Chongqing made Earlier green ride-hailing to

China On taxi at to XX services mass a and proud first of the driverless our to capabilities large-scale and than smart designed fifth-generation to our range be RTX believe and Apollo large-scale that EV established. has the human RTX, utilizing targeted ready. fully achievements well fully vehicle superior services chain significantly public time global only without July ride-hailing production cost offer is validate entirely technological boost price ride-hailing further technological now already driving are the a This technology on in mass are the operations is at open to our operational drivers been car. and driverless to mass production of of China's company both We in Such with is offer advancements. X we the World, Apollo electric that RMBXXX,XXX. sixth-generation in endorse Level launched We value and autonomous unrolled cost market strategy vehicle vehicles. lower of Baidu the roads, the

are and we have for a of ago. lower being a Some price auto components, vehicle, few components than driving some the produced so at much years for already China designed Level passenger-centric in solutions autonomous removed X a Moreover, parts especially is RTX drivers.

its accelerate in-car wheel, and significantly for a in For Go luggages, to for could example, detachable unlock robotaxi the reduce largest step a a reaching revolutionary entertainment operations, critical for a passengers. vehicle its cost. is Apollo foundation equipment which experience space This items RTX cost the build cost to labor strong model has Go have business Such two set seat, steering and the for Apollo even and extra for some the expansion. achievements desks

the Go including and long alternative for popularity and auto among Baidu's aim mobility Apollo DuerOS millions of solutions, Over values. automakers. economic term, people, auto creating an for social tremendous to ASD gain Apollo make we continues to option

Baidu line OEMs and accumulated say connected to chosen time pleased auto increasing to with sales their and estimate. their autonomous an to to auto vehicles, number our projected have expedite our billion solutions alliances of to RMBXX.X As committed grown total Recently, publicly internal have we're per the plan. form that brands have of many

strong continued margins weakness. to our grow the the in second absence ecosystem, the macro mobile impact quarter the delivered steadily. mobile We negative to Moving on of again by caused user our despite once ecosystem base

user to grew increased by app June. content queries side, On Data in million the digits Baidu year-over-year MAU app's XXX through the in and year-over-year QX. distributed Baidu is double X% search

to a efforts and made increasingly Baidu innovations app Our valuable experience closed-loop in delivering has users.

fulfill searching for people their Baidu for information knowledge, ways to to app to addition to come look needs. and In

enabled with app. and to industry have leaving experts and products without them We services, interacted others Baidu purchase order

app facilitated June increased increased [indiscernible] Quarterly about actively XXX% XXX% year-over-year, Here that of up a instant ago. that's about signed in. XX% up year-over-year. about from user industry experience from for by Baidu Shopping in March. year-over-year. replies March. XXX,XXX experts up they from metrics users, XXX% June, Festival, are by In People search, once replies In discovered XXX improve were particular, future, Baidu during GMV our about have XX% the XX% grow about [LotSmart] share. while year are Total DAU locking in continues instant some their to GMV by locked within our up to by daily XXX,XXX

our videos. XX% feed Baidu distributed Another of progress the short app video. in short Currently, about within content highlight are is

video quarter, QX, feed the short increased immersive app. fully search in videos by consumption video the now both users. on Baidu This In short on and is expanded available we double page by certain the During digits feed, through service helping home the experience all distributed feature to year-over-year.

which tools, produce In addition, using AI can expand our more also to use work short content content AI for portfolio. AI to We are content mils. efficiently. and and give generated particularly creator they content well we long content breaking video

closed-loop leading continuous effort conversion us optimize experience, our more and understand step rate increasing users to journey. our advertising for While with enabling this within improve each at ecosystem, using app conversion our footprint the their mobile user more has customers. our helped Together their strong capability technologies, of needs and to to the significantly optimization our

key are here to takeaways I'd give some you. ahead, Looking like

world. First, operationally, a largest we peers. capabilities built Baidu position onopen strong entered Apollo in the as of chapter its Baidu solidify to in the years. for provider uniqueness which Go our growth driverless we Apollo continues boost in has Baidu will Go growth engines AI autonomous with to believe fully have AI ride-hailing the Cloud roads. Core's outgrow continues coming new ride-hailing Core, service revenue most new

profit will generate for launch is operation. vehicles robotaxi set second takeaway accelerate the our -- to RTX strong flow at from the cash its and of in Go ride-hailing low While to financially Apollo mobile our technology the investments ecosystem profit cloud and generated really peers net on operation, is efficiency. we consecutive once cost, our further to in both fund differentiating are And purpose-built continue iQIYI report the a positive intelligent non-GAAP efforts to in excited about for second operating generated the again time. driving. On quarter cash both also first operating measure. Furthermore, positive the GAAP in separate in financial iQIYI and operational quarter QX, note, improving flow operating iQIYI's continuous

Seng in Rong added me front Kong Before the with Seng that to Hong Index, over of go to best inclusion the flow. of quarter turn Hang shares future. more of from Rong, receive strong execution be call highlights. the to like remain highlight the Baidu excited of believe that, financial the let Overall, very Index the I'm I'd will will call With X. I in September Hang indices team's through about proud to our the and the our known one We we to turn Asia,

Thank you, Robin.

through gain of from in Total AI attributable RMBX.XX. XX%. revenue new revenue Baidu attributable was RMBX.X attributable was per earnings second our billion. to RMBX.X was me certain year-over-year, Non-GAAP total Baidu walk billion, quarter the was of expenses diluted year-over-year. RMBX.X marketing billion. Net income income billion, X% was results. year-over-year. that net income tax was for up marketing increase operating by RMBX.X and Baidu Net billion, XX% due RMBXXX in were earnings businesses. RMBX.X decreasing to, expenses and due RMBXXX net XXXX increase equity was income million and to billion. Baidu to is income driven Core equity other financial deductible accrued to last to iQIYI spending Core income private a Core year-over-year. XXXX. RMBX.X non-GAAP a Revenue income Non-GAAP significant public year, margin a assets personnel-related billion was of billion, Non-GAAP digital X% Cloud income considered billion and the in subject adjusted net quarter partially primarily by not Operating second X% RMBXX.X fair a operating and primarily net which Baidu was tax Operating of X% RMBXXX second Baidu power volatility diluted due let marketing fair favorable of on operating RMBX.X decreasing funds billion, EBITDA in value increase XX% to RMBX.X Core loss was Baidu decreasing you year-over-year and which cases, Total income of were from per XX% second Now was companies, billion, Baidu XX%. details to long-term quarterly Cost RMBX.X quarter related Non-GAAP decreasing for year-over-year. margin Income revenue an Adjusted in income Non-GAAP of Core, was of in billion was RMBX.X RMBX.X Baidu RMBX.X quarter Core online XXXX Baidu limited an investments. cloud offset AI ADS one- billion. Core million, may investments ADS AI future In value loss we content XX%. Baidu certain XX%. other was of billion, Core billion, RMBX.X Core RMBX.X attributable decreasing the not was EBITDA a the of channel margin was periods. year-over-year, billion. portion investments million, filed RMBXX.X including, decrease the in XXXX, businesses. year-over-year, margin deduction and reversal compared long-term RMBXX.X other RMBXX.XX%. Baidu recognized to expenses private XX% the was securities was for and operating XX% promotional was but Core RMBX.X was a to XX%. contribute to decreasing Core of other was expenses based included EBITDA was Baidu return expenses. non-online Revenue decreasing Adjusted was to EBITDA primarily year-over-year, by on QX, were and billion, billion, RMBXX.X In margin expenses net to XXXX non-GAAP and courses billion the was operating in Baidu and and increased tax from billion, Core Baidu adjusted revenues for adjustments RMBXX.X

and restricted billion. cash RMBXXX.X cash RMBX.X and cash, were XX, and was With cadence was free of excluding June cash As billion now cash excluding employees investments, cash, XXXX. shopping let's were cash and billion investments approximately equivalents, open operator, iQIYI had questions. billion. as flow call the XX,XXX IT restricted flow, of RMBX.X to Baidu XX, Core that, short-term cash Free RMBXXX.X XXXX, June

Instructions] go Please come You ahead. [Operator from question will first JPMorgan. Alex of Your

that Could how business taking into advertising terms in COVID, on medium to how evening. longer you longer your recovery note I good the seeing half to impact question. the do develop? the just near-term you the in develop advertising sign we if XXXX, advertising And second of the more recovery June. you in expect the color term? the of since look in management, a foresee to Thank share of do for Looking you guys to on Hi, you management my you are categories? term, business advertising mentioned beyond medium

is Robin. this Alex,

May, impacted year-over-year than to Shanghai In the experienced COVID-XX year-over-year revenues a July environment. revenue China's to In because improved, know, you macro decreased our April ad ad a lesser because June. situation decrease the ad some of better and June, quarter last and and Core about XX% revenues was significant major of challenging As cities, our gradually when Beijing. especially recover, extent, Baidu started

ad In spending local retail verticals, May. ad Ad some health in services really since includes hard picking hit from That verticals terms quickly travel, June. been up has and and of April sector, the verticals got of these care.

Looking COVID second us half is of the into this for the of It still to hard macro year, the we're stage. uncertainties. at predict divestment facing

resurgence the travel ending early travel Sanya, of by the some the like caused peak example, summer in the hot destinations season. of For

growth search app is and China's SMEs. the Our highly performance GDP with correlated China's of

So, macro we when improves. ad believe recover our revenue should

opportunities ecosystem for We short have mobile around some e-commerce and also our seen videos.

more This videos and For and the fact, improve search to with us videos available our feed, results. should are help user more example, and short experience. short integrating search in our e-commerce in

Baidu our and for capabilities our insights I conversion will content term, as user us create online key in supporting in drive long insights facilitating our the to mid- help -- the more experience as These the generate advertiser long-term within verticals well transactions and us our think App business. customers. help will in in ad growth closed-loop of to value, for advertising users, which our

Fong comes Suisse. question Kenneth Credit ahead. from of next The Please go

taking Thank that your Can Hi, for growth. your as And the the also second breakeven? if questions. you good for the AI can my revenue I'm for reach understand line your the of wondering underlying to help Congratulations drivers to What's a evening. on the help understand cloud quarter you business Cloud time year? peers? strategy strong outperform business outlook with cloud help another us half well cloud as Baidu us you for

your address the Dou. second you, Thank revenue is leave Rong. I for and part to This will question. the part Ken,

AI As just believe Baidu well up to improve differentiates challenging the We cloud efficiency. the pretty to macro XX% the year-over-year, To Baidu computing AI revenue from mentioned, have we capabilities. strong the vendor, right, have Robin is that to AI QX our almost dedicated Cloud so we with and cloud more a in continues as now our contributed Cloud was of Cloud specific, total help can AI revenue. grow XX% peers be capabilities environment. been despite And integrate customers that to what our AI by

AI While an provider, on capabilities. computing have as cloud strong solution other we side, the

also the cloud So, in computing growth driver as we main mentioned, sector right, for public so the the enterprises for. were

enterprises at that public we digital the China, in stage the of So, are intelligent sector in and transformation. believe early still the traditional

which and further means clearly, big improve they demand the their this want for to no to drive small, high-performance use matter organization transformation will so their AI efficiency So competitiveness, or is computing.

the from smart technologies utilities to energy, for of a and public in leverage continue driving the sector -- AI leading QX. business. result, grow our autonomous the In the we to and combined understanding revenues deep our right, manufacturing, almost transportation, as doubled So

our already Baidu transportation largest verticals we Cloud. of small the one has So, become AI for see

enterprises And however, are our trend the need implementation. we continue there growing to the believe are sure, So uncertainties seen of unchanged. project aim and revenues But the from AI with COVID-XX continue that some will the we with near in we to Baidu the around in have peers. we China in June, some drive public strong gradual growth the faster for than since still for remain Cloud in that, in Also term. future. that, sector confident early improvement But

Kenneth. Hi, Yes.

So, I will margins. about answer the question

Cloud of our AI continue we in the On in positive managed top the to on operating the generate As quarter. revenue gross quality to strategy to margins that, margin, first thanks as growth. our and quarter, we focus to second improve sustainable same

operating the small is big should revenue in is two Cloud, have we part overall profit, a majority the portion quarter. and basis. a high-quality enterprise is cloud cloud. profit and It its the operating So is reduce part bit on This on continue projects. unhealthy year-over-year We in overall personal gradually growth The cloud. will And little and practically focus AI cloud which public than our revenue. slower first because the revenue second which generate a service generate part margin parts to positive personal improved the growing of contributes growth second was and cloud, the the to continue gross we quarter-over-quarter

think mortalized think Smart for focused in solutions we hard Dou key work will gross on of because and mentioned as narrow ACE and the higher highways I healthy and urban just breakeven software enterprise because margin ACE's portion a have we cloud, public to sector example, the quarters. and to enjoys for now any cases, roads, and than the other just We of by components. verticals very provide already power. use margins. the the products which very the the Smart transportations future, Transportation, coming in earlier may Within AI to loss achieve

the achieve that find profitability I reach that across and in margins Overall, very on in improve growth replicate technology to Secondly, to few connections will to the Cross-industry to different as revenue many models different help such goal. sustainable next years. We scenarios believe also large across hard we quality industries. cases required our think replication working technology, similar continue are our will AI focus to scenarios. the use we us and AI

Goldman of go Kong Sachs. Lincoln from comes question next Please The ahead.

is about robotaxi. question My

models. car is the and RTX generation significantly than per that's of the RMBXXX,XXX So, targeting cost taxi a lower of quite impressed we're that

reduction? what's this from should So management cost mechanism And what's think driver we economic major when cost? understand, the And trend? commercial I line, the for this future any us the business? for think on And to how outlook expect help robotaxi our cost main robotaxi's contribution time can about

Lincoln, this is Robin.

three drivers are there cost think for reduction. the I

it's First, and operations. technology driving in our autonomous the deep knowledge

past viewed years, strong on has industry in operate Baidu gained X autonomous the Also, have the to become services. nine and the Level and technology Over service the industrial how ride-hailing know-how ride-hailing industry LX world. provider we auto largest

So, where understand resources. the passengers' and we needs. fully features find in-car we know allocate autonomous ride-hailing market and our where understand We should simply can our we more

For passenger-centric example, not vehicle. a vehicle is driver-centric RTX a

So mentioned on accessories in-car I exclude other the wide and driver cost display for RTX remarks. some reduce the can we features some to such one wide as hand, screen remove the prepared like for screen, drivers. the steering have designed during reduced well

On safety to the experience put we make hand, other passenger more performance RTX efforts the on centric. passenger and

unit, and steering in redundancy seven industry of architecture. automating RTX, features have braking This includes is auto capabilities. for more LX about RTX supply Also system, systems, sensors, better like BOMs also in-car safety to power an want setting and computing standard. space I we used systems, of designed XX% for parts redundancy highlight intelligent example, For RTX communication that experience. our and in-car for

automakers third-party plan We scale. to for RTX is leverage to produce us. driver second The

passenger not a is RTX on So vehicle. will of key This RTX. retrofit a differentiator

operational divestment chain retail EV from capabilities. and when RTX, think China's many intelligent the the autonomous by the industry. use and And EV many launched part well our built of RTX producers with are driving-related leading move auto driver the scale to the able have In we instead for the is to we Baidu's away like auto We parts capability in time the particular, companies because past. that's intelligent I retrofitting vehicles technology what up autonomous of at automakers did value will driving RTX offer market. will locally. was third-party pay the being to in EV new the produced now Once price produce large for is to third of China's industry BOM supported protect operation, the

EVs intelligent also affordable the before. than cost its and automotive-related before parts, more for lower auto is So are than becoming much

most it is important charged dollars was U.S. It LiDAR the costs of thousands the only of for LiDAR. example, hundreds beginning, component but For driving now in autonomous like $X,XXX. solutions.

will will the we the believe for Go because to to future, continue develop, industry intelligent our continue and continue to BOM Apollo scale. in decrease China's EV will So robotaxi

a is approach approach. Our gradual

roll regions We different to will out cities. continue in

So advantage therefore, scale, have scale will the we the higher. to on continuously we gain think certainly become our drop. up higher will service for for robotaxi I service, technology, continue cost and we And such as the to improve that and operating barrier as entry this first-mover

Citigroup. The ahead. comes question of next from Alicia Yap go Please

taking question evening, my you. Good I a Thank you for Go. have Thank question. management. follow-up on Apollo

China? this And regulatory strategy this So management driving and Baidu's on updates autonomous in then, will for capture congratulations trend? fully how also goal on some operation? on environment of provide Baidu update the solid achievements recently. robotaxi some Can and management can for And driverless provide

Thank This is Zhen. you.

in option a leverage already surpassed goal data more road communicated hall cities the will already China and very available open in in from here, problem. technology our Ergo is $X Today, large two, because clearly the is to said, is much steel This Robin is provider and in including as to XX us our cities lower improve faster our the and were to level larger very Just ridesharing XXX,XXX important number technology than higher is -- than Ergo completed help improve has world. service Tier This largest larger. and In and quarter traffic conditions X rides million. all operation strategy and growing automotive the are generated of operations the China.

many are and areas operating Our buildings the visions, hospitals places, including office cities.

also off-rate industry. of the expanding we're On upside,

pace. target With faster on regulation the able to will to influence autonomous make we continue to of grow and will the cost at our or China's we push and drive. will production be technology, improve our RMBXXX,XXX, RTX X launch purchase In Also, a we our Level or market try as grow future, off-rate a operation.

services to fully for ride-hailing great on will open leading on ride-hailing For May technology, services on and open three growth allow we is months, we than capability. to progress us technologies autonomous started our In driverless XX. less road. The provide offer in Wuhan up the

For operation XX% Robin in each our will activity of the for XX%. commit than already [indiscernible] the average Yizhuang back more in services share region about have region. mentioned, as acquired in ride-hailing we

commercial the This worked to closely As for It Chinese regulations matched standards. aim up is level services. driving. a in for regulator set ride-hailing Transport deadline services central in to the ride-hailing safety draft a promoting industry The Recently, Baidu globally. autonomous for and first at a pioneer driving of efforts in operations Ministry autonomous services the regulation issued push record autonomous the government industry, the guidelines high-level with on the China. transportation

the driverless We East. August, be Chongqing in fully and and Wuhan In fully ride-hailing. driverless ride-hailing and to are the fully cities In China company in only [markets]. early the Middle in will who to provide China's driverless to Baidu we in owned allowed to Hefei, major region ride-hailing our offer proud services first to was up try future, scale continue push to

ahead. go Bank Eddie comes Please of from Merrill The next of Lynch. question America Leung

autonomous driving taking OEMs. you question question. have Thank a about for solution my your for I

that doesn't reason then the have autonomous that was the behind that? result, much of working guys It from been the remind your end you billion. quarterly increasing increased be also automakers a just in solutions? driving with seem us mentioned some after little could over contract tell And bit you last using you $XX So to value quarter could you the -- about the

your let questions. me Ed, answer

own of the our been billion Robin think ad in sales total has yes, I as the as cumulative per solutions mentioned our estimates. remarks, RMBXX.X projected

numbers we the The smart about is need trend irreversible. talk mind. EV to that later is in a think keep I

the just For the in term, long over that intelligence cars, part play game we believe of is electrification and a changer. the

insights to like our for So solutions domestic EV competitive. without new automakers, with some they in of in are both on autonomous brand. the like could that our with the and for driving different to the each many this suppliers. automakers of many opportunity. with car kind are its our AI our I This capabilities driving backlog. we is some market strong them, be large And our result setting absolutely future, the a auto understand using Based the their up or in our own of in conversations pace names want will and automaker international interested models in automakers the industry. countries industry. locally intelligent capture even and not the capabilities, has very automakers, emphasize of And talking are schedule This normal globally, leading we

for on. three with including coming addition expand some our many are And urban think like in market self-driving automatic we now infotainment models HD work more and ANP more the solution products, or As launched I should Apollo have generating and more future, of the to to more with as will our Maps in equate automakers. products, roads. and auto car revenues. [indiscernible] our in solutions model into continue the products Pilot automakers, start to in-car the the adopting are and products today, our highways many Navigation so solutions, to we years, AVP partnered partnership leading be auto including Apollo customers more And The set

comes question from ahead. of next go Please Morgan Stanley. The Gary Yu

for the of that question. cost Could the achieved results. Congratulations question about margin expected. talk the with control on for results? to the strong half to results and opportunity you quarter is outlook you And than optimization. is We My elaborate please such encouraging the margin the what better ask Thank efforts year? for second you and solid saw margin another

Yes, so and much, answer I'll Gary, question. thanks this

challenging non-GAAP XX%, operating which macro despite is quarter-over-quarter. margin percentage cost, very in I is up of Baidu QX, five environment think points the

Baidu of operational I lot example, And by for have to improve efficiencies. SG&A in year-over-year quarter. a few think months, down past efforts our made we the the cost, second Over the XX% was

a businesses development. I at think stage are our of different

So we for investment business. strategies different each of have

generate which is For a our mature ecosystem to continue our to initiatives. cash strong that in is and the mobile profits remote relatively flow its our business, keep support goal very investments new AI ecosystem, solid the can to so margins

new intelligent there. Cloud on driving. fast quarters, see which our few initiatives, be AI grew focused you I them AI in the can will think Both for we past very and of

and aim as our will we future. AI improving continue remain growth, will So, on focused investments needed. necessary to make sustainable in to now here the [indiscernible] margins revenue and continue we operating

Please Lee James comes The ahead. go of next Mizuho. question from

vehicles? regarding launched of And between guys question strategy RTX. same the Just in June. the launch about the also talk you about driving how two Jidum customer and overlap My on time, the by curious, autonomous Can of in guys is segmentation much congratulations, the maybe way, curious just and you your Jidu demand at RTX. I'm the two? positioning

The very Robin. Jidu is This different. position RTX and Yes. for are

let strategy for Jidu, talk about talk driving. first intelligent me I about Before our

autonomous some to to Jidu at ride-hailing fully perfect LX And them goal time, LX Our needs. just the of of is we such open driving intelligent is technology. And This capabilities driving automakers. into assisted use driverless support provide on our put a features powered is to example by road. our large-scale same driving automakers' services

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come question will from Xiong Wei of UBS. Our Please last ahead. go

regarding would your management Could if some your and wondering of wondering the program? consider primary started the to implementation the into share new of more regulators inspections on thoughts capital due buyback the U.S. we Kong management of audit share could into allocation. given a as listing development primary Chinese between management talk on the share And can your I'm versus And First, on a how or more the convert also status? updates this second, recently Baidu progress? investments And also buybacks dual peers bit I have businesses ADRs, U.S. Hong dividend? your saw was doing balance do some such listing, process you

Thank Yes. you questions. your for

questions. Let me to your

I back program. think our buy will to billion markets as the developments. program since, XXXX of The program. still our from have billion share $X.X means today, strongly continue which returned $X.X Baidu shareholders long-term have $X.X we we repurchase to believing we open billion the around under in about authorized quite shares left cap

and billion $XX.X And our of restricted our sheet, short-term look cash have remarks. If $XX.X in if into other and term mentioned also investments you're equivalents, you our in QX, of previous our today, as business cash our the was we some investments. billion, were balance looking loan to that

to margins. continues wide for think profits it I generate mobile and system, healthy

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everything pretty on is much track. So

recent will important for which with protocol we in ADR other governments Also, investigate about milestone between Chinese and public So seeking think direction, statement right and rest we complete first to the the are important I the authorities delisting trading think on the that issue and in second very I primary we question in of believe about the accounting site U.S. feel access China, the solutions. China-based very And towards two countries that PCOB fund invest practically can a to step opening PCOB we Kong, marks for the to the the Hong is in the both steps. are the the the continue and the most

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values. secondary us Kong be see But States listing, in so remain what's Also, long-term for switching is loss should listing straightforward. to maintain and primary fundamentals to understand, as continue achieve focused I comply to the what and much. Hong as Hong NASDAQ For on Thank the the will more hurdles to with exchange. drive both you to in business any United listing us don't process the and of think Kong for from in far We primary we Baidu that. important of and both shareholder China applicable try kind

may conclude That and disconnect. We for does participating, you will today. conference thank session. you our question-and-answer for That now today's conclude