Baidu, Inc. ADS
BIDU · Nasdaq
Next quarter
Expected to report Nov 17, 2026 — estimated from last year’s reporting date.
Consensus is $1.05 EPS for Sep 2026 across 2 estimates, ranging $0.85 to $1.25.
BIDU Jun 2026
- 35.29%
- $1.19
- $0.77
- —
- —
Highlights
- AI Cloud Infra: Revenue rose 50% year over year to RMB7.3 billion, while GPU Cloud revenue growth accelerated to 283% from 184% in Q1.
- Earnings miss: Reported EPS was $0.77 versus the $1.19 consensus, a 35.29% shortfall; Baidu reported GAAP diluted EPS of $0.85 and non-GAAP diluted EPS of $1.06.
- AI-powered mix: Baidu Core AI-powered Business revenue reached RMB12.5 billion, up 25% year over year and accounting for 50% of Baidu General Business revenue versus 38% a year ago.
- Top line: Revenue was RMB31.3 billion ($4.62 billion), down 4% year over year and 2% sequentially; Baidu General Business revenue fell 4% year over year to RMB25.2 billion.
- Legacy pressure: Legacy Business revenue declined 23% year over year to RMB10.4 billion, while online marketing services fell 19% to RMB13.1 billion.
- Profitability: GAAP operating income was RMB3.0 billion, down from RMB3.3 billion a year ago and RMB3.2 billion in Q1; operating margin was 10%.
- Cash generation: Operating cash flow was RMB3.4 billion, positive for the fourth consecutive quarter, although free cash flow was negative RMB8.0 billion after RMB11.4 billion of capital expenditures in the first half.
- Liquidity and returns: Cash and investments totaled RMB283.1 billion ($41.72 billion), and Baidu repurchased $259 million of shares since the start of Q1.
- Apollo Go: The robotaxi business reached 28 cities and more than 350 million autonomous kilometers, including over 240 million fully driverless kilometers, while expanding testing or commercial operations into London, Dubai, Hong Kong and Switzerland.
Analysis
Baidu’s second quarter was a clear earnings miss against expectations, with supplied reported EPS of $0.77 versus $1.19 consensus, or 35.29% below forecast. The company’s GAAP diluted EPS was $0.85, down from $3.00 a year ago and $1.29 in the prior quarter based on the reported RMB figures; non-GAAP diluted EPS was $1.06, versus $1.99 a year ago and $1.29 in Q1. Revenue of RMB31.3 billion ($4.62 billion) declined 4% year over year and 2% sequentially, while operating income fell to RMB3.0 billion from RMB3.3 billion a year ago and RMB3.2 billion in Q1.
The defining feature was the divergence between accelerating AI infrastructure and weakening legacy monetisation. AI Cloud Infra revenue grew 50% to RMB7.3 billion, with GPU Cloud growth accelerating sharply to 283%, helping AI-powered Business reach RMB12.5 billion, or half of Baidu General Business revenue. That progress was offset by a 23% decline in Legacy Business revenue and a 19% fall in online marketing services. Baidu also continued to fund expansion: first-half capital expenditures were RMB11.4 billion, leaving first-half free cash flow negative RMB8.0 billion, even as quarterly operating cash flow remained positive at RMB3.4 billion.
AI Cloud acceleration
AI Cloud Infra was the strongest operating contributor and the clearest evidence of Baidu’s strategic transition. Revenue reached RMB7.3 billion, up 50% year over year, although it declined 17% sequentially from RMB8.8 billion. Within the segment, GPU Cloud revenue growth accelerated to 283% from 184% in Q1, reflecting mounting demand for public-cloud AI computing.
- AI-powered Business: Revenue reached RMB12.5 billion, up 25% year over year but down 8% sequentially, and represented 50% of Baidu General Business revenue versus 38% in Q2 2025.
- AI Applications: Revenue was RMB2.5 billion, up 3% year over year and sequentially. AI DAU penetration across Baidu Wenku and Baidu Drive increased 27.4% year over year.
- AI-native marketing: Revenue was RMB2.6 billion, approximately flat year over year and up 11% sequentially.
Legacy monetisation pressure
The AI mix is improving, but it is not yet fully offsetting deterioration in Baidu’s established advertising businesses. Legacy Business revenue fell 23% year over year to RMB10.4 billion, while Baidu General Business declined 4% to RMB25.2 billion. Online marketing services, still 52% of General Business revenue, fell 19% year over year to RMB13.1 billion.
- Offsetting growth: The Others category rose 21% year over year to RMB12.1 billion, driven by the company’s AI-powered activities, but declined 10% sequentially.
- User base: Baidu App monthly active users reached 644 million in June 2026, providing scale for the company’s AI-enabled consumer products despite the advertising slowdown.
Earnings and margins
The consolidated result weakened despite cost discipline. Revenue declined to RMB31.3 billion from RMB32.7 billion a year ago and RMB32.1 billion in Q1. Cost of revenue was RMB19.1 billion, up 4% year over year as AI Cloud-related costs increased, while SG&A fell 23% to RMB4.6 billion and R&D fell 10% to RMB4.6 billion.
- Operating profit: GAAP operating income was RMB3.0 billion, versus RMB3.3 billion a year ago and RMB3.2 billion in Q1; operating margin was 10%, compared with 10% and 10%, respectively.
- Adjusted result: Non-GAAP operating income was RMB3.8 billion, with a 12% margin. Adjusted EBITDA was RMB6.2 billion, representing a 20% margin.
- Below-the-line volatility: Other income fell to RMB184 million from RMB4.9 billion a year ago, primarily because of lower fair-value gains on long-term investments and higher foreign-exchange losses.
Apollo Go expansion
Apollo Go continued to build geographic reach and operating experience rather than contribute a separately quantified financial result. Its footprint reached 28 cities, with more than 350 million autonomous kilometers accumulated, including over 240 million fully driverless kilometers.
- International rollout: Apollo Go began open-road testing in London with Uber and Lyft, launched fully driverless commercial operations in Dubai, and began fully driverless testing in Hong Kong after receiving the city’s first permits.
- Operating capability: The company also conducted open-road testing in Switzerland with PostBus and signed an agreement to explore autonomous ride-hailing in Kazakhstan.
Cash and capital allocation
Baidu remained cash-generative at the operating level but continued to invest heavily in infrastructure. Operating cash flow was RMB3.4 billion in the quarter, the fourth consecutive positive quarter, while first-half capital expenditures reached RMB11.4 billion and first-half free cash flow was negative RMB8.0 billion.
- Balance sheet: Cash and investments totaled RMB283.1 billion ($41.72 billion) at June 30, 2026.
- Share repurchases: Baidu returned $259 million to shareholders through buybacks since the beginning of Q1 2026.
- Listing: Baidu submitted its application to convert its Hong Kong listing to dual-primary status and expects the conversion to become effective within 2026, subject to shareholder and exchange approval.
