Baidu's Q2 revenue fell 4% year-on-year, while core net profit increased by 35%. Revenue from new AI businesses exceeded 10 billion yuan for the first time | Financial Report Insights

Baidu released its Q2 2025 financial report, showing total quarterly revenue of 32.7 billion yuan, with a net profit attributable to Baidu's core business of 7.4 billion yuan, a year-on-year increase of 35%, exceeding market expectations. Driven by AI, new AI business revenue, including intelligent cloud, grew strongly, surpassing 10 billion yuan for the first time, with a year-on-year increase of 34%.

During the quarter, the number of global ride-hailing services provided by Luobo Kuaipao exceeded 2.2 million, a year-on-year increase of 148%, with a cumulative number of ride-hailing services exceeding 14 million, ranking first in the world. According to IDC reports, Baidu Intelligent Cloud has ranked first in China's AI public cloud market for six consecutive years.

On the 20th, Baidu Group announced its Q2 performance:

• Q2 revenue was 32.71 billion yuan, a year-on-year decline of 4%. This was basically in line with market estimates of 32.74 billion yuan.

• Adjusted (Non-GAAP) net profit was 4.8 billion yuan, a year-on-year decline of 35%.

• Adjusted operating profit was 4.45 billion yuan, a year-on-year decrease of 41%, exceeding market estimates of 3.97 billion yuan.

• Free cash flow turned negative at 4.7 billion yuan.

Core Business Progress:

• Advertising Business: Core online marketing revenue was 16.2 billion yuan, a sharp decline of 15% year-on-year, becoming the main factor dragging down overall revenue, reflecting that the AI transformation of the search business poses challenges to short-term monetization capabilities.

• AI Innovation Business: Non-online marketing revenue grew by 34% year-on-year, surpassing 10 billion yuan for the first time, mainly driven by AI cloud business, becoming the key engine and strategic focus for the company's growth.

• iQIYI: Revenue was 6.6 billion yuan, a year-on-year decline of 11%.

• Intelligent Driving: The number of fully autonomous driving orders completed by Apollo Go in Q2 increased by 148% year-on-year to 2.2 million. Its global cooperation with Uber and Lyft marks the commercialization exploration moving from China to the global market.

After the announcement, Baidu's U.S. stock fell 1.84% in pre-market trading.

Baidu Q2 Revenue Declines 2% Year-on-Year, Advertising Business Faces "Growing Pains"

Total revenue for Q2 2025 was 32.71 billion yuan, a year-on-year decline of 4%. Core business revenue declined by 2% year-on-year. Adjusted (Non-GAAP) net profit was 4.8 billion yuan, a significant year-on-year decline of 35%. GAAP net profit increased by 33% year-on-year, but this was mainly driven by non-operating long-term investment fair value gains, while core operating profit declined by 45% year-on-year Free cash flow turned negative at 4.7 billion RMB, primarily due to increased investment in AI business.

Baidu's cash cow — online marketing business revenue decreased by 15% year-on-year to 16.2 billion RMB, a decline that far exceeded market expectations. The company's management attributed this to "the intensified AI transformation of Baidu Search." Financial report data shows that by the end of June, over 50% of mobile search result pages contained AI-generated content.

Significant Growth in AI Cloud and Autonomous Driving

Non-marketing business revenue led by AI Cloud grew by 34% year-on-year, surpassing 10 billion RMB for the first time, with its share of Baidu's total core revenue increasing to 38%, indicating that Baidu's revenue structure is evolving towards greater diversification. Baidu's AI Cloud business has also been ranked first in the Chinese market by IDC for six consecutive years. The cost of revenue for this quarter increased by 12% year-on-year, one of the main reasons being "the increase in costs related to AI Cloud business."

Meanwhile, the autonomous driving service Apollo Go is racing towards global expansion at an unprecedented pace. During the quarter, Apollo Go's global ride-hailing services exceeded 2.2 million, a year-on-year increase of 148%, with a cumulative total of over 14 million ride-hailing services, ranking first in the world. According to IDC reports, Baidu Intelligent Cloud has ranked first in the Chinese AI public cloud market for six consecutive years. This quarter, strategic partnerships were established with ride-hailing giants Uber and Lyft for the Asian, Middle Eastern, and European markets, planning to deploy thousands of fully autonomous vehicles