Baidu Q4 2024 Earnings: AI Gains Offset Online Ad Decline – What’s Next?

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Readers should conduct their own research before making any financial decisions.

1. Overview: A Mixed Quarter Amid AI Growth and Ad Slowdown

Baidu (NASDAQ: BIDU, HKEX: 9888) reported its Q4 2024 earnings, reflecting a mix of AI-driven growth and weak online marketing performance. Despite soft advertising revenue, Baidu’s AI Cloud, autonomous driving (Apollo Go), and mobile ecosystem continued to expand.

Apollo Go delivered over 1.1M robotaxi rides, marking a 36% increase

Key Themes from Q4 2024:

✔ AI Cloud revenue up 26% YoY, showing strong enterprise demand.

✔ Apollo Go delivered over 1.1M robotaxi rides, marking a 36% increase.

✔ Total revenue declined 2% YoY to RMB34.1 billion (USD 4.68 billion).

✔ Net income increased 100% YoY, boosted by foreign exchange gains.

✔ Baidu Core grew 1% YoY, while iQIYI’s revenue declined 14% YoY.

CEO Robin Li emphasized that Baidu’s transformation into an AI-first company is gaining traction, setting the stage for long-term value creation.

2. Key Financial Highlights: A Closer Look at the Numbers

Metric	Q4 2024	Q4 2023	YoY Change
Total Revenue	RMB 34.1B	RMB 35.0B	-2%
Net Income	RMB 5.2B	RMB 2.6B	+100%
Baidu Core Revenue	RMB 27.7B	RMB 27.5B	+1%
iQIYI Revenue	RMB 6.6B	RMB 7.7B	-14%
AI Cloud Revenue	RMB 9.8B	RMB 8.3B	+18%
Adjusted EBITDA	RMB 7.0B	RMB 9.1B	-23%
Earnings per ADS (GAAP)	RMB 14.26	RMB 6.77	+111%
Earnings per ADS (Non-GAAP)	RMB 19.18	RMB 21.86	-12%

Key Observations:

• Baidu Core remains stable, supported by AI Cloud expansion.

• AI services are driving non-online marketing revenue growth (+18% YoY).

• iQIYI’s weaker performance dragged down overall revenue.

• Higher expected credit losses impacted operating income (-27% YoY).

  
  

3. Business Segment Performance & Outlook

🚀 AI Cloud: The Bright Spot

AI Cloud revenue surged 26% YoY, supported by:

✅ Strong enterprise demand for AI services.

✅ ERNIE handling 1.65 billion API calls per day (+178% QoQ).

✅ Baidu Wenku MAUs reached 94 million, up 216% YoY.

Outlook: With continued investments in AI cloud and enterprise solutions, this segment is likely to remain a key driver of future growth.

🚖 Apollo Go (Autonomous Driving): Scaling Up

Baidu’s robotaxi service, Apollo Go, provided over 1.1 million rides in Q4, a 36% YoY increase. Notably, it:

✔ Received Hong Kong’s first robotaxi testing permit.

✔ Expanded fully driverless operations across China in Feb 2025.

Outlook: Baidu expects Apollo Go to break even in Wuhan in 2025, positioning it for wider commercialization and profitability.

📱 Mobile Ecosystem: AI-Enhanced Growth

• Baidu App MAUs hit 679 million (+2% YoY).

• Managed Page ad revenue contributed 48% of Baidu Core’s marketing revenue.

  
  

Outlook: AI-powered search experiences and advertising recovery could stabilize this segment.

📉 Online Marketing: A Weak Spot

• Online ad revenue declined 7% YoY as advertisers reduced spending.

• iQIYI revenue fell 14% YoY, reflecting softer streaming demand.

  
  

Outlook: A gradual advertising rebound and AI-driven ad tech enhancements could help stabilize this segment.

4. Opinion: Is Baidu Stock a Buy, Hold, or Sell?

📊 Strengths:

✅ AI Cloud is a growth engine with 26% revenue expansion.

✅ Apollo Go’s scaling could unlock long-term revenue streams.

✅ Strong R&D focus (17% of revenue) keeps Baidu competitive in AI.

⚠️ Risks & Challenges:

❌ Ad revenue decline (-7% YoY) pressures short-term growth.

❌ Free cash flow turned negative due to AI investments.

❌ Regulatory risks & China’s economic slowdown pose headwinds.

5. Final Thoughts: Looking Ahead to 2025

Baidu’s AI-first strategy is starting to show real traction, with AI Cloud and autonomous driving outpacing declines in ad revenue. However, short-term profitability concerns and a weak ad market remain challenges.

Key to Watch in 2025:

✔ AI Cloud’s continued revenue momentum.

✔ Apollo Go’s path to profitability in Wuhan & beyond.

✔ Potential rebound in China’s ad market.

Baidu is no longer just a search engine company—its AI transformation is in full swing. The next 12-18 months will be critical in determining whether its AI bets pay off.

Disclaimer: This article is for educational and informational purposes only and should not be considered financial or investment advice. All investments carry risks, including potential capital loss. Readers should conduct their own research and consult a qualified financial professional before making any investment decisions. The author and publisher are not responsible for any financial losses incurred based on the information provided.