Baidu, Inc. Q4 FY2024 earnings call

• AI Cloud business demonstrated robust momentum with 26% year-over-year revenue growth in Q4, driven by broad market recognition of AI capabilities. ERNIE's API costs surged, with external API costs growing 178% quarter-over-quarter in December.
• Baidu Wenku's subscription revenue grew 21% year-over-year in Q4, and it integrated with Baidu Drive. Search results had 22% AI-generated content, and user metrics improved with higher engagement, more search queries, and longer time spent.
• Apollo Go in Q4 provided approximately 1.1 million rides nationwide, a 36% year-over-year growth, and secured permits to test in Hong Kong, expanding global presence.

Baidu core total revenue for the fourth quarter was RMB27.7 billion. The AI Cloud business saw revenue growth of 26% year-over-year, with Q4 revenue reaching RMB7.1 billion. Baidu Core's online marketing revenue in Q4 was RMB17.9 billion, accounting for 65% of Baidu Core's total revenues. Non-online marketing revenue was RMB9.8 billion, up 18% year-over-year. The AI Cloud business's robust growth offset the softness in the online marketing business.

• AI Cloud revenue growth is expected to maintain strong momentum in 2025.
• Search monetization will be pursued once GenAI-enabled search product features are sufficiently refined.
• Autonomous driving business aims to scale up with faster growth in ride volumes in 2025, leveraging validated business model and global expansion plans.

Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from current expectations. Detailed discussions of these risks and uncertainties can be found in Baidu's latest Annual Report and other documents filed with the SEC and Hong Kong Stock Exchange.

Q: Alicia Yap asked about the strategic thinking behind open sourcing ERNIE 4.5-series and making ERNIE Bot free, and Baidu's plan to stay ahead in the foundation models market.

A: Robin Li stated that open sourcing helps drive adoption, ERNIE 4.5 is the best model, and Baidu's decade-long R&D investment and 4-stack AI capabilities position it to stay ahead.

Q: Lincoln Kong inquired about the search business's future adjustments, GenAI result mix, user metrics, and competition with AI chatbots.

A: Unidentified rep said around 22% of search result pages have AI-generated content, user metrics improved with higher search queries per user, and Baidu Search leverages ERNIE for personalized experiences and competes by leading AI transformation.

Q: Gary Yu asked about AI Cloud's continued growth, profitability, and market outlook.

A: Unidentified rep mentioned AI Cloud's revenue grew 26% in Q4, driven by demand for ERNIE and AI infrastructure, and expects continued growth in 2025 with expanding market share.

Q: Miranda Zhuang questioned Robotaxi business progress, targets, and competition.

A: Robin Li said Apollo Go had 1.1 million rides in Q4, expanded to Hong Kong, and aims to scale with innovative models and global expansion.

Q: Thomas Chong asked about Baidu's 2025 strategic focus and shareholder returns.

A: Junjie He stated focus on AI capabilities, AI Cloud adoption, autonomous driving scaling, and accelerated share buybacks as part of returning value to shareholders