TLDR
- Q4 net income plummeted 66% from prior year to 1.78 billion yuan, falling short of analyst projections
- Third consecutive quarterly revenue decline with 4% drop to 32.74 billion yuan
- AI business segment revenue surged 48%, representing 43% of overall general business revenue
- Apollo Go autonomous service delivered 3.4 million rides without drivers in Q4, surging over 200% annually
- Ernie AI platform reached 202 million monthly active users by December
The Chinese search giant delivered disappointing fourth-quarter financial performance, triggering a 2.7% decline in its American depositary receipts to $129.80 during Thursday’s premarket session.
Net income contracted 66% compared to the same period last year, landing at 1.78 billion yuan ($259 million). Wall Street analysts had forecast 2.56 billion yuan, making this a significant shortfall.
Total revenue decreased 4% to 32.74 billion yuan during the December quarter. This represents the third straight quarter where sales have contracted. The previous year’s comparable period showed revenue of 34.12 billion yuan and net income of 5.19 billion yuan.
Looking at the full fiscal year, revenue contracted 3% while net income tumbled 76% to 5.59 billion yuan.
The disappointing performance stemmed primarily from Baidu’s advertising division, which continues to face headwinds from challenging macroeconomic conditions. Weak consumer confidence throughout China has pressured marketing budgets across multiple industries.
AI Momentum Can’t Offset Core Business Weakness
Despite the overall weakness, some positives emerged. The company’s AI-driven operations — encompassing cloud services, self-driving technology, and artificial intelligence applications — experienced 48% revenue growth year-over-year, reaching 11.3 billion yuan.
This division now comprises 43% of general business revenue, climbing from 39% during the previous quarter.
AI cloud infrastructure sales increased 34% to 5.8 billion yuan.
The Ernie AI platform, Baidu’s artificial intelligence assistant, surpassed 200 million monthly active users in December. The technology is embedded within both the company’s mobile search application and desktop platform.
Apollo Go, the company’s autonomous taxi platform, executed 3.4 million fully driverless trips during Q4, representing growth exceeding 200% from the prior year.
CEO Robin Li characterized 2025 as “a pivotal year as AI became the new core of Baidu.” While the AI metrics demonstrate strong momentum, they proved insufficient to counterbalance the advertising downturn.
Looking Ahead for BIDU Investors
Baidu revamped its quarterly financial reporting structure to emphasize its artificial intelligence priorities. The company revealed plans earlier this month to distribute its inaugural dividend alongside launching a new $5 billion stock repurchase initiative.
Market analysts have highlighted a potential public offering of Kunlunxin, the company’s AI semiconductor division, as a possible positive catalyst for shareholders. Nomura analysts indicated the listing might generate strong investor interest given robust demand for Chinese chip design companies.
BIDU’s ADRs have declined approximately 16% during the past month and are down over 6% year-to-date, following a nearly 60% rally throughout 2025.
At publication time, BIDU ADRs were changing hands at $129.80, representing a 2.7% premarket decline.
