Chinese search engine company Baidu Inc. has reported its quarterly earnings that surpassed the expectations of analysts. The company’s impressive results were boosted by a resurgence of the Covid-19 disease and restrictions that raised the demand for its cloud and artificial intelligence products.
Following the announcement, the company’s US-listed shares were up more than 5 percent in pre-market trading even as the company mentioned that the current quarter will be filled with challenges.
Baidu was founded originally as a search engine tool but has expanded into cloud services, autonomous driving, and robotaxis in recent times. The company has made the expansion as competition for its core search platform and advertisement business increases.
The company received permission to deploy robotaxis without human drivers on open Chinese roads for the first time. Its robotaxi service called Apollo Go is currently available in 10 Chinese cities.
The robotaxi service operated 196,000 rides during the just-concluded quarter.
For the first quarter ended March 31st, the company’s revenue rose 1 percent to 28.1 billion yuan, the equivalent of $4.22 billion. Sadly, this is the slowest growth the company has reported in six quarters. Revenue, however, surpassed analysts’ estimate of 27.82 billion, according to data from Refinitiv.
Baidu Inc. reported a net loss of 855 million yuan, or 2.87 yuan per American Depository Share (ADS). The net loss comes amid the resurgence of the Covid-19 disease and macro-economic challenges. For the previous year, the company reported a profit of 25.65billion yuan or 73.76 yuan per ADS.
In a statement, Robin Li, Baidu’s founder and chief executive said that “Since mid-March, our business has been negatively impacted by the recent COVID-19 resurgence in China.” He also added that Covid-19-related challenges will continue to have an effect on its operations in the near future.
Its Baidu Core which envelopes online ad sales and non-ad sales from its AI-powered products grew 4 percent to 20.48 billion yuan. Its online ad revenue dropped 4% YoY to 15.7 billion yuan.
Sales from Baidu AI cloud, part of the non-ad revenue and one of its fastest-growing sectors, soared 45%.