complete report from bidu
-----------------------------
BEIJING, China, Feb. 13 /Xinhua-PRNewswire/ -- Baidu.com, Inc. (Nasdaq:
BIDU), the leading Chinese language Internet search provider, today announced
its unaudited financial results for the fourth quarter and fiscal year ended
December 31, 2007(1).
(Logo: newscom.com )
Fourth Quarter and Fiscal Year 2007 Highlights
-- Total revenues in the fourth quarter 2007 increased to RMB571.1
million ($78.3 million), representing a 110.5% increase from the
corresponding period in 2006.
-- Total revenues in fiscal year 2007 increased to RMB1,744.4 million
($239.1 million), representing a 108.2% increase from 2006.
-- Net income in the fourth quarter 2007 increased to RMB219.8 million
($30.1 million), representing a 79.0% increase from the corresponding
period in 2006. Diluted earnings per share ("EPS") for the fourth
quarter 2007 was RMB6.32 ($0.87); diluted EPS excluding share-based
compensation expenses (non-GAAP) for the fourth quarter of 2007 was
RMB6.70 ($0.92). Costs and expenses related to Baidu's Japan
operations for the fourth quarter of 2007 were RMB25.2 million ($3.5
million), which reduced diluted EPS by RMB0.73 ($0.10).
-- Net income in fiscal year 2007 increased to RMB629.0 million ($86.2
million), representing a 108.4% increase from 2006. Diluted EPS for
2007 was RMB18.11 ($2.48); diluted EPS excluding share-based
compensation expenses (non-GAAP) for 2007 was RMB19.26 ($2.64). Costs
and expenses related to Baidu's Japan operations for 2007 were RMB73.4
million ($10.1 million), which reduced diluted EPS by RMB2.11 ($0.29).
-- The number of active online marketing customers during the fourth
quarter grew to over 155,000, an increase of 8.4% from the previous
quarter.
"We are pleased to report another quarter of solid results, with healthy
earnings growth demonstrating the scalability of our business model," said
Robin Li, Baidu's chairman and CEO. "These results were driven by our
continued strategy of enhancing our product and service offerings to ensure
the best user experience. Our efforts were rewarded by increases in our user
traffic and expansion of our market share, further strengthening our position
as the leader in Chinese language search."
Mr. Li continued, "During the fourth quarter, we achieved strong revenue
growth alongside a steady increase in our number of online marketing customers.
As we continue to focus on best serving our users and customers, and as we
consistently provide relevant new products and services while exploring
opportunities for value-adding partnerships, we expect to continue taking
advantage of growth opportunities to ensure sustained strong growth over the
long term."
Fourth Quarter 2007 Results
Baidu reported total revenues of RMB571.1 million ($78.3 million) for the
fourth quarter ended December 31, 2007, representing a 110.5% increase from
the corresponding period in 2006.
Online marketing revenues for the fourth quarter were RMB569.6 million
($78.1 million), representing a 111.2% increase from the fourth quarter 2006.
The growth was driven by the increases in both the number of active online
marketing customers and revenue per customer. Baidu had more than 155,000
active online marketing customers in the fourth quarter of 2007, representing
an 8.4% increase from the previous quarter and 43.5% from the corresponding
period in 2006. Revenue per online marketing customer for the fourth quarter
increased to approximately RMB3,700 ($507.2), a sequential increase of 5.7%
and an increase of 48.0% from the corresponding period in 2006.
Traffic acquisition cost (TAC) as a component of cost of revenues was
RMB72.3 million ($9.9 million), representing 12.7% of total revenues, compared
to 8.7% in the corresponding period in 2006. The increase in TAC as a
percentage of total revenues primarily reflects the continued growth of
revenue contribution from Baidu Union members.
Bandwidth costs as a component of cost of revenues was RMB35.9 million
($4.9 million), representing 6.3% of total revenues, compared to 4.7% in the
corresponding period in 2006. Depreciation costs as a component of cost of
revenues was RMB46.7 million ($6.4 million), representing 8.2% of total
revenues, compared to 6.2% in the corresponding period in 2006. The increase
in bandwidth and depreciation costs as percentages of total revenues reflects
expansion of network capacity to support Baidu's long-term growth.
Selling, general and administrative expenses were RMB132.2 million ($18.1
million), representing an increase of 86.2% from the corresponding period in
2006, primarily due to expansion of the direct sales force.
Research and development expenses were RMB46.5 million ($6.4 million),
representing a 122.7% increase from the corresponding period in 2006,
primarily due to an increase in research and development staff.
Share-based compensation expenses, which were allocated to related
operating cost and expense line items, increased in aggregate to RMB13.3
million ($1.8 million) in the fourth quarter of 2007 from RMB7.4 million in
the corresponding period in 2006. The increase in share-based compensation
expenses primarily reflects increased options grants during the quarter.
Operating profit was RMB176.3 million ($24.2 million), representing a
73.3% increase from the corresponding period in 2006. Operating profit
excluding share-based compensation expenses (non-GAAP) was RMB189.6 million
($26.0 million) for the fourth quarter of 2007, a 73.8% increase from the
corresponding period in 2006.
Income tax benefit was RMB18.6 million ($2.5 million), which was primarily
attributable to the receipt of a reinvestment incentive tax refund of RMB21.2
million ($2.9 million) in the fourth quarter.
Net income was RMB219.8 million ($30.1 million), representing a 79.0%
increase from the corresponding period in 2006. Basic and diluted EPS for the
fourth quarter of 2007 amounted to RMB6.45 ($0.88) and RMB6.32 ($0.87),
respectively.
Net income excluding share-based compensation expenses (non-GAAP) was
RMB233.1 million ($32.0 million), a 79.1% increase from the corresponding
period in 2006. Basic and diluted EPS excluding share-based compensation
expenses (non-GAAP) for the fourth quarter of 2007 were RMB6.84 ($0.94) and
RMB6.70 ($0.92), respectively.
As of December 31, 2007, the Company had cash, cash equivalents and shortterm
investments of RMB1.6 billion ($218.3 million). Net operating cash inflow
and capital expenditures for the fourth quarter of 2007 were RMB334.6 million
($45.9 million) and RMB166.2 million ($22.8 million), respectively.
Adjusted EBITDA (non-GAAP), which is defined in this announcement as
earnings before interest, taxes, depreciation, amortization, other nonoperating
income and share-based compensation expenses, were RMB247.0 million
($33.9 million) for the fourth quarter of 2007, representing an 87.0% increase
from the corresponding period in 2006.
Fiscal Year 2007 Results
Total revenues in 2007 were RMB1,744.4 million ($239.1 million),
representing a 108.2% increase from 2006.
Online marketing revenues in 2007 were RMB1,741.0 million ($238.7 million),
representing a 110.1% increase from 2006. The growth was driven by the
increases in both the number of active online marketing customers and revenue
per customer. Baidu had more than 214,000 active online marketing customers in
2007, representing a 49.7% increase from 2006. Revenue per online marketing
customer for 2007 increased to RMB8,100 ($1,110.4), an increase of 39.7% from
2006.
Traffic acquisition costs in 2007 were RMB204.7 million ($28.1 million),
representing 11.7% of total revenues compared to 9.0% in 2006. The increase in
TAC as a percentage of total revenues primarily reflects the continued growth
of revenue contribution from Baidu Union members.
Selling, general and administrative expenses in 2007 were RMB411.2 million
($56.4 million), representing an increase of 64.3% from the previous year,
mainly due to expansion of the direct sales force and strengthening of the
distributor network.
Research and development expenses totaled RMB140.7 million ($19.3 million)
in 2007, representing a 77.6% increase from 2006 primarily due to an increase
in research and development staff.
Operating profit in 2007 was RMB547.2 million ($75.0 million), a 108.1%
increase from 2006. Operating profit excluding share-based compensation
expenses (non-GAAP) in 2007 was RMB587.0 million ($80.5 million), representing
an 88.7% increase from 2006.
Net income in 2007 was RMB629.0 million ($86.2 million), representing a
108.4% increase from 2006. Basic and diluted EPS for 2007 amounted to RMB18.57
($2.55) and RMB18.11 ($2.48), respectively.
Net income excluding share-based compensation expenses (non-GAAP) in 2007
was RMB668.8 million ($91.7 million), reflecting a 93.6% increase from 2006.
Basic and diluted EPS excluding share-based compensation expenses (non-GAAP)
in 2007 were RMB19.75 ($2.71) and RMB19.26 ($2.64), respectively.
Full year net operating cash inflow and capital expenditures were RMB979.5
million ($134.3 million) and RMB569.1 million ($78.0 million), respectively.
Adjusted EBITDA (non-GAAP) was RMB768.0 million ($105.3 million) in 2007,
representing a 101.2% increase from 2006.
Outlook for First Quarter 2008
Baidu currently expects to generate total revenues in an amount ranging
from RMB533 million ($73.1 million) to RMB548 million ($75.1 million) for the
first quarter of 2008, representing a 93% to 99% increase from the
corresponding period in 2007. This forecast reflects Baidu's current and
preliminary view, which is subject to change.
Conference Call Information
Baidu's management will hold an earnings conference call at 8 PM on
February 13, 2008 U.S. Eastern Standard Time (9 AM on February 14, 2008
Beijing/Hong Kong time).
Dial-in details for the conference call are as follows:
US: +1-617-614-3453
UK: +44-207-365-8426
Hong Kong: +852-3002-1672
Passcode for all regions: 47462262
A replay of the conference call may be accessed by phone at the following
number until 10 PM on February 20, 2008 U.S. Eastern Standard Time:
International: +1-617-801-6888
Passcode: 56506980
Additionally, a live and archived webcast of this conference call will be
available at ir.baidu.com .
(1) This announcement contains translations of certain RMB amounts into
U.S. dollars at specified rates solely for the convenience of the
reader. Unless otherwise noted, all translations from RMB to U.S.
dollars are made at a rate of RMB7.2946 to US$1.00, the effective noon
buying rate as of December 31, 2007 in The City of New York for cable
transfers of RMB as certified for customs purposes by the Federal
Reserve Bank of New York.
About Baidu
Baidu.com, Inc. is the leading Chinese language Internet search provider.
As a technology-based media company, Baidu aims to provide the best way for
people to find information. In addition to serving individual Internet search
users, Baidu provides an effective platform for businesses to reach potential
customers. Baidu's ADSs, each of which represents one Class A ordinary share,
currently trade on the Nasdaq Global Select Market under the symbol "BIDU".
Safe Harbor Statement
This announcement contains forward-looking statements. These statements
are made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements. Among
other things, the outlook for first quarter 2008 and quotations from
management in this announcement, as well as Baidu's strategic and operational
plans, contain forward-looking statements. Baidu may also make written or oral
forward-looking statements in its periodic reports to the U.S. Securities and
Exchange Commission in its annual report to shareholders, in press releases
and other written materials and in oral statements made by its officers,
directors or employees to third parties. Statements that are not historical
facts, including statements about Baidu's beliefs and expectations, are
forward-looking statements. Forward-looking statements involve inherent risks
and uncertainties. A number of factors could cause actual results to differ
materially from those contained in any forward-looking statement, including
but not limited to the following: our growth strategies; our future business
development, results of operations and financial condition; our ability to
attract and retain users and customers; competition in the Chinese language
Internet search market; competition for online marketing customers; changes in
our revenues and certain cost or expense items as a percentage of our revenues;
the outcome of ongoing, or any future, litigation or arbitration, including
those relating to copyright and other intellectual property rights; the
expected growth of the Chinese language Internet search market and the number
of Internet and broadband users in China; and Chinese governmental policies
relating to the Internet and Internet content providers. Further information
regarding these and other risks is included in our annual report on Form 20-F
and other documents filed with the Securities and Exchange Commission. Baidu
does not undertake any obligation to update any forward-looking statement,
except as required under applicable law. All information provided in this
press release and in the attachments is as of February 14, 2008, and Baidu
undertakes no duty to update such information, except as required under
applicable law.
About Non-GAAP Financial Measures
To supplement Baidu's consolidated financial results presented in
accordance with GAAP, Baidu uses the following measures defined as non-GAAP
financial measures by the SEC: adjusted EBITDA, operating profit excluding
share-based compensation expenses, net income excluding share-based
compensation expenses, and basic and diluted EPS excluding share-based
compensation expenses. The presentation of these non-GAAP financial measures
is not intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with GAAP. For more
information on these non-GAAP financial measures, please see the tables
captioned "Reconciliations of non-GAAP results of operations measures to the
nearest comparable GAAP measures" and "Reconciliation from net cash provided
by operating activities to adjusted EBITDA" set forth at the end of this
release.
Baidu believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its performance and liquidity by excluding
certain expenses and expenditures that may not be indicative of its operating
performance from a cash perspective. We believe that both management and
investors benefit from referring to these non-GAAP financial measures in
assessing our performance and when planning and forecasting future periods.
These non-GAAP financial measures also facilitate management's internal
comparisons to Baidu's historical performance and liquidity. Baidu computes
its non-GAAP financial measures using the same consistent method from quarter
to quarter, except that the non-GAAP measures for the quarter ended March 31,
2006 reflected the one-time cumulative effect of change in accounting
principle due to our adoption of SFAS 123(R) since January 1, 2006. We believe
these non-GAAP financial measures are useful to investors in allowing for
greater transparency with respect to supplemental information used by
management in its financial and operational decision-making. A limitation of
using non-GAAP operating profit excluding share-based compensation expenses,
net income excluding share-based compensation expenses, and basic and diluted
EPS excluding share-based compensation expenses is that these non-GAAP
measures exclude share-based compensation charge that has been and will
continue to be for the foreseeable future a significant recurring expense in
our business. A limitation of using non-GAAP Adjusted EBITDA is that it does
not include all items that impact our net income for the period. Management
compensates for these limitations by providing specific information regarding
the GAAP amounts excluded from each non-GAAP measure. The accompanying tables
have more details on the reconciliations between GAAP financial measures that
are most directly comparable to non-GAAP financial measures.
Baidu.com, Inc.
Condensed Consolidated Balance Sheets
December 31, September 30, December 31,
(in RMB thousands) 2007 2007 2006
Unaudited Unaudited Audited
ASSETS
Current assets:
Cash and cash equivalents 1,350,600 1,301,072 1,136,274
Short-term investments 242,037 128,168 85,339
Accounts receivable, net 64,274 50,615 23,051
Prepaid expenses and other current
assets 65,996 109,354 32,339
Deferred tax assets, net 2,587 1,866 1,734
Total current assets 1,725,494 1,591,075 1,278,737
Non-current assets:
Fixed assets, net 678,886 494,852 191,734
Land use right, net 96,472 96,960 92,400
Intangible assets, net 40,460 37,715 44,386
Goodwill 51,093 51,097 47,316
Investments, net 15,439 5,697 --
Deferred tax assets, net 15,716 8,745 5,802
Other non-current assets 32,348 51,830 7,702
Total non-current assets 930,414 746,896 389,340
TOTAL ASSETS 2,655,908 2,337,971 1,668,077
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued expenses and other
liabilities 359,310 302,455 153,141
Customers' deposits 257,577 229,408 141,185
Deferred revenue 11,832 11,295 2,583
Deferred income 2,485 3,206 4,090
Total current liabilities 631,204 546,364 300,999
Non-current liabilities:
Long-term payable 3,000 3,000 7,000
Deferred income 332 634 2,817
Total non-current liabilities 3,332 3,634 9,817
Total liabilities 634,536 549,998 310,816
Shareholders' equity
Class A Ordinary Shares, Par value
US$0.00005 per share, 825,000,000
shares authorized, and 22,574,381
shares and 25,136,147 shares issued
and outstanding as at December 31,
2006 and December 31, 2007 10 10 9
Class B Ordinary Shares, Par value
US$0.00005 per share, 35,400,000
shares authorized, and 11,130,018
shares and 8,996,842 shares issued
and outstanding as at December 31,
2006 and December 31, 2007 4 4 5
Additional paid-in capital 1,171,575 1,140,499 1,088,176
Accumulated other comprehensive
income/(loss) (81,953) (64,438) (33,697)
Retained earnings 931,736 711,898 302,768
Total shareholders' equity 2,021,372 1,787,973 1,357,261
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY 2,655,908 2,337,971 1,668,077
Baidu.com, Inc.
Condensed Consolidated Statements of Income
(in RMB thousands except for share, per share information)
For the Three Months Ended
Dec. 31, Dec. 31, Sept. 30,
2007 2006 2007
Unaudited Unaudited Unaudited
Revenues:
Online marketing services 569,588 269,754 496,120
Other services 1,474 1,552 410
Total revenues 571,062 271,306 496,530
Operating costs and expenses:
Cost of revenues (note 1, 2) (216,012) (77,669) (180,704)
Selling, general and administrative
(note 2) (132,230) (70,999) (110,312)
Research and development (note 2) (46,535) (20,899) (37,433)
Total operating costs and expenses (394,777) (169,567) (328,449)
Operating profit 176,285 101,739 168,081
Other income:
Interest income 12,846 12,016 12,188
Other income, net 12,146 3,048 4,040
Total other income 24,992 15,064 16,228
Income before income taxes 201,277 116,803 184,309
Income taxes 18,561 6,000 (2,580)
Cumulative effect of change in
accounting principle -- -- --
Net income 219,838 122,803 181,729
Earnings per share for Class A and
Class B ordinary shares:
Basic 6.45 3.65 5.35
Diluted 6.32 3.54 5.23
Weighted average aggregate number of
Class A and Class B ordinary shares
outstanding:
Basic 34,087,848 33,666,239 33,983,137
Diluted 34,797,946 34,711,753 34,763,639
(1) Cost of revenues are detailed as
follows:
Business tax and surcharges (36,614) (16,357) (30,702)
Traffic acquisition costs (72,299) (23,631) (59,155)
Bandwidth costs (35,857) (12,656) (31,837)
Depreciation costs (46,662) (16,898) (40,654)
Operational costs (23,820) (7,931) (17,979)
Share-based compensation expenses (760) (196) (377)
Total cost of revenues (216,012) (77,669) (180,704)
(2) Includes share-based compensation
expenses as follows:
Cost of revenues (760) (196) (377)
Selling, general and administrative (5,539) (6,166) (68)
Research and development (6,986) (992) (5,027)
Total share-based compensation
expenses (13,285) (7,354) (5,472)
Twelve Months Ended
December 31, December 31,
2007 2006
Unaudited Audited
Revenues:
Online marketing services 1,741,021 828,484
Other services 3,404 9,354
Total revenues 1,744,425 837,838
Operating costs and expenses:
Cost of revenues (note 1, 2) (645,406) (245,489)
Selling, general and administrative
(note 2) (411,163) (250,240)
Research and development (note 2) (140,702) (79,231)
Total operating costs and expenses (1,197,271) (574,960)
Operating profit 547,154 262,878
Other income:
Interest income 49,009 42,354
Other income, net 20,053 4,187
Total other income 69,062 46,541
Income before income taxes 616,216 309,419
Income taxes 12,752 (12,256)
Cumulative effect of change in
accounting principle -- 4,603
Net income 628,968 301,766
Earnings per share for Class A and
Class B ordinary shares:
Basic 18.57 9.06
Diluted 18.11 8.75
Weighted average aggregate number of
Class A and Class B ordinary shares
outstanding:
Basic 33,872,611 33,290,696
Diluted 34,724,364 34,506,594
(1) Cost of revenues are detailed as
follows:
Business tax and surcharges (108,783) (51,833)
Traffic acquisition costs (204,693) (75,180)
Bandwidth costs (117,554) (40,005)
Depreciation costs (147,115) (51,574)
Operational costs (65,544) (25,481)
Share-based compensation expenses (1,717) (1,416)
Total cost of revenues (645,406) (245,489)
(2) Includes share-based compensation
expenses as follows:
Cost of revenues (1,717) (1,416)
Selling, general and administrative (17,371) (32,970)
Research and development (20,760) (13,894)
Total share-based compensation
expenses (39,848) (48,280)
Reconciliations of non-GAAP results of operations measures to the
nearest comparable GAAP measures (*) (in RMB thousands, unaudited)
Three months ended December 31,
2006
Non-GAAP
GAAP Result Adjustment Results
Operating profit 101,739 7,354 109,093
Three months ended December 31,
2006
GAAP Result Adjustment Non-GAAP
Results
Net income 122,803 7,354 130,157
Three months ended September 30,
2007
GAAP Result Adjustment Non-GAAP
Results
Operating profit 168,081 5,472 173,553
Three months ended September 30,
2007
GAAP Result Adjustment Non-GAAP
Results
Net income 181,729 5,472 187,201
Three months ended December 31,
2007
GAAP Result Adjustment Non-GAAP
Results
Operating profit 176,285 13,285 189,570
Three months ended December 31,
2007
GAAP Result Adjustment Non-GAAP
Results
Net income 219,838 13,285 233,123
Twelve months ended December 31,
2007
GAAP Result Adjustment Non-GAAP
Results
Operating profit 547,154 39,848 587,002
Twelve months ended December 31,
2007
GAAP Result Adjustment Non-GAAP
Results
Net income 628,968 39,848 668,816
Twelve months ended December 31,
2006
GAAP Result Adjustment Non-GAAP
Results
Operating profit 267,878 48,280 311,158
Twelve months ended December 31,
2006
GAAP Result Adjustment Non-GAAP
Results
Net income 301,766 43,677 345,443
(*) The adjustment is only for share-based compensation and cumulative
effect of change in accounting principle.
Reconciliation from net cash provided by operating activities to adjusted
EBITDA(*) (in RMB thousands, unaudited)
Three months ended As a % of
December 31, 2006 total revenues
Net cash provided by operating
activities 170,835 63%
Changes in assets and liabilities,
net of effects of acquisitions (17,721) -7%
Income taxes expenses (6,000) -2%
Interest income and other, net (15,064) -6%
Adjusted EBITDA 132,050 48%
Three months ended As a % of
September 30, 2007 total revenues
Net cash provided by operating
activities 254,870 51%
Changes in assets and liabilities,
net of effects of acquisitions (17,800) -4%
Income taxes expenses 2,580 1%
Interest income and other, net (16,228) -3%
Adjusted EBITDA 223,422 45%
Three months ended As a % of
December 31, 2007 total revenues
Net cash provided by operating
activities 334,609 59%
Changes in assets and liabilities,
net of effects of acquisitions (44,063) -8%
Income taxes expenses (18,561) -3%
Interest income and other, net (24,992) -4%
Adjusted EBITDA 246,993 44%
Twelve months ended As a % of
December 31, 2007 total revenues
Net cash provided by operating
activities 979,478 56%
Changes in assets and liabilities,
net of effects of acquisitions (129,713) -7%
Income taxes expenses (12,752) -1%
Interest income and other, net (69,062) -4%
Adjusted EBITDA 767,951 44%
Twelve months ended As a % of
December 31, 2006 total revenues
Net cash provided by operating
activities 526,144 63%
Changes in assets and liabilities,
net of effects of acquisitions (110,264) -13%
Income taxes expenses 12,256 1%
Interest income and other, net (46,541) -6%
Adjusted EBITDA 381,595 45%
(*) Definition of adjusted EBITDA: earnings before interest, taxes,
depreciation, amortization, other non-operating income, share-based
compensation expenses and cumulative effect of change in accounting
principle.
For more information, please contact:
Investor Inquiries:
Linda Sun
Baidu.com, Inc.
Tel: +8610-8262-1188
Email: ir@baidu.com
Investor and Media Inquiries:
China
Helen Plummer
Ogilvy Public Relations Worldwide (Beijing)
Tel: +86-10-8520-3090
Email: Helen.plummer@ogilvy.com
US
Thomas Smith
Ogilvy Public Relations Worldwide (New York)
Tel: +1-212-880-5269
Email: thomas.smith@ogilvypr.com
SOURCE Baidu.com, Inc.
CONTACT:
Investors: Linda Sun of Baidu.com, Inc., +86-10-8262-1188, or ir@baidu.com; or
Investors and Media: Helen Plummer of Ogilvy Public Relations Worldwide
(Beijing), +86-10-8520-3090, or helen.plummer@ogilvy.com, or Thomas Smith of
Ogilvy Public Relations Worldwide (New York), +1-212-880-5269, or
thomas.smith@ogilvypr.com, for Baidu
-0- Feb/13/2008 21:30 GMT
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