bidu beats!
Baidu Announces Second Quarter 2008 Results
BEIJING, July 23 /Xinhua-PRNewswire/ -- Baidu.com, Inc. (Nasdaq: BIDU), the
leading Chinese language Internet search provider, today announced its unaudited
financial results for the second quarter ended June 30, 2008. (1)
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(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
RMB 6.8591 to USD 1.00, the effective noon buying rate as of June 30, 2008 in
The City of New York for cable transfers of RMB as certified for customs
purposes by the Federal Reserve Bank of New York.
Second Quarter 2008 Highlights
-- Total revenues in the second quarter of 2008 increased to RMB802.6 million
(US$117.0 million), representing a 100.0 % increase from the corresponding
period in 2007.
-- Operating profit in the second quarter of 2008 increased to RMB276.3 million
(US$40.3 million), representing a 114.3 % increase from the corresponding period
in 2007.
-- Net income in the second quarter of 2008 increased to RMB265.0 million
(US$38.6 million), representing an 86.7 % increase from the corresponding period
in 2007.
-- Diluted earnings per share ("EPS") for the second quarter of 2008 were
RMB7.62 (US$1.11); diluted EPS excluding share-based compensation expenses
(non-GAAP) for the second quarter of 2008 were RMB8.46 (US$1.23). Costs and
expenses related to Baidu's Japan operations, incurred in both Japan and China,
in the second quarter of 2008 were RMB29.5 million (US$4.3 million), which
reduced diluted EPS by RMB0.85 (US$0.12).
-- The number of active online marketing customers during the second quarter
grew to over 181,000, an increase of 12.4 % from the previous quarter.
"This quarter saw impressive growth for Baidu," said Robin Li, Baidu's chairman
and chief executive officer. "Our ability to make such progress was due to the
appreciation of paid search by our loyal small and medium sized enterprise
customers as well as a growing appreciation of search engine marketing by large
enterprises in China. The scalability of our business, aided by increasing
numbers of large enterprise customers, helped Baidu post record results this
quarter, despite some impact from the devastating earthquake this past May."
Jennifer Li, Baidu's chief financial officer, said, "In the second quarter of
2008, we were able to produce steady increases in both the number of active
online marketing customers and revenues per active online marketing customer. We
are also pleased to report that our operating margin improved from previous
quarters reflecting the scalability of our search business."
In order to better serve customers' needs, Baidu recently launched "My
Marketing Center", which is a customized platform integrating industry
information, market trends and business and industry news and reports to aid
existing customers in their sales and marketing efforts. The platform combines
Baidu's vast resources in online information search and aggregation to help
customers make better use of search marketing tools to improve customer
targeting, increase sales and enhance brand impact. From the inception of the
company, Baidu's objective has been to provide the best way for people to find
period in 2007.
Online marketing revenues for the second quarter were RMB802.2 million
(US$117.0 million), representing a 100.2 % increase from the second quarter of
2007. Growth was mainly driven by increases in both the number of active online
marketing customers and revenue per customer. Baidu had more than 181,000 active
online marketing customers in the second quarter of 2008, representing a
sequential increase of 12.4% and an increase of 41.4% from the corresponding
period in 2007. Revenue per active online marketing customer for the second
quarter increased to approximately RMB4,400 (US$641), a sequential increase of
22.2% and an increase of 41.9% from the corresponding period in 2007.
Traffic acquisition costs (TAC) as a component of cost of revenues were
RMB101.7 million (US$14.8 million), representing 12.7% of total revenues,
compared to 11.2 % in the corresponding period in 2007. 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 were RMB43.0 million (US$6.3
million), representing 5.4% of total revenues, compared to 7.1% in the
corresponding period in 2007. Depreciation costs as a component of cost of
revenues were RMB57.8 million (US$8.4 million), representing 7.2% of total
revenues, compared to 8.5% in the corresponding period in 2007.
Selling, general and administrative expenses were RMB174.2 million (US$25.4
million), representing an increase of 85.9% from the corresponding period in
2007, primarily due to expansion of the direct sales force and an increase in
customer service staff.
Research and development expenses were RMB71.1 million (US$10.4 million),
representing a 123.7 % increase from the corresponding period in 2007, 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 by 229.9% to RMB29.3 million
(US$4.3 million) in the second quarter of 2008 from RMB8.9 million in the
corresponding period in 2007. The increase in share-based compensation reflects
a change in estimated forfeiture rate and increased grants to employees.
Operating profit was RMB276.3 million (US$40.3 million), representing a 114.3%
increase from the corresponding period in 2007. Operating profit excluding
share-based compensation expenses (non-GAAP) was RMB305.6 million (US$44.6
million) for the second quarter of 2008, a 121.7% increase from the
corresponding period in 2007.
Adjusted EBITDA (non-GAAP), which is defined in this announcement as earnings
before interest, taxes, depreciation, amortization, other non- operating income
and share-based compensation expenses, were RMB376.8 million (US$54.9 million)
for the second quarter of 2008, representing a 110.0 % increase from the
corresponding period in 2007.
Income tax expense was RMB28.6 million (US$4.2 million), compared to an income
tax expense of RMB1.8 million in the second quarter of 2007. The increase in tax
expenses over last year is due to higher tax rates applicable to some PRC-based
subsidiaries as their tax holidays either expired or partially elapsed.
Net income was RMB265.0 million (US$38.6 million), representing an 86.7%
increase from the corresponding period in 2007. Basic and diluted EPS for the
second quarter of 2008 amounted to RMB7.74 (US$1.13) and RMB7.62 (US$1.11),
respectively.
ation, including those relating to copyright and other intellectual property
rights; the expected growth of the Chinese language and Japanese language
Internet search markets 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 July
24, 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 o *** STORY TRUNCATED due to excessive
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