"Baidu Core delivered another solid quarter, powered by our AI cloud revenue growing 73% year over year," said Rong Luo, CFO of Baidu. "With a diversified AI portfolio, including cloud services, smart transportation, smart devices, self-driving, smart EV and robotaxi, we are well positioned for long-term growth."
Total revenues were CNY 31.9 billion, increasing 13% year-on-year.
Revenue from Baidu Core was CNY 24.7 billion, increasing 15% year-on-year; online marketing revenue was CNY 19.5 billion up 6% year-on-year and non-online marketing revenue was CNY 5.2 billion, up 76% year-on-year, driven by cloud and other AI-powered businesses.
Revenue from iQIYI was CNY 7.6 billion, increasing 6% year-on-year.
Cost of revenues was CNY 16.1 billion, increasing 26% year-on-year, primarily due to an increase in traffic acquisition costs, content costs and cost of goods sold related to new AI business.
Research and development expense was CNY 6.2 billion increasing 35% year-on-year, primarily related to personnel-related expenses.
Operating income was CNY 2.3 billion. Baidu Core operating income was CNY 3.7 billion and Baidu Core operating margin was 15%. Non-GAAP operating income was CNY 4.7 billion. Baidu Core non-GAAP operating income was CNY 5.8 billion and Baidu Core non-GAAP operating margin was 24%.
For the fourth quarter of 2021, Baidu expects revenues to be between CNY 31.0 billion and CNY 34.0 billion, representing a growth rate of 2% to 12% year-on-year, which assumes that Baidu Core revenue will grow between 5% and 16% year-on-year.
The COVID-19 situation in China is evolving and business visibility is limited. The above forecast reflects Baidu's current and preliminary view, which is subject to substantial uncertainties.