BIDU Q3 FY24

As of September 30, 2024, Baidu's operating revenue totaled US$33.557 billion, a 2.61% decrease from the same period in 2023. This change reflects the challenges faced in revenue growth, possibly affected by various factors.

## Key Financial Data

1. Operating Revenue: Operating revenue in 2024 was US$33.557 billion, a 2.61% YoY decrease, indicating pressure from competition and the economic environment.

2. Advertising Revenue: Advertising revenue in Q3 2024 was RMB18.8 billion, a 4% YoY decrease, marking the third consecutive quarter of decline, showing the weakness of the advertising business.

3. Operating Profit: Operating profit was RMB5.9 billion, a 19% YoY decrease, reflecting the impact of the decline in advertising revenue on profitability.

4. User Engagement: The daily call volume of the Ernie Bot reached 1.5 billion, a 30x YoY increase, showcasing the growth potential in the AI field.

## Industry Comparison

1. Overall Industry Analysis: The overall growth of the digital advertising industry has slowed down, with several companies reporting revenue declines, closely related to economic uncertainty and reduced advertising spending, making Baidu's revenue decline less isolated.

2. Peer Evaluation Analysis: Baidu's revenue decline is in the middle range among peers, with some competitors achieving revenue growth through innovation and market strategy adjustments, further increasing market pressure on Baidu.

## Conclusion

In summary, Baidu's current revenue decline is mainly affected by the overall unfavorable industry environment, intensified competition, and lagging product updates. Although there has been a significant increase in user engagement in the AI field, the continuous decline in advertising revenue remains a major risk in the future.

## Opportunities

1. AI Product Upgrades: Baidu has launched several AI product upgrades, including the Baihe AI Heterogeneous Computing Platform and the Qianfan Large Model Platform, attracting more customers.

2. New Market Expansion: With the transformation of digital marketing and the expansion of enterprises into overseas markets, Baidu can leverage its technological capabilities for new market development.

3. User Growth Potential: The significant increase in the daily call volume of the Ernie Bot shows strong demand in the AI field, which is expected to drive related revenue growth in the future.

## Risks

1. Continued Decline in Advertising Revenue: The continued decline in advertising revenue may affect overall operating revenue, especially cautious spending by small and medium-sized advertisers.

2. Intensified Competition: Increased competition from other technology companies may further erode Baidu's market share.

3. Macroeconomic Uncertainty: Economic fluctuations may lead to continued reductions in advertising spending, affecting the company's overall profitability.

Through the above analysis, Baidu faces challenges while also having potential opportunities to explore. However, it is crucial to closely monitor market changes and competition dynamics to adjust strategies in a timely manner.