Baidu (NASDAQ:BIDU) released first-quarter financial results and hosted an earnings call on Monday. Read the complete transcript below.
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Access the full call at https://edge.media-server.com/mmc/p/bf8a5jir/
Summary
Baidu Inc reported a 2% increase in total revenue year-over-year for Q1 2026, with revenue from its AI-powered business growing by 49% and accounting for over half of its general business revenue.
The company highlighted the significant growth in its AI Cloud infra segment, with a 79% increase in overall revenue and GPU cloud revenue growing by 184% year-over-year.
Management expressed confidence in AI as the primary growth driver, with strategic initiatives focusing on expanding AI infrastructure and applications, including AI search, digital humans, and autonomous vehicles.
Baidu Inc achieved a milestone with its AI-powered business comprising more than 50% of total revenue, driven by AI cloud infrastructure and application growth.
Future outlook is positive, with expectations for continued AI-driven growth and profitability, and plans to expand Robotaxi operations globally.
The management emphasized the importance of maintaining strategic investment in AI while balancing shareholder returns, and is open to dual primary listing in Hong Kong.
Full Transcript
OPERATOR
Hello and thank you for standing by for Baidu’s first quarter 2026 earnings conference call. At this time, all participants are in a listen only mode. After management’s prepared remarks, there will be a question and answer session. Today’s conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today’s conference, Juan Lin, Baidu’s Director of Investor Relations.
Juan Lin (Director of Investor Relations)
Hello everyone and welcome to Baidu’s first quarter 2026 earnings conference call. Baidu’s earnings release was distributed earlier today and you can find a copy on our website as well as on Newswire services. On the call today we have Robin Lee, our co Founder and CEO Julius Rong Law, our UDP in Charge of Baidu Mobile Ecosystem Group mega, our EVP in charge of Baidu AI Cloud Group ACG and Henry Hai Jiang, our cfo. After our prepared remarks, we will hold a Q and A session. Please note that the discussion today will contain forward looking statements made under the safe harbor provisions of the U.S. credit Security Litigation Reform act of 1995. Forward looking statements are subject to risks and uncertainties that cause actual results to differ materially from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest Annual Report and other filings with SEC and Hong Kong Stock Exchange. Baidu does not undertake any obligation to update any forward looking statements except as required under applicable law. Our earnings press release and this call include discussions of certain unaudited non GAAP financial measures. Our press release contains a reconciliation of the unaudited non GAAP measures to the unaudited most directly comparable gap measures and is available on our IR website at ir.baidu.com As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on Byduce IR website. I will now turn the call over
Robin Lee (Co-Founder and CEO)
Q1 was an encouraging start to 2026. Baidu General Business generated RMB 26.0 billion in total revenue in Q1, up 2% year over year, marking a return to positive growth. Revenue from our core AI-powered business reached RMB 13.6 billion, up 49% year over year. For the first time, it accounted for more than half of Baidu General business revenue reaching 52%. This is an important milestone as AI-powereded business has now become the majority of our revenue mix. AI Cloud infrastructure delivered exceptional momentum in Q1 with overall revenue growing 79% year over year within AI Cloud infra, GPU cloud revenue continued its strong trajectory from last quarter’s 143% growth, accelerating further to 184% year over year. Apollo Go also had a strong quarter. We delivered 3.2 million fully driverless rides in Q1, sustaining triple digit growth in total rise year over year, reflecting the continued scaling of our operations. Together, these results confirm that AI has clearly become the primary growth driver of Baidu, reinforcing our position as an AI first company. As AI adoption continues to accelerate, real world applications are expanding, opening up new and increasingly diverse demand for AI capabilities. We are confident in our ability to capture these opportunities as they unfold and believe AI will continue to drive the next phase of Baidu’s growth. Now let me walk you through the key highlights of this quarter, starting with AI Cloud infra. As AI adoption accelerates across industries, we continue to see demand surge across both training and inference workloads, with inference ramping especially fast and accounting for a growing share of overall demand. Q1 was a quarter of significantly accelerated growth for our AI cloud infra. With revenue growth well above the broader market, the mix of our business continued to shift toward higher quality revenue streams. GPU Cloud, which typically carries stronger margins, has become a meaningful contributor to our total AI cloud infrastructure revenue, underscores the ongoing improvement in overall business health. A key driver behind this momentum is the differentiated advantage of Baidu’s full stack AI capabilities, one that very few companies globally can truly claim. With proprietary components at every layer from underlying infrastructure to applications, we were able to ensure stable and reliable compute supply while also optimizing end to end across the entire stack, continuously improving performance, reducing costs and delivering compelling cost effectiveness for our customers. As AI applications continue to proliferate, this full stack advantage becomes increasingly pronounced, enabling us to capture a broader and more diverse range of opportunities. At the infrastructure layer, we hold a distinct advantage through kunlunxin, our self developed AI chips. We have seen strong and expanding demand for kunlunxim with a growing number of customers across diverse industries adopting it for a broadening range of AI workloads. This reflects growing market recognition of kunlunxian’s stability, efficiency, compatibility and versatility. It is also among the first domestic AI chips to achieve large scale commercial deployment in a single AI computing cluster of over 30,000 accelerators. With industry leading cluster performance and stability built on a comprehensive software stack, Kunlunxin delivers broad compatibility with different models and frameworks as well as strong usability across enterprise environments. To date, it has been optimized and validated for workloads across various models, covering the latest versions of ERNIE and other mainstream foundation models, with inference support recently extended to deep seq v4, glm 5.1 and minimax m2.7 as an important component of our AI infrastructure, Kunlunxin further strengthens the foundation of our infrastructure layer, enabling Baidu Inc AI Cloud to support customers AI deployment with greater efficiency, reliability and cost effectiveness, and enhancing the overall competitiveness of our cloud offerings. These advantages are translating into strong client momentum. On the infrastructure side, Baidu Inc AI Cloud has become a trusted infrastructure partner for a growing number of major companies across a broad range of industries including Internet gaming, embodied AI, autonomous driving, smartphones, financial services and more. This quarter we added several prominent new clients, including leading model companies. Our client base also includes leading names such as unitree, Honor, Oppo and Vivo. At the same time, existing top tier clients continue to deepen their collaboration with us and scale their usage, driving healthy expansion across our client base. On the MOS front, as OpenCloud gained traction across the industry, we moved quickly to expand the model library on our Tian Fan MOS platform. In addition to ERNIE, Tianfan now supports an expanding setup in demand models including popular ones from Drupal, AI Minimax, Kimi and Deep seq, keeping our model library comprehensive and up to date. In March, daily average token consumption from external customers grew to nearly seven times the level of a year ago. While our MOS revenue also scaled rapidly, we believe the MOS platform still has significant untapped potential as the ecosystem around agents and AI applications continues to evolve. On foundation models, we recently launched ERNIE 5.1, which delivers stronger tax capabilities, a more compact model size and enhanced reasoning compared to its predecessor. We also made advances in key areas including code generation, agenda capabilities and deep search. Recently on the LM Arena, Earni 5.1 ranked first among Chinese models. On the text leaderboard. Ernie 5.1 also topped the LM Arena Search leaderboard among Chinese models, ranking fourth globally, making it the only Chinese model to appear on that leaderboard as well. Looking ahead, we remain firmly committed to advancing ERNIE through an application driven approach, continuously iterating based on real world needs to keep ERNIE at the forefront of AI capabilities. Now let me turn to AI applications. We have long believed that the true value of AI is ultimately realized through applications, and we have been early and persistent in building a comprehensive portfolio serving both enterprises and individual users. This quarter we continue to see encouraging progress across several high potential directions. Let me highlight a few examples. The first is dualmate, our AI agent for everyday productivity, which we recently showcased at Baidu Create DualMate is designed to execute complex multi step workflows across applications and files, autonomously handling long running tasks from start to finish. Available across both PC and mobile, it enables users to initiate tasks anytime and from anywhere while operating continuously in the background. As a 24.7ai assistant, users simply describe what they need and come back to results. What truly differentiates DualMate is its seamless integration with Baidu’s proprietary skills including AI search, ByteCoding and more. As we continue to expand Dumai’s scale ecosystem, we believe it will be able to better tackle an ever wider range of office workflows and complex real world tasks, helping users complete the end to end more effectively. Turning to Digital Humans Our hyper realistic digital human technology continue to advance with improved performance and increasing readiness for large scale deployment. On the cost front, we achieved around 80% cost reduction over the past two quarters, lowering the adoption barrier and making our digital humans more affordable and accessible for a broader range of clients. Meanwhile, we are also taking our digital human capabilities global. At the recent Baidu Create, we launched an overseas digital human platform that enables merchants and creators to easily generate digital human content from e commerce live streams to digital human videos and beyond. To make our digital humans truly work for global markets, we have built in deep localization from the ground up, supporting 24 languages including Spanish, French and Thai, with script and presentation styles culturally adapted to resonate with local audiences. This helps merchants run round the clock digital human live streams that feel authentically native, unlocking new levels of efficiency and conversion potential across global markets. Our growing partner base in China and overseas includes Jingdong, Soybang, TikTok and Shopee, with several partners deepening their collaboration with us. Next is Miao Da. Our vibe coding platform. Miao Da empowers anyone to bring their ideas to life without writing a single line of code, and we are seeing this value increasingly recognized. In March monthly, active users of Miao Da grew around 70% quarter over quarter, while our domestic paying user rate reached approximately three times the level at the end of last year. At Baidu Create, we launched MiaoDa 3.0, introducing an enterprise version and a mobile app, enabling broader adoption across both individuals and enterprises as well as more flexible usage across time and use scenarios. Notably, Miaoda now supports the generation of standalone mobile applications, further expanding what users can create with Miao Da. Another example is FAMO Agent, our self evolving agent designed to address complex operational challenges across industries and help enterprises unlock meaningful productivity gains. With the launch of Pharma Agent 2.0 at Baidu create, we further expanded its accessibility. While earlier versions were primarily used by developers and technical teams, FAMO Agent 2.0 lowers the barrier to entry by enabling domain experts to interact with the agent directly through natural language. No coding expertise required. For example, at Qingdao Port, one of one of the world’s leading ports. With highly sophisticated scheduling system and deeply complex operational logic, FAMO Agent is helping push the efficiency of an already advanced system even further. In an environment where thousands of interdependent variables must be coordinated in real time, FAMO Agent autonomously explores the solution space to identify optimal decisions across birth control scheduling, equipment allocation and cargo …
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