Baidu reported Q4 2025 revenue of RMB 32.7 billion ($4.68 billion), up 5% sequentially, with Non-GAAP diluted EPS of RMB 10.62 ($1.52) per ADS, beating analyst estimates of $1.12 by 35.7%. AI-powered business now accounts for 43% of general business revenue. BIDU shares fell roughly 5.7% following the report as GAAP profit weakness and legacy ad softness overshadowed the AI growth narrative.
About Baidu
Baidu, Inc. (NASDAQ: BIDU; HKEX: 9888) is a leading Chinese AI and internet technology company founded in January 2000 by Robin Li and Eric Xu, headquartered in Beijing, China. Often referred to as the “Google of China,” Baidu operates China’s dominant search engine and has aggressively pivoted toward artificial intelligence over the past several years. The company trades on both the Nasdaq and the Hong Kong Stock Exchange, with one ADS representing eight Class A ordinary shares.
As of February 27, 2026, Baidu carries a market capitalization of approximately $36.9 billion. Its trailing P/E ratio stands at roughly 11.76 based on recent earnings, though this metric is elevated on a GAAP basis due to a significant impairment charge in 2025. Baidu operates two primary segments: Baidu Core (which includes AI Cloud, search, autonomous driving via Apollo Go, and AI applications) and iQIYI (online entertainment). As of December 31, 2025, Baidu General Business employed approximately 29,000 people. The company has invested over RMB 100 billion in AI since launching ERNIE in March 2023.
Top Financial Highlights
- Q4 2025 total revenue reached RMB 32.7 billion or $4.68 billion, reflecting a 5% quarter over quarter increase and slightly surpassing market expectations of RMB 32.66 billion.
- Full year 2025 revenue totaled RMB 129.1 billion or $18.46 billion, representing a 3% year over year decline, largely attributed to continued softness in legacy business segments.
- Q4 core AI powered business revenue exceeded RMB 11 billion, accounting for 43% of Baidu’s general business revenue, highlighting the structural shift toward AI driven operations.
- For FY2025, core AI powered business revenue reached RMB 40.0 billion, rising 48% year over year and reinforcing the company’s strategic focus on artificial intelligence solutions.
- AI cloud infrastructure revenue for FY2025 stood at RMB 19.8 billion, increasing 34% year over year, supported by strong enterprise demand. Subscription based revenue from AI accelerator infrastructure surged 143% year over year in Q4, indicating accelerating adoption.
- Q4 GAAP net income was RMB 1.8 billion or $255 million, delivering a 5% net margin and diluted earnings per ADS of RMB 3.71.
- Q4 non GAAP net income amounted to RMB 3.9 billion or $559 million, with a 12% non GAAP net margin and non GAAP diluted earnings per ADS of RMB 10.62 or $1.52, reflecting improved adjusted profitability.
- Q4 non GAAP operating income reached RMB 3.0 billion, translating into a 9% operating margin, while full year non GAAP operating income totaled RMB 15.0 billion with a 12% margin.
- Q4 EBITDA stood at RMB 4.7 billion, resulting in a 14% EBITDA margin and demonstrating stable operational leverage.
- Q4 operating cash flow was RMB 2.6 billion, with second half 2025 operating cash flow reaching RMB 3.9 billion, marking a recovery from negative cash flow recorded in the first half of the year.
- Cash and short term investments totaled RMB 294.1 billion or $42.06 billion as of December 31, 2025, providing significant liquidity for strategic initiatives.
- A new $5 billion share repurchase program was announced, alongside the introduction of Baidu’s first dividend policy, signaling a stronger focus on shareholder returns.
- Apollo Go completed 3.4 million fully driverless rides in Q4 and exceeded 10 million rides for FY2025, with autonomous ride hailing operations expanded across 26 cities.
- The proposed spin off and separate listing of the AI chip subsidiary Kunlunxin is progressing, indicating further strategic emphasis on semiconductor and AI hardware capabilities.
Operational Highlights
The following table sets forth selected revenue highlights for our Baidu Core AI-powered Business for the periods indicated:
- Baidu Core AI-powered Business generated RMB 9.6 billion in Q3 2025 and increased to RMB 11.3 billion in Q4 2025.
- For the full year, revenue from Baidu Core AI-powered Business reached RMB 40.0 billion in FY 2025, compared with RMB 27.0 billion in FY 2024, representing a year-over-year growth of 48%.
- AI Cloud Infrastructure revenue stood at RMB 4.2 billion in Q3 2025 and rose to RMB 5.8 billion in Q4 2025. For the full year 2025, AI Cloud Infrastructure generated RMB 19.8 billion, up from RMB 14.8 billion in FY 2024, reflecting 34% year-over-year growth.
- AI Applications revenue was RMB 2.6 billion in Q3 2025 and RMB 2.7 billion in Q4 2025. On a full-year basis, AI Applications contributed RMB 10.2 billion in FY 2025, compared with RMB 9.8 billion in FY 2024, marking a 5% year-over-year increase.
- AI-native Marketing Services recorded RMB 2.8 billion in Q3 2025 and RMB 2.7 billion in Q4 2025. For FY 2025, revenue reached RMB 9.8 billion, significantly higher than RMB 2.4 billion in FY 2024, representing 301% year-over-year growth.
- The Baidu Core AI-powered Business accounted for 39% of Baidu’s general business in Q3 2025 and increased to 43% in Q4 2025.
- On a full-year basis, this segment represented 39% of Baidu’s general business in FY 2025, compared with 26% in FY 2024.
Beat or Miss?
Baidu’s Q4 2025 results came in mixed relative to Wall Street expectations. Revenue met consensus, while Non-GAAP earnings comfortably beat estimates. GAAP profitability, however, was weighed down by impairment charges and rising operating expenses.
| Metric | Reported | Estimated | Difference/Analysis |
| Revenue (Q4) | RMB 32.7B ($4.68B) | RMB 32.66B ($4.68B) | In line with estimates |
| Non-GAAP EPS per ADS | RMB 10.62 ($1.52) | $1.12 | Beat by 35.7% |
| Adjusted Net Income (Q4) | RMB 3.9B ($559M) | RMB 3.46B | Beat by ~13% |
| Adjusted Operating Profit (Q4) | RMB 3.0B ($424M) | N/A | Beat expectations by ~13%, driven by gross profit outperformance |
| GAAP Net Income (Q4) | RMB 1.8B ($255M) | N/A | Declined significantly from RMB 5.2B in Q4 2024 |
| FY2025 Revenue | RMB 129.1B ($18.46B) | ~$18.42B | Roughly in line |
BOCI maintained a Buy rating on Baidu with a target price of $172, noting that despite expenses exceeding expectations, adjusted operating profit and adjusted net profit surpassed market expectations by 13%, primarily due to outperforming gross profit.
What Leadership Is Saying?
CEO Robin Li on AI Strategy and Vision – “Revenue from Baidu’s Core AI-powered Business exceeded RMB 11 billion in Q4, accounting for 43% of Baidu General Business revenue. Meanwhile, AI-native Marketing Services continued to grow, unlocking new possibilities for the long term. As our AI-first strategy takes clear shape, we’re confident in our ability to create lasting value in the AI era.”
CFO Haijian He on Financial Performance and Shareholder Returns-Baidu reported solid quarterly progress, with General Business revenue rising 6% sequentially and Non GAAP operating income increasing 28% quarter over quarter to RMB 2.8 billion. Operating cash flow turned positive in the second half of 2025, reaching RMB 3.9 billion, marking a recovery from the negative position in the first half. The company also launched a new share repurchase program of up to US$5 billion and introduced its first dividend policy, with an initial payment expected by the end of 2026.
Historical Performance
Baidu Q4 2025 vs Q4 2024
Year-over-year comparisons reflect the ongoing transition from legacy internet advertising toward AI-driven business lines. Revenue declined modestly on a YoY basis, while GAAP profitability was significantly impacted by a large impairment charge.
| Category | Q4 2025 | Q4 2024 | Change (%) |
| Total Revenue | RMB 32.7B ($4.68B) | RMB 34.1B ($4.68B) | -4.1% YoY |
| GAAP Operating Income | RMB 1.5B | RMB 3.9B | -61.50% |
| GAAP Net Income | RMB 1.8B | RMB 5.2B | -65.40% |
| Non-GAAP Net Income | RMB 3.9B | RMB 6.7B | -41.80% |
| Non-GAAP EPS per ADS | RMB 10.62 ($1.52) | RMB 19.18 ($2.63) | -44.60% |
| AI Cloud Infra Subscription Revenue | +143% YoY growth | +26% YoY growth (AI Cloud) | Accelerating |
| Category | FY 2025 | FY 2024 | Change (%) |
| Total Revenue | RMB 129.1B | RMB 133.1B | -3.00% |
| GAAP Net Income | RMB 5.6B | RMB 23.8B | -76.50% |
| Non-GAAP Net Income | RMB 18.9B | RMB 27.0B | -30.00% |
| Operating Cash Flow | -RMB 3.0B (FY) | RMB 13.1B | N/M |
| Cash & Investments | RMB 294.1B | RMB 139.1B (cash equiv. only) | N/A (different measures) |
The FY2025 operating loss of RMB 5.8 billion was primarily driven by a one-time RMB 16.2 billion impairment of long-lived assets. Excluding this impairment, operating income for FY2025 was RMB 10.4 billion.
Competitor Comparison
China’s Big Three Tech
Baidu competes directly with Alibaba and Tencent in AI cloud, digital advertising, and foundational AI models. The table below compares the most recently available quarterly results for each company. Note: Alibaba operates on a fiscal year ending March 31, so its “September Quarter 2025” corresponds to its fiscal Q2 FY2026. Tencent’s most recent results are Q3 2025.
| Category | Baidu (Q4 2025) | Alibaba (Sept Q 2025) | Tencent (Q3 2025) |
| Quarterly Revenue | RMB 32.7B | RMB 247.8B | RMB 192.9B |
| Revenue YoY Growth | -4% YoY / +5% QoQ | +5% YoY (+15% ex-disposals) | +15% YoY |
| Net Income (GAAP) | RMB 1.8B | RMB 20.6B | RMB 64.9B |
| Non-GAAP Net Income | RMB 3.9B | RMB 10.4B | RMB 72.8B (Non-IFRS) |
| Operating Margin | 5% (GAAP) / 9% (Non-GAAP) | 2% (GAAP) | ~33% (GAAP) |
| Key AI Growth Driver | AI Cloud Infra +34% YoY | Cloud AI revenue triple-digit growth | AI boosting ad targeting, gaming |
Baidu trails significantly in absolute revenue scale compared to Alibaba and Tencent, but its AI Cloud infrastructure growth rate of 34% YoY (and 143% subscription growth) is competitive within the sector. Tencent leads in profitability and overall scale, while Alibaba’s operating margins are temporarily compressed due to heavy investments in quick commerce.
How the Market Reacted?
BIDU shares dropped approximately 5.7% on February 27, 2026, closing at $125.15, down from the prior close of $132.65. The sell-off came despite Non-GAAP earnings beating analyst expectations by a wide margin. Investor sentiment was weighed down by the sharp GAAP profit decline (Q4 net income fell 65% YoY), ongoing weakness in legacy online advertising revenue, and concerns that AI momentum has not yet fully offset the drag from traditional businesses.
The overall tone of the report was mixed: bullish on AI transformation and shareholder returns (the $5 billion buyback and first-ever dividend policy), but bearish on near-term profitability and the significant RMB 16.2 billion impairment charge recorded during 2025.
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