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Fourth Quarter and Fiscal Year 2008 Highlights
-- Total revenues in the fourth quarter of 2008 were RMB902.1 million
($132.2 million), a 58.0% increase from the corresponding period in
2007.
-- Total revenues in fiscal year 2008 were RMB3.2 billion ($468.8 million),
an 83.3% increase from 2007.
-- Operating profit in the fourth quarter of 2008 was RMB304.7 million
($44.7 million), a 72.9% increase from the corresponding period in 2007.
-- Operating Profit in fiscal year 2008 was RMB1.1 billion ($160.7
million), a 100.4% increase from 2007.
(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 RMB6.8225 to US$1.00, the effective noon
buying rate as of December 31, 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.
Net income in the fourth quarter of 2008 was
Net income in fiscal year 2008 was
The number of active online marketing customers during the fourth quarter was over 197,000, an increase of 1.5% from the previous quarter.
"Having gone through this important quarter, Baidu has become a stronger
company with a higher quality customer base, tighter operational controls and
more confidence in our ability to overcome challenges," said
Fourth Quarter 2008 Results
Baidu reported total revenues of
Online marketing revenues for the fourth quarter of 2008 were
Traffic acquisition cost (TAC) as a component of cost of revenues was
Bandwidth costs as a component of cost of revenues were
Selling, general and administrative expenses were
Research and development expenses were
Share-based compensation expenses, which were allocated to related
operating costs and expense line items, increased in aggregate by 61.8% to
Operating profit was
Income tax expense was
Net income was
Net income excluding share-based compensation expenses (non-GAAP) was
As of
Adjusted EBITDA (non-GAAP), defined in this announcement as earnings
before interest, taxes, depreciation, amortization, other non-operating income
and share-based compensation expenses, was
Fiscal Year 2008 Results
Total revenues in 2008 were
Online marketing revenues in 2008 were
Traffic acquisition costs in 2008 were
Selling, general and administrative expenses in 2008 were
Research and development expenses totaled
Operating profit in 2008 was
Net income in 2008 was
Net income excluding share-based compensation expenses (non-GAAP) in 2008
was
Full year net operating cash inflow and capital expenditures were
Adjusted EBITDA (non-GAAP) was
Outlook for First Quarter 2009
We expect moderate year-over-year growth for the first quarter of 2009 due to two factors. First, we anticipate a portion of our online marketing customers may scale back on marketing spending given the current market environment. Second, we expect that the removal of certain sponsored links during the fourth quarter of 2008 resulted in a net loss of around 5% of revenue, impacting the first quarter.
Given the above considerations, Baidu currently expects to generate total
revenues in an amount ranging from
Conference Call Information
Baidu's management will hold an earnings conference call at
Dial-in details for the conference call are as follows: US: +1-617-614-2704 UK: +44-207-365-8426 Hong Kong: +852-3002-1672 Passcode for all regions: 55283502
A replay of the conference call may be accessed by phone at the following
number until
International: +1-617-801-6888
Passcode: 72328702
Additionally, a live and archived webcast of this conference call will be available at http://ir.baidu.com .
About Baidu
Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving individual Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu's ADSs, each of which represents one Class A ordinary share, currently trade on the NASDAQ Global Select Market under the symbol "BIDU."
Safe Harbor Statement
This announcement contains forward-looking statements. These statements
are made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates," "confident" and similar
statements. Among other things, the outlook for first quarter 2009 and
quotations from management in this announcement, as well as Baidu's strategic
and operational plans, contain forward-looking statements. Baidu may also make
written or oral forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission in its annual report to shareholders, in
press releases and other written materials and in oral statements made by its
officers, directors or employees to third parties. Statements that are not
historical facts, including statements about Baidu's beliefs and expectations,
are forward-looking statements. Forward-looking statements involve inherent
risks and uncertainties. A number of factors could cause actual results to
differ materially from those contained in any forward-looking statement,
including but not limited to the following: our growth strategies; our future
business development, results of operations and financial condition; our
ability to attract and retain users and customers; competition in the Chinese
language Internet search market; competition for online marketing customers;
changes in our revenues and certain cost or expense items as a percentage of
our revenues; the outcome of ongoing, or any future, litigation or arbitration,
including those relating to copyright and other intellectual property rights;
the expected growth of the Chinese language Internet search market and the
number of Internet and broadband users in
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 has
computed its non-GAAP financial measures using the same consistent method from
quarter to quarter since
Baidu, Inc. Condensed Consolidated Balance Sheets December September December (in RMB thousands) 31, 2008 30, 2008 31, 2007 Unaudited Unaudited Audited ASSETS Current assets: Cash and cash equivalents 2,362,171 2,088,554 1,350,600 Short-term investments 301,244 206,360 242,037 Accounts receivable, net 92,777 100,193 64,274 Prepaid expenses and other current assets 90,704 109,597 65,996 Deferred tax assets, net 5,580 2,587 2,587 Total current assets 2,852,476 2,507,291 1,725,494 Non-current assets: Fixed assets, net 789,714 748,582 678,886 Land use right, net 94,520 95,008 96,472 Intangible assets, net 31,263 33,814 40,460 Goodwill 51,082 51,081 51,093 Investments, net 12,281 20,197 15,439 Deferred tax assets, net 26,537 17,060 15,716 Other non-current assets 80,118 84,394 32,348 Total non-current assets 1,085,515 1,050,136 930,414 TOTAL ASSETS 3,937,991 3,557,427 2,655,908 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accrued expenses and other liabilities 423,029 371,745 359,310 Customers' deposits 422,526 357,884 257,577 Deferred revenue 3,441 9,149 11,832 Deferred income 332 633 2,485 Total current liabilities 849,328 739,411 631,204 Non-current liabilities: Long-term payable -- -- 3,000 Deferred income -- -- 332 Total non-current liabilities -- -- 3,332 Total liabilities 849,328 739,411 634,536 Shareholders' equity Class A Ordinary Shares, Par value US$0.00005 per share, 825,000,000 shares authorized, and 25,136,147 shares and 25,641,847 shares issued and outstanding as at December 31, 2007 and December 31, 2008 11 11 10 Class B Ordinary Shares, Par value US$0.00005 per share, 35,400,000 shares authorized, and 8,996,842 shares and 8,873,986 shares issued and outstanding as at December 31, 2007 and December 31, 2008 4 4 4 Additional paid-in capital 1,218,356 1,254,593 1,171,575 Accumulated other comprehensive loss (109,552) (127,770) (81,953) Retained earnings 1,979,844 1,691,178 931,736 Total shareholders' equity 3,088,663 2,818,016 2,021,372 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,937,991 3,557,427 2,655,908 Baidu, Inc. Condensed Consolidated Statements of Income For the Three Months Ended (in RMB thousands except for share, December December September per share information) 31, 2008 31, 2007 30, 2008 Unaudited Unaudited Unaudited Revenues: Online marketing services 901,389 569,588 918,179 Other services 731 1,474 946 Total revenues 902,120 571,062 919,125 Operating costs and expenses: Cost of revenues (note 1, 2) (336,543) (216,012) (309,342) Selling, general and administrative (note 2) (175,313) (132,230) (163,247) Research and development (note 2) (85,541) (46,535) (78,231) Total operating costs and expenses (597,397) (394,777) (550,820) Operating profit 304,723 176,285 368,305 Other income: Interest income 15,320 12,846 11,375 Exchange loss, net (2) (1,898) (5) Other income, net 10,451 14,044 3,009 Total other income 25,769 24,992 14,379 Income before income taxes 330,492 201,277 382,684 Income taxes (41,826) 18,561 (34,825) Net income 288,666 219,838 347,859 Earnings per share for Class A and Class B ordinary shares: Basic 8.39 6.45 10.15 Diluted 8.31 6.32 10.00 Weighted average aggregate number of Class A and Class B ordinary shares outstanding: Basic 34,392,036 34,087,848 34,257,974 Diluted 34,740,057 34,797,946 34,786,353 (1) Cost of revenues are detailed as follows: Business tax and surcharges (58,215) (36,614) (57,288) Traffic acquisition costs (131,352) (72,299) (108,797) Bandwidth costs (49,245) (35,857) (48,029) Depreciation costs (57,908) (46,662) (56,907) Operational costs (38,317) (23,820) (37,379) Share-based compensation expenses (1,506) (760) (942) Total cost of revenues (336,543) (216,012) (309,342) (2) Includes share-based compensation expenses as follows: Cost of revenues (1,506) (760) (942) Selling, general and administrative (10,220) (5,539) (6,933) Research and development (9,765) (6,986) (9,149) Total share-based compensation expenses (21,491) (13,285) (17,024) Twelve Months Ended (in RMB thousands except for share, December 31, December 31, per share information) 2008 2007 Unaudited Audited Revenues: Online marketing services 3,194,461 1,741,021 Other services 3,791 3,404 Total revenues 3,198,252 1,744,425 Operating costs and expenses: Cost of revenues (note 1, 2) (1,155,457) (645,406) Selling, general and administrative (note 2) (659,804) (411,163) Research and development (note 2) (286,256) (140,702) Total operating costs and expenses (2,101,517) (1,197,271) Operating profit 1,096,735 547,154 Other income: Interest income 47,677 49,009 Exchange loss, net (1,920) (2,425) Other income, net 21,687 22,478 Total other income 67,444 69,062 Income before income taxes 1,164,179 616,216 Income taxes (116,071) 12,752 Net income 1,048,108 628,968 Earnings per share for Class A and Class B ordinary shares: Basic 30.63 18.57 Diluted 30.19 18.11 Weighted average aggregate number of Class A and Class B ordinary shares outstanding: Basic 34,217,443 33,872,611 Diluted 34,717,489 34,724,365 (1) Cost of revenues are detailed as follows: Business tax and surcharges (200,085) (108,783) Traffic acquisition costs (418,474) (204,693) Bandwidth costs (178,651) (117,554) Depreciation costs (225,799) (147,115) Operational costs (127,906) (65,544) Share-based compensation expenses (4,542) (1,717) Total cost of revenues (1,155,457) (645,406) (2) Includes share-based compensation expenses as follows: Cost of revenues (4,542) (1,717) Selling, general and administrative (41,651) (17,371) Research and development (37,784) (20,760) Total share-based compensation expenses (83,977) (39,848) Reconciliations of non-GAAP Results of Operations Measures to the Nearest Comparable GAAP Measures (*) (in RMB thousands, unaudited) Three months ended December 31, 2007 GAAP Result Adjustment Non-GAAP Results Operating profit 176,285 13,285 189,570 Three months ended December 31, 2007 GAAP Result Adjustment Non-GAAP Results Net income 219,838 13,285 233,123 Three months ended September 30, 2008 GAAP Result Adjustment Non-GAAP Results Operating profit 368,305 17,024 385,329 Three months ended September 30, 2008 GAAP Result Adjustment Non-GAAP Results Net income 347,859 17,024 364,883 Three months ended December 31, 2008 GAAP Result Adjustment Non-GAAP Results Operating profit 304,723 21,491 326,214 Three months ended December 31, 2008 GAAP Result Adjustment Non-GAAP Results Net income 288,666 21,491 310,157 Twelve months ended December 31, 2008 GAAP Result Adjustment Non-GAAP Results Operating profit 1,096,735 83,977 1,180,712 Twelve months ended December 31, 2008 GAAP Result Adjustment Non-GAAP Results Net income 1,048,108 83,977 1,132,085 Twelve months ended December 31, 2007 GAAP Result Adjustment Non-GAAP Results Operating profit 547,154 39,848 587,002 Twelve months ended December 31, 2007 GAAP Result Adjustment Non-GAAP Results Net income 628,968 39,848 668,816 (*) The adjustment is only for share-based compensation. Reconciliation From Net Cash Provided by Operating Activities to Adjusted EBITDA(*) (in RMB thousands, unaudited) Three months ended As a % of December 31, 2007 total revenues Net cash provided by operating activities 334,609 59% Changes in assets and liabilities, net of effects of acquisitions (44,063) -8% Income taxes expenses (18,561) -3% Interest income and other, net (24,992) -4% Adjusted EBITDA 246,993 44% Three months ended As a % of September 30, 2008 total revenues Net cash provided by operating activities 482,172 52% Changes in assets and liabilities, net of effects of acquisitions (45,293) -5% Income taxes expenses 34,825 4% Interest income and other, net (14,379) -1% Adjusted EBITDA 457,325 50% Three months ended As a % of December 31, 2008 total revenues Net cash provided by operating activities 482,108 53% Changes in assets and liabilities, net of effects of acquisitions (99,277) -11% Income taxes expenses 41,826 5% Interest income and other, net (25,769) -3% Adjusted EBITDA 398,888 44% Twelve months ended As a % of December 31, 2008 total revenues Net cash provided by operating activities 1,616,534 50% Changes in assets and liabilities, net of effects of acquisitions (203,736) -6% Income taxes expenses 116,071 4% Interest income and other, net (67,444) -2% Adjusted EBITDA 1,461,425 46% Twelve months ended As a % of December 31, 2007 total revenues Net cash provided by operating activities 979,478 56% Changes in assets and liabilities, net of effects of acquisitions (129,713) -7% Income taxes expenses (12,752) -1% Interest income and other, net (69,062) -4% Adjusted EBITDA 767,951 44% (*) Definition of adjusted EBITDA: earnings before interest, taxes, depreciation, amortization, other non-operating income, and share-based compensation expenses. For further information, please contact: Baidu, Inc. Linda Sun Tel: +86-10-8262-1188 Email: ir@baidu.com Brunswick Group (Beijing) Cynthia He Tel: +86-10-6566-2256 Email: che@brunswickgroup.com Brunswick Group (New York) Mike Guerin Tel: +1-212-333-3810 Email: mguerin@brunswickgroup.com
SOURCE Baidu, Inc.