China’s search engine giant Baidu reported a 25 per cent increase in profit last year, with mobile again a key driver of its topline growth, which it has forecast at 33-37 per cent in Q1.
The company said mobile search revenue surpassed PC search income for the first time in December.
Baidu chairman and CEO Robin Li said the company has transitioned from a PC-centric to a mobile-first company, positioning it for what he said is “the next phase of our mobile opportunity: connecting people with services”.
Its net income last year increased 25.4 per cent to CNY13.18 billion ($2.13 billion), and its adjusted EBITDA (non-GAAP) rose 21.3 per cent to CNY16.75 billion.
Revenue jumped 53.6 per cent to CNY49.05 billion, with mobile revenue accounting for 37 per cent of the total. That percentage was 42 per cent in Q4 – up from 36 per cent in Q3.
The company said strong growth in marketing revenues, which expanded 52.5 per cent to CNY48.49 billion, was driven by increases in both the number of active online marketing customers and revenue per customer.
Baidu had about 813,000 active online marketing customers last year — up 8 per cent from 2013. Revenue per online marketing customer rose 40.8 per cent to CNY59,400.
Traffic acquisition costs as a percentage of total revenue rose to 12.9 per cent from 11.6 per cent the previous year. The company said the increase mainly reflects a higher contribution from contextual ads, mobile and the promotion of Hao123.
Bandwidth costs as a percentage of cost of revenue fell to 5.8 per cent compared to 6.1 per cent in 2013, while content costs as a component of revenues increased to 3.8 per cent from 2.6 per cent from a year ago.
Selling, general and administrative expenses doubled last year to CNY10.382 billion due to higher promotional spending for mobile products and services.
The company’s spending on R&D jumped 70 per cent to CNY6.98 billion as it expanded its R&D team.