Chinese internet giant Baidu used its Q2 earnings call to forecast strong demand for AI cloud services to help drive 8 per cent to 19 per cent year-on-year revenue growth in the current quarter and core advertising sales to increase at a similar rate.
Revenue is predicted to come in between CNY30.6 billion ($4.7 billion) and CNY33.5 billion.
On its Q2 earnings call, CFO Herman Yu explained the Covid-19 (coronavirus) situation in China is evolving and business visibility is limited, noting its forecast “reflects our current and preliminary view, which is subject to substantial uncertainties”.
Chairman and CEO Robin Li said Baidu core delivered another strong quarter, “powered by the fast growth of our new AI business. AI enables businesses and local governments to do more and serve more people”.
Highlighting gains in its mobile ecosystem, Li said Baidu app monthly active users (MAUs) increased 9 per cent to 580 million and daily logged-in users reached 77 per cent.
The company posted a net loss of CNY583 million compared with a CNY3.6 billion profit in Q2 2020, due to booking a CNY3.1 billion fair-value loss on long-term investments.
Revenue increased 20 per cent to CNY31.4 billion. Core online marketing sales rose 18 per cent to CNY19 billion, non-online marketing turnover 80 per cent to CNY5 billion and AI cloud 71 per cent to CNY3.3 billion.
Video streaming platform iQIYI revenue increased 3 per cent to CNY7.6 billion.
R&D expenses were up 30 per cent to CNY6.3 billion.
Asked if the government is comfortable with a private company having full control of sensitive road traffic data on its system, Li said it maintains constant dialogue with the regulator and “we haven’t heard anything that’s going to have an adverse impact on our business operation yet”.