Chinese internet giant Baidu returned to profit in Q2 2022 on one-off gains, as widespread Covid-19 (coronavirus) lockdowns in major cities put pressure on advertising and video streaming spend.

Co-founder and CEO Robin Li said in an earnings call a resurgence in cases led to an “unfavourable macro environment”, but noted its AI cloud and intelligent driving businesses maintained rapid growth momentum.

Looking to the second half, Li said it is still facing macroeconomic uncertainties. At this stage, he added “it’s hard for us to predict” how the pandemic will play out in the coming months.

The company registered a net profit of CNY3.6 billion ($543 million), compared with a CNY583 million loss in Q2 2021. Its profit was boosted by recognising a fair value gain of CNY536 million on long-term investments.

Total revenue dropped 5 per cent to CNY29.6 billion, as online marketing sales fell 10 per cent to CNY17.1 billion. Non-online marketing revenue, covering cloud and other AI-powered businesses, grew 22 per cent to CNY6.1 billion.

Li said cloud sales jumped 31 per cent year-on-year and accounted for 18 per cent of core revenue, up from 14 per cent a year earlier.

Revenue at its video streaming platform iQIYI fell 13 per cent to CNY6.7 billion. The average daily number of subscribing members dipped to 98 million from 99 million a year earlier.

Monthly active users (MAUs) of the Baidu app increased 8 per cent to 628 million, and daily logged-in users reached 84 per cent.

R&D expenses were flat year-on-year at CNY6.3 billion.