Tech giant Baidu saw a sizeable decline in total revenues in the first quarter of 2020, as China’s economy grappled with the impacts of the COVID-19 outbreak.
Baidu’s unaudited financial results for the first quarter of 2020 point to a 7% YoY decline in total revenues, including a 13% decline in Baidu Core revenue to USD$2.2 billion.
Baidu Core adjusted EBITDA nonetheless rose 38% to hit $0.7 billion, while the adjusted EBITDA margin rose to 30%, for an 11 point increase compared to the year previously.
“Given COVID-19 headwinds, Baidu focused on quality revenue growth and continued to be disciplined with spending ROI, to maximize long-term shareholder value, said Herman You, Baidu CFO.
“Baidu Core’s operating efficiency can be attributed to the strengthening of Baidu mobile ecosystem, enabling in-app search to grow faster and be more profitable than browser search, and growing new AI businesses with smaller losses.”
Baidu CEO Robin Li expressed optimism about the company’s near-term prospects given China’s effective containment of COVID-19.
“With the pandemic coming under control in China, offline activities are rebounding and Baidu stands to benefit from a restart of the Chinese economy,” said Li.
“In March, a month after the peak of COVID-19 new cases, Baidu’s traffic remained robust with Baidu App DAUs reaching 222 million, up 28% year over year, in-app search queries up 45% and feed time spent up 51%.
“Our strategy to strengthen Baidu’s mobile ecosystem and promote in-app search has resulted in users increasingly come to Baidu for critical and reliable information.”