Baidu Inc Earnings - Q4 2025 Analysis & Highlights
Baidu's Q4 2025 earnings call focused on the company's transformation into an AI-native business, with significant progress in AI infrastructure, applications, and autonomous driving, alongside announcements of shareholder returns and the proposed Kunlunxin chip spin-off.
Key Financial Results
Total revenue in Q4 2025 was RMB 32.7 billion, increasing 5% quarter-over-quarter.
Full year 2025 total revenue was RMB 129.1 billion, decreasing 3% year-over-year, primarily due to a decrease in legacy business, partially offset by an increase in Baidu Core AI-powered Business.
Baidu General Business total revenue in Q4 was RMB 26.1 billion.
Core AI-powered Business revenue exceeded RMB 11 billion in Q4, accounting for 43% of Baidu General Business revenue.
Cost of revenues was RMB 18.3 billion in Q4, remaining flat quarter-over-quarter.
Cost of revenues was RMB 72.4 billion in 2025, increasing 10% year-over-year, primarily due to an increase in costs related to Baidu Core AI-powered Business.
Operating income was RMB 1.5 billion in Q4 with an operating margin of 5%.
Operating loss was RMB 5.8 billion in 2025 with an operating loss margin of 5%, but excluding impairment of long-lived assets, operating income was RMB 10.4 billion.
Non-GAAP operating income was RMB 3.0 billion in Q4 with a non-GAAP operating margin of 9%.
Non-GAAP operating income was RMB 15.0 billion in 2025 with a non-GAAP operating margin of 12%.
Net income attributable to Baidu was RMB 1.8 billion in Q4 with a net margin of 5%, and diluted earnings per ADS was RMB 3.71.
Non-GAAP net income attributable to Baidu was RMB 3.9 billion in Q4 with a non-GAAP net margin of 12%, and non-GAAP diluted earnings per ADS was RMB 10.62.
Net income attributable to Baidu was RMB 5.6 billion in 2025 with a net margin of 4%, and diluted earnings per ADS was RMB 11.78.
Total cash and investments were RMB 294.1 billion as of December 31, 2025.
Operating cash flow was RMB 2.6 billion in Q4.
Operating cash flow for 2025 was negative RMB 3.0 billion, but remained positive for the past two consecutive quarters.
Business Segment Results
AI Cloud Infrastructure revenue reached approximately RMB 20 billion in 2025, up 34% year-over-year, outpacing industry growth.
Subscription-based revenue from AI accelerator infrastructure grew 143% year-over-year in Q4, accelerating further from 128% in Q3.
AI Cloud Infra and AI Applications combined reached RMB 30 billion in revenue for the full year 2025.
Revenue from AI applications exceeded RMB 10 billion for the full year 2025.
Apollo Go delivered 3.4 million fully driverless operational rides in Q4, with weekly rides peaking at over 300,000.
Total rides increased by over 200% year-over-year.
Apollo Go delivered over 10 million fully driverless operational rides in 2025 alone.
Cumulative rides provided to the public have surpassed 20 million as of February 2026.
Apollo Go's global footprint reached 26 cities worldwide as of February 2026.
AI-native Marketing Services, including digital humans and agents, sustained strong growth with revenue up 110% year-over-year.
The number of digital humans livestreaming on Baidu's platform increased nearly 200% year-over-year in December 2025.
ERNIE Assistant's MAU exceeded 200 million in December.
Baidu App has an MAU of around 700 million.
Capital Allocation
Baidu announced a new $5 billion share repurchase program to be executed on a regular basis in a disciplined and transparent manner.
Baidu adopted a dividend policy for the first time.
Baidu has invested over RMB 100 billion in AI since launching ERNIE in March 2023, and will continue to maintain this level of investment density going forward.
Baidu is exploring alternative ways of supporting financial needs, including operational and financing leasing, as well as access to low-cost interest banking borrowing with rates as low as below 2%.
Industry Trends and Dynamics
Enterprise AI adoption is rapidly expanding, with customers integrating AI into core operations.
Demand growth is occurring in both training and inference workloads, with AI computing demand expected to keep expanding.
Robotaxi has reached a tipping point globally, with more countries and regions creating supportive environments for robotaxi operations.
The industry is expected to accelerate in 2026 as robotaxi operations expand.
Embodied AI showed notable momentum, with revenue from this vertical doubling quarter-over-quarter in Q4.
The AI-to-C product market is highly competitive, with competitors employing aggressive marketing strategies to rapidly scale user bases.
Competitive Landscape
Baidu's full-stack, end-to-end AI architecture provides a key differentiator in capturing enterprise AI opportunities.
Baidu's AI infrastructure achieves an excellent balance across performance, efficiency, and cost, powered by a diverse mix of chips with deep expertise in heterogeneous computing and unified scheduling.
Kunlunxin AI chips deliver stable, high-performance AI computing at scale with broad compatibility across different models and frameworks, enabling customers to deploy faster with lower integration costs.
Kunlunxin chips have a proven track record of large-scale, real-world deployments with leading enterprises across diverse industries, spanning financial services, telecommunications, energy, and Internet sectors.
Apollo Go leads globally in operating scale, safety record, efficiency, and cost structure, with the RT6 vehicle offering the industry's best cost structure at under $30,000 per vehicle.
Apollo Go was the first to achieve unit economics breakeven in Wuhan in late 2024.
Very few players have entered right-hand drive robotaxi markets, while Baidu has already established a presence and is making rapid progress.
Baidu's ERNIE Assistant maintains low error rates with minimal hallucinations, delivering highly trustworthy content to users.
Management believes applications matter more than models because models ultimately create value through applications.
Macroeconomic Environment
No specific macroeconomic factors were discussed in the earnings call.
Growth Opportunities and Strategies
Baidu is pursuing one of the most comprehensive and ambitious AI search transformations globally, continuously improving the quality of AI search results while expanding what users can accomplish directly within search.
Baidu introduced AI-generated infographics into search results and integrated more MCP capabilities across key scenarios, including e-commerce, healthcare, and local services.
Baidu integrated OpenClaw, an open-source agent framework, directly into Baidu App with one-click access, enabling users to benefit from cutting-edge agentic AI capabilities.
Baidu is scaling its AI search API, with adoption accelerating in Q4 with call volume up over 110% quarter-over-quarter.
Digital humans represent a compelling form of AI application, combining visual presence, voice, and real-time interaction to create more engaging and effective experiences.
Production costs for hyper-realistic digital humans declined to roughly one-third of previous quarter levels, positioning this technology for broader adoption.
Miaoda, Baidu's vibe coding platform, enables users without coding experience to build applications through natural language, with users globally creating over 1 million AI applications as of early February.
Yijian, Baidu's advanced visual intelligence platform, enables enterprises to automate operational compliance and safety checks through intelligent visual analysis.
FM Agent, Baidu's self-evolving agent, is designed to solve complex operational challenges by autonomously reasoning across data, rules, and real-world constraints.
Baidu established the Personal Super Intelligence Business Group (PSIG), unifying Baidu Wenku and Baidu Drive to accelerate the rollout of new applications.
Apollo Go is accelerating international expansion to capture global opportunities, with partnerships with Uber and Lyft in London and Dubai.
Apollo Go's focus is on three areas: aggressively scaling up safe and comfortable operations, continuously improving unit economics, and expanding with flexible business models both domestically and internationally.
Baidu is advancing its proprietary foundation model ERNIE, with restructured model development organization into two dedicated teams—one advancing state-of-the-art capabilities and another tailoring models for specific business needs.
Financial Guidance and Outlook
Management believes the Core AI-powered Business will become the majority of Baidu General Business in the foreseeable future.
Baidu remains highly confident in sustaining strong growth momentum in AI Cloud in 2026.
AI Cloud Infra is expected to maintain strong momentum with AI accelerator infrastructure continuing to serve as a core driver, propelling the overall cloud business toward a more sustainable and high-quality growth mode.
As enterprise AI deployments deepen further, Baidu's cloud business is expected to continue to grow faster than the industry.
Operating cash flow for Baidu is expected to remain positive going forward, even with significant AI investment.
Management expects more cities to achieve positive unit economics over time for Apollo Go.
Management expects more cities to achieve unit economics breakeven for Apollo Go in 2026.
AI Chip Strategy and Kunlunxin Spin-off
Baidu announced the proposed spin-off and separate listing of Kunlunxin, its proprietary AI chip company.
Kunlunxin is a result of over a decade of investment and represents a critical infrastructure component of Baidu's full-stack AI capabilities.
The proposed spin-off and separate listing of Kunlunxin is expected to unlock significant value for Baidu.
Kunlunxin serves as a key component of Baidu's own cloud platform's computing power, playing an important role in the overall AI infrastructure.
Autonomous Driving Safety and Performance
Apollo Go's fully driverless vehicles experience an airbag deployment accident only once every over 12 million kilometers, making it the safest globally.
Apollo Go fleets have accumulated more than 300 million autonomous kilometers, including over 190 million fully driverless autonomous kilometers.
