BIDU 4Q25 First Take: the company adopted a new reporting framework this quarter, splitting results into AI biz. and other legacy biz.; AI includes AI infra, AI apps, and AI-native marketing. As the Street is still setting estimates under the old framework, Dolphin Research restores the prior disclosure for comparison, focusing on BIDU only and excluding iQIYI.
Overall, the Q4 print was underwhelming. It was not a strong quarter. However, given the prolonged correction, buybacks providing support, and narratives such as Kunlun Chip’s IPO and potential Stock Connect inclusion later this year, we do not expect sustained penalties.
On the top line, results were broadly in line with BBG consensus; overall ads slightly missed, and legacy ads were still down 26%, with the timing and pace of recovery uncertain. Cloud and other slightly beat, with cloud infra relatively strong.
On opex, GAAP OP came in below expectations due to approx. RMB 700 mn in severance and some bad-debt provisions. Ex these items, lower D&A and headcount optimization improved efficiency, driving Adj. OP to a modest beat.
Looking at BIDU’s AI biz. in isolation, performance across the three pillars was mixed. Details follow:
1) Cloud Infra (cloud + compute): given last year’s high base (projects clustered in a short window), QoQ is more relevant. Q4 grew 35% QoQ, a decent trend.
2) AI Apps (incl. Baidu Wenku, Baidu Cloud Drive, and digital employees): flat QoQ. The cloud drive likely remained a drag.
3) AI-native marketing (agents and digital humans): edged lower QoQ; given industry trends, competition likely weighed. Watch the call for color on seasonality and other objective factors. $Baidu(BIDU.US) $BIDU-SW(09888.HK)
