Baidu, Inc. — Earnings Release 2021

Nov 17, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Under our weighted voting rights structure, our share capital comprises Class A ordinary shares and Class B ordinary shares. Each Class A ordinary share entitles the holder to exercise one vote, and each Class B ordinary share entitles the holder to exercise 10 votes, respectively, on all matters subject to the vote at general meetings of the Company. Shareholders and prospective investors should be aware of the potential risks of investing in a company with a weighted voting rights structure. Our American depositary shares, each representing eight of our Class A ordinary shares, are listed on Nasdaq in the United States under the symbol BIDU.

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Baidu, Inc. 百度集團股份有限公司

(A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability) (Stock Code: 9888)

ANNOUNCEMENT OF THE 2021 THIRD QUARTER RESULTS

We hereby announce our unaudited results for the three months ended September 30, 2021 (“ 2021 Third Quarter Results ”). The 2021 Third Quarter Results are available for viewing on the websites of the Hong Kong Stock Exchange at www.hkexnews.hk and our website at http://ir.baidu.com.

By order of the Board Baidu, Inc. Mr. Robin Yanhong Li Chairman of the Board and Chief Executive Officer

Hong Kong, November 17, 2021

As at the date of this announcement, the board of directors of the Company comprises Mr. Robin Yanhong Li as director, and Mr. James Ding, Mr. Brent Callinicos, Mr. Yuanqing Yang and Mr. Jixun Foo as independent directors.

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Baidu Announces Third Quarter 2021 Results

BEIJING, China, November 17, 2021 — Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888) (“ Baidu ” or the “ Company ”), a leading AI company with strong Internet foundation, today announced its unaudited financial results for the third quarter ended September 30, 2021.

“Baidu is bringing innovation across the consumer, enterprise and public sector with our commitment to AI,” said Robin Li, co-founder and CEO of Baidu. “Our AI Cloud is helping businesses better serve customers and move faster with greater efficiency. We are building Baidu Apollo smart transportation and intelligent driving to smoothen traffic congestion, accelerate the move to EV and reduce traffic accidents.”

“Baidu Core delivered another solid quarter, powered by our AI cloud revenue growing 73% year over year,” said Rong Luo, CFO of Baidu. “With a diversified AI portfolio, including cloud services, smart transportation, smart devices, self-driving, smart EV and robotaxi, we are well positioned for long-term growth.”

Third Quarter 2021 Financial Highlights1

(In millions except per ADS, unaudited) Total revenues Operating income Operating income (non-GAAP) 2 Net income (loss) to Baidu Net income to Baidu (non-GAAP) 2 Diluted earnings (loss) per ADS Diluted earnings per ADS (non-GAAP) 2 Adjusted EBITDA 2 Adjusted EBITDA margin			Baidu, Inc.
	Q3 2020 RMB 28,232 6,156 7,636 13,678 6,988 39.79 20.35 9,073 32%	Q2 2021 Q3 2021 RMB RMB US$ 31,350 31,921 4,954 3,463 2,308 358 5,653 4,708 731 (583) (16,559) (2,570) 5,359 5,090 790 (1.70) (48.18) (7.48) 15.41 14.66 2.28 7,295 5,962 925 23% 19% 19%

• 1 Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB6.4434 as of September 30, 2021, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader.

• 2 Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details).

2

(In millions, unaudited) Total revenues Operating income Operating income (non-GAAP) 2 Net income (loss) to Baidu Core Net income to Baidu Core (non-GAAP) 2 Adjusted EBITDA 2 Adjusted EBITDA margin			Baidu Core		QOQ 3% (20%) (10%) — (1%) (12%)
	Q3 2020 RMB 21,379 7,404 8,505 14,368 7,486 9,822 46%	Q2 2021 Q3 2021 RMB RMB US$ 24,041 24,661 3,827 4,619 3,718 577 6,467 5,823 904 172 (15,625) (2,425) 5,942 5,855 909 7,991 6,994 1,085 33% 28% 28%		YOY 15% (50%) (32%) — (22%) (29%)

Other Highlights

Corporate

• Q3 ’21 net loss includes a RMB18.9 billion non-cash, mark-to-market loss in long-term investments arising from quarterly fair-value adjustment.

• ESG:

• ✓ Baidu donated RMB90 million to help Henan province cope with its recent natural disaster.

• ✓ Xiaodu launched “visual assistance” to enable visually impaired voice control and ondemand screen-text reading for a smoother audio experience.

• ✓ In October, Baidu established a Data Management Committee, to consolidate its existing committees on data management, data privacy & protection and data security, to further improve its policies and oversight around data management.

AI Cloud

• Baidu releases end-to-end AI cloud solution, powered by Kunlun AI chip and PaddlePaddle deep learning framework, to help financial services firms digitize and automate their operational processes, enlisting leading customers like China Life and Bank of Jiangsu.

• Lijiang, a UNESCO Heritage Site with 800-year old bridges and waterways, is using Baidu smart-city cloud to keep the city safe and clean for visitors. Leveraging the digitalization of tourist areas, Baidu AI solution helps local authorities timely detect and address infractions, e.g., illegal parking and littering.

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• Tongxiang, Zhejiang (province) signed with Baidu to enable its manufacturing-based enterprises with Baidu AI solutions, allowing Baidu to further penetrate into industrial Internet.

• Baidu ACE smart transportation has been adopted by 24 cities, tripling year over year, based on contract amount over RMB10 million.

Intelligent Driving

• Apollo L4 has accumulated over 10 million test miles, up 189% year over year, and has received 411 autonomous driving permits, reflecting Apollo’s broad geographic coverage and wide-ranging test scenarios.

• Rides provided by Apollo Go doubled sequentially, which are available in Shanghai, Beijing, Guangzhou, Changsha and Cangzhou.

• WM Motor, a Chinese EV OEM, signed with Baidu to install Apollo Navigation Pilot (ANP) in its new W6 SUV, taking the total makes that have partnered with Apollo for self-driving and infotainment solutions to 31.

Other Growth Initiatives

• Xiaodu ranks No.1 in smart display shipments globally and smart speaker shipments in China for Q2 2021, according to Strategy Analytics, IDC and Canalys.

• In August 2021, Xiaodu completed Series B financing at a valuation of US$5.1 billion with Baidu retaining super-majority shareholding.

Mobile Ecosystem

• In September, Baidu App’s MAUs reached 607 million, up 12% year over year, and daily logged in users reached an all-time high of 79%, reflecting positive user experience.

• Managed Page reached 43% of Baidu Core Q3 online marketing revenue, through continuous marketing-cloud enhancements, such as expanded e-commerce features and tools.

• The open nature of Baidu’s Internet infrastructure is leading to top smartphone makers to select Baidu’s smart mini program as the landing page for their browser search.

iQIYI

• iQIYI subscribers reached 104 million in September 2021, creating a strong foundation to provide innovative, self-developed blockbusters.

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Third Quarter 2021 Financial Results

Total revenues were RMB31.9 billion ($4.95 billion), increasing 13% year over year.

• Revenue from Baidu Core was RMB24.7 billion ($3.83 billion), increasing 15% year over year; online marketing revenue was RMB19.5 billion ($3.02 billion), up 6% year over year, and non-online marketing revenue was RMB5.2 billion ($806 million), up 76% year over year, driven by cloud and other AI-powered businesses.

• Revenue from iQIYI was RMB7.6 billion ($1.18 billion), increasing 6% year over year.

Cost of revenues was RMB16.1 billion ($2.50 billion), increasing 26% year over year, primarily due to an increase in traffic acquisition costs, content costs and cost of goods sold related to new AI business.

Selling, general and administrative expenses were RMB7.3 billion ($1.14 billion), increasing 56% year over year, primarily due to an increase in channel spending, promotional marketing, personnel-related expenses and contingent loss pertaining to legal proceeding involving former advertising agency.

Research and development expense was RMB6.2 billion ($957 million), increasing 35% year over year, primarily related to personnel-related expenses.

Operating income was RMB2.3 billion ($358 million). Baidu Core operating income was RMB3.7 billion ($577 million), and Baidu Core operating margin was 15%. Non-GAAP operating income was RMB4.7 billion ($731 million). Baidu Core non-GAAP operating income was RMB5.8 billion ($904 million), and Baidu Core non-GAAP operating margin was 24%.

Total other loss, net was RMB21.5 billion ($3.34 billion), which included a RMB18.9 billion noncash, mark-to-market loss in long-term investments. Such quarterly fair-value adjustment may result in further net income volatility in the future.

Income tax benefit was RMB1.8 billion ($286 million), compared to an income tax expense of RMB1.6 billion for Q3 ’20, primarily due to an increase in deferred tax benefit recognized on fair value loss of long-term investments and deduction on certain expenses that were previously considered non-deductible.

Net loss attributable to Baidu was RMB16.6 billion ($2.57 billion), and diluted loss per ADS was RMB48.18 ($7.48). Net loss attributable to Baidu Core was RMB15.6 billion ($2.43 billion). Non-GAAP net income attributable to Baidu was RMB5.1 billion ($790 million), and non-GAAP diluted earnings per ADS was RMB14.66 ($2.28). Non-GAAP net income attributable to Baidu Core was RMB5.9 billion ($909 million).

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Adjusted EBITDA was RMB6.0 billion ($925 million). Adjusted EBITDA for Baidu Core was RMB7.0 billion ($1.09 billion) and adjusted EBITDA margin for Baidu Core was 28%.

As of September 30, 2021, cash, cash equivalents, restricted cash and short-term investments were RMB194.6 billion ($30.20 billion), and cash, cash equivalents, restricted cash and shortterm investments excluding iQIYI were RMB183.6 billion ($28.49 billion). Free cash flow was RMB691 million ($108 million), and free cash flow excluding iQIYI was RMB2.9 billion ($449 million).

Financial Guidance

For the fourth quarter of 2021, Baidu expects revenues to be between RMB31.0 billion ($4.81 billion) and RMB34.0 billion ($5.27 billion), representing a growth rate of 2% to 12% year over year, which assumes that Baidu Core revenue will grow between 5% and 16% year over year.

The COVID-19 situation in China is evolving and business visibility is limited. The above forecast reflects Baidu’s current and preliminary view, which is subject to substantial uncertainties.

Conference Call Information

Baidu’s management will hold an earnings conference call at 7:30 AM on November 17, 2021, U.S. Eastern Time (8:30 PM on November 17, 2021, Beijing Time).

Please register in advance of the conference call using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID by email.

For pre-registration, please click http://apac.directeventreg.com/registration/event/8590343. It will automatically direct you to the registration page of “Baidu Q3 2021 Earnings Conference Call”, where you may fill in your details for RSVP. If it requires you to enter a participant conference ID, please enter “8590343”.

In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), Direct Event passcode and unique registrant ID) provided in the confirmation email that you have received following your pre-registration.

Additionally, a live and archived webcast of this conference call will be available at http://ir.baidu.com.

A replay of the conference call may be accessed by phone at the following number until November 24 2021:

International: +61 2 8199 0299 Conference ID: 8590343

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About Baidu

Founded in 2000, Baidu’s mission is to make the complicated world simpler through technology. Baidu is a leading AI company with strong Internet foundation, trading on the NASDAQ under “BIDU” and HKEX under “9888”. One Baidu ADS represents eight Class A ordinary shares.

Contacts

Investors Relations, Baidu, Inc. Tel: +86-10-5992-8888 Email: ir@baidu.com

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forwardlooking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the outlook for the fourth quarter of 2021, quotations from management in this announcement, as well as Baidu’s and other parties’ strategic and operational plans, contain forward-looking statements. Baidu may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in announcements made on the website of The Stock Exchange of Hong Kong Limited (the “ Hong Kong Stock Exchange ”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Baidu’s beliefs and expectations, are forwardlooking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forwardlooking statement, including but not limited to the following: Baidu’s growth strategies; its future business development, including development of new products and services; its ability to attract and retain users and customers; competition in the Chinese Internet search and newsfeed market; competition for online marketing customers; changes in the Company’s revenues and certain cost or expense items as a percentage of its revenues; the outcome of ongoing, or any future, litigation or arbitration, including those relating to intellectual property rights; the expected growth of the Chinese-language Internet search and newsfeed market and the number of Internet and broadband users in China; Chinese governmental policies relating to the Internet and Internet search providers, and general economic conditions in China and elsewhere. Further information regarding these and other risks is included in the Company’s annual report on Form 20-F and other documents filed with the Securities and Exchange Commission, and announcements on the website of the Hong Kong Stock Exchange. Baidu does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of the press release, and Baidu undertakes no duty to update such information, except as required under applicable law.

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Non-GAAP Financial Measures

To supplement Baidu’s consolidated financial results presented in accordance with GAAP, Baidu uses the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) attributable to Baidu, non-GAAP net margin, non-GAAP diluted earnings per ADS, adjusted EBITDA, adjusted EBITDA margin and free cash flow. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Baidu believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding certain items that may not be indicative of its recurring core business operating results, such as operating performance excluding non-cash charges or non-operating in nature. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to Baidu’s historical performance and liquidity. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Company’s results of operations. These nonGAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data.

Non-GAAP operating income represents operating income excluding share-based compensation expenses, amortization and impairment of intangible assets resulting from business combinations and contingent loss pertaining to legal proceeding in relation to former advertising agency.

Non-GAAP net income attributable to Baidu represents net income attributable to Baidu excluding share-based compensation expenses, amortization and impairment of intangible assets resulting from business combinations, contingent loss pertaining to legal proceeding in relation to former advertising agency, disposal gain or loss, impairment of long-term investments, fair value change of long-term investments, charitable donation from Baidu, adjusted for related income tax effects. Baidu’s share of equity method investments for these non-GAAP reconciling items, amortization and impairment of intangible assets not on the investees’ books, accretion of their redeemable noncontrolling interests, and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per shares, adjusted for related income tax effects, are also excluded.

Non-GAAP diluted earnings per ADS represents diluted earnings per ADS calculated by dividing non-GAAP net income attributable to Baidu, which is adjusted for accretion for the redeemable non-controlling interests, by the weighted average number of ordinary shares expressed in ADS. Adjusted EBITDA represents operating income excluding depreciation, amortization and impairment of intangible assets resulting from business combinations, contingent loss pertaining to legal proceeding in relation to former advertising agency, and share-based compensation expenses.

For more information on non-GAAP financial measures, please see the tables captioned “Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measures.”

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Baidu, Inc. Condensed Consolidated Statements of Income (Loss)

(In millions except for per share (or ADS) information, unaudited)

Revenues: Online marketing services Others Total revenues Costs and expenses: Cost of revenues (1) Selling, general and administrative (1) Research and development (1) Total costs and expenses Operating income Other income (loss): Interest income Interest expense Foreign exchange (loss) income, net Share of loss from equity method investments Others, net Total other income (loss), net Income (loss) before income taxes Income tax expense (benefit) Net income (loss) Net loss attributable to noncontrolling interests Net income (loss) attributable to Baidu		Three Months Ended	Three Months Ended	September 30, 2021 US$ (2) 3,267 1,687 4,954 2,503 1,136 957 4,596 358 227 (137) 1 (1) (3,426) (3,336) (2,978) (286) (2,692) (122) (2,570)
	September 30, 2020 RMB 20,201 8,031 28,232 12,815 4,700 4,561 22,076 6,156 1,297 (755) (271) (546) 9,169 8,894 15,050 1,618 13,432 (246) 13,678	June 30, 2021 RMB 20,828 10,522 31,350 15,897 5,707 6,283 27,887 3,463 1,342 (845) (36) (4) (2,887) (2,430) 1,033 2,197 (1,164) (581) (583)	September 30, 2021 RMB 21,050 10,871 31,921 16,126 7,320 6,167 29,613 2,308 1,462 (880) 7 (4) (22,079) (21,494) (19,186) (1,839) (17,347) (788) (16,559)

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September 30, 2020 RMB Earnings (loss) per ADS (1 ADS representing 8 Class A ordinary shares): — Basic 40.21 — Diluted 39.79 Earnings (loss) per share for Class A and Class B ordinary shares: — Basic 5.03 — Diluted 4.97 Weighted average number of Class A and Class B ordinary shares outstanding (in millions): — Basic 2,719 — Diluted 2,747 (1) Includes share-based compensation expenses as follows: Cost of revenues 81 Selling, general and administrative 403 Research and development 930 Total share-based compensation expenses 1,414		Three Months Ended	Three Months Ended	September 30, 2021 US$ (2) (7.48) (7.48) (0.93) (0.93) 2,778 2,778 11 55 144 210
		June 30, 2021 RMB (1.70) (1.70) (0.21) (0.21) 2,782 2,782 112 483 1,521 2,116	September 30, 2021 RMB (48.18) (48.18) (6.02) (6.02) 2,778 2,778 74 353 921 1,348

(2) All translations from RMB to U.S. dollars are made at a rate of RMB6.4434 to US$1.00, the exchange rate in effect as of September 30, 2021 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

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Baidu, Inc. Condensed Consolidated Balance Sheets

(In millions, unaudited)

ASSETS Current assets: Cash and cash equivalents Restricted cash Short-term investments, net Accounts receivable, net Amounts due from related parties Other current assets, net Total current assets Non-current assets: Fixed assets, net Licensed copyrights, net Produced content, net Intangible assets, net Goodwill Long-term investments, net Amounts due from related parties Deferred tax assets, net Operating lease right-of-use assets Other non-current assets Total non-current assets Total assets	December 31, September 30, September 30, 2020 2021 2021 RMB RMB US$ 35,782 40,701 6,317 758 10,773 1,672 126,402 143,127 22,213 8,668 8,704 1,351 726 947 147 11,006 11,142 1,728 183,342 215,394 33,428 17,508 20,722 3,216 6,435 7,293 1,132 6,556 9,598 1,490 2,022 1,769 275 22,248 22,605 3,508 76,233 74,012 11,486 3,438 3,485 541 1,674 2,567 398 9,804 10,491 1,628 3,448 16,420 2,547 149,366 168,962 26,221 332,708 384,356 59,649	December 31, September 30, September 30, 2020 2021 2021 RMB RMB US$ 35,782 40,701 6,317 758 10,773 1,672 126,402 143,127 22,213 8,668 8,704 1,351 726 947 147 11,006 11,142 1,728 183,342 215,394 33,428 17,508 20,722 3,216 6,435 7,293 1,132 6,556 9,598 1,490 2,022 1,769 275 22,248 22,605 3,508 76,233 74,012 11,486 3,438 3,485 541 1,674 2,567 398 9,804 10,491 1,628 3,448 16,420 2,547 149,366 168,962 26,221 332,708 384,356 59,649
		US$ 6,317 1,672 22,213 1,351 147 1,728
		33,428
		3,216 1,132 1,490 275 3,508 11,486 541 398 1,628 2,547
		26,221
		59,649

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LIABILITIES AND EQUITY Current liabilities: Short-term loans Accounts payable and accrued liabilities Customer deposits and deferred revenue Deferred income Long-term loans, current portion Convertible senior notes, current portion Notes payable, current portion Amounts due to related parties Operating lease liabilities Total current liabilities Non-current liabilities: Deferred income Deferred revenue Amounts due to related parties Long-term loans Notes payable Convertible senior notes Deferred tax liabilities Operating lease liabilities Other non-current liabilities Total non-current liabilities Total liabilities Redeemable noncontrolling interests Equity Total Baidu shareholders’ equity Noncontrolling interests Total equity Total liabilities, redeemable noncontrolling interests, and equity	December 31, September 30, September 30, 2020 2021 2021 RMB RMB US$ 3,016 3,990 619 36,716 40,461 6,279 12,626 13,525 2,099 158 99 15 7,427 659 102 4,752 4,808 746 — 5,793 899 1,324 1,824 283 2,366 2,756 428 68,385 73,915 11,470 97 119 18 686 197 31 3,543 3,318 515 — 12,768 1,982 48,408 48,438 7,517 11,927 12,671 1,967 3,067 3,377 524 4,693 4,900 760 59 92 14 72,480 85,880 13,328 140,865 159,795 24,798 3,102 7,916 1,229 182,696 211,378 32,805 6,045 5,267 817 188,741 216,645 33,622 332,708 384,356 59,649	December 31, September 30, September 30, 2020 2021 2021 RMB RMB US$ 3,016 3,990 619 36,716 40,461 6,279 12,626 13,525 2,099 158 99 15 7,427 659 102 4,752 4,808 746 — 5,793 899 1,324 1,824 283 2,366 2,756 428 68,385 73,915 11,470 97 119 18 686 197 31 3,543 3,318 515 — 12,768 1,982 48,408 48,438 7,517 11,927 12,671 1,967 3,067 3,377 524 4,693 4,900 760 59 92 14 72,480 85,880 13,328 140,865 159,795 24,798 3,102 7,916 1,229 182,696 211,378 32,805 6,045 5,267 817 188,741 216,645 33,622 332,708 384,356 59,649
		US$ 619 6,279 2,099 15 102 746 899 283 428
		11,470
		18 31 515 1,982 7,517 1,967 524 760 14
		13,328
		24,798
		1,229 32,805 817
		33,622
		59,649

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Baidu, Inc. Selected Information

(In millions, unaudited)

Total revenues YOY QOQ Costs and expenses: Cost of revenues (1) Selling, general and administrative (1) Research and development (1) Total costs and expenses YOY Cost of revenues Selling, general and administrative Research and development Cost and expenses Operating income (loss) YOY QOQ Operating margin Add: total other income (loss), net Less: income tax expense (benefit) Less: net income (loss) attributable to NCI Net income (loss) attributable to Baidu	Three months ended September 30, 2020 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 21,379 7,188 (335) 28,232 6,728 6,363 (276) 12,815 3,354 1,364 (18) 4,700 3,893 671 (3) 4,561 13,975 8,398 (297) 22,076 7,404 (1,210) (38) 6,156 35% (17%) 22% 8,827 67 8,894 1,599 19 1,618 264 13 (523) (3) (246) 14,368 (1,175) 485 13,678	Three months ended September 30, 2020 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 21,379 7,188 (335) 28,232 6,728 6,363 (276) 12,815 3,354 1,364 (18) 4,700 3,893 671 (3) 4,561 13,975 8,398 (297) 22,076 7,404 (1,210) (38) 6,156 35% (17%) 22% 8,827 67 8,894 1,599 19 1,618 264 13 (523) (3) (246) 14,368 (1,175) 485 13,678	Three months ended September 30, 2020 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 21,379 7,188 (335) 28,232 6,728 6,363 (276) 12,815 3,354 1,364 (18) 4,700 3,893 671 (3) 4,561 13,975 8,398 (297) 22,076 7,404 (1,210) (38) 6,156 35% (17%) 22% 8,827 67 8,894 1,599 19 1,618 264 13 (523) (3) (246) 14,368 (1,175) 485 13,678	Three months ended June 30, 2021 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 24,041 7,608 (299) 31,350 9,289 6,869 (261) 15,897 4,526 1,185 (4) 5,707 5,607 676 — 6,283 19,422 8,730 (265) 27,887 4,619 (1,122) (34) 3,463 19% (15%) 11% (2,204) (226) — (2,430) 2,167 30 — 2,197 76 19 (676) (3) (581) 172 (1,397) 642 **(583) **	Three months ended June 30, 2021 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 24,041 7,608 (299) 31,350 9,289 6,869 (261) 15,897 4,526 1,185 (4) 5,707 5,607 676 — 6,283 19,422 8,730 (265) 27,887 4,619 (1,122) (34) 3,463 19% (15%) 11% (2,204) (226) — (2,430) 2,167 30 — 2,197 76 19 (676) (3) (581) 172 (1,397) 642 **(583) **	Three months ended June 30, 2021 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 24,041 7,608 (299) 31,350 9,289 6,869 (261) 15,897 4,526 1,185 (4) 5,707 5,607 676 — 6,283 19,422 8,730 (265) 27,887 4,619 (1,122) (34) 3,463 19% (15%) 11% (2,204) (226) — (2,430) 2,167 30 — 2,197 76 19 (676) (3) (581) 172 (1,397) 642 **(583) **	Three months ended September 30, 2021 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 24,661 7,589 (329) 31,921 15% 6% 13% 3% (0%) 2% 9,370 7,028 (272) 16,126 6,089 1,246 (15) 7,320 5,484 683 — 6,167 20,943 8,957 (287) 29,613 39% 10% 26% 82% (9%) 56% 41% 2% 35% 50% 7% 34% 3,718 (1,368) (42) 2,308 (50%) 13% (63%) (20%) 22% (33%) 15% (18%) 7% (21,163) (331) — (21,494) (1,848) 9 — (1,839) 28 22 (838) (3) (788) (15,625) (1,730) 796 (16,559)	Three months ended September 30, 2021 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 24,661 7,589 (329) 31,921 15% 6% 13% 3% (0%) 2% 9,370 7,028 (272) 16,126 6,089 1,246 (15) 7,320 5,484 683 — 6,167 20,943 8,957 (287) 29,613 39% 10% 26% 82% (9%) 56% 41% 2% 35% 50% 7% 34% 3,718 (1,368) (42) 2,308 (50%) 13% (63%) (20%) 22% (33%) 15% (18%) 7% (21,163) (331) — (21,494) (1,848) 9 — (1,839) 28 22 (838) (3) (788) (15,625) (1,730) 796 (16,559)	Three months ended September 30, 2021 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 24,661 7,589 (329) 31,921 15% 6% 13% 3% (0%) 2% 9,370 7,028 (272) 16,126 6,089 1,246 (15) 7,320 5,484 683 — 6,167 20,943 8,957 (287) 29,613 39% 10% 26% 82% (9%) 56% 41% 2% 35% 50% 7% 34% 3,718 (1,368) (42) 2,308 (50%) 13% (63%) (20%) 22% (33%) 15% (18%) 7% (21,163) (331) — (21,494) (1,848) 9 — (1,839) 28 22 (838) (3) (788) (15,625) (1,730) 796 (16,559)	Three months ended September 30, 2021 (US$) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 3,827 1,178 (51) 4,954 1,454 1,091 (42) 2,503 945 193 (2) 1,136 851 106 — 957 3,250 1,390 (44) 4,596 577 (212) (7) 358 (3,285) (51) — (3,336) (287) 1 — (286) 4 4 (130) (3) (122) (2,425) (268) 123 (2,570)	Three months ended September 30, 2021 (US$) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 3,827 1,178 (51) 4,954 1,454 1,091 (42) 2,503 945 193 (2) 1,136 851 106 — 957 3,250 1,390 (44) 4,596 577 (212) (7) 358 (3,285) (51) — (3,336) (287) 1 — (286) 4 4 (130) (3) (122) (2,425) (268) 123 (2,570)	Three months ended September 30, 2021 (US$) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 3,827 1,178 (51) 4,954 1,454 1,091 (42) 2,503 945 193 (2) 1,136 851 106 — 957 3,250 1,390 (44) 4,596 577 (212) (7) 358 (3,285) (51) — (3,336) (287) 1 — (286) 4 4 (130) (3) (122) (2,425) (268) 123 (2,570)	Three months ended September 30, 2021 (US$) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 3,827 1,178 (51) 4,954 1,454 1,091 (42) 2,503 945 193 (2) 1,136 851 106 — 957 3,250 1,390 (44) 4,596 577 (212) (7) 358 (3,285) (51) — (3,336) (287) 1 — (286) 4 4 (130) (3) (122) (2,425) (268) 123 (2,570)
	Baidu Core 21,379 6,728 3,354 3,893 13,975 7,404 35% 8,827 1,599 264 14,368	iQIYI 7,188 6,363 1,364 671 8,398 (1,210) (17%) 67 19 13 (1,175)	Elim & adj (2) (335) (276) (18) (3) (297) (38) (523) (3) 485	Baidu Core 24,041 9,289 4,526 5,607 19,422 4,619 19% (2,204) 2,167 76 172	iQIYI 7,608 6,869 1,185 676 8,730 (1,122) (15%) (226) 30 19 (1,397)	Elim & adj (2) (299) (261) (4) — (265) (34) — — (676) (3) 642	Baidu Core 24,661 15% 3% 9,370 6,089 5,484 20,943 39% 82% 41% 50% 3,718 (50%) (20%) 15% (21,163) (1,848) 28 (15,625)	iQIYI 7,589 6% (0%) 7,028 1,246 683 8,957 10% (9%) 2% 7% (1,368) 13% 22% (18%) (331) 9 22 (1,730)	Elim & adj (2) (329) (272) (15) — (287) (42) — — (838) (3) 796	Baidu Core 3,827 1,454 945 851 3,250 577 (3,285) (287) 4 (2,425)	iQIYI 1,178 1,091 193 106 1,390 (212) (51) 1 4 (268)	Elim & adj (2) (51) (42) (2) — (44) (7) — — (130) (3) 123
													4,596
													358 (3,336) (286) (122)
													(2,570)

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Three months ended September 30, 2020 (RMB) Three months ended June 30, 2021 (RMB) Three months ended September 30, 2021 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. Baidu Core iQIYI Elim & adj (2) Baidu, Inc. Baidu Core iQIYI Elim & adj (2) Baidu, Inc. YOY — 47% — QOQ — 24% 2,740% Net margin 67% (16%) 48% 1% (18%) (2%) (63%) (23%) (52%) Non-GAAP financial measures: Operating income (loss) (non-GAAP) 8,505 (831) 7,636 6,467 (780) 5,653 5,823 (1,073) 4,708 YOY (32%) 29% (38%) QOQ (10%) 38% (17%) Operating margin (non-GAAP) 40% (12%) 27% 27% (10%) 18% 24% (14%) 15% Net income (loss) attributable to Baidu (non-GAAP) 7,486 (830) 6,988 5,942 (1,065) 5,359 5,855 (1,400) 5,090 YOY (22%) 69% (27%) QOQ (1%) 31% (5%) Net margin (non-GAAP) 35% (12%) 25% 25% (14%) 17% 24% (18%) 16% Adjusted EBITDA 9,822 (711) 9,073 7,991 (662) 7,295 6,994 (990) 5,962 YOY (29%) 39% (34%) QOQ (12%) 50% (18%) Adjusted EBITDA margin 46% (10%) 32% 33% (9%) 23% 28% (13%) 19% (1) Includes share-based compensation as follows: Cost of revenues 29 52 81 69 43 112 34 40 74 Selling, general and administrative 187 216 403 274 209 483 196 157 353 Research and development 846 84 930 1,443 78 1,521 837 84 921 Total share-based compensation 1,062 352 1,414 1,786 330 2,116 1,067 281 1,348	Three months ended September 30, 2020 (RMB) Three months ended June 30, 2021 (RMB) Three months ended September 30, 2021 (RMB) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. Baidu Core iQIYI Elim & adj (2) Baidu, Inc. Baidu Core iQIYI Elim & adj (2) Baidu, Inc. YOY — 47% — QOQ — 24% 2,740% Net margin 67% (16%) 48% 1% (18%) (2%) (63%) (23%) (52%) Non-GAAP financial measures: Operating income (loss) (non-GAAP) 8,505 (831) 7,636 6,467 (780) 5,653 5,823 (1,073) 4,708 YOY (32%) 29% (38%) QOQ (10%) 38% (17%) Operating margin (non-GAAP) 40% (12%) 27% 27% (10%) 18% 24% (14%) 15% Net income (loss) attributable to Baidu (non-GAAP) 7,486 (830) 6,988 5,942 (1,065) 5,359 5,855 (1,400) 5,090 YOY (22%) 69% (27%) QOQ (1%) 31% (5%) Net margin (non-GAAP) 35% (12%) 25% 25% (14%) 17% 24% (18%) 16% Adjusted EBITDA 9,822 (711) 9,073 7,991 (662) 7,295 6,994 (990) 5,962 YOY (29%) 39% (34%) QOQ (12%) 50% (18%) Adjusted EBITDA margin 46% (10%) 32% 33% (9%) 23% 28% (13%) 19% (1) Includes share-based compensation as follows: Cost of revenues 29 52 81 69 43 112 34 40 74 Selling, general and administrative 187 216 403 274 209 483 196 157 353 Research and development 846 84 930 1,443 78 1,521 837 84 921 Total share-based compensation 1,062 352 1,414 1,786 330 2,116 1,067 281 1,348		Three months ended September 30, 2021 (US$) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 904 (166) 731 909 (217) 790 1,085 (153) 925 5 6 11 30 25 55 131 13 144 166 44 210	Three months ended September 30, 2021 (US$) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 904 (166) 731 909 (217) 790 1,085 (153) 925 5 6 11 30 25 55 131 13 144 166 44 210	Three months ended September 30, 2021 (US$) Baidu Core iQIYI Elim & adj (2) Baidu, Inc. 904 (166) 731 909 (217) 790 1,085 (153) 925 5 6 11 30 25 55 131 13 144 166 44 210
			Baidu Core 904 909 1,085 5 30 131 166	iQIYI Elim & adj (2) (166) (217) (153) 6 25 13 44
	1,348				210

(2) Relates to intersegment eliminations and adjustments

• (3) Relates to the net loss attributable to iQIYI noncontrolling interests

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Baidu, Inc. Condensed Consolidated Statements of Cash Flows

(In millions, unaudited)

Net cash provided by (used in) operating activities Net cash (used in) provided by investing activities Net cash (used in) provided by financing activities Effect of exchange rate changes on cash, cash equivalents and restricted cash Net (decrease) increase in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash At beginning of period At end of period Net cash provided by (used in) operating activities Less: Capital expenditures Free cash flow	Three months ended September 30, 2020 (RMB) Three months ended June 30, 2021 (RMB) Three months ended September 30, 2021 (RMB) Baidu excl. iQIYI iQIYI Baidu, Inc. Baidu excl. iQIYI iQIYI Baidu, Inc. Baidu excl. iQIYI iQIYI Baidu, Inc. 9,716 (1,929) 7,787 9,362 (1,426) 7,936 5,436 (2,081) 3,355 (6,576) 343 (6,233) (12,220) 58 (12,162) (15,857) 1,885 (13,972) (4,387) 238 (4,149) 5,256 801 6,057 7,744 867 8,611 (77) (113) (190) (342) (92) (434) (47) (21) (68) (1,324) (1,461) (2,785) 2,056 (659) 1,397 (2,724) 650 (2,074) 16,597 5,280 21,877 44,756 7,395 52,151 46,812 6,736 53,548 15,273 3,819 19,092 46,812 6,736 53,548 44,088 7,386 51,474 9,716 (1,929) 7,787 9,362 (1,426) 7,936 5,436 (2,081) 3,355 (1,417) (90) (1,507) (2,435) (61) (2,496) (2,548) (116) (2,664) 8,299 (2,019) 6,280 6,927 (1,487) 5,440 2,888 (2,197) 691	Three months ended September 30, 2021 (US$) Baidu excl. iQIYI iQIYI Baidu, Inc. 844 (323) 521 (2,461) 293 (2,168) 1,201 135 1,336 (8) (3) (11) (424) 102 (322) 7,266 1,045 8,311 6,842 1,147 7,989 844 (323) 521 (395) (18) (413) 449 (341) 108

Note: Baidu excl. iQIYI represents Baidu, Inc. minus iQIYI’s consolidated cash flows.

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Baidu, Inc. Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures

(In millions except for per ADS information, unaudited)

Three months ended September 30, 2020 (RMB) Baidu Core iQIYI Baidu, Inc. Operating income (loss) 7,404 (1,210) 6,156 Add: Share-based compensation expenses 1,062 352 1,414 Add: Amortization and impairment of intangible assets (1) 39 27 66 Add: Contingent loss (5) — — — Operating income (loss) (non-GAAP) 8,505 (831) 7,636 Add: Depreciation of fixed assets 1,317 120 1,437 Adjusted EBITDA 9,822 (711) 9,073 Net income (loss) attributable to Baidu 14,368 (1,175) 13,678 Add: Share-based compensation expenses 1,056 352 1,252 Add: Amortization and impairment of intangible assets (1) 38 27 55 Add: Disposal loss (gain) (5) — (5) Add: Impairment of long-term investments — — — Add: Fair value (gain) loss of long-term investments (8,855) (39) (8,880) Add: Reconciling items on equity method investments (2) 556 3 558 Add: Charitable donation from Baidu (4) — — — Add: Contingent loss (5) — — — Add: Tax effects on non-GAAP adjustments (3) 328 2 330 Net income (loss) attributable to Baidu (non-GAAP) 7,486 (830) 6,988	Three months ended June 30, 2021 (RMB) Three months ended September 30, 2021 (RMB) Baidu Core iQIYI Baidu, Inc. Baidu Core iQIYI Baidu, Inc. 4,619 (1,122) 3,463 3,718 (1,368) 2,308 1,786 330 2,116 1,067 281 1,348 62 12 74 62 14 76 — — — 976 — 976 6,467 (780) 5,653 5,823 (1,073) 4,708 1,524 118 1,642 1,171 83 1,254 7,991 (662) 7,295 6,994 (990) 5,962 172 (1,397) (583) (15,625) (1,730) (16,559) 1,777 330 1,947 1,086 281 1,231 55 12 62 55 14 63 — (45) (28) — — — 205 2 206 3,187 29 3,202 3,180 (9) 3,175 18,970 8 18,974 190 32 207 36 3 38 — — — 90 — 90 — — — 976 — 976 363 10 373 (2,920) (5) (2,925) 5,942 (1,065) 5,359 5,855 (1,400) 5,090	Three months ended June 30, 2021 (RMB) Three months ended September 30, 2021 (RMB) Baidu Core iQIYI Baidu, Inc. Baidu Core iQIYI Baidu, Inc. 4,619 (1,122) 3,463 3,718 (1,368) 2,308 1,786 330 2,116 1,067 281 1,348 62 12 74 62 14 76 — — — 976 — 976 6,467 (780) 5,653 5,823 (1,073) 4,708 1,524 118 1,642 1,171 83 1,254 7,991 (662) 7,295 6,994 (990) 5,962 172 (1,397) (583) (15,625) (1,730) (16,559) 1,777 330 1,947 1,086 281 1,231 55 12 62 55 14 63 — (45) (28) — — — 205 2 206 3,187 29 3,202 3,180 (9) 3,175 18,970 8 18,974 190 32 207 36 3 38 — — — 90 — 90 — — — 976 — 976 363 10 373 (2,920) (5) (2,925) 5,942 (1,065) 5,359 5,855 (1,400) 5,090	Three months ended September 30, 2021 (US$) Baidu Core iQIYI Baidu, Inc. 577 (212) 358 166 44 210 10 2 12 151 — 151 904 (166) 731 181 13 194 1,085 (153) 925 (2,425) (268) (2,570) 169 44 191 9 2 10 — — — 494 5 497 2,944 1 2,945 6 — 6 14 — 14 151 — 151 (453) (1) (454) 909 (217) 790	Three months ended September 30, 2021 (US$) Baidu Core iQIYI Baidu, Inc. 577 (212) 358 166 44 210 10 2 12 151 — 151 904 (166) 731 181 13 194 1,085 (153) 925 (2,425) (268) (2,570) 169 44 191 9 2 10 — — — 494 5 497 2,944 1 2,945 6 — 6 14 — 14 151 — 151 (453) (1) (454) 909 (217) 790
	Baidu Core 4,619 1,786 62 — 6,467 1,524 7,991 172 1,777 55 — 205 3,180 190 — — 363 5,942	iQIYI (1,122) 330 12 — (780) 118 (662) (1,397) 330 12 (45) 2 (9) 32 — — 10 (1,065)	Baidu Core 577 166 10 151 904 181 1,085 (2,425) 169 9 — 494 2,944 6 14 151 (453) 909	iQIYI (212) 44 2 — (166) 13 (153) (268) 44 2 — 5 1 — — — (1) (217)

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Diluted earnings (loss) per ADS Add: Accretion of the redeemable noncontrolling interests Add: Non-GAAP adjustments to earnings per ADS Diluted earnings per ADS (non-GAAP)	Three months ended September 30, 2020 (RMB) Baidu Core iQIYI Baidu, Inc. 39.79 0.04 (19.48) 20.35	Three months ended June 30, 2021 (RMB) Baidu Core iQIYI Baidu, Inc. (1.70) 0.02 17.09 15.41	Three months ended September 30, 2021 (RMB) Baidu Core iQIYI Baidu, Inc. (48.18) 0.49 62.35 14.66	Three months ended September 30, 2021 (US$) Baidu Core iQIYI Baidu, Inc. (7.48) 0.08 9.68 2.28
	Baidu Core iQIYI	Baidu Core iQIYI	Baidu Core iQIYI	Baidu Core iQIYI

• (1) This represents amortization and impairment of intangible assets resulting from business combinations.

• (2) This represents Baidu’s share of equity method investments for other non-GAAP reconciling items, amortization and impairment of intangible assets not on the investee’s books, accretion of their redeemable noncontrolling interests, and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per shares.

• (3) Tax impact of non-GAAP adjustments is separately presented from 2020Q4, with comparative periods retrospectively adjusted.

• (4) This represents non-recurring charitable donation to discrete events.

• (5) This represents contingent loss pertaining to legal proceeding involving former advertising agency.

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