BEIJING, China, Feb. 13 /Xinhua-PRNewswire/ -- Baidu.com, Inc.
(NASDAQ: BIDU), the leading Chinese language Internet search
provider, today announced its unaudited financial results for the
fourth quarter and fiscal year ended December 31, 2007(1). (Logo:
http://www.newscom.com/cgi-bin/prnh/20041011/BAIDULOGO ) Fourth
Quarter and Fiscal Year 2007 Highlights -- Total revenues in the
fourth quarter 2007 increased to RMB571.1 million ($78.3 million),
representing a 110.5% increase from the corresponding period in
2006. -- Total revenues in fiscal year 2007 increased to RMB1,744.4
million ($239.1 million), representing a 108.2% increase from 2006.
-- Net income in the fourth quarter 2007 increased to RMB219.8
million ($30.1 million), representing a 79.0% increase from the
corresponding period in 2006. Diluted earnings per share ("EPS")
for the fourth quarter 2007 was RMB6.32 ($0.87); diluted EPS
excluding share-based compensation expenses (non-GAAP) for the
fourth quarter of 2007 was RMB6.70 ($0.92). Costs and expenses
related to Baidu's Japan operations for the fourth quarter of 2007
were RMB25.2 million ($3.5 million), which reduced diluted EPS by
RMB0.73 ($0.10). -- Net income in fiscal year 2007 increased to
RMB629.0 million ($86.2 million), representing a 108.4% increase
from 2006. Diluted EPS for 2007 was RMB18.11 ($2.48); diluted EPS
excluding share-based compensation expenses (non-GAAP) for 2007 was
RMB19.26 ($2.64). Costs and expenses related to Baidu's Japan
operations for 2007 were RMB73.4 million ($10.1 million), which
reduced diluted EPS by RMB2.11 ($0.29). -- The number of active
online marketing customers during the fourth quarter grew to over
155,000, an increase of 8.4% from the previous quarter. "We are
pleased to report another quarter of solid results, with healthy
earnings growth demonstrating the scalability of our business
model," said Robin Li, Baidu's chairman and CEO. "These results
were driven by our continued strategy of enhancing our product and
service offerings to ensure the best user experience. Our efforts
were rewarded by increases in our user traffic and expansion of our
market share, further strengthening our position as the leader in
Chinese language search." Mr. Li continued, "During the fourth
quarter, we achieved strong revenue growth alongside a steady
increase in our number of online marketing customers. As we
continue to focus on best serving our users and customers, and as
we consistently provide relevant new products and services while
exploring opportunities for value-adding partnerships, we expect to
continue taking advantage of growth opportunities to ensure
sustained strong growth over the long term." Fourth Quarter 2007
Results Baidu reported total revenues of RMB571.1 million ($78.3
million) for the fourth quarter ended December 31, 2007,
representing a 110.5% increase from the corresponding period in
2006. Online marketing revenues for the fourth quarter were
RMB569.6 million ($78.1 million), representing a 111.2% increase
from the fourth quarter 2006. The growth was driven by the
increases in both the number of active online marketing customers
and revenue per customer. Baidu had more than 155,000 active online
marketing customers in the fourth quarter of 2007, representing an
8.4% increase from the previous quarter and 43.5% from the
corresponding period in 2006. Revenue per online marketing customer
for the fourth quarter increased to approximately RMB3,700
($507.2), a sequential increase of 5.7% and an increase of 48.0%
from the corresponding period in 2006. Traffic acquisition cost
(TAC) as a component of cost of revenues was RMB72.3 million ($9.9
million), representing 12.7% of total revenues, compared to 8.7% in
the corresponding period in 2006. The increase in TAC as a
percentage of total revenues primarily reflects the continued
growth of revenue contribution from Baidu Union members. Bandwidth
costs as a component of cost of revenues was RMB35.9 million ($4.9
million), representing 6.3% of total revenues, compared to 4.7% in
the corresponding period in 2006. Depreciation costs as a component
of cost of revenues was RMB46.7 million ($6.4 million),
representing 8.2% of total revenues, compared to 6.2% in the
corresponding period in 2006. The increase in bandwidth and
depreciation costs as percentages of total revenues reflects
expansion of network capacity to support Baidu's long-term growth.
Selling, general and administrative expenses were RMB132.2 million
($18.1 million), representing an increase of 86.2% from the
corresponding period in 2006, primarily due to expansion of the
direct sales force. Research and development expenses were RMB46.5
million ($6.4 million), representing a 122.7% increase from the
corresponding period in 2006, primarily due to an increase in
research and development staff. Share-based compensation expenses,
which were allocated to related operating cost and expense line
items, increased in aggregate to RMB13.3 million ($1.8 million) in
the fourth quarter of 2007 from RMB7.4 million in the corresponding
period in 2006. The increase in share-based compensation expenses
primarily reflects increased options grants during the quarter.
Operating profit was RMB176.3 million ($24.2 million), representing
a 73.3% increase from the corresponding period in 2006. Operating
profit excluding share-based compensation expenses (non-GAAP) was
RMB189.6 million ($26.0 million) for the fourth quarter of 2007, a
73.8% increase from the corresponding period in 2006. Income tax
benefit was RMB18.6 million ($2.5 million), which was primarily
attributable to the receipt of a reinvestment incentive tax refund
of RMB21.2 million ($2.9 million) in the fourth quarter. Net income
was RMB219.8 million ($30.1 million), representing a 79.0% increase
from the corresponding period in 2006. Basic and diluted EPS for
the fourth quarter of 2007 amounted to RMB6.45 ($0.88) and RMB6.32
($0.87), respectively. Net income excluding share-based
compensation expenses (non-GAAP) was RMB233.1 million ($32.0
million), a 79.1% increase from the corresponding period in 2006.
Basic and diluted EPS excluding share-based compensation expenses
(non-GAAP) for the fourth quarter of 2007 were RMB6.84 ($0.94) and
RMB6.70 ($0.92), respectively. As of December 31, 2007, the Company
had cash, cash equivalents and short- term investments of RMB1.6
billion ($218.3 million). Net operating cash inflow and capital
expenditures for the fourth quarter of 2007 were RMB334.6 million
($45.9 million) and RMB166.2 million ($22.8 million), respectively.
Adjusted EBITDA (non-GAAP), which is defined in this announcement
as earnings before interest, taxes, depreciation, amortization,
other non- operating income and share-based compensation expenses,
were RMB247.0 million ($33.9 million) for the fourth quarter of
2007, representing an 87.0% increase from the corresponding period
in 2006. Fiscal Year 2007 Results Total revenues in 2007 were
RMB1,744.4 million ($239.1 million), representing a 108.2% increase
from 2006. Online marketing revenues in 2007 were RMB1,741.0
million ($238.7 million), representing a 110.1% increase from 2006.
The growth was driven by the increases in both the number of active
online marketing customers and revenue per customer. Baidu had more
than 214,000 active online marketing customers in 2007,
representing a 49.7% increase from 2006. Revenue per online
marketing customer for 2007 increased to RMB8,100 ($1,110.4), an
increase of 39.7% from 2006. Traffic acquisition costs in 2007 were
RMB204.7 million ($28.1 million), representing 11.7% of total
revenues compared to 9.0% in 2006. The increase in TAC as a
percentage of total revenues primarily reflects the continued
growth of revenue contribution from Baidu Union members. Selling,
general and administrative expenses in 2007 were RMB411.2 million
($56.4 million), representing an increase of 64.3% from the
previous year, mainly due to expansion of the direct sales force
and strengthening of the distributor network. Research and
development expenses totaled RMB140.7 million ($19.3 million) in
2007, representing a 77.6% increase from 2006 primarily due to an
increase in research and development staff. Operating profit in
2007 was RMB547.2 million ($75.0 million), a 108.1% increase from
2006. Operating profit excluding share-based compensation expenses
(non-GAAP) in 2007 was RMB587.0 million ($80.5 million),
representing an 88.7% increase from 2006. Net income in 2007 was
RMB629.0 million ($86.2 million), representing a 108.4% increase
from 2006. Basic and diluted EPS for 2007 amounted to RMB18.57
($2.55) and RMB18.11 ($2.48), respectively. Net income excluding
share-based compensation expenses (non-GAAP) in 2007 was RMB668.8
million ($91.7 million), reflecting a 93.6% increase from 2006.
Basic and diluted EPS excluding share-based compensation expenses
(non-GAAP) in 2007 were RMB19.75 ($2.71) and RMB19.26 ($2.64),
respectively. Full year net operating cash inflow and capital
expenditures were RMB979.5 million ($134.3 million) and RMB569.1
million ($78.0 million), respectively. Adjusted EBITDA (non-GAAP)
was RMB768.0 million ($105.3 million) in 2007, representing a
101.2% increase from 2006. Outlook for First Quarter 2008 Baidu
currently expects to generate total revenues in an amount ranging
from RMB533 million ($73.1 million) to RMB548 million ($75.1
million) for the first quarter of 2008, representing a 93% to 99%
increase from the corresponding period in 2007. This forecast
reflects Baidu's current and preliminary view, which is subject to
change. Conference Call Information Baidu's management will hold an
earnings conference call at 8 PM on February 13, 2008 U.S. Eastern
Standard Time (9 AM on February 14, 2008 Beijing/Hong Kong time).
Dial-in details for the conference call are as follows: US:
+1-617-614-3453 UK: +44-207-365-8426 Hong Kong: +852-3002-1672
Passcode for all regions: 47462262 A replay of the conference call
may be accessed by phone at the following number until 10 PM on
February 20, 2008 U.S. Eastern Standard Time: International:
+1-617-801-6888 Passcode: 56506980 Additionally, a live and
archived webcast of this conference call will be available at
http://ir.baidu.com/ . (1) This announcement contains translations
of certain RMB amounts into U.S. dollars at specified rates solely
for the convenience of the reader. Unless otherwise noted, all
translations from RMB to U.S. dollars are made at a rate of
RMB7.2946 to US$1.00, the effective noon buying rate as of December
31, 2007 in The City of New York for cable transfers of RMB as
certified for customs purposes by the Federal Reserve Bank of New
York. About Baidu Baidu.com, Inc. is the leading Chinese language
Internet search provider. As a technology-based media company,
Baidu aims to provide the best way for people to find information.
In addition to serving individual Internet search users, Baidu
provides an effective platform for businesses to reach potential
customers. Baidu's ADSs, each of which represents one Class A
ordinary share, currently trade on the Nasdaq Global Select Market
under the symbol "BIDU". 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 forward-looking statements can
be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes,"
"estimates" and similar statements. Among other things, the outlook
for first quarter 2008 and quotations from management in this
announcement, as well as Baidu's 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 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
statements about Baidu's beliefs and expectations, are
forward-looking 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
forward-looking statement, including but not limited to the
following: our growth strategies; our future business development,
results of operations and financial condition; our ability to
attract and retain users and customers; competition in the Chinese
language Internet search market; competition for online marketing
customers; changes in our revenues and certain cost or expense
items as a percentage of our revenues; the outcome of ongoing, or
any future, litigation or arbitration, including those relating to
copyright and other intellectual property rights; the expected
growth of the Chinese language Internet search market and the
number of Internet and broadband users in China; and Chinese
governmental policies relating to the Internet and Internet content
providers. Further information regarding these and other risks is
included in our annual report on Form 20-F and other documents
filed with the Securities and Exchange Commission. 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 February 14,
2008, and Baidu undertakes no duty to update such information,
except as required under applicable law. About Non-GAAP Financial
Measures To supplement Baidu's consolidated financial results
presented in accordance with GAAP, Baidu uses the following
measures defined as non-GAAP financial measures by the SEC:
adjusted EBITDA, operating profit excluding share-based
compensation expenses, net income excluding share-based
compensation expenses, and basic and diluted EPS excluding
share-based compensation expenses. 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. For more information on
these non-GAAP financial measures, please see the tables captioned
"Reconciliations of non-GAAP results of operations measures to the
nearest comparable GAAP measures" and "Reconciliation from net cash
provided by operating activities to adjusted EBITDA" set forth at
the end of this release. Baidu believes that these non-GAAP
financial measures provide meaningful supplemental information
regarding its performance and liquidity by excluding certain
expenses and expenditures that may not be indicative of its
operating performance from a cash perspective. We believe that both
management and investors benefit from referring to these non-GAAP
financial measures in assessing our 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. Baidu computes its non-GAAP
financial measures using the same consistent method from quarter to
quarter, except that the non-GAAP measures for the quarter ended
March 31, 2006 reflected the one-time cumulative effect of change
in accounting principle due to our adoption of SFAS 123(R) since
January 1, 2006. We believe 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
non-GAAP operating profit excluding share-based compensation
expenses, net income excluding share-based compensation expenses,
and basic and diluted EPS excluding share-based compensation
expenses is that these non-GAAP measures exclude share-based
compensation charge that has been and will continue to be for the
foreseeable future a significant recurring expense in our business.
A limitation of using non-GAAP Adjusted EBITDA is that it does not
include all items that impact our net income for the period.
Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from each non-GAAP
measure. The accompanying tables have more details on the
reconciliations between GAAP financial measures that are most
directly comparable to non-GAAP financial measures. Baidu.com, Inc.
Condensed Consolidated Balance Sheets December 31, September 30,
December 31, (in RMB thousands) 2007 2007 2006 Unaudited Unaudited
Audited ASSETS Current assets: Cash and cash equivalents 1,350,600
1,301,072 1,136,274 Short-term investments 242,037 128,168 85,339
Accounts receivable, net 64,274 50,615 23,051 Prepaid expenses and
other current assets 65,996 109,354 32,339 Deferred tax assets, net
2,587 1,866 1,734 Total current assets 1,725,494 1,591,075
1,278,737 Non-current assets: Fixed assets, net 678,886 494,852
191,734 Land use right, net 96,472 96,960 92,400 Intangible assets,
net 40,460 37,715 44,386 Goodwill 51,093 51,097 47,316 Investments,
net 15,439 5,697 -- Deferred tax assets, net 15,716 8,745 5,802
Other non-current assets 32,348 51,830 7,702 Total non-current
assets 930,414 746,896 389,340 TOTAL ASSETS 2,655,908 2,337,971
1,668,077 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Accrued expenses and other liabilities 359,310 302,455 153,141
Customers' deposits 257,577 229,408 141,185 Deferred revenue 11,832
11,295 2,583 Deferred income 2,485 3,206 4,090 Total current
liabilities 631,204 546,364 300,999 Non-current liabilities:
Long-term payable 3,000 3,000 7,000 Deferred income 332 634 2,817
Total non-current liabilities 3,332 3,634 9,817 Total liabilities
634,536 549,998 310,816 Shareholders' equity Class A Ordinary
Shares, Par value US$0.00005 per share, 825,000,000 shares
authorized, and 22,574,381 shares and 25,136,147 shares issued and
outstanding as at December 31, 2006 and December 31, 2007 10 10 9
Class B Ordinary Shares, Par value US$0.00005 per share, 35,400,000
shares authorized, and 11,130,018 shares and 8,996,842 shares
issued and outstanding as at December 31, 2006 and December 31,
2007 4 4 5 Additional paid-in capital 1,171,575 1,140,499 1,088,176
Accumulated other comprehensive income/(loss) (81,953) (64,438)
(33,697) Retained earnings 931,736 711,898 302,768 Total
shareholders' equity 2,021,372 1,787,973 1,357,261 TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY 2,655,908 2,337,971 1,668,077
Baidu.com, Inc. Condensed Consolidated Statements of Income (in RMB
thousands except for share, per share information) For the Three
Months Ended Dec. 31, Dec. 31, Sept. 30, 2007 2006 2007 Unaudited
Unaudited Unaudited Revenues: Online marketing services 569,588
269,754 496,120 Other services 1,474 1,552 410 Total revenues
571,062 271,306 496,530 Operating costs and expenses: Cost of
revenues (note 1, 2) (216,012) (77,669) (180,704) Selling, general
and administrative (note 2) (132,230) (70,999) (110,312) Research
and development (note 2) (46,535) (20,899) (37,433) Total operating
costs and expenses (394,777) (169,567) (328,449) Operating profit
176,285 101,739 168,081 Other income: Interest income 12,846 12,016
12,188 Other income, net 12,146 3,048 4,040 Total other income
24,992 15,064 16,228 Income before income taxes 201,277 116,803
184,309 Income taxes 18,561 6,000 (2,580) Cumulative effect of
change in accounting principle -- -- -- Net income 219,838 122,803
181,729 Earnings per share for Class A and Class B ordinary shares:
Basic 6.45 3.65 5.35 Diluted 6.32 3.54 5.23 Weighted average
aggregate number of Class A and Class B ordinary shares
outstanding: Basic 34,087,848 33,666,239 33,983,137 Diluted
34,797,946 34,711,753 34,763,639 (1) Cost of revenues are detailed
as follows: Business tax and surcharges (36,614) (16,357) (30,702)
Traffic acquisition costs (72,299) (23,631) (59,155) Bandwidth
costs (35,857) (12,656) (31,837) Depreciation costs (46,662)
(16,898) (40,654) Operational costs (23,820) (7,931) (17,979)
Share-based compensation expenses (760) (196) (377) Total cost of
revenues (216,012) (77,669) (180,704) (2) Includes share-based
compensation expenses as follows: Cost of revenues (760) (196)
(377) Selling, general and administrative (5,539) (6,166) (68)
Research and development (6,986) (992) (5,027) Total share-based
compensation expenses (13,285) (7,354) (5,472) Twelve Months Ended
December 31, December 31, 2007 2006 Unaudited Audited Revenues:
Online marketing services 1,741,021 828,484 Other services 3,404
9,354 Total revenues 1,744,425 837,838 Operating costs and
expenses: Cost of revenues (note 1, 2) (645,406) (245,489) Selling,
general and administrative (note 2) (411,163) (250,240) Research
and development (note 2) (140,702) (79,231) Total operating costs
and expenses (1,197,271) (574,960) Operating profit 547,154 262,878
Other income: Interest income 49,009 42,354 Other income, net
20,053 4,187 Total other income 69,062 46,541 Income before income
taxes 616,216 309,419 Income taxes 12,752 (12,256) Cumulative
effect of change in accounting principle -- 4,603 Net income
628,968 301,766 Earnings per share for Class A and Class B ordinary
shares: Basic 18.57 9.06 Diluted 18.11 8.75 Weighted average
aggregate number of Class A and Class B ordinary shares
outstanding: Basic 33,872,611 33,290,696 Diluted 34,724,364
34,506,594 (1) Cost of revenues are detailed as follows: Business
tax and surcharges (108,783) (51,833) Traffic acquisition costs
(204,693) (75,180) Bandwidth costs (117,554) (40,005) Depreciation
costs (147,115) (51,574) Operational costs (65,544) (25,481)
Share-based compensation expenses (1,717) (1,416) Total cost of
revenues (645,406) (245,489) (2) Includes share-based compensation
expenses as follows: Cost of revenues (1,717) (1,416) Selling,
general and administrative (17,371) (32,970) Research and
development (20,760) (13,894) Total share-based compensation
expenses (39,848) (48,280) Reconciliations of non-GAAP results of
operations measures to the nearest comparable GAAP measures (*) (in
RMB thousands, unaudited) Three months ended December 31, 2006
Non-GAAP GAAP Result Adjustment Results Operating profit 101,739
7,354 109,093 Three months ended December 31, 2006 GAAP Result
Adjustment Non-GAAP Results Net income 122,803 7,354 130,157 Three
months ended September 30, 2007 GAAP Result Adjustment Non-GAAP
Results Operating profit 168,081 5,472 173,553 Three months ended
September 30, 2007 GAAP Result Adjustment Non-GAAP Results Net
income 181,729 5,472 187,201 Three months ended December 31, 2007
GAAP Result Adjustment Non-GAAP Results Operating profit 176,285
13,285 189,570 Three months ended December 31, 2007 GAAP Result
Adjustment Non-GAAP Results Net income 219,838 13,285 233,123
Twelve months ended December 31, 2007 GAAP Result Adjustment
Non-GAAP Results Operating profit 547,154 39,848 587,002 Twelve
months ended December 31, 2007 GAAP Result Adjustment Non-GAAP
Results Net income 628,968 39,848 668,816 Twelve months ended
December 31, 2006 GAAP Result Adjustment Non-GAAP Results Operating
profit 267,878 48,280 311,158 Twelve months ended December 31, 2006
GAAP Result Adjustment Non-GAAP Results Net income 301,766 43,677
345,443 (*) The adjustment is only for share-based compensation and
cumulative effect of change in accounting principle. Reconciliation
from net cash provided by operating activities to adjusted
EBITDA(*) (in RMB thousands, unaudited) Three months ended As a %
of December 31, 2006 total revenues Net cash provided by operating
activities 170,835 63% Changes in assets and liabilities, net of
effects of acquisitions (17,721) -7% Income taxes expenses (6,000)
-2% Interest income and other, net (15,064) -6% Adjusted EBITDA
132,050 48% Three months ended As a % of September 30, 2007 total
revenues Net cash provided by operating activities 254,870 51%
Changes in assets and liabilities, net of effects of acquisitions
(17,800) -4% Income taxes expenses 2,580 1% Interest income and
other, net (16,228) -3% Adjusted EBITDA 223,422 45% Three months
ended As a % of December 31, 2007 total revenues Net cash provided
by operating activities 334,609 59% Changes in assets and
liabilities, net of effects of acquisitions (44,063) -8% Income
taxes expenses (18,561) -3% Interest income and other, net (24,992)
-4% Adjusted EBITDA 246,993 44% Twelve months ended As a % of
December 31, 2007 total revenues Net cash provided by operating
activities 979,478 56% Changes in assets and liabilities, net of
effects of acquisitions (129,713) -7% Income taxes expenses
(12,752) -1% Interest income and other, net (69,062) -4% Adjusted
EBITDA 767,951 44% Twelve months ended As a % of December 31, 2006
total revenues Net cash provided by operating activities 526,144
63% Changes in assets and liabilities, net of effects of
acquisitions (110,264) -13% Income taxes expenses 12,256 1%
Interest income and other, net (46,541) -6% Adjusted EBITDA 381,595
45% (*) Definition of adjusted EBITDA: earnings before interest,
taxes, depreciation, amortization, other non-operating income,
share-based compensation expenses and cumulative effect of change
in accounting principle. For more information, please contact:
Investor Inquiries: Linda Sun Baidu.com, Inc. Tel: +8610-8262-1188
Email: Investor and Media Inquiries: China Helen Plummer Ogilvy
Public Relations Worldwide (Beijing) Tel: +86-10-8520-3090 Email:
US Thomas Smith Ogilvy Public Relations Worldwide (New York) Tel:
+1-212-880-5269 Email:
http://www.newscom.com/cgi-bin/prnh/20041011/BAIDULOGO DATASOURCE:
Baidu.com, Inc. CONTACT: Investors: Linda Sun of Baidu.com, Inc.,
+86-10-8262-1188, or ; or Investors and Media: Helen Plummer of
Ogilvy Public Relations Worldwide (Beijing), +86-10-8520-3090, or ,
or Thomas Smith of Ogilvy Public Relations Worldwide (New York),
+1-212-880-5269, or , for Baidu Web site: http://www.baidu.com/
Copyright