By Eduardo Baptista and Yuvraj Malik
(Reuters) -Search engine giant Baidu Inc beat first-quarter revenue and profit estimates on Tuesday as businesses spent more on advertising amid China’s post-COVID reopening, and said it was awaiting regulatory approval to launch its ChatGPT-like Ernie bot.
Business momentum in China is building after it dropped most of its strict COVID curbs late last year, with consumers and businesses reviving spending.
China’s economy grew a faster-than-expected 4.5% year-on-year in the three months through March, according to the latest official data.
Baidu CEO Robin Li said on Tuesday that after the Lunar New Year in late January, there was a quick economic recovery that especially benefited the company’s advertisers in offline sectors such as travel and healthcare.
“Some of these verticals have already rebounded to above pre-pandemic levels, indicating solid signs of recovery,” Li said. Baidu’s revenue rose 10% to 31.14 billion yuan ($4.54 billion) in the quarter to March 31, surpassing analysts’ estimates of 29.97 billion yuan, according to Refinitiv data.
Revenue from Baidu Core, which includes search-based ad sales, cloud offerings and its autonomous driving initiatives, grew 8% to 23 billion yuan.
Of this, revenue from Baidu’s largest segment, online marketing, accounted for 16.6 billion yuan, up 6%. Revenue at its streaming service iQIYI rose 15% to 8.3 billion yuan, driven by 28% growth in its subscriber base.
U.S.-listed shares of the search engine giant rose as much as 5% in premarket trading.
Baidu reported net income of 5.83 billion yuan, compared to net loss in the year-ago quarter. Excluding items, it earned 16.10 yuan per American Depository Share (ADS), higher than Wall Street’s estimate of 12.46 yuan.
The company’s much-touted rival to ChatGPT, Ernie bot, has yet to be officially launched, despite having been partially unveiled to the public in mid-March.
Baidu CEO Li said in a press release on Tuesday that the company planned to “steadily incorporate” the generative AI-driven chatbot into all of the search engine giant’s businesses, without giving a specific timeline.
Li later said on a call with analysts that the company had applied for government review and approval of Ernie bot, and would roll it out at large scale once it gets the “green light” from regulators.
“During our testing of Ernie bot, we have engaged in close discussions with the regulators,” Li said.
(Reporting by Eduardo Baptista in Beijing, Yuvraj Malik in Bengaluru; Editing by Jan Harvey and Mark Potter)
