2025-08-20 13:00Financial Data and Key Metrics Changes - Total revenue for the company was RMB22.7 billion, a decrease of 4% year over year [32] - Revenue from Baidu Core was RMB26.3 billion, down 2% year over year [32] - Baidu Core's online marketing revenue decreased by 15% year over year to RMB16.2 billion [33] - Non-online marketing revenue for Baidu Core increased by 34% year over year, reaching RMB10 billion [33] - AI cloud revenue grew 27% year over year to RMB6.5 billion [21][33] - Operating income was RMB3.3 billion, with an operating margin of 13% [35] - Net income attributed to Baidu was RMB7.3 billion, with a diluted earnings per ADS of RMB20.35 [37] Business Line Data and Key Metrics Changes - AI cloud business showed strong growth, with revenue increasing by 27% year over year [21][33] - Digital human technology revenue increased by 55% quarter over quarter, contributing 3% of Baidu Core's online marketing revenue [30] - Revenue generated by agents for advertisers grew 50% year over year, contributing 13% of Baidu Core's online marketing revenue [29] Market Data and Key Metrics Changes - Baidu App's monthly active users reached 735 million, representing a 5% year over year growth [20] - Daily average time spent per user in Q2 increased by 4% year over year [20] Company Strategy and Development Direction - The company is focusing on AI transformation, particularly in Baidu Search, to enhance user experience and drive long-term value [19][28] - The strategy includes a shift from traditional search results to AI-generated, multimodal content [55] - The company is committed to investing in AI and has made substantial investments in AI transformation, particularly in search [81] Management's Comments on Operating Environment and Future Outlook - Management acknowledged near-term headwinds in advertising revenue but expressed confidence in the long-term potential of AI search monetization [81] - The company is optimistic about the growth of its AI cloud services, driven by increasing demand across various sectors [76] - Management indicated that while revenue and margins may face pressure in the near term, there is potential for recovery and improvement in profitability over time [83] Other Important Information - The company has established partnerships with Uber and Lyft to expand its autonomous driving services globally [14][92] - Apollo Go provided over 2.2 million fully driverless rides in Q2, marking a 148% year-over-year increase [13][26] Q&A Session Summary Question: How does the company view the current landscape of AI models and the positioning of Ernie? - Management noted that the pace of model iteration is faster than ever, with a diverse landscape where different models excel at various tasks [44][45] - Ernie is positioned as an application-driven model focused on generating multimodal search results and enhancing user engagement [46][47] Question: What updates can be shared regarding AI search monetization testing? - Management indicated that AI search transformation is progressing rapidly, with higher user engagement and retention metrics [54][55] - The end game for AI search involves delivering intelligent, personalized responses and connecting users with real-world services [58] Question: Can management provide a breakdown of AI cloud revenue and margin profile? - AI cloud revenue grew 27% year over year, with subscription-based revenue accounting for more than half of the total [62] - The company aims to reduce project-based revenue for greater stability and improve profitability over the long term [63] Question: What are the plans for cost optimization and margin trends? - Management is focused on internal efficiency gains while continuing to invest in AI [81] - There is an expectation for revenue and margins to remain under pressure in the near term, but potential for recovery exists as the core advertising business stabilizes [83] Question: How does the company assess its long-term differentiation in the autonomous driving landscape? - Management emphasized the company's leadership in both left-hand and right-hand drive markets, with a focus on operational excellence and cost efficiency [86][90] - Partnerships with global mobility platforms are seen as a strategy to accelerate market entry and scale operations [92]