❯ Baidu Q2 Revenue Down 4% YoY, Fifth Consecutive Quarterly Decline

FINANCIALSBaidu reported Q2 revenue of RMB 31.3 billion (about $4.62 billion), down 4% year over year and short of the roughly $4.69 billion market expectation — its fifth consecutive quarter of revenue decline. Net profit came in at about $341 million, down 68% YoY; operating profit was RMB 3.0 billion, below RMB 3.3 billion a year earlier. Baidu’s U.S.-listed shares fell about 5% in pre-market trading after the release.

BREAKDOWNThe numbers reveal a clear split: AI-related revenue rose 25% YoY to RMB 12.5 billion, with GPU cloud revenue surging 283% — the fourth consecutive quarter of triple-digit growth. Online marketing revenue, meanwhile, fell 19% YoY, as generative Q&A eats into the search-advertising base. AI now accounts for about half of total revenue, but its growth still can’t fill the hole left by the advertising decline.

MODEL LAGThe uglier picture is on the model side. Ernie hasn’t had a major version upgrade in months, while rivals keep rolling out new models one after another; in open-weight model comparisons, it has now slipped behind companies like Moonshot AI. Selling compute and building models have already become two decoupled businesses in China — Baidu has proven the former is very easy to do, and that doing it well doesn’t mean the latter keeps pace. For buyers, putting both capabilities on the same supplier scorecard no longer makes sense.

▪ SIGNALGPU cloud up 283%, ads down 19% — Baidu is being pulled in opposite directions by its own two businesses.