After the market closed today, Baidu, Inc. (NASDAQ: BIDU), the leading Chinese language Internet search provider, announced its unaudited financial results for the first quarter ended March 31, 2011.

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First Quarter 2011 Highlights

• Total revenues in the first quarter of 2011 were RMB2.436 billion ($372.0 million), an 88.3% increase from the corresponding period in 2010.
• Operating profit in the first quarter of 2011 was RMB1.195 billion ($182.4 million), a 125.1% increase from the corresponding period in 2010.
• Net income in the first quarter of 2011 was RMB1.071 billion ($163.5 million), a 122.8% increase from the corresponding period in 2010. Diluted earnings per ADS(2) for the first quarter of 2011 were RMB3.06 ($0.47); diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) for the first quarter of 2011 were RMB3.15 ($0.48).

 

First Quarter 2011 Results

Baidu reported total revenues of RMB2.436 billion ($372.0 million) for the first quarter of 2011, representing an 88.3% increase from the corresponding period in 2010.

Online marketing revenues for the first quarter of 2011 were RMB2.435 billion ($371.8 million), representing an 88.2% increase from the corresponding period in 2010. Baidu had approximately 274,000 active online marketing customers in the first quarter of 2011, representing a 24.0% increase from the corresponding period in 2010 and a 0.7% decrease from the previous quarter. Revenue per online marketing customer for the first quarter was approximately RMB8,900 ($1,359), a 50.8% increase from the corresponding period in 2010 and flat compared to the previous quarter.

Traffic acquisition cost (TAC) as a component of cost of revenues was RMB198.6 million ($30.3 million), representing 8.2% of total revenues, as compared to 13.2% in the corresponding period in 2010 and 8.1% in the fourth quarter of 2010.

Bandwidth costs as a component of cost of revenues were RMB121.9 million ($18.6 million), representing 5.0% of total revenues, compared to 4.5% in the corresponding period in 2010. Depreciation costs as a component of cost of revenues were RMB122.8 million ($18.8 million), representing 5.0% of total revenues, compared to 5.1% in the corresponding period in 2010.

Selling, general and administrative expenses were RMB332.6 million ($50.8 million), representing an increase of 55.0% from the corresponding period in 2010, primarily due to increased personnel costs and marketing expenses.

Research and development expenses were RMB239.3 million ($36.5 million), a 95.9% increase from the corresponding period in 2010. The increase was primarily due to increased R&D personnel expenses.

Share-based compensation expenses, which were allocated to related operating costs and expense line items, were RMB31.3 million ($4.8 million) in the first quarter of 2011, compared to RMB19.5 million in the corresponding period in 2010 and RMB28.2 million in the previous quarter.

Operating profit was RMB1.195 billion ($182.4 million), representing a 125.1% increase from the corresponding period in 2010. Operating profit excluding share-based compensation expenses (non-GAAP) was RMB1.226 billion ($187.2 million), a 122.8% increase from the corresponding period in 2010.

Income tax expense was RMB181.3 million ($27.7 million), compared to an income tax expense of RMB70.7 million in the corresponding period in 2010. The effective tax rate for the first quarter of 2011 was 14.5%, compared to 12.8% for the corresponding period in 2010 and 12.1% in the previous quarter.

Net income was RMB1.071 billion ($163.5 million), representing a 122.8% increase from the corresponding period in 2010. Basic and diluted earnings per ADS for the first quarter of 2011 amounted to RMB3.07 ($0.47) and RMB3.06 ($0.47), respectively.

Net income excluding share-based compensation expenses (non-GAAP) was RMB1.102 billion ($168.3 million), a 120.3% increase from the corresponding period in 2010. Basic and diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) for the first quarter of 2011 amounted to RMB3.16 ($0.48) and RMB3.15 ($0.48), respectively.

As of March 31, 2011, Baidu had cash, cash equivalents and short-term investments of RMB8.644 billion ($1.320 billion). Net operating cash inflow and capital expenditures for the first quarter of 2011 were RMB977.3 million ($149.2 million) and RMB386.8 million ($59.1 million), respectively.

Adjusted EBITDA (non-GAAP), defined in this announcement as earnings before interest, taxes, depreciation, amortization, other non-operating income and share-based compensation expenses, was RMB1.387 billion ($211.9 million) for the first quarter of 2011, representing a 116.4% increase from the corresponding period in 2010.