Total revenue for the fourth quarter of 2025 reached RMB 32.7 billion ($4.68 billion), a 5% sequential increase that helped keep the company’s top line near the upper end of analyst expectations. The figure represents a 3% year‑over‑year decline, reflecting a continued contraction in the legacy advertising business that has been a drag on overall growth.
Operating income climbed to RMB 1.5 billion ($212 million), giving a 5% operating margin, while non‑GAAP operating income rose to RMB 3.0 billion ($424 million) for a 9% non‑GAAP margin. Net income attributable to Baidu fell to RMB 1.8 billion ($255 million), a sharp year‑over‑year drop from RMB 5.19 billion, and diluted earnings per share were RMB 3.71 ($0.53). The decline in profitability is largely driven by the weakening advertising segment and the high cost of scaling new AI initiatives.
The company’s AI‑powered businesses continued to expand. AI Cloud infrastructure revenue for the quarter was RMB 5.8 billion, up 21% year‑over‑year, while AI‑native marketing services generated RMB 2.7 billion, an 110% increase from the same period a year earlier. These segments now account for a growing share of total revenue, but the momentum is not yet sufficient to offset the erosion in the advertising arm.
Cash‑flow metrics improved markedly. Operating cash flow turned positive in the second half of 2025, generating RMB 3.9 billion across Q3 and Q4, a turnaround that signals the company’s ability to fund its AI investments from its own operations.
The market reacted negatively, with the stock falling 6.6% on the day of the release. Investors focused on the steep year‑over‑year drop in net income, the compression of profitability, and the persistent weakness in the legacy advertising business, all of which outweighed the positive momentum in AI‑driven segments.
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