Revenue rose 1.4% to 26.33 billion yuan ($3.84 billion) for the three months ended June 30, beating the 25.8 billion yuan average of analysts’ estimates. The company’s shares rose 8.4% in extended trading.
Baidu’s better-than-expected results will soothe investors’ worries that the 19-year-old company is losing steam as China’s internet evolves from desktop to mobile. Rivals like ByteDance have increasingly chipped away at Baidu’s core ad sales via increasingly popular news and social media apps. ByteDance also recently launched a general search engine, posing a direct challenge to Baidu’s core business.
But the search leader kept ByteDance at bay thanks to “years of search engine research and development, 174 million daily active users, and strong content ecosystem,” Bloomberg Intelligence analysts Vey-Sern Ling and Tiffany Tam wrote in an Aug. 12 note.
Net income dropped to 2.41 billion yuan. In May, Baidu posted its first loss since going public in 2005.
Baidu has fallen off the list of China’s five most valuable internet companies, trailing Meituan and NetEase Inc., after shedding more than 40% of its market value this year. Once touted as a member of China’s tech triumvirate alongside Alibaba Group Holding Ltd. and Tencent, Baidu has been left behind as the country’s internet evolves.