Baidu, Inc.

Hello and thank you for standing by for Baidu's fourth quarter and fiscal year 2025 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Juan Lin, Baidu's Director of Investor Relations.

Hello, everyone, and welcome to Baidu's fourth quarter and the fiscal year 2025 earnings conference call. Baidu's earnings release was distributed earlier today, and you can find a copy on our website, as well as on Newswire Services. On the call today, we have Robin Lee, our co-founder and CEO. Julius Rongluo, our EVP in charge of Baidu Mobile Ecosystem Group, MEG, Dou Shen, our EVP in charge of Baidu AI Cloud Group, ACG, and Henry Haijianhe, our CFO. After our prepared remarks, we will hold a Q&A session. Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Credit Securities Dedication Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report and other findings with SEC and Hong Kong Stock Exchange. Baidu does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Our earnings press release and this call includes discussions of certain unaudited non-GAAP financial measures. Our press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable gap measures and is available on our IR website at ir.baidu.com. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on Baidu's IR website. I will now turn the call over to our CEO, Robin.

Hello, everyone. Baidu General Business total revenue was RMB 26.1 billion. Revenue from our core AI power business exceeded RMB 11 billion, accounting for 43% of Baidu General Business revenue. In AI Cloud Infra, subscription-based revenue from AI accelerator infrastructure grew 143% year-over-year, accelerating further from 128% in Q3. Meanwhile, Apollo Go maintained its robust momentum delivering 3.4 million fully driverless operational rise in the quarter. Total rise increased by over 200% year over year. 2025 marked the third year of our journey in GenAI and a pivotal year where AI became the new core of our portfolio. In 2025, We made substantial progress in scaling AI across our businesses, accelerating AI cloud growth, expanding Robotaxi operations with improved unit economics, and deepening AI integration into our mobile ecosystem. Looking at our portfolio through an AI native lens, momentum across our core AI-powered businesses continue to build in 2025. AI Cloud Infra gained strong traction through its highly efficient and cost-effective training and inference capabilities. Revenue from AI Cloud Infra reached approximately RMB 20 billion in 2025, up 34% year-over-year, outpacing industry growth. Our AI application portfolio is among the most comprehensive in the industry. Combining AI-empowered flagship products with AI-native offerings that unlock entirely new use cases. For the full year 2025, revenue from AI applications exceeded RMB 10 billion. ApolloGo achieved a significant landmark. We delivered over 10 million fully driverless operational rides in 2025 alone. To date, we have provided a total of over 20 million rides to the public cumulatively. With our accelerated global expansion, ApolloGo's footprint has now reached 26 cities worldwide, reinforcing our leadership in autonomous ride-hailing services. Lastly, our AI native marketing services, including digital humans and agents, sustained strong growth with revenue up 110% year-over-year. Collectively, these results demonstrate AI's growing contribution to Baidu's value creation and our ability to translate AI capabilities into scalable commercial impact. Now, let me share the key highlights of the quarter, starting with our proprietary AI chips. This quarter, we announced the proposed spin-off and separate the listing of Kunlunxin. After more than a decade of steadfast investment in self-developed AI chips, we're proud to see the market increasingly recognize their value and proven performance. This milestone validates our long-term strategic vision and unlocks new opportunities for value creation. Our AI chips are built on a proprietary architecture developed in-house from day one. They deliver stable, high-performance AI computing at scale with broad compatibility across different models and frameworks. This enables customers to deploy faster with lower integration costs. What distinguishes our AI chips is a proven track record of large scale, real world deployments with leading enterprises across diverse industries, spanning financial services, telecommunications, energy, and internet sectors. Customers choose our chips for reliable performance, stable supply at scale, exceptional software compatibility, and strong efficiency, especially in inference workloads. Looking ahead, we see significant opportunities for both Baidu and Kunlunxin as AI infrastructure demand continues to accelerate. Next, I will turn to our AI cloud infrastructure. Our infrastructure is among the most advanced in China, powered by a diverse mix of domestic and international high-performance computing resources. In Q4, subscription-based revenue from AI accelerator infrastructure grew 143% year over year, achieving triple-digit growth for the full year 2025. Importantly, we saw a continued shift toward a more recurring, structurally healthier revenue model. The robust growth was fueled by rapidly expanding enterprise AI adoption. As customers integrate AI into core operations, the unique value of our full-stack, end-to-end AI architecture becomes increasingly evident. By owning and optimizing across all four layers, we achieve sustained advantages in stability and cost effectiveness, better addressing enterprises' needs for AI deployment. These advantages are translating into tangible market momentum, fueling accelerated adoption of our AI cloud infra. In Q4, we further broadened our client reach Leading enterprise clients deepen their partnerships with us, driving increases in both usage and spending. We also saw healthy growth contribution from our mid-tier clients. We continue to strengthen our presence in diverse industries like internet services, gaming, autonomous driving, and embodied AI, underscoring the versatility of our infrastructure. Embodied AI, in particular, showed notable momentum Revenue from this vertical double quarter over quarter in Q4. We onboarded a new wave of leading humanoid robotics companies, cementing our position as a go-to cloud service provider for China's fast-growing embodied AI industry. Next, I'll cover our foundation model progress, which is a critical part of our AI capabilities. We remain fully committed to advancing our proprietary foundation model, ERNI, Following the unveil of Ernie 5.0 last quarter, we launched an updated version in January. As we advance Ernie, we remain guided by a clear application-driven approach, making Ernie strongest where it matters most for our portfolio. To execute this approach more effectively, we recently restructured our model development organization into two dedicated teams. One team advances early state-of-the-art foundation model capabilities, maintaining our technological edge in this fast-evolving space. The other team tailors models for specific business needs, reducing costs, improving response latency, and optimizing model size and efficiency to ensure our technologies are not just cutting edge, but readily scalable across our businesses. Close collaboration between both teams ensures our technologies stay grounded in real-world needs while our applications benefit from continuous technological advancement. Now turning to AI applications. This is where we believe AI's greatest value will ultimately reside. We are pioneering AI applications to solve complex real-world problems for both individuals and enterprises. Let me share our progress across multiple key areas. starting with AI-powered search. In Q4, we continued our AI search transformation, pursuing one of the most comprehensive and ambitious transformations globally. Our focus remained on continuously improving the quality of AI search results while expanding what users can accomplish directly within search. This quarter, for example, we introduced AI-generated infographics into our search results visualizing text-based information where appropriate to make key insights immediately clear and digestible. We've also integrated more MCP capabilities across key scenarios, including e-commerce, healthcare, and local services. This enables actions such as shopping, booking, and healthcare consultation to be completed seamlessly within the search experience. During the Chinese New Year, we moved quickly to embrace the latest AI agent innovation by integrating OpenClaw, a recently popular open source agent framework, directly into Baidu app with one-click access, enabling our users to immediately benefit from cutting-edge agentic AI capabilities. With an MAU of around 700 million, we provide easy access to OpenClaw for almost half of the Chinese population. For Ernie Assistant, which is the AI chatbot integrated across our platform, we enhanced the user experience by introducing broader multimodal capabilities. These improvements have been well received by users, driving Ernie Assistant's MAU to exceed 200 million in December. We are also scaling our AI Search API. Adoption has accelerated in Q4 with call volume up over 110 person-quarter over quarter. With industry-leading authority, comprehensiveness, and newly added multilingual capabilities, our AI Search API is now opening up broader possibilities for the international market. Next is digital humans, which represent a compelling form of AI application. They combine visual presence, voice, and real-time interaction to create more engaging and effective experiences. In December 2025, the number of digital humans live streaming on our platform increased nearly 200% year-over-year. Beyond Baidu's own platforms, our digital human technology is expanding to empower the broader industry. Leading companies have partnered with us, including Jingdong, Zuo Ye Bang, and TikTok, validating the performance and efficiency of our digital humans. On the technology front, we believe our hyper-realistic digital human represents the next generation of capabilities. This quarter, production costs declined to roughly one-third of previous quarter levels, bringing industry leading cost performance and positioning this technology for broader adoption. Another area of progress is Miao Da, our wide coding platform, which enables users without coding experience to build applications through natural language, including WeChat mini programs, websites, minigames, and more. Following the Q4 launch of MiaoDa's international version, MeDo, users globally have created over a million AI applications as of early February, all without writing a single line of code. Looking ahead, we see meaningful opportunities to unlock even greater possibilities in AI application development. Lastly, we are using AI to solve operational problems and drive efficiency gains across industries. One example is Yijian, our advanced visual intelligence platform. Yijian enables enterprises to automate operational compliance and safety checks through intelligent visual analysis. while known brands across coffee chains, quick service restaurants, and fine dining are now using Yijian to ensure high standard operations across their thousands of locations. Another example is FM Agent, our self-evolving agent designed to solve complex operational challenges. By autonomously reasoning across data, rules, and real-world constraints, it simulates countless scenarios to identify best solutions. We've seen strong validation both internally through our own cloud resource optimization and externally across industries like manufacturing, energy, finance, and logistics, where efficiency improvement is a universal priority. On the organizational front, we recently established the Personal Superintelligence Business Group, or PSIG. PSIG unifies Baidu Wenku and Baidu Drive are two flagship consumer-facing AI applications. Even before this organizational integration, the two teams had already collaborated at the product level to deliver innovations like Free Canvas and Jamflow. This new group enables even deeper collaboration going forward as we accelerate the rollout of new applications to foster a robust growth curve driven by application layer innovation Shifting to physical AI, ApolloGo represents our largest AI application in the physical world. 2025 was a year of accelerated scaling for ApolloGo, where we reinforced our leadership in operational scale and achieved significant progress in global expansion. We continue to expand fully driverless operations at pace, delivering 3.4 million fully driverless operational rides in Q4, with weekly rides peaking at over 300,000. Total rides grew by over 200% year over year. Cumulative rides provided to the public have surpassed 20 million as of February 2026, firmly cementing our position as the world's leading autonomous ride hailing service provider. We entered 2026 with momentum across key international markets. In the UK, we advanced our partnerships with Uber and Lyft, moving forward with plans to pilot autonomous vehicles in London, with testing expected to begin in the first half of 2026. This represents an important step in Apollo GO's international expansion, extending our right-hand drive robot taxi capabilities from Hong Kong to another strategically important market. In Switzerland, we initiated testing in St. Gallen following our market entry last quarter. In the Middle East, we achieved progress in both Abu Dhabi and Dubai. In Abu Dhabi, we launched fully autonomous ride-hailing services on Yas Island in January with Autogo. In Dubai, we secured the city's first fully driverless testing permit from the Roads and Transport Authority. We also announced the next phase of our global partnership with Uber to bring our fully autonomous ride-hating services to Dubai via the Uber platform. These are critical milestones that accelerate our progress across the Emirates. In Asia, we entered a new market, South Korea, starting with the Seoul metropolitan area, further expanding our presence across the Asian region. Meanwhile, in Hong Kong, we expanded our open-road testing into Tsuen Wan and initiated cross-district testing between Airport Island and Tung Chang, bringing us closer to commercial readiness there. As of February 2026, ApolloGo's global footprint reached 26 cities, demonstrating the scalability of our autonomous driving technology across diverse regulatory and operational environments. Looking ahead, we are focused on accelerating expansion to more cities globally while continuously improving operational excellence and unit economics. Our growing experience across diverse markets gives us confidence in our ability to scale further, and we expect more cities to achieve positive unit economics over time. Underpinning this expansion, safety remains our top priority and the foundation of everything we do. our autonomous ride-hailing service. It's the safest globally, with our fully driverless vehicles experience an airbag deployment accident only once every over 12 million kilometers. As we scale, we will continue strengthening safety standards and ensure sustained reliability. Ultimately, our mission is to harness AI to transform mobility, making it fundamentally safer. more affordable and more comfortable, and improving how billions of people move, work, and live. In summary, with AI now firmly integrated across our portfolio, we believe we are well positioned to deliver sustainable value and shape the next phase of the AI era. With that, let me turn the call over to Henry to go through the financial results.