For the quarter, Baidu (ticker: BIDU) reported revenue of $ 3.69 billion, down about 1% from a year ago, and in line with the consensus of Wall Street analysts at $ 3.7 billion. Non-GAAP earnings were $ 2.08 per share, good for the Street Consensus at $ 1.38. Baidu said that adjusted Ebitda (income before interest, taxes, depreciation and amortization) was $ 993 million.
Baidu CEO Robin Li said in a statement that “with COVID-19 becoming more manageable in China, Baidu’s business is slowly being restored.” He noted that “in-app revenue grew in the second quarter, despite a challenging macro environment.”
The company bought $ 540 million in supplies back in the second quarter, bringing purchases over the past two years to $ 1.9 billion. Baidu also said its board has expanded its authorization to purchase expansion to $ 3 billion from $ 1 billion, effective through 2022. Baidu closed the quarter with $ 21.8 billion in cash and short-term investments.
For the September quarter, Baidu sees revenue ranging from $ 3.7 billion to $ 4.1 billion, representing growth from minus 6% to plus 2%. Street consensus has been $ 4 billion. “The situation of Covid-19 in China is evolving, and business visibility is very limited,” the company said.
Meanwhile, iQIYI (IQ) reported Thursday-quarter results Thursday afternoon, revealing an ongoing SEC investigation.
IQIYI reported revenue for the quarter of $ 1 billion, up 4% from a year ago, but slightly below the Street consensus at $ 1.05 billion, with a loss of 28 cents per share, which was better than the consensus forecast for a loss of 49 cents a share. The company said it had 104.9 million subscribers on June 30, 99.4% of its paying members, up from 100.5 million a year ago.
“We delivered another quarter of growth amid the volatile environment, with total revenue growing 4% year over year,” said iQIYI CEO Dr. Yu Gong in a statement. “The Covid-19 pandemic has had a huge impact on our business in our first half of the year, resulting in unusual user behavior, fluctuating numbers and unusual challenges. Nevertheless, we have further secured our dominant market position, supported by our substantial IP assets, excellent content and robust technology platform. ”
IQIYI revealed that the SEC has launched an investigation into “certain acquisitions and investments identified in a report issued by short-selling firm Wolfpack Research in April 2020,” and has requested “certain financial and business records” from Jan. 1, 2018. .
In that report, Wolfpack claims that it finds that iQIYI “fraud started well before its IPO in 2018 and still has.”
The report claims that “IQ is unable to grow its business legally enough to increase its financial statements,” and that IQ inflated its 2019 revenue by 27% -44%. “IQ does this because the user numbers are about 42% -60% too large,” the report says. “Then IQ inflates its expenses, the prices it pays for content, other assets, and acquisitions to burn counterfeit cash to hide the fraud from its auditor and investors.”
IQIYI said that “shortly after the publication of the Wolfpack report, the company hired professional advisers to conduct an internal review of some of the key allegations in the Wolfpack report and report its findings to the Audit Committee.”
The company said that these advisors have “examined iQIYI’s books and records” and are conducting testing procedures that, in their opinion, are necessary and appropriate for evaluating the key allegations in the Wolfpack Report, including accounting policy analysis, data analysis on or the company produces orders and inflates revenue and / or expenses. ”
IQIYI said that “the internal review is ongoing and we are currently unable to predict the timing for completion, outcome or consequences of the internal review.”
Baidu in late trading is down 7.7%, at $ 115.04. IQIYI is off 17.9%, at $ 17.90.
Write to Eric J. Savitz by [email protected]
.
