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May 18 (Reuters) - China’s Baidu Inc reported quarterly revenue on Tuesday that beat Wall Street estimates, as the company beefed up its cloud and artificial intelligence services to fend off competition in the online advertising sector.
The Beijing-based tech giant has diversified its revenue sources by expanding its cloud services and intelligent driving technology footprint as competition for digital advertising sales heats up from local internet giants Alibaba and ByteDance.
The company, which obtained a secondary listing in Hong Kong in March, said total revenue rose 25% to 28.13 billion yuan ($4.38 billion) in the first quarter, boosted partly by the 70% year-on-year growth of its non-advertising revenue, which includes the cloud and artificial intelligence businesses.
Analysts on average had expected revenue of 27.25 billion yuan, according to IBES data from Refinitiv.
Baidu’s online ad revenue hit 16.3 billion yuan, a 27% increase compared with the same period a year earlier, when Baidu swung to an operating loss due to COVID-19 lockdowns.
Baidu’s non-ad revenue can exceed its ad revenue within Baidu Core in the next three years, said Baidu chairman and chief executive Robin Li in a conference call. The company’s ad revenue contributed around 80% of Baidu Core’s over the quarter.
“We see a great opportunity to offer non-ad services of our own to meet the needs of our large user base,” Li said.
The company’s flagship mobile Baidu App accumulated 558 million monthly active users as of March.
Baidu’s results also come amid a regulatory clampdown on China’s internet giants to keep a check on the country’s big techs’ monopolistic practices.
U.S.-listed shares of the company rose 3.5% in premarket trading. The shares had been on a tear in the first quarter amid a series of block trades tied to the meltdown of hedge fund Archegos Capital Management.
$1 = 6.4228 Chinese yuan renminbi Reporting by Eva Mathews in Bengaluru, Yingzhi Yang in Beijing; Editing by Maju Samuel, Louise Heavens and Ed Osmond