BIDU earnings name for the interval ending December 31, 2024.
Picture supply: The Motley Idiot.
Baidu (BIDU -7.42%)
This autumn 2024 Earnings Name
Feb 18, 2025, 7:30 a.m. ET
Contents:
- Ready Remarks
- Questions and Solutions
- Name Members
Ready Remarks:
Operator
Howdy, and thanks for standing by for Baidu’s fourth quarter and monetary yr 2024 earnings convention name. At the moment, all members are in listen-only mode. After administration’s ready remarks, there will probably be a question-and-answer session. In the present day’s convention is being recorded.
When you have any objections, you could disconnect presently. I wish to flip the assembly over to your host for at the moment’s convention, Juan Lin, Baidu’s director of investor relations.
Juan Lin — Director, Investor Relations
Howdy, everybody, and welcome to Baidu’s fourth quarter and monetary yr 2024 earnings convention name. Baidu’s earnings launch was distributed earlier at the moment, and you could find a replica on our web site in addition to on Newswire companies. On the decision at the moment, we’ve Robin Li, our co-founder and CEO; Julius Rong, our EVP answerable for Baidu Cell Ecosystem Group, MEG; Dou Shen, our EVP answerable for Baidu AI Cloud, ACG; and Jackson Junjie He, our interim CFO. After our ready remarks, we’ll maintain a Q&A session.
Please notice that the dialogue at the moment will include forward-looking statements made below the secure harbor provisions of the U.S. Securities Litigation Reform Act of 1995. Ahead-looking statements are topic to dangers and uncertainties that will trigger precise outcomes to vary materially from our present expectations. For detailed discussions of those dangers and uncertainties, please discuss with our newest annual report and different paperwork filed with the SEC and Hong Kong Inventory Alternate.
Baidu doesn’t undertake any obligation to replace any forward-looking statements besides as required below relevant legislation. Our earnings press launch and this name embrace discussions of sure unaudited non-GAAP monetary measures. Our press launch comprises a reconciliation of the unaudited non-GAAP measures to be audited most instantly comparable GAAP measures and is out there on the IR web site at ir.baidu.com. As a reminder, this convention will probably be recorded.
As well as, the webcast of this convention name will probably be out there on Baidu’s IR web site. I’ll now flip the decision over to our CEO, Robin.
Robin Li — Co-Founder and Chief Government Officer
Howdy, everybody. Baidu core complete income for the fourth quarter noticed a slight year-over-year enhance, reaching RMB 27.7 billion. Our AI cloud enterprise demonstrated sturdy momentum with income development accelerating to 26% yr over yr, offsetting the softness in our on-line advertising and marketing enterprise. The expansion was primarily pushed by broad market recognition of our AI capabilities through which we’ll proceed to take a position to verify we keep on the forefront of this know-how megatrend.
2024 marked a pivotal yr as Gen-AI demonstrated sturdy market demand. We see this momentum mirrored within the real worth we created for our clients by way of our AI merchandise and options, in addition to AI cloud companies. This development reveals how enterprises have woke up to AI’s transformative potential, catalyzing broader adoption throughout numerous situations, whereas affirming the market’s belief in Baidu’s technical capabilities and AI experience. As we proceed to cement our management place as an AI innovator, our imaginative and prescient is step by step coming to fruition on a number of fronts.
Our strategic AI investments are exhibiting significant progress throughout our key companies. Our cloud enterprise demonstrated strengthening momentum towards the top of the yr with each sturdy income development and margin growth as we continued to rebuild your complete product portfolio of our cellular ecosystem with AI, most notably in Baidu search. In the meantime, Baidu’s autonomous ride-hailing service, Apollo Go has confirmed the viability of its enterprise mannequin, strengthening our confidence in pursuing international growth and exploring asset-light enterprise fashions. ERNIE has demonstrated industry-leading capabilities in instruction following and state-of-the-art iRAG know-how that minimizes hallucination.
This best-in-class capabilities have pushed widespread adoption throughout numerous situations, resulting in considerably rising API prices. In December, ERNIE dealt with roughly 1.65 billion API prices every day. We witnessed a very sturdy exterior demand with exterior API prices rising 178% quarter over quarter. We noticed fast development throughout numerous enterprise sectors resembling training, e-commerce, leisure, and recruitment.
The sturdy development in exterior API price is pushed by two causes. First, companies are discovering sufficient worth from integrating ERNIE into their every day operations. Second, worth issues. Because the inference price goes down, adoption goes up fairly rapidly.
We not too long ago made a big strategic choice to open supply our upcoming ERNIE 4.5 sequence and make ERNIE Bot free for finish customers, which we imagine will additional develop market consciousness of ERNIE’s capabilities and allow broader adoption throughout an rising array of industries. Reflecting this rising market recognition, our AI cloud enterprise delivered a sturdy efficiency. In This autumn, we’ve partnered with main enterprises throughout numerous sectors, serving to them deal with particular operational challenges utilizing our AI merchandise and options. We collaborated with State Grid Company of China to develop a tailor-made AI answer based mostly on ERNIE and our MaaS platform, [Inaudible].
We’ve got developed complete AI options that permeate key operational processes. From energy dispatching and gear situation analysis to procurement, security supervision, advertising and marketing, and workplace techniques. Our options have demonstrated exceptional effectiveness in boosting operational reliability. Impressed by these outcomes, State Grid has elevated its spending on our AI cloud companies, additional deepening its collaboration with us.
We additionally collaborated with [Inaudible], a number one recruitment firm to undertake [Inaudible] ERNIE-powered outbound calling product for campus recruitment, that includes extremely humanlike voice with pure conversational talents. The product permits refined multi-round interactions. ERNIE’s superior capabilities ensured correct gauging of candidates’ curiosity in job alternatives whereas constantly maintaining conversations on monitor. With this product, [Inaudible] achieved a 50% greater acceptance price for job honest invites and 70% decrease labor prices.
The rising market recognition and adoption bolstered our confidence, and we’re optimistic that the expansion momentum we witnessed at the moment is only a begin. As enterprises proceed to find novel methods to harness ERNIE and our AI cloud potential, we foresee an ever-expanding horizon of prospects unfolding earlier than us. On the consumer-facing product, Baidu Wenku is a shining instance. In This autumn, Wenku’s subscription income grew 21% yr over yr.
In December, Wenku’s month-to-month energetic person of AI-enabled options reached 94 million, virtually doubling quarter over quarter, making Wenku one of many world’s largest AI merchandise by the variety of paying customers. This quarter, we built-in Baidu Wenku with Baidu Drive, enhancing Wenku as an AI-powered creativity platform. This integration permits Wenku to mix private cloud storage with AI-powered search and document-creation capabilities, whereas enabling customers to streamline their workflow from looking out, accessing recordsdata to creating and sharing, all inside a unified seamless platform. Moreover, Wenku launched Free Canvas in January, which transforms content material creation by enabling customers to prepare numerous codecs, textual content, slides, audio, movies, and even web site hyperlinks on a unified canvas.
Free Canvas additionally integrates with Wenku’s current AI capabilities, together with AI editor and AI-powered PowerPoint options, permitting customers to entry our full suite of AI enhancing instruments and save or share their work in any desired format by way of Baidu Drive. Leveraging ERNIE, Wenku is remodeling right into a next-generation clever creativity platform that redefines how customers create, collaborate, and produce their concepts to life. Now, turning to go looking, our largest consumer-facing product, which stands as one other compelling testomony to our AI transformation. Over the previous a number of quarters, we’ve aggressively leveraged ERNIE to rework search.
This has been a difficult however deeply significant journey like pioneers crossing unfamiliar waters, we embraced the uncertainties that include beginning new territories. After in depth exploration, we’ve outlined our path ahead in leveraging the facility of language fashions to current the multimedia content material in search outcomes. At present, 22% of our search end result pages include AI-generated content material. Throughout the quarter, we primarily targeted on redefining and enhancing the standard of our AI-generated search outcomes.
By means of ERNIE’s superior capabilities in content material technology, we are able to ship limitless high-quality content material on demand, vastly increasing the depth and breadth of our search outcomes. This quarter, we expanded past textual content technology to generate numerous content material codecs, together with brief movies, nodes, brokers, digital people and stay streaming. By means of this extra dynamic and diverse content material mixtures, customers can now uncover a broader vary of knowledge that was beforehand inaccessible, introduced in additional participating ways in which’s aligned with evolving person preferences. Consequently, we’ve achieved substantial enhancements throughout three dimensions of our search leads to high quality, amount, and format variety.
Alongside this, we additional enhanced the search expertise by optimizing the matching between queries and search outcomes. By analyzing the character and intent of every question, the Gen-AI-enabled search can decide the optimum content material format and presentation fashion resembling delivering AI-generated brief movies for easy methods to queries, producing comparative charts for analysis-focused searches, and dynamically organizing content material sequences. This clever matching ensures that customers obtain not simply essentially the most related outcomes however in the best and easy-to-understand format. The effectiveness of this transformation is mirrored in our improved person metrics.
On Baidu App, customers uncovered to AI-generated search outcomes demonstrated greater engagement ranges, carried out extra search queries, and confirmed greater retention charges and longer time spent. We’re inspired to see every day search queries per person elevated by 2% yr over yr in December. Throughout our AI transformation of search, we positioned sturdy emphasis on brokers as we envision brokers will turn out to be one of the vital vital types of AI-native purposes. Our brokers have now transcended their preliminary chatbot origins by way of convergence with digital human know-how, evolving into embodied clever entities with vivid visible presence, because of our industry-leading digital human know-how.
This represents a strong innovation path we pioneered, breaking new floor in how brokers work together with customers. Taking our newly launched lawyer brokers for instance. These embodied lawyer brokers can rework authorized experience and {industry} know-how into participating multimodal content material, that includes attorneys’ precise look in stay streaming and AI-generated brief movies. By means of these brokers, we are able to effectively generate high-quality authoritative content material at scale for Baidu search and feed whereas pioneering progressive codecs of content material and person engagement.
Furthermore, these brokers additionally create vital worth for attorneys by serving to them construct private manufacturers, improve engagement with potential purchasers, and enhance lead conversion. Such brokers have gotten a compelling new addition to Baidu’s content material ecosystem, creating new prospects whereas additional diversifying our content material panorama. Within the subject of clever driving, our continued investments in AI are additionally propelling vital progress in our Robotaxi enterprise. In This autumn, Apollo Go delivered exceptional outcomes that bolstered our place because the world’s prime autonomous ride-hailing service supplier.
Our home operations proceed to indicate sturdy momentum, and we’ve efficiently validated our pioneering enterprise mannequin by way of years of operations and established a path to profitability within the autonomous driving {industry}. Importantly, our unrelenting concentrate on security stays on the core of our efforts as we develop our companies. Up to now, Apollo Go fleets have gathered greater than 130 million autonomous kilometers with an excellent security document, underscoring our industry-leading requirements. This operational and security monitor document has paved the best way for additional scaling and operational enhancement.
Constructing on this achievement, we’re assured in increasing past Mainland China as we enter the following section of development. In November 2024, Apollo Go secured permits to conduct testing on open roads in Hong Kong, making us the one firm to obtain Robotaxi testing authorization within the area. Notably, Hong Kong represents our first entry right into a right-hand drive left-hand visitors market, showcasing our potential to undertake our autonomous driving know-how to completely different visitors techniques whereas sustaining rigorous security requirements. This achievement acknowledges our deep experience in autonomous driving operations as we’re dedicated to increasing our footprint and bringing secure, dependable, and handy autonomous drive hailing companies to extra cities and areas worldwide.
Now, let me evaluation the important thing highlights for every enterprise for the fourth quarter. AI cloud income reached RMB 7.1 billion in This autumn, delivering a robust year-over-year enhance of 26% with increasing non-GAAP working margins. This quarter, we doubled the dimensions of our unified GPU cluster, but nonetheless achieved a 99% legitimate coaching time, a exceptional achievement enabled by our sooner and extra superior community structure. Our community has confirmed the potential to allow GPUs throughout completely different geographical areas to work collectively seamlessly with minimized efficiency loss and routinely resolve for the frequent community points inherent in large-scale computing with virtually unperceivable impression to our purchasers, demonstrating our potential to ship peak efficiency at a large scale.
We proceed to boost [Inaudible], our MaaS platform, which improves the mannequin and app improvement expertise for our clients and companions. Our platform options the early household of fashions and provides entry to a number of high-quality fashions throughout the globe with DeepSeek being certainly one of our newest additions. We provide post-train, SFT, knowledge labeling and preparation for our fashions hosted on [Inaudible], enabling us to ship essentially the most appropriate fashions and instruments to enterprise purchasers in any respect scales. The rising market recognition of our AI experience continues to drive sturdy momentum in our enterprise shopper pipeline.
We’ve got established deep partnerships with main enterprises, together with Xiaomi and [Inaudible], additional highlighting the rising belief in Baidu AI Cloud. In addition to, we’re more and more changing into the popular selection for mid-tier companies. This displays the strengthening competitiveness of our AI infrastructure and marks a wholesome evolution and diversification of our buyer portfolio. For our cellular ecosystem, our present precedence is to additional improve the person expertise and refine our product options.
We are going to discover monetization alternatives after our Gen-AI-enabled search product options and framework turn out to be sufficiently refined. Moreover, we proceed to see brokers rising as a promising avenue for monetization, which represents significant development potential for our promoting enterprise. In December, over 27,000 advertisers have been producing advert spending by way of ERNIE brokers every day with fast development in healthcare, authorized, training, and B2B sectors. This fast adoption stems from brokers’ distinctive potential to handle their particular ache factors.
Brokers can rapidly grasp advanced non-standardized service portfolios, a activity that historically requires prolonged coaching for human customer support folks, whereas effectively qualifying these from normal buyer inquiries by way of clever multi-round interactions. For clever driving, in This autumn, Apollo Go offered roughly 1.1 million rides to the general public nationwide, representing a year-over-year development of 36%. In January, the cumulative rides offered to the general public exceeded 9 million. Additionally, we reached one other milestone not too long ago with the profitable transition to 100% totally collaborative operations nationwide.
Constructing on this sturdy momentum and with an unwavering dedication to security as our prime precedence, we anticipate to see even sooner development in our experience volumes, with a big acceleration anticipated in 2025 as we additional scale our operations. We proceed to enhance the know-how as we scale up, mixed with our validated enterprise mannequin and preliminary steps in increasing international footprint. We imagine we’re nicely positioned to create substantial worth and reshape the way forward for mobility. Pushed by our deep-rooted perception in know-how and conviction in AI long-term worth creation potential, we’ll proceed to take a position to verify we stand on the forefront of cutting-edge AI know-how and deploy that to all our merchandise throughout the board.
With that, let me flip the decision over to Jackson to undergo the monetary outcomes.
Junjie He — Interim Chief Monetary Officer
Thanks, Robin. Now, let me stroll by way of the main points of our fourth quarter and full yr 2024 monetary outcomes. Complete revenues within the fourth quarter had been RMB 34.1 billion, reducing 2% yr over yr. Complete revenues for the total yr 2024 had been RMB 133.1 billion, reducing 1% yr over yr.
Baidu Core’s This autumn revenues had been RMB 27.7 billion, rising 1% yr over yr. In 2024, Baidu Core generated RMB 104.7 billion in income, rising 1% yr over yr. Baidu Core on-line advertising and marketing income decreased 7% yr over yr to RMB 17.9 billion in This autumn, accounting for 65% of Baidu Core’s complete revenues. Baidu Core on-line advertising and marketing income decreased by 3% yr over yr in 2024.
Baidu Core’s non-online advertising and marketing income was RMB 9.8 billion, up 18% yr over yr. For the total yr 2024, non-online advertising and marketing enterprise elevated 12% yr over yr. The rise in non-online advertising and marketing enterprise was primarily pushed by AI cloud enterprise. Income from iQIYI was RMB 6.6 billion in This autumn, reducing 14% yr over yr.
Income from iQIYI was RMB 29.2 billion in 2024, reducing 8% yr over yr. Price of revenues was RMB 18 billion in This autumn, rising 3% yr over yr, primarily because of the enhance in visitors acquisition prices, prices associated to AI cloud enterprise, and a one-time write-down of inventories, partially offset by a lower in personnel-related bills and content material prices. Price of income was RMB 66.1 billion in 2024, rising 2% yr over yr, primarily as a consequence of a rise in visitors acquisition prices, bandwidth prices, and server custody charges, partially offset by a lower in personnel-related bills and content material prices. Working bills had been RMB 12.2 billion in This autumn, which remained flat in comparison with the identical interval final yr, primarily as a consequence of a rise in anticipated credit score losses, server depreciation bills, and server custody charges, which is for Gen-AI analysis and improvement enter and the channel spending and promotional advertising and marketing bills, partially offset by a lower in personnel-related bills.
RMB561 million of the rise in anticipated credit score losses was pertaining to a one-time accrual. Working expense was RMB 45.8 billion in 2024, reducing 4% yr over yr, primarily as a consequence of a lower in personnel-related bills. Working revenue was RMB 3.9 billion in This autumn, in comparison with RMB 5.4 billion for a similar interval final yr. Baidu Core working revenue was RMB 3.6 billion, and Baidu Core working margin was 13% in This autumn, in comparison with RMB 4.7 billion and 17% for a similar interval final yr.
The lower was as a consequence of one-time losses of RMB 1 billion, together with accrual of credit score losses, write-down of inventories, and others. Working revenue was RMB 21.3 billion in 2024. Baidu Core working revenue was RMB 19.5 billion, and Baidu Core working margin was 19% in 2024. Non-GAAP working revenue was RMB 5 billion in Q3.
Non-GAAP Baidu Core working revenue was RMB 4.6 billion, and non-GAAP Baidu Core working margin was 17% in This autumn. Non-GAAP working revenue was RMB 26.2 billion in 2024. Non-GAAP due Baidu Core working revenue was RMB 23.9 billion, and non-GAAP Baidu Core working margin was 23% in 2024. In This autumn, complete different revenue web was RMB 2.7 billion, in comparison with complete different loss web of RMB 2.5 billion for a similar interval final yr, primarily as a consequence of a rise in web international alternate achieve arising from alternate price fluctuation between Renminbi and U.S.
greenback and a lower in pickup of losses from an fairness technique funding, which modified sure phrases of its most well-liked shares and resulted in vital loss pickup in 2023. Earnings tax expense was RMB1.6 billion. In 2024, complete different revenue web was RMB 7.4 billion, rising 120% yr over yr, primarily as a consequence of a lower in pickup losses. Earnings tax expense was RMB 4.4 billion.
In This autumn, web revenue attributable to Baidu was RMB 5.2 billion, and diluted earnings per ADS was RMB 14.26. Web revenue attributable to Baidu Core are RMB 5.3 billion, and web margin for Baidu Core was 19%. Non-GAAP web revenue attributable to Baidu was RMB 6.7 billion. Non-GAAP diluted earnings per ADS was RMB 19.19.
Non-GAAP web revenue attributable to Baidu Core was RMB 3.7 billion, and non-GAAP web margin for Baidu Core was 24%. In 2024, web revenue to Baidu is up 23.8 billion, and diluted earnings per ADS was RMB 65.91. Web revenue attributable to Baidu Core was RMB 23.4 billion, and web margin for Baidu Core is 22%. Web non-GAAP web revenue attributable to Baidu was RMB 27 billion.
Non-GAAP diluted earnings per ADS was RMB 76.85. Non-GAAP web revenue attributable to Baidu Core was RMB 26.3 billion. And non-GAAP web margin for Baidu Core was 25%. As of December thirty first, 2024, money, money equivalents, residual money, and short-term investments had been RMB 139.1 billion, and money, money equivalents, restricted money, and short-term investments, excluding iQIYI, had been RMB134.7 billion.
Free money circulation was RMB 23million, and free money circulation, excluding iQIYI, was RMB 11.1 billion in 2024. We outline web money place as money and money equivalents plus complete restricted money, deposits, and others, much less complete loans, convertible senior notes, and notes payable. As of December thirty first, 2024, web money place for Baidu was RMB 170.5 billion. Baidu Core had roughly 31,000 workers as of December thirty first, 2024.
With that, operator, let’s now open the decision to questions.
Questions & Solutions:
Operator
Girls and gents, we’ll now start the question-and-answer session. [Operator instructions] Your first query comes from Alicia Yap with Citigroup. Please go forward.
Alicia Yap — Analyst
Hey, thanks. Good night, administration. Thanks for taking my questions. My query is on the newest sizzling subject.
So, we’ve seen DeepSeek gaining plenty of consideration recently and Baidu latest announcement for the open sourcing, the upcoming ERNIE 4.5-series and likewise making ERNIE Bot free of charge. So, may administration share with us the strategic pondering behind this transfer? And likewise, how can we view the present aggressive panorama of the inspiration fashions? How does Baidu plan to remain forward of this evolving market? Thanks.
Robin Li — Co-Founder and Chief Government Officer
Hello, Alicia. Let me reply your questions. The Gen-AI and basis mannequin market remains to be nascent however transferring at a really quick tempo. The DeepSeek success story will definitely speed up the adoption price of basis fashions.
As basis fashions turn out to be extra accessible and inexpensive, I imagine we’re getting into a very transformative section. We’re seeing an explosion of recent AI purposes and use circumstances that may open up unimaginable alternatives and push the boundaries of what is doable with AI. One factor we discovered from DeepSeek is that open sourcing the very best fashions can enormously assist adoption. When the mannequin is open supply, folks naturally need to strive it out of curiosity, which helps drive broader adoption.
ERNIE 4.5 will probably be our greatest fashions ever. And we wish to have our customers and clients strive them out extra simply than earlier than. So, our choice to open supply ERNIE 4.5 sequence can be backed by our deep confidence in our know-how management. This conviction stems from our decade-long dedication to R&D funding, our steady technological innovation, and our distinctive place as one of many few firms worldwide with full stack AI capabilities.
ERNIE has already demonstrated sturdy market traction with every day API prices surging from 50 million to 1.65 billion in only one yr. So, by way of open sourcing, we imagine extra builders and customers will acknowledge ERNIE’s true worth, driving even broader adoption and increasing its impression throughout extra situations. Equally, making ERNIE Bot free will allow extra customers to match our basis fashions with different fashions on an apple-to-apple foundation as a result of they do not cost. Final time we had a serious improve of ERNIE was in October 2023.
So, it is a very long time in the past. So, keep tuned for ERNIE 4.5 within the subsequent couple of months. Having stated that, I need to emphasize one essential level. Irrespective of open supply or shut supply, basis fashions turn out to be really helpful solely once they can successfully deal with real-world issues at scale.
We’ve got been dedicated to an application-driven strategy in repeatedly iterating ERNIE. With this mindset, since launching, we’ve been utilizing ERNIE to renovate our merchandise whereas serving enterprise clients. Internally, we have leveraged ERNIE to efficiently rework our consumer-facing merchandise like Baidu Search and Baidu Wenku. Externally by way of our MaaS platform, [Inaudible], we’re enhancing the mannequin and software improvement expertise for enterprise purchasers.
ERNIE’s industry-leading capabilities in instruction following and state-of-the-art retrieval augmented technology know-how minimizes hallucinations, have enabled large adoption throughout numerous situations. And [Inaudible] complete software chain permits our clients to customise any mannequin for their very own software situations. Going ahead, we plan to speed up ERNIE’s iteration based mostly on the efficiency enchancment and cost-cutting potential. We are going to proceed evolving it in areas with the best potential for real-world impression.
We’re excited in regards to the new chapter of AI improvement, and we stay up for seeing AI know-how convey extra groundbreaking purposes which have lasting worth for the society. Thanks.
Operator
Thanks. Your subsequent query comes from Lincoln Kong from Goldman Sachs. Please go forward.
Lincoln Kong — Goldman Sachs — Analyst
Thanks for taking my query. So, my query is in regards to the search enterprise. So, following latest quarters of search revamp, so how ought to we take into consideration the long run adjustment or modifications? So, what is the present mixture of the Gen-AI end result, and what’s our goal combine? And likewise, as AI integration continued to deepen, may you share extra coloration across the person metrics? On condition that AI chatbot resembling DeepSeek and [Inaudible] additionally providing search functionality, so how do you view the competitiveness or the competitors dynamics between Baidu search and people AI chatbots? Thanks.
Rong Luo — Government Vice President
Hello, Lincoln. Let me reply questions. At present, round 22% of all search end result pages have contained AI-generated content material. Nonetheless, there may be rather more premium itemizing.
We’ve got essentially remodeled search and making extra highly effective and environment friendly than ever earlier than. After which as Robin stated within the ready remarks, with ERNIE, we’ve increasing the search past textual content, hyperlinks to supply numerous content material codecs, together with brief movies, stay streaming, brokers, nodes, and brief performs. And these completely different codecs could be dynamically mixed to create a personalised search experiences. As we proceed to rework search, we’re additionally growing capabilities which permit for the deep personalization adapting to every customers’ habits and choice.
And our efforts have led to the higher person outcomes. In January, we are able to see the quantity month-to-month energetic customers who conduct a search on Baidu App, 83% engaged with the generative AI content material. What’s much more encouraging is that in December, the search queries per person on the Baidu App grew by 2% yr over yr. We concentrate on steady enchancment in person experiences, increasing AI’s position as we see more and more constructive person engagements.
Constructing on this, let me share a small case of how ERNIE brokers can create values for our advertisers. Throughout this previous Chinese language New 12 months vacation, whereas many small and medium enterprises are closed for one week and buyer demand in sure {industry} truly peak, our ERNIE brokers successfully bridge this hole. For instance, listening to an organization ought to enhance inquiries as a household reunited and chat on aged dad and mom’ well being wants. However their clients — however their very own customer support crew truly had been away as a result of they had been on vacation.
By means of ERNIE brokers, we’ve the corporate successfully establish and qualify the extremely related gross sales leads, enabling them to effectively circulation up and serve their clients seamlessly even with a lowered vacation. And concerning your query about AI chatbots and search, we imagine that we’re nonetheless within the very early stage of the AI revolution pushed by the inspiration fashions. Whether or not it is AI-native chatbot like DeepSeek or our AI-driven merchandise, these form of efforts, this all symbolize other ways to discover AI potential. Because the chief in China’s search market with lots of of hundreds of thousands of customers, we preserve agility and holistic market view by inserting the very best improvements and incorporating the really progressive AI options.
We proceed to pioneer AI transformations and enhancing the search experiences for our huge person base. Additionally, search by its nature is deeply rooted in language and textual content understanding, which aligns completely with the big language mannequin capabilities, which place us nicely to steer within the AI-powered search transformation. We imagine search is evolving into an built-in platform that transcend the AI chatbots and one which not solely gives the sensible solutions but in addition guides customers by way of their in journey from discovering solutions to offering in-depth evaluation to finishing duties and finally to delivering the excellent companies and options. Whereas AI chatbot represents an vital early section AI software improvement, the [Inaudible] at the moment has not but emerged.
And for us, the secret is to take care of this fast and decided tempo of the AI transformation, specializing in discovering what customers really want and one from the following technology of search. Thanks, Lincoln.
Operator
Thanks. Your subsequent query comes from Alex Yao from JPMorgan. Please go forward.
Alex Yao — Analyst
Hey, administration, thanks for taking my query. So, may you touch upon Core advert development outlook for first quarter ’25 and full yr 2025? What are the macro assumptions you made underlying this outlook because the promoting enterprise really bottomed out in 4Q ’24 and began to recuperate? Lastly, what are the potential alternatives for monetizing Gen-AI search, and what’s the anticipated timing? Thanks.
Rong Luo — Government Vice President
Thanks, Alex. That is Julius. Let me reply your query. Sure, we’re seeing the completely different sorts of seamless insurance policies rolling out prior to now few months just like the financial easing of fiscal stimulus and buying and selling insurance policies — whereas we imagine that these measures will finally will profit the economic system, they usually want a while to circulation by way of.
On condition that our promoting enterprise is very correlated with the small and medium enterprises who’re significantly delicate to macro situations, plus is persistently difficult aggressive panorama. And we’ve not actually seen any enhancements in This autumn but. Regardless of the near-term pressures, our efforts to rework search with monetary fashions are progressing steadily. And we imagine that this AI transformations will proceed to boost the person experiences and create new alternatives.
This quarter, we additional deepened AI transformation of search, and we’re seeing encouraging enhancements in person metrics as we talked about within the ready remarks. And we imagine this may assist drive income development and open new monetization alternatives in the long term. Additionally, we have not began to monetize our search outcomes at scale but, which is round 22 % of the overall queries. As soon as our AI-powered search options are sufficiently refined, we’ll transfer ahead with monetization.
With greater high quality person merchandise, we’re seeing alternatives for future development. Based mostly on these elements, we predict that we’re reaching the purpose of our commercial companies. We anticipate our app companies to step by step enhance with the primary half of the yr performing higher than This autumn and the second half of the yr exhibiting additional enchancment over the primary half. Thanks, Alex.
Operator
Thanks. Your subsequent query comes from Gary Yu from Morgan Stanley. Please go forward.
Gary Yu — Morgan Stanley — Analyst
Thanks for the chance. So, my query is concerning AI cloud. Given the sturdy development of your AI cloud enterprise this quarter, can we anticipate a continued constructive trajection going into 2025 and each when it comes to income and likewise profitability? What are the primary drivers behind this momentum? And moreover, may administration share your outlook on the AI cloud market in 2025? How ought to we strategy enterprise cloud demand, and what incremental alternatives does AI convey to this phase? Thanks.
Dou Shen — Government Vice President and Head, AI Cloud
Thanks, Gary, in your query. So, as Robin talked about, our AI cloud income development accelerated to 26% yr over yr in This autumn, contributing to a full-year income development of 17% in ’24. Notably, Gen-AI-related income almost tripled yr over yr in 2024. So, this development was fueled by rising demand for ERNIE and our AI infrastructure and scoring the market’s sturdy recognition of our technological management.
So, in consequence, we’ve efficiently attracted a various buyer base and constructed a sturdy pipeline of alternatives. So, for the AI infrastructure, we’ve established partnerships throughout numerous sectors, together with Web, automotive, sensible units, manufacturing, power, finance, utilities, and many AI GC start-ups. Our buyer base continues to develop healthily with sturdy positive factors amongst each top-tier and mid-tier clients, demonstrating our increasing market share in China’s cloud market. On the MaaS platform, [Inaudible], it gives complete basis fashions with the industry-leading worth and efficiency.
So, we provided the ERNIE household of fashions from flagship to light-weight variants designed to fulfill numerous wants. And apart from ERNIE, we additionally present entry to a variety of high-quality third-party basis fashions, together with DeepSeek’s V3 and R1 fashions. Because of our full stack AI capabilities and end-to-end optimization, we are able to guarantee optimum efficiency and stability for any mannequin hosted on our platform, whereas sustaining extremely aggressive presence. So, along with that, [Inaudible] gives a full sight of instruments for fine-tuning fashions and constructing AI-native apps in order that our clients can simply work out options catering for their very own particular wants.
So, when it comes to the AI cloud market, we imagine it’ll develop quickly in 2024 — 2025. On one hand, throughout the latest Chinese language New 12 months vacation, massive language fashions grew to become a broadly mentioned subject. This not solely additional elevated public consciousness in basis fashions, but in addition encourage extra folks to suppose merely about easy methods to leverage them to enhance their very own companies. Then again, we’re assured that the efficiency of basis fashions will proceed to enhance whereas the price will steadily decline.
Certainly, now, this may additional decrease the barrier to make the most of these fashions. So, in consequence, we imagine extra enterprises will combine basis fashions into each facet of their enterprise operations from R&D to manufacturing and to gross sales, which is able to drive explosive development in API price. Thereafter, we anticipate elevated spending on Baidu AI Cloud as we’ve noticed a transparent development prior to now that the customers who adopted basis fashions by way of API prices on our [Inaudible] MaaS platform additionally tended to extend their spending on our AI cloud companies. On the revenue aspect, our non-GAAP working margin continued to develop yr over yr in This autumn as we targeted on high-value alternatives that align with our strategic priorities, which drives sustainable, sturdy development.
So, wanting into 2025, we’re assured that our AI cloud income development will preserve sturdy momentum whereas persevering with to generate constructive working revenue. Thanks, Gary.
Operator
Thanks. Your subsequent query comes from Xiong Wei from UBS. Please go forward.
Wei Xiong — Analyst
Hello, administration. Good night. Thanks for taking my query. I need to ask about our margin development.
So, given the near-term headwinds in core adverts and the rising mixture of cloud income, how ought to we take into consideration the core margin ranges within the first quarter and likewise full yr 2025? Is there any room to additional optimize our working effectivity? And likewise, are there any funding plans for the total yr that we must always pay attention to? Thanks.
Junjie He — Interim Chief Monetary Officer
Thanks, Wei, in your query. That is Jackson. So, regardless of the near-term stress, so we stay optimistic that our strategic AI funding will ship extra sustainable impression. So, we keep targeted on bettering resilience throughout all facets of our enterprise operations and see encouraging progress throughout our companies.
First, for our on-line advertising and marketing enterprise. We anticipate our promoting income to step by step enhance, pushed by our plan to monetize our AI-generated search outcomes at scale and likewise our revenues to seize development alternatives when the macro improves. Secondly, for our AI cloud enterprise, it has already demonstrated sturdy development with continued margin enchancment, pushed by our rising market presence and the aggressive benefit in our distinctive self-developed four-layer AI structure and full stack AI capabilities. So, we stay assured in sustaining this sturdy momentum going ahead.
Third, for our whole driving enterprise, significantly Robotaxi, Apollo Go, we stay targeted on narrowing losses with higher operational effectivity and improved UE. We’re additionally exploring progressive operational fashions, together with asset-light fashions. As you requested for the investments and optimization in 2025, we’ll preserve optimum useful resource allocation to high-growth alternatives whereas keep aligned with our long-term technique. Our investments will proceed to concentrate on initiatives that supply each great future alternatives and robust ROI potential, together with additional advancing ERNIE’s capabilities, deepening the AI transformation search, enhancing our AI cloud choices, and increasing our autonomous driving initiatives.
As we transfer ahead with these initiatives, we stay dedicated to enhancing operational effectivity and fostering synergies throughout enterprise group to maximise the impression of those strategic investments. Thanks.
Operator
Thanks. Your subsequent query comes from Miranda Zhuang from Financial institution of America Securities. Please go forward.
Miranda Zhuang — Financial institution of America Merrill Lynch — Analyst
Good night. Thanks, administration, for taking my query. My query is in regards to the Robotaxi enterprise. Can administration present updates to the progress of the Robotaxi enterprise heading into 2025? What different targets for fleet measurement unit economies and worth proposition for our Robotaxi enterprise? What do you suppose the {industry} is approaching? Are we reaching an inflection level, and what’s your view in regards to the competitors dynamics as we’re seeing that China’s Robotaxi rivals leveraging ecosystem methods with automakers and likewise ride-hailing platforms? So, questioning what’s Baidu’s strategy to compete and scale? Thanks.
Robin Li — Co-Founder and Chief Government Officer
Yeah, that is Robin. We have invested in autonomous driving know-how for over a decade. We’ve got turned our large imaginative and prescient into actuality. By means of Apollo Go, we established ourselves as a number one international participant in autonomous driving know-how.
We function in one of the vital difficult environments globally. China’s visitors situations are among the many world’s most advanced as a consequence of its huge inhabitants, numerous highway situations, dynamic visitors situations, and sophisticated city layouts. The value for experience hailing in China it is about like one-seventh of that within the U.S. So, our profitable operation right here demonstrates our distinctive technological and operational capabilities.
We designed the RT6, our sixth-generation autonomous automobile, from the bottom up. It’s the most cost-effective Robotaxi automobile the world has ever seen. With this energy, we have efficiently validated our enterprise mannequin and laid a robust basis for additional scaling and international growth. In This autumn, Apollo Go offered roughly 1.1 million rides nationwide.
That is a 36% enhance yr over yr. And in January, the cumulative rides offered to the general public exceeded 9 million. Moreover, as I discussed, we have achieved 100% totally driverless operations in China, which implies that we haven’t any security drivers on the automobiles anymore. So, it is a new {industry} benchmark, and it reinforces our management on this space.
As I discussed earlier, in November of final yr, Apollo Go acquired the inexperienced mild to begin open highway testing in Hong Kong. And this is a vital step as a result of Hong Kong is our first right-hand drive and right-hand visitors market. It reveals our potential to adapt our autonomous driving know-how to completely different visitors techniques, opening doorways for growth into different markets with related driving setups. This yr will probably be a paramount yr for our growth, we anticipate to develop our fleet measurement and experience volumes sooner than ever.
As we push ahead, we’re additionally actively in search of cooperation alternatives. We’ve got recognized quite a lot of potential companions, together with mobility service suppliers, native taxi firms, third-party fleet operators and different potential companions. This asset-light strategy will enable us to scale up effectively whereas sustaining flexibility. By working with a various vary of companions, we intention to strengthen our place available in the market and produce autonomous driving to much more folks.
Trying on the broader market. As I discussed in our final earnings name, for the reason that market remains to be in its infancy, competitors truly helps speed up market improvement and foster a extra pleasant pro-innovation regulatory atmosphere. And on this rising market, our mission stays clear: delivering safer, extra handy, and extra snug mobility expertise for extra customers. Thanks.
Operator
Thanks. Your subsequent query comes from Thomas Chong from Jefferies. Please go forward.
Thomas Chong — Analyst
Hello, good night. Thanks, administration, for taking my questions. Trying into 2025, what will probably be Baidu’s strategic focus for enterprise investments. Particularly, how will assets be allotted throughout search, autonomous driving, cloud companies, and basis fashions? Moreover, what’s administration’s outlook on full-year 2025 capital expenditures in addition to shareholders’ returns.
Thanks.
Junjie He — Interim Chief Monetary Officer
Thanks, Thomas. That is Jackson. So, as we consider our capital allocation alternatives in 2025, so our strategy are guided by the next strategic concerns. So, we’ll proceed to spend money on advancing our AI capabilities as a long-term strategic precedence.
So, with that, we’ll additional deepen the AI transformation throughout our product portfolio, significantly search. For AI cloud, we intention to drive the adoption of our AI infrastructure, our MaaS platform, [Inaudible], and the ERNIE amongst enterprise clients, assembly their rising demand for our AI merchandise and options, in addition to AI cloud companies. In autonomous driving, we’re specializing in scaling home operations, exploring progressive operational mannequin, and increasing our worldwide presence, whereas guaranteeing disciplined ROI administration and efficient loss management. For capex, two key priorities drive our choices: to strengthening our know-how management and accelerating the adoption of our AI merchandise and AI cloud companies throughout completely different sectors.
As you requested for shareholder returns, we repurchased over $1 billion for the reason that starting of 2024, which is considerably greater than our complete buybacks in 2023. So, in complete, we’ve repurchased $1.7 billion below our $5 billion buy program, which runs by way of December 2025. So, going ahead, we plan to speed up our buyback program as a part of our ongoing efforts to return worth to our shareholders for his or her enduring belief and help. Thanks.
Operator
Girls and gents, that’s on a regular basis we’ve for questions. That does conclude our convention for at the moment. [Operator signoff]
Period: 0 minutes
Name members:
Juan Lin — Director, Investor Relations
Robin Li — Co-Founder and Chief Government Officer
Junjie He — Interim Chief Monetary Officer
Alicia Yap — Analyst
Lincoln Kong — Goldman Sachs — Analyst
Rong Luo — Government Vice President
Alex Yao — Analyst
Gary Yu — Morgan Stanley — Analyst
Dou Shen — Government Vice President and Head, AI Cloud
Wei Xiong — Analyst
Miranda Zhuang — Financial institution of America Merrill Lynch — Analyst
Thomas Chong — Analyst
