Baidu.com (NASDAQ:BIDU), the Chinese internet search and robotaxi company, reported a fall in sales for the past quarter but higher profits, though both were better than expected.
The shares were trading down 2% in US premarket trading on Thursday, down 0.2% in Hong Kong.
Baidu reported revenue of 34.45 billion yuan ($4.75 billion) for the third quarter of 2024, down 3% compared to a year ago and 1% lower than the second quarter, but better than the $4.6 billion that analysts were expecting.
Net income was up 14% at 6.68 billion yuan ($1.09 billion), which was also better than $857.17 million consensus forecast.
Results for the third quarter to September 30 reflected ongoing weakness in the Beijing company's online marketing business, offset by the growth of its AI cloud arm.
"Our strong AI capabilities are gaining broader market recognition," said CEO Robin Li, pointing to increasing adoption of the Ernie AI-powered chatbot, which so far this month is handling roughly 1.5 billion queries per day, up from 600 million in August.
Robotaxi arm Apollo Go also hit a new milestone, with the latest autonomous vehicles operating on public roads across multiple cities in China, Li said.
Apollo Go provided 988,000 rides in the quarter, up 20% compared to a year ago, with Baidu noting that its fully driverless vehicles accounted for over 70% of its nationwide total for the three-month period, which increased to 80% in October.
For comparison, Google's Waymo is providing 150,000 driverless rides per week, as per its latest update, equivalent to 1.8 million rides for a quarter.
Looking forward, Li said: "Despite the near-term pressures, we remain steadfast in our AI-focused strategy and are confident in our long-term trajectory. As we further scale AI, we are emboldened to find how it can drive innovations and create value for consumers, enterprises and society at large."