Baidu.com (BIDU) has announced its unaudited financial results for the quarter ended September 30, 2005. Total revenues increased to CNY88.9 million, representing a 27.6% increase from the previous quarter and a 174.4% increase from the corresponding period in 2004.
Online marketing revenues for the third quarter of 2005 were CNY85.9 million, representing a 28.7% increase from the previous quarter and a 188.5% increase from the corresponding period a year ago.
The growth was primarily attributable to an increase in the number of active online marketing customers which, increased to over 53,000, representing a 28.9% increase from the previous quarter and a 148.2% increase from the corresponding period in 2004.
Depreciation expenses of servers and other equipment as a component of cost of revenues was CNY7.7 million, representing a 63.6% increase from the previous quarter and a 318.6% increase from the corresponding period in 2004. This increase was primarily attributable to expenses incurred in connection with the building of our new major data center in Beijing to strengthen our ability to support increasing user traffic.
Capital expenditures totaled CNY38.9 million for the third quarter of 2005, representing a 149.3% increase from the previous quarter.
Bandwidth cost as a component of cost of revenues was CNY6.7 million, representing a 66.0% increase from the previous quarter and a 333.7% increase from the corresponding period in 2004 relating mostly to our data center expansion.
Traffic acquisition cost as a component of cost of revenues was CNY5.7 million, representing 6.4% of total revenues compared to 9.4% in the corresponding period in 2004.
Research and Development expenses were CNY11.0 million, a 58.8% increase from the previous quarter and a 224.0% increase from the corresponding period in 2004 reflecting the increase in R&D headcount.
Selling and marketing expenses as a component of selling, general and administrative expenses were CNY19.7 million, representing an increase of 22.7% from the previous quarter and 189.8% from the corresponding quarter in 2004. The increase was mainly due to our ongoing brand promotion efforts during the quarter and the expenses incurred in strengthening our sales and distribution network.
Operating profit on a GAAP basis was CNY6.9 million, representing a 42.2% decrease from the previous quarter and 172.0% increase from the corresponding period in 2004.
The sequential decrease was mainly due to share-based compensation expenses and an increase in server depreciation and bandwidth costs associated with the opening of the new data center. Operating profit excluding share-based compensation expenses (non-GAAP) was CNY17.7 million for the third quarter of 2005, remaining stable from the previous quarter and a 139.8% increase from the corresponding period in 2004.
Net income on a GAAP basis was CNY8.5 million, representing a 29.4% decrease from the previous quarter and a 189.3% increase from the corresponding period in 2004.
Net income excluding share-based compensation expenses (non-GAAP) was CNY19.3 million, a 6.0% increase from the previous quarter and a 147.9% increase from the corresponding period in 2004. Basic and diluted earnings per ADS for the third quarter of 2005 amounted to CNY0.35 and CNY0.26, respectively.
Net cash provided by operating activities was CNY53.5 million for the third quarter of 2005, representing a 65.6% increase from the previous quarter and a 205.6% increase from the corresponding period in 2004.
Baidu currently expects to generate total revenues in an amount ranging from CNY102 million to CNY106 million for the fourth quarter of 2005, representing a 215-227% increase from the corresponding period in 2004.
