Chinese search engine Baidu.com's (BIDU) unaudited financial results for the fourth quarter and fiscal year ended December 31, 2006 show total revenues in the fourth quarter 2006 increased to CNY271.3 million, a whopping 136.1% increase from the corresponding period in 2005.
"We are pleased to deliver another quarter of robust results as our rapidly growing brand recognition and our focus on providing the best user experience allowed us to strengthen our leading position in Chinese search," said Robin Li, Baidu's Chairman and CEO.
Total revenues in 2006 were CNY837.8 million, representing a 162.5% increase from 2005.
Online marketing revenues for the fourth quarter were CNY269.8 million, representing a 141.4% increase from the fourth quarter 2005. The growth was driven by the increases in both the number of active online marketing customers and revenue per customer. Baidu had more than 108,000 active online marketing customers in the fourth quarter of 2006, representing a 5.9% increase from the previous quarter. Revenue per online marketing customer for the fourth quarter increased to CNY2500, a sequential increase of 7.3% and an increase of 41.0% from the corresponding period in 2005.
Traffic acquisition cost as a component of cost of revenues was CNY23.6 million, representing 8.7% of total revenues, compared to 7.8% in the corresponding period in 2005. Selling, general and administrative expenses were CNY71.0 million, representing an increase of 43.8% from the corresponding period in 2005, primarily due to expansion of the direct sales force. Research and development expenses were CNY20.9 million, representing a 46.2% increase from the corresponding period in 2005, primarily due to headcount increases.
Share-based compensation expenses, which were allocated to related operating cost and expense line items, decreased in aggregate to CNY7.4 million in the fourth quarter of 2006 from CNY10.5 million in the corresponding period in 2005. The decrease in share-based compensation expenses primarily reflects reduced options grants during the quarter, decelerated amortization of existing options granted before 2006 and change in actual and estimated option forfeiture rate.
Operating profit was CNY101.7 million, representing a 615.3% increase from the corresponding period in 2005.
Net income was CNY122.8 million, representing a 400.2% increase from the corresponding period in 2005. Basic and diluted EPS for the fourth quarter of 2006 amounted to CNY3.65 and CNY3.54, respectively.
As of December 31, 2006, Baidu had cash, cash equivalents and short- term investments of CNY1.2 billion. Net operating cash flow and capital expenditures for the fourth quarter of 2006 were CNY170.8 million and CNY22.8 million, respectively.
Baidu currently expects to generate total revenues in an amount ranging from CNY265 million to CNY275 million for the first quarter of 2007, representing a 95% to 103% increase from the corresponding period in 2006.
