The following is the full text of the internal letter:
Dear Baidu students:
Today, Baidu released its unaudited financial report for the second quarter ended June 30. In the second quarter, Baidu achieved revenue of 29.647 billion yuan; net profit attributable to Baidu (non-GAAP) reached 5.541 billion yuan, a year-on-year increase of 3% and a month-on-month increase of 43%, exceeding market expectations.
The difficulties and challenges of the macro environment are believed to have been deeply felt by everyone. In the Baidu Simple Appointment a few days ago, the students also talked about this issue. We need to fully recognize the difficulty and fully consider this premise in every work decision. But in difficult times, it is also necessary to have rational faith. Over the years, Baidu has been working hard to change the world with technology and make the complex world simpler with technology. The value that technology brings to people’s lives and the productivity of society is definite. Our years of accumulation and long-term investment in technology have made people feel more and more that Baidu can provide unique value.
China’s digital and intelligent transformation provides Baidu with huge growth opportunities.
China’s digital and intelligent transformation is still in its infancy. Organizations are eager to use technology to improve efficiency and productivity. We are on a track with long-term dividends. But among them, we need to find out the real variables and analyze how many factors Baidu’s technology can play a key role. For example, we propose that intelligent transportation can improve efficiency by adjusting traffic lights, and it is because we see that Baidu’s accumulation in AI over the years can play a key role, and we have the confidence to say so.
In recent years, Baidu Smart Cloud has cut into the core scenarios of key industries such as manufacturing, water, energy, transportation, and public utilities, accumulated industry experience, and then deposited the general needs of different industries into AI products. Through AI innovation to achieve cross-industry replication of similar cases, the profit performance of Baidu Intelligent Cloud has been further optimized. In the second quarter, Baidu Smart Cloud once again led the industry in growth rate, with revenue increasing by 31% year-on-year and 10% month-on-month, accounting for a further increase in Baidu’s core revenue. Continuing to do so, Baidu Smart Cloud will become more competitive in China’s digital and intelligent transformation.
Apollo has taken a critical step in building a revolutionary business model and accelerating its expansion.
The target mass production cost of the Apollo RT6 we launched in July is only 250,000 yuan, which is equivalent to the price of an ordinary new energy vehicle. The dramatic drop in the cost of driverless cars has allowed us to deploy tens of thousands of these vehicles across the country. In August this year, Radish Kuaipao launched fully unmanned commercial operations in Chongqing and Wuhan. Baidu has become the first and only company in China to provide the public with fully unmanned autonomous driving services on open roads.
The reduction of vehicle cost and labor cost will promote the accelerated expansion of Carrot Run. Large-scale operations can better drive technological progress and provide more favorable conditions for us to further improve L4-level autonomous driving technology.
In the second quarter, the operation scale of Radish Express continued to expand, providing 287,000 rides, a year-on-year increase of nearly 500%. As of July 20, 2022, the cumulative order volume of Carrot Run has reached 1 million, making it the world’s largest autonomous driving travel service provider. In Yizhuang, Beijing, radish running has become an important way for citizens to travel daily, accounting for about 10% of the market share of online car-hailing travel in Yizhuang area.
With the blessing of AI technology and lean operations, Baidu’s mobile ecosystem has become more prosperous, and its operational efficiency has continued to improve. In June, the number of monthly active users of Baidu App reached 628 million, an increase of 8% year-on-year, and the number of daily logged-in users accounted for 84%.
These achievements also benefit from the continuous improvement of our organizational capabilities.
We conducted a new round of high-level cross-BG rotation in May this year. Judging from the results, Baidu’s organizational capabilities are more mature. We have a stable and excellent management team, and we have also made great progress in the rejuvenation of senior executives. We will also fully trust and empower young talents. According to the quarterly survey that 30,000 employees participated in, compared with the previous quarter, the morale of employees in this quarter has improved significantly. The students are full of confidence in the completion of the established business goals in their departments, and the departments are more cohesive and cohesive, and more successful difficult determination.
Only when the direction is clear can the quasi course be followed; only by keeping up with the thought can we put it into action. Play chess well, play active battles well; seek progress while maintaining stability, and you will surely achieve something.