Chinese search engine giant Baidu beat Wall Street estimates for its latest completed quarter as the company’s financials were driven up by a rebound in advertising sales and stronger demand for the artificial intelligence and  cloud products offered by the company.

The current Chief Financial Officer (CFO) of the company, Herman Yu, has been appointed as the new chief strategy officer of the company even though h will continue to serve as the CFO till such time that the company finds a successor to his position, Baidu said.

The company has been able to diversify its sources of revenues as there was strong demand for the autonomous driving service and artificial intelligence-powered cloud products of the company – which registered strong growth and in which the company had invested heavily in recent years. The string business and revenues generated by these business units also helped the company to ward off competition in its core online search segment from companies such as Alibaba and ByteDance.  

The company also reported a 21 per cent year on year growth in its capital expenditure during the quarter to ramp these products, at about 15.9 billion yuan.  

A 15 per cent growth in advertising revenue during the quarter was reported by the company for its streaming affiliate, iQIYI, as well as a growth in the number of subscribers which reached 106.2 million by June. This was driven by addition of original content on the platform. The company reported a 3 per cent rise in total revenue at iQIYI at 7.6 billion yuan in the quarter.

The total revenue for the company increased to 31.35 billion yuan ($4.84 billion) during the second quarter ended June 30, compared to 26.03 billion yuan that was reported by the company in the same period a year ago, said Baidu, also known known as China’s Google. That was more than the average estimate of analysts of 30.96 billion yuan, according to IBES data from Refinitiv.

An adjusted profit of 15.41 yuan per American Depository share (ADS) was reported by the company which comfortably beat estimates of 13.05 yuan per ADS.

There is also increased scrutiny of Baidu and its services from online regulators in China in over issues related to data security and user privacy. The regulator has already taken multiple actions against a number of giants in China’s tech industry.

(Adapted from Investing.com)