Baidu revenue grows 6% in fourth quarter as AI and advertising boost business

China's Baidu said fourth-quarter revenue rose 6%, helped by gains from its artificial intelligence applications and a growing advertising business.

For the three months through December, the company reported revenue of 34.95 billion yuan ($4.92 billion), broadly in line with analysts' average estimate of 34.97 billion yuan, according to LSEG data.

The company's adjusted net income rose by 44% to 7.76 billion yuan, compared with 5.37 billion yuan for the same period a year earlier, beating analysts' forecasts for 6.32 billion yuan.

As China's largest internet search engine, Baidu makes the majority of its revenue from advertising. But as China's economy slows and consumers spend less, Baidu has increasingly invested in AI. In March last year, it launched its ChatGPT-like ERNIE Bot in bid to capture from the potential of the technology.

The company said ERNIE AI services have already started to contribute to Baidu's revenues.

"Throughout 2023, we made significant strides in advancing ERNIE and ERNIE Bot, reinventing our products and services, and achieving breakthroughs in monetization." Co-founder and CEO Robin Li said in a statement.

The U.S.-listed shares of the company rose by 0.4% in trading before the bell.

Baidu's online marketing revenue grew 6% to 19.2 billion yuan.

For the quarter, its adjusted profit was 21.86 yuan per American Depositary Share (ADS), compared with a profit of 15.25 yuan per share a year earlier.

This exceeded analysts' average estimate of 17.87 yuan per ADS, according to LSEG.