Baidu reported its first quarterly loss since going public

Chinese search engine giant Baidu (BIDU) has seen its stock tank 23% since it reported its first-quarter earnings results on May 16.

Its revenue rose 15% YoY (year-over-year) to 24.1 billion Chinese yuan ($3.5 billion) during the first quarter, slowing down for the fourth straight quarter. Meanwhile, the app’s daily active user count reached 174 million, growing 28% YoY.

Baidu Stock Has Plunged 23% since It Reported Its Earnings

However, the company posted a net loss of 327 million yuan ($49 million), its first loss since going public 15 years ago. The loss was mostly the result of high marketing costs, spending on content for its video-streaming service, and investments in futuristic technologies such as AI.

Baidu is facing stiff competition and tighter regulations

A slowing Chinese economy and tighter regulations are hurting Baidu’s ad growth. The company is also facing stiff competition from Tik Tok’s parent, ByteDance, a news aggregator. As with Google, online ads are still Baidu’s main source of revenue. Both Baidu and Google are seeing a slowdown as a result of increasing competition. Meanwhile, its investment in next-gen technologies isn’t going to pay off right away.

Baidu’s revenue is often seen as a measure of the Chinese private sector’s health. Its slowing growth is currently in line with the slowing Chinese economy. Its stock has nearly halved in the past 12 months.

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