Baidu, Inc. (NASDAQ: BIDU) shares slipped after the company reported a decline in revenue and negative free cash flow, underscoring how its aggressive push into AI is reshaping the business, even as core advertising weakness persists.

The company reported quarterly revenue of $4.38 billion, a decline of 7% year-on-year (Y/Y), topping analysts’ consensus estimate of $4.31 billion.

Despite the revenue shortfall, Baidu’s adjusted earnings per American Depositary Share (ADS) came in at $1.56, exceeding the forecast of 91 cents.

Also Read: Baidu’s Apollo Go Targets Global Growth To Compete With Waymo, Tesla

Baidu’s core revenue fell 7% Y/Y to $3.46 billion. Online marketing revenue dropped 18% Y/Y to $2.16 billion.

However, non-online marketing revenue posted a strong gain, increasing 21% Y/Y to $1.31 billion, driven largely by its AI Cloud business.

Revenue ...