Hello, and thank you for standing by for Baidu's first quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Juan Lin, Baidu's Director of Investor Relations.
Hello, everyone, and welcome to Baidu's Q1 2022 earnings conference call. Baidu's earnings release was distributed earlier today, and you can find a copy on our website as well as our newsletter services. On the call today, we have Robin Li, our Co-Founder and CEO, Rong Luo, our CFO, Dou Shen, our EVP in charge of Baidu AI Cloud Group, ACG, and Zhenyu Li, our SVP in charge of Baidu Intelligent Driving. After our prepared remarks, we will hold a Q&A session. Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.
For detailed discussions of these risks and uncertainties, please refer to our latest annual report and other documents filed with the SEC and Hong Kong Exchanges and Clearing. Baidu does not undertake any obligation to update any forward-looking statements except as required under applicable law. Our earnings press release and this call includes discussions of certain unaudited non-GAAP financial measures. Our press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures and is available on our IR website at ir.baidu.com. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on Baidu's IR website. I will now turn the call over to our CEO, Robin Li.
Hello, everyone. We delivered solid first quarter results driven by the continued strength of our new AI business. More specifically, revenues from Baidu AI Cloud increased by 45% year-over-year. We achieved new wins for Apollo Self-Driving or ASD from automakers during the quarter, validating our confidence in the auto solution monetization roadmap. Apollo Go made groundbreaking headway. We won the first permit in China for driverless ride-hailing services on open roads in April, further fortifying our unquestionable leadership in the robot taxi market. Like many other companies in China since mid-March, our business has been negatively impacted by measures to stem the spread of COVID-19. Basically, the recovery of our ad business and the implementation of some cloud projects have been delayed.
In the near term, the challenges related to the virus continue to cause uncertainty to the macro environment and pressure our business operation. Looking beyond the near term turbulence, we believe both China's economy and Baidu's business will remain promising for the mid to long term. We expect our ad business to recuperate when overall economic buoyancy returns. In the meantime, to enable our long-term growth, we will continue to invest proactively and prudently in our new AI businesses, including Baidu AI Cloud, Apollo Go, and ASD. Most notably, our new AI businesses are well-aligned with China's priorities in tech innovation, green transition, and digital economy. The themes have been repeatedly emphasized by top officials at national events, including the recent meeting convened by Chinese People's Political Consultative Conference, boosting the application of AI in China, and with that, the long-term growth prospects of Baidu.
We see great opportunities to use technology to accelerate the development of the real economy. Organizations in various sectors such as energy and utilities, manufacturing, finance, and the public sector, have come to realize that not only they need to digitize what they do, they can also use all kinds of AI technology to enhance their competitiveness through cost reduction and efficiency improvement. The demand for digitization and AI come at the same time. That presents a unique opportunity for us to deliver Baidu AI Cloud solutions in a seamless way. In addition, Baidu ACE Smart Transportation supports our contribution to the growing economy.
According to China Academy of Transportation Sciences of the Ministry of Transport, Baidu ACE projects have helped Baoding City reduce its carbon dioxide output by 24,400 tons annually, which is equivalent to planting more than 240,000 trees. As more and more cities adopt the Baidu ACE smart transportation, we believe we will make increasing contributions to reduce carbon emissions with AI technologies, and fulfill our commitment to the environment and society. Now let's review the first quarter operational highlights. Baidu AI Cloud maintained its fast growth momentum, benefiting from digital and intelligent transformation of China's traditional industry and the public service sector, as well as our cutting-edge AI technology. Over the past quarter, we have achieved rapid revenue growth with an emphasis on the quality of growth.
With the integration of AI and cloud, we have built a wide range of AI-powered applications and tools that can generate more replicable and scalable AI solutions in industries such as the public service sector, energy and utility, healthcare, as well as transportation. By doing so, we are working hard to shorten our project implementation time, and we believe we will be able to also improve our margin over the long term. One example is how we bring AI to the public service sector. Last year, we talked about how we used AI to build a smart city together with the Lijiang Municipality, helping improve the city's safety, efficiency, convenience, and environmental quality. By serving larger cities such as Lijiang, Baidu AI Cloud has standardized a set of AI solutions that many other cities or districts can adopt and adapt.
This year, Guandu, one of the seven districts of Kunming City, began adopting our AI solution to keep the region safe and clean. Compared to the Lijiang project, we managed to reduce the development time of our smart city project by 50%. Another example is in the energy and utility sector. We empowered Quanzhou Water Company to deploy our AI solutions for predicting water consumption and automatically adjusting water supply. By serving Quanzhou, we have established a set of AI solutions for the water industry, quickly driving our business scaling. In March, we won a project from the water company of the Baiyun District of Guangzhou, one of the largest cities in China. On top of offering similar solutions to Quanzhou, we also build additional AI solutions to help customers improve wastewater treatment and flood control in the region.
Given the expanded scope of Baiyun District of Guangzhou, this contract amount will be multiple the size of the Quanzhou project. Turning to ACE Smart Transportation. By the end of the first quarter, Baidu ACE has been adopted by 41 cities, up from 16 cities a year ago and 35 cities a quarter ago, based on the contract amount of over RMB 10 million. Leveraging our AI capabilities to synergize a vast amount of real-time data from multiple sources, Baidu ACE has helped increase traffic management efficiency. According to a senior official from the Beijing High-Level Automated Driving Demonstration Area, the traffic flow at the intersection has improved by 28%, thanks to our ACE smart transportation solution in the Yizhuang region.
Going forward, we continue to aim at above-industry growth for our AI cloud business and target long-term quality revenue and sustainable growth despite the near-term headwinds caused by the COVID-19 control measures. Moving to intelligent driving. We continue to grow our deals pipeline with auto OEM for the provision of our ASD solutions, in particular for Apollo Navigation Pilot, or ANP. According to our internal estimates, recently the total projected cumulative sales of auto solution, including ASD and DuerOS for Auto, surpassed RMB 10 billion. After winning a partnership with BYD at the beginning of the year, in April, we received a nomination letter from Dongfeng Motor, which is a top three domestic automaker. Dongfeng intends to adopt our ANP, AVP and HD Map in one of its popular auto models.
With smart driving and smart connectivity gaining popularity and considering in-house development is costly and time-consuming, automakers are increasingly interested in adopting our intelligent driving solution to capture this new trend. As a result, we expect our ASD pipeline to keep growing in the future. Apollo Go achieved a major new milestone with the award of the first driverless ride-hailing permit in China on public roads. On April 28, 2022, the Beijing High-level Automated Driving Demonstration Area took the lead nationally when it specified the criteria and granted permits for providing driverless ride-hailing services on open roads in the Yizhuang region of Beijing. Apollo Go became the first company to receive the permit. We believe this approval indicates a regulatory openness to taking a further step towards a fully driverless mobility future, allowing Apollo Go to further scale up its operation.
In 2018, we became the first company to launch road testing for autonomous driving in Yizhuang. In the fourth quarter of 2020, we won the project to build ACE smart transportation and introduced our autonomous ride-hailing services in the densely populated areas of Beijing. By doing so, we have taken a more holistic approach to intelligent mobility, which synergized our ACE smart transportation solutions, autonomous vehicles, maps, and cloud services. This approach has allowed us to better overcome the complexity and high density of urban traffic in Beijing. Last year, Apollo Go was authorized to conduct driverless testing on open roads and provide paid autonomous ride-hailing services. This April, we were allowed to provide driverless ride-hailing services on open roads to passengers without a safety driver behind the steering wheel. This rapid development reflects the government's recognition of our proprietary technologies and operational capabilities.
In the future, we plan to replicate the Yizhuang case to other cities. Most recently, we were authorized to conduct driverless testing on open roads in Chongqing, following the permit for Apollo Go to charge passengers on open roads three months ago. We are happy to note that Apollo Go continues to hold a leading position in the global autonomous ride-hailing market. During the first quarter, we provided 196,000 rides, up over 11x from a year ago. The number of rides dropped by 8% quarter-on-quarter, mainly due to the COVID-19 control measures since the beginning of this year and weak seasonality. In terms of geographic coverage, Apollo Go further advanced into 10 cities in China. While expanding our services, Baidu has worked hard to meet the technical challenges of China's complex traffic environment.
It is important to note that by serving passengers on a daily basis and on a much wider scale, we have detected problems that have been unnoticeable during the testing phase, further speeding up the development of our autonomous driving technology. Looking ahead, we are confident in maintaining our absolute market leadership in intelligent driving, as demonstrated by the ongoing growth of Apollo's pipeline and scaling of the Apollo Go operation. Now, briefly updating you on DuerOS. Xiaodu retains the top rankings in smart display and smart speaker shipments that we have provided in previous quarters, and revenues continue to grow rapidly. Moving to mobile ecosystem, Baidu App users and traffic growth remained solid. In March, MAU increased by 13% year-over-year to 632 million, and daily logged-in users continued to trend up, reaching 83%.
Both in-app search queries and daily content distributed by feed achieved double-digit year-over-year growth. Baidu Smart Mini Program MAU reached 500 million mark, up 22% from a year ago. While our mobile ecosystem continued to thrive, we persist in our efforts to innovate and improve user experience. In videos, daily short videos distributed by Baidu App, including both search and feed, enjoyed accelerated year-over-year growth to over 25% in March, enabled by the fully immersive video experience we introduced at the end of last year. In services, over 100,000 industry participants signed up for our instant replies feature in March, up from about 44,000 in December. Total daily instant replies increased by almost 6x year-over-year in March, up about 20% from last December.
As China's mobile internet matures, apps and mobile platforms are eager to acquire traffic at affordable costs. We have observed that many vertical leaders, in particular local service providers such as Meituan Waimai and Maoyan, choose to deepen their collaboration with Baidu App by tailor-making their offers to our users. This has resulted in notable increases in user engagement and transactions for their Smart Mini Programs on Baidu. In e-commerce, GMV facilitated by Baidu Search, though still small, grew about 14x year-over-year in the quarter. The above-mentioned innovations and steps forward are the latest in our transformation from information search to delivering closed loop user experiences, which enables us to strengthen our mobile ecosystem around search. Going forward, we will continue to work hard on maintaining stable margins for the mobile ecosystem and fund our investments in the new AI businesses despite the near-term headwinds.
With that, let me turn the call over to Rong to go through our financial highlights.
Thank you, Robin. Now let me walk you through the details of our first quarter financial results. Baidu's Q1 revenue was RMB 28.4 billion, or $4.5 billion, up 1% year-over-year. Baidu Core Q1 revenue reached RMB 21.4 billion, or $3.4 billion, up 4% year-over-year. Advertising for Baidu Core reached RMB 5.7 billion, up 35% year-over-year, and accounting for 27% of Baidu Core's revenue, up from 21% a year ago. AI cloud revenue was RMB 3.9 billion, up 45% year-over-year. Cloud contributed almost 70% of the non-GAAP revenue, and remained a key revenue growth engine. Our apps benefited from the multi-cloud strategy adopted by many of our customers, in particular the customers in the internet industry.
Our business for enterprises and the public sector is the driving force for cloud revenue, again achieving rapid revenue growth in key sectors such as energy and utilities, the public service sector and the transportation. Revenue from Xiaodu remained solid in the quarter. Baidu Core app revenue was RMB 15.7 billion, decreasing 4% year-over-year. The performance of our app business is highly correlated with the macro, having been impacted by the COVID-19 related control measures. In fact, many of our top industries, such as travel, franchising, real estate and healthcare, having suffered from the reduced offline activities. On the flip side, when people are staying at home due to the COVID-19 restrictions, they tend to spend more time on our platform.
In particular, they come to Baidu App to check reliable information about the COVID-19 situation, which has positively contributed to our user and traffic growth. As Robin said, we expect our app business to recover once the macro environment improves, thanks to our widely diversified customer space that covers many industries in the Chinese economy. iQIYI revenue was RMB 7.3 billion, decreasing 9% year-over-year. iQIYI average daily number of total subscriber members reached RMB 101 million for the quarter, and membership revenue was up 4% year-over-year, mainly due to a refined membership strategy to improve monetization capabilities.
Cost of revenue was RMB 15.5 billion, up 4% year-over-year, primarily due to an increase in cost of goods sold, traffic acquisition costs, bandwidth costs, and the other costs related to the new AI business, offset by a decrease in content costs. Operating expenses were RMB 10.3 billion, decreasing 1% year-over-year, primarily due to a decrease in channel spending, promotional marketing, and tax expenses. Non-GAAP operating income was RMB 4 billion, or $650 million, and non-GAAP operating margin was 14%. Non-GAAP operating income for Baidu Core was RMB 3.9 billion, or $581 million. Non-GAAP operating margin for Baidu Core was 17%. Adjusted EBITDA was RMB 5.5 billion, or $867 million.
Adjusted EBITDA margin was 19%. Adjusted EBITDA for Baidu Core was RMB 5.1 billion or $805 million. Adjusted EBITDA margin for Baidu Core was 24%. Cash and short-term investments for Baidu Core as of March 31, 2022 was RMB 185.8 billion or $29.3 billion. Free cash flow for Baidu excluding iQIYI was RMB 1.1 billion or $175 million. Baidu Core had approximately 38,000 employees as of March 31, 2022. Operator, with that, let's now open the floor to questions.
Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask questions, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Participants are requested to restrict one question at each time.
Our first question comes from the line of Alicia Yap, Citigroup. Please ask the question.
Hi. Thank you management. Thanks for taking my questions. Congratulations on the solid set of results in the tough environment. My questions is on the outlook. Wonder, can management give us some color what should we expect for your revenue trend in the second quarter and also the rest of the year? In particular, when do you expect the inflection point for your advertising business to happen, given, you know, most of the offline spending is, you know, correlated with the macro. Secondly, noticed that your first quarter operating margin came in stronger and better than the market expected. Could you give us some color how we should think about the margin outlook for the second quarter and also the rest of the second half?
Lastly, if I may just in light of the latest macro environment, wondering if there's any change in Baidu's long-term strategy and the growth outlook? Thank you.
Thank you, Alicia. This is Rong Luo, and let me take your first questions about the convenience. I think as Robin Li has mentioned in his prepared remarks, starting from mid-March, our app and cloud business has been negatively impacted by the rapid development of Omicron. I think which is, let's say, different from the previous variants, Omicron has spread faster and affected many cities, including top cities in China, like Shanghai and Beijing. Such impact has already lasted over two months and is still ongoing in China. This is lasting much longer than any previous round of resurgences. The COVID situation is more severe than early March. For many of our customers, the business activities have been significantly disrupted, and our ad business has been negatively impacted. Also, we had to reduce the business travel because of the COVID-19 restrictions.
This also caused a negative impact to our B2B and 2G business, especially the AI cloud serving the enterprises and the public sectors, because we have to postpone some of the deployments of our AI cloud projects. Taking into consideration of all of these factors, we think compared to the first quarter, the second quarter will be more challenging for us as well as for the industry. On the one hand is we have relatively limited visibility for the second half of this year at this stage, but this should largely depending on how the pandemic develops. On the other hand is we're also happy to see that recently the Chinese government has released clear signals to support economic development and the digital economy at the top level.
We will continue to closely monitor the development of the virus and the macro conditions. Here I would like to emphasize that Baidu's own advertising is widely diversified and covers many industries in the Chinese economy. We believe once there is a rebound of the Chinese economy, our advertising business will definitely benefit from such recovery. Given the current macroeconomic uncertainties, we will be more disciplined with our spending and investment. For example, we will be very prudent in spending on sales and marketing. With that said, on one side, we continue to see a lot of growth potentials in the AI-enabled new businesses, so we are determined to continue investing in these areas such as AI cloud and the intelligent driving. This business, having been developing so fast during the past quarters.
On the other side is for the mobile ecosystem, the overall mobile internet market in China maturing. We will balance our investment and the growth in this area, and we will be more disciplined with our investments here.
On your long-term strategy question, despite the near-term challenges, Baidu's long-term vision for our business remains unchanged. We believe that our mobile ecosystem provides a unique value proposition to our users and ad customers. AI will raise the bar again and again for information access in the years to come. We will also continue to innovate and provide search users with closed-loop services within Baidu apps. As you see that our non-ad revenue now accounted for 27% of Baidu Core. That is up from 21% a year ago. Within non-ad, we believe our new AI businesses, like, Baidu AI Cloud and intelligent driving are well geared with China's goal in technology, innovation, digital economy and green transition.
These businesses have made enormous progress over the past quarters and are well positioned to capture the total addressable market. Baidu AI Cloud continue to drive the digital and intelligent transformation of China's traditional industry and the public service sector. So you see that our cloud revenues from enterprises and public sector consistently outgrow that are up here. Intelligent and connected vehicles are becoming the new attraction in auto sales. Many automakers have come to realize that adopting Baidu solution is better than investing heavily in developing their in-house solution. The Apollo Go already holds a leading position in the global autonomous ride-hailing market. We just won the first permit in China for driverless ride-hailing services, also held in Beijing. In May, we were allowed to conduct driverless testing in Chongqing.
You can see our vision and the duality remains the same. We are an AI company with a strong internet foundation. There's a lot of synergy between all of our businesses and our technology innovation. With that, we are very confident in Baidu's long-term growth potential.
Thank you.
Thank you. The next question comes from Lincoln Kong, GS. Please ask the question.
Thank you, management, for taking my question. My first question is that we saw earlier, you know, the media report the Chinese People's Political Consultative Conference had a meeting in Beijing last week. Robin Li, you're one of the attendees from the internet companies. We're quite curious to learn what's your takeaway from the meeting, and have you made any proposal in the meeting? My second question is about the mobile. We noticed that the user growth was pretty strong for the Baidu App. Can you help us understand, you know, the underlying drivers of your user growth for the mobile ecosystem? How should we think about the user growth potential going forward?
Yeah. Regarding to the CPPCC meeting, many senior government officials attended that meeting. It was mainly focusing on supporting the healthy and sustainable development of the digital economy. All these attendees of the conference could clearly feel the government support and openness for technology innovation and their willingness and determination to promote the development of China's digital economy. Very notably, investment in R&D highly appreciated and encouraged. I basically talked about two points. One, I called out the importance of using AI to improve the efficiency for China's massive infrastructure, be it in transportation, utility, energy, or telecommunications. Today, China already has a very comprehensive infrastructure in this area, but they have not yet been powered by AI or simply saying they're not smart enough. Take the transportation industry as an example.
Most of China's traffic lights are not powered by real-time data from multiple sources. An AI-powered V2X has not yet become fully available here. Given the current transportation network, many local governments have to implement strict restrictions on purchasing and using vehicles, restraining domestic consumption because of this. AI-enabled traffic lights and V2X will help improve efficiency and reduce accidents. According to our estimate, intelligent transportation system could help improve traffic efficiency by 15%-30%. This is not just an estimate. We actually have proven this in a number of cities in China. If we apply this kind of efficiency gain to the entire transportation system, that's like two point four to four point eight percent of additional annual GDP for the city.
I believe that intelligent transformation could significantly lift productivity, efficiency and competitiveness for this industry and also for the entire nation. In my prepared remarks, I also shared some examples of how Baidu AI Cloud helps our customers to run their complex workload in many industries. Secondly, I also called for further regulatory support for tech innovation. For example, a more comprehensive industry regulation for autonomous driving on open roads and in complex road conditions. Autonomous driving technology is reshaping the auto industry. To a certain extent, China leads in autonomous and fully driverless technologies, while the adoption of autonomous driving vehicles in China will increase the efficiency by reducing traffic jams and accidents.
Before that, we need to make necessary adjustments to the current transportation law and consider the profound changes that autonomous driving and even fully driverless cars can bring to China's transportation system. To be more specific, we need to set up regulatory standards for fully driverless vehicles to be issued a license plate to get on open road and remove safety driver and charge passengers. Also, we need guidelines on how to identify responsibilities when accidents happen. These proposals have been well received by the officials who attended the meeting.
Yeah. Thanks, Lincoln. This is Rong Luo. I will take your question about our mobile ecosystem. I think thing as well we just talked about, you know, in February-March. In March, Baidu App MAU was at 58% year-over-year. Baidu Smart Mini Program MAU reached 500 million marks. Our platform is widely recognized as a go-to place for high-quality information and knowledge. Let me show you one example. Actually, the control measures against the COVID-19 resurgence has made many students study online from home. We have seen that they come to Baidu App to search for authoritative and reliable class-related information and knowledge. Lately, we have been seeing a significant increase of such search queries. The daily search query for education-related keywords on mobile have increased above 15%, 30% year-over-year.
So far, what we see, that is. That's the number in the second quarter. More importantly, I think we as a company will also continue to innovate in search and continue to improve the user experiences. In the first place, we will continue to use AI to improve our search experiences, driving a consistent increase in our daily searches per user. I think search is a technology driven with a high entry barrier, and technology is in our core and DNA. In the second place, we continue to improve the closed-loop experience, the closed-loop services to our search users. We provide the users with the product team services and connect them to the industry participants for professional advice through our building blocks.
I think, for example, the e-commerce GMV facilitated by Baidu Search grew by about 14x year-over-year in the quarter. Also, we also see the monthly orders for local services within Baidu App increased by over 200% year-over-year in March. Now, the users not only coming to Baidu App to search information, but increasingly they also want to enjoy the closed-loop facilities over here. In the third place, we also made, you know, promising progress in adopting the short videos into our search results, and we are working very hard to capture opportunity. In addition to these new product features, we also work on enriching our video content portfolio by using AI to cost effectively generate the video content. Looking ahead, we will work hard to continue improving the user experiences and maintain the healthy user growth.
Thank you so much, Lincoln.
Thank you, Robin. Thank you, Rong.
Thank you. The next question comes from Gary Yu, Morgan Stanley. Please ask your question.
Hi. Thank you, management, for the opportunity, and congratulations on a very resilient set of results. I have some follow-up questions regarding the Baidu AI Cloud business. The first one is on the outlook for the coming quarters. This is particularly because some of your peers have indicated some slowdown in cloud revenue growth. Just wanted to see, you know, how we should expect Baidu AI Cloud growth going forward. The second question is also related to that, which is, you know, is there any update on the strategy and progress in terms of building standardized solutions? Because I think this is important to improve your Baidu AI Cloud margin going forward. Just wanted to see, what's the progress there and how should we look at margin going forward. Thank you.
Gary, let me answer your questions since Leo is dialing from home. Baidu AI Cloud grew 45% year-over-year to RMB 3.9 billion in Q1, and it contributed almost 70% of our core total non-GAAP revenue. Baidu AI Cloud basically includes two parts. One is the personal cloud, the other is the cloud for enterprise and the public sector. The rapid growth in cloud has been driven by the enterprise and public service sector. For example, energy, utilities, smart transportation, smart cities, and more. Last quarter, revenues from this portion grew much faster than the overall AI cloud revenue. We are confident that revenues from enterprise and public service sector will continue to drive the growth of Baidu AI Cloud in the coming quarters.
As I mentioned earlier, we did notice that since mid-March, this new round of COVID-19 develops quickly across many cities in China. As a result, we had to reduce business travels and postpone the deployment of some AI cloud projects. That being said, we think such impact is just temporary. Looking beyond COVID impact, we are confident about the unique positioning of our AI cloud. The integration of cloud and AI enables our customers from many industries to make significant productivity and efficiency gains through AI. The market potential is huge, and we are just at the beginning of capturing this huge opportunity arising from the transformation in China's traditional industries and public service sector.
In terms of margin, Baidu AI Cloud is still loss-making at the operational level, but we do have some positive growth margin and gross profit. For our personal cloud, although its revenue growth has been slower than the enterprise and public sector, it should continue to generate decent margins going forward. For the cloud business, for enterprise and public sector, the growth driver for our overall AI Cloud revenue, this part of the business also enjoys a positive growth margin. A few quarters ago, we have already set as our priority the health of the business to make sure that we grow revenue both at speed and with quality. We proactively identified key industries other than the Internet sector to explore the opportunities in AI path and fast.
At the same time, as we accumulate more experience in each industry, we try our best to standardize our products and solutions to further scale our business. You know, traffic lights at an intersection in the city of Baoding is not much different from a traffic light in the city of Guangzhou. We can at least standardize the product or solution industry by industry first. In the longer term, I do think we can build a strong foundation to solve problems in different industries using more, you know, standardized solutions or technology. Recent developments in AI, especially in large models, be it in language models or vision, have give us new hope to solve all kinds of problems using one large standard deep learning platform.
Going forward, if we look beyond the COVID-19 impact for the cloud business, we continue to aim at high revenue growth and remain focused on quality and sustainable revenue growth. Margin should gradually improve from there.
Thank you, Robin.
Thank you. Next question comes from James Lee. Mr. Lee, please ask your question.
Great. Thanks for taking my questions here. Congratulations on Apollo Go on achieving the breakthrough of driverless operations there. Two questions relating to that. First, is how do you expect the driverless technology to improve the curve of cost efficiency? Is that pretty consistent with what you guys laid out at the analyst day last year, or are you ahead of schedule here? Second, can you also elaborate your plans on scaling up the driverless autonomous ride-hailing services? Thanks.
As I mentioned earlier, scaling up operations allows us to improve the Level 4 autonomous technology faster and facilitates our goal of ultimately providing fully driverless ride-hailing services in a much wider region. The number of rides provided by Apollo Go has been growing exponentially. Also, such scalable operation makes us the largest autonomous ride-hailing service provider in the world. In Q1 alone, we provided almost 200,000 rides. With the data gathered from such large-scale operations in real-life driving scenarios, we gain a lot of operational experience. To be more specific, serving passengers every day has allowed us to identify problems that are not visible during the testing phase. I'm highly confident that serving passengers in real world will not only speed up our operation expansion, but also accelerate technology advancement.
I think our strong driverless technologies and capabilities will allow us to receive more regulatory green light. This is very important for us to further accelerate our operation. Our priorities remain unchanged. Speeding up our operation, improving our autonomous driving technology, and reducing the cost and expenses are our top priorities. Baidu is proud to be the first company to receive permits to offer ride-hailing services on open roads in China's capital without a safety driver behind the steering wheel. That means a lot to us because first on the regulation front, it is the first time that the government allows the removal of a safety driver from the driver's seat on public roads. In particular, in an area of 60 sq km in Beijing is a highly complex driving environment.
This marks a regulatory breakthrough in China's autonomous ride-hailing industry, reflecting the government's open attitude toward a fully driverless operation in the future. Secondly, it demonstrates our strong driverless technology and capabilities as we are the first to be granted the permit, and we started to use them right away. On the cost side, labor cost is one of the largest cost items. One of the most critical steps to limit costs in autonomous ride-hailing is to remove the safety driver in the car and have a remote safety driver managing multiple vehicles simultaneously. This will build a strong foundation to allow us eventually remove safety staff from the cars and achieve fully driverless ride-hailing. With the newly granted permit, we are much closer to achieving that goal.
Once we are authorized to remove safety staff on the passenger seat completely, our cost per mile will be reduced significantly. Scaling up also helps to reduce the manufacturing cost per vehicle. Right now, we are on the way to make our sixth generation robotaxi. In the future, we aim to further expand our fleet of driverless ride-hailing vehicles on open road to more cities. We believe we will achieve the goal to provide safer, cheaper, and more convenient mobility service to the public. In short, to answer your question, despite all the disruptions caused by COVID-19, starting in our March of this year, I think we are on track to achieve our goal of, you know, fully driverless robotaxi service. Thanks so much.
Thank you. The next question comes from Tian Hou, TH Capital, please ask a question.
Good evening, Robin, Rong, and Juan. Congratulations on the good set of results. A question related to Apollo's self-driving business. You mentioned that there were more wins following your partnership with BYD this year. Could you please share some the outlook for the backlog numbers for 2022? Last quarter earnings, you mentioned the backlog is at RMB 1 billion. I just want to get some updates on that. The second one is related to the trends. Could you please elaborate the cooperation with Dongfeng? In particular, you know, how does the revenue model work? That's the question. Thank you.
Thank you, Tian. Let me take this question. I think the intelligent and connected vehicles are becoming more and more popular among consumers, and therefore, also become a new attraction in auto sales today. Our Apollo self-driving business, which we call ASD for short, derives from our world-class, world-leading, level four autonomous driving technologies. Many automakers come to us and try to use our auto solutions in order to capture the big trend of the vehicle intelligence in China. Especially the larger automakers like BYD and Dongfeng Motor. They start to use our ASD solutions, in particular, ANP solutions. We call Apollo Navigation Pilot, which is our high-value solution for intelligent driving.
We believe working with these big automakers can also allow us to refine our product experiences and strengthen our competitive advantages in this market. With the increasing adoption of the smart units in China, we believe Baidu's strong autonomous driving capability can also put us in a very strong position to win more business in this area. According to our internal estimates, the total projected cumulative sales of our auto solutions recently surpassed RMB 10 billion. Just for reference, the same number, the same metric we talked about in last quarter was above RMB 8 billion. The growth was driven primarily by the pipeline sales from the larger automakers. Now this amount has been growing very fast over the past two to three years, and the contribution from ASD products has been expanding very quickly.
Again, I would like to make clear that this number is our preliminary estimates, which including the contract size and commitment letters we received from the customers. Our estimates also made based on the assumption of the timing of the new models, the pricing of them, and the future sales volume of them. In general, we are happy to see the ASD business is pretty much on track to deliver more milestones in the future. Thank you so much, Tian Hou.
Thank you.
Thank you. The next question comes from Natalie Wu, Haitong International. Please ask the question.
Hi, good evening. Thanks for taking my question, and congratulations on a very solid quarter. My question is regarding the recent executive reshuffle. Just regarding the news of your executive reshuffle that took place recently, mainly for your MEG and cloud business. Just wondering, may I ask the major reasons behind it? What kind of the strategic or operational change will it bring to the cloud and MEG and mobile business? Thank you.
Yeah, we do management reshuffle, you know, from time to time. I believe our executive reshuffle program helps expand the capability of individuals to excel within Baidu. It demonstrates that we have already established a strong and agile team, which is able to make adjustments in a dynamic market environment. Many large companies have used this kind of a program to develop leaders for their organizations and drive strategy execution, in particular, in a dynamic world. In fact, Baidu develops coaches and promotes talents internally. Dou Shen, Wang Haifeng, and Jackson He have all risen to senior positions within Baidu. Dou Shen joined us in 2012, I believe, and demonstrated his capabilities in various management roles in Baidu. He made a significant contribution to strengthening our mobile ecosystem.
Baidu AI Cloud is already the revenue growth engine for us, as we are benefiting from the digital and intelligent transformation of China's traditional industry and the public service sector. I trusted those capabilities to help the business and keep our momentum at full speed. We believe having a dedicated senior executive to lead the business will allow us to better capture the huge market potential. As for Haifeng, our CTO, he will be able to spend more time on our long-term technology vision and drive synergies between AI and all of our business. Jackson joined us in 2019. In the past few years, he served in various financial management roles in the mobile business and was highly involved in its daily operation. He already built a deep understanding of our mobile business.
Our mobile ecosystem is a cash cow for Baidu and will continue generating strong profits. I believe Jackson is highly capable of helping us execute our strategy, given his strong financial management and operational background. In short, with this strong homegrown team, we believe Baidu is fully capable to execute its business strategy in all areas going forward.
Thank you. The last question comes from Miranda Zhuang, Bank of America Securities. Please ask the question.
Thank you for taking my question, and congratulations on the results. My question is about Jidu. We saw the news that Jidu is about to launch a new car model soon. Can management give us more additional color on how is the car model different from other EV startups and traditional OEMs cars? What's Jidu's pipeline for this year and next year? Given the disruption to the supply chain from the COVID, are you still on track with the previous plan to take orders in second half this year and start the mass production next year? Thank you.
Miranda, Jidu plans to introduce its first model for mass production in early next month. The market that Jidu targets is the family passenger vehicles with the price above RMB 200,000. We believe it is a very big and promising market in which Jidu has a lot of room for growth. We are all very excited about the features that Jidu will have installed, and the value Jidu can offer to consumers when it becomes available. For Jidu, the key point is not being electric but being intelligent. We believe Baidu is the best in intelligent driving technology, which Jidu will leverage in the upcoming models. Jidu's key selling point for upcoming model will be more on the software side, as well as the seamless integration of hardware and software.
This model will be equipped with Baidu's leading autonomous driving solution like ANP, AVP, as well as our advanced infotainment system like DuerOS for Auto. The team has filed many patents during the development stage. Jidu car will be much more like an auto robot than any other car on the market. On the pipeline side, Jidu plans to introduce its first concept production car on June 8th, and take orders for its first model in the second half of this year, and deliver the vehicles starting in 2023. Despite the you know COVID stuff, and despite the you know majority of the team are based in Shanghai, I think we are pretty much still on track.
This is in line with our expectation for it when we started this business. We're also very happy to see that Jidu plans to launch its second model at the end of this year, then to start taking orders in 2023, and deliver the vehicles in 2024. We believe Jidu equipped with our industry-leading intelligent driving capabilities will be well-positioned in the EV market. Thank you.
Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect.