Baidu Inc (ADR) (NASDAQ: BIDU) stock fell 1.68% though the company reported better than expected results on the back of strong growth in its online advertisement business. The revenue for this segment grew 25 percent to 21.1 billion Chinese yuan ($3.10 billion) in the second quarter. The net income attributable to Baidu rose to 6.4 billion Chinese yuan in the second quarter from 4.42 billion yuan from a year earlier, which is a growth of 64 percent. Despite the better than expected results, Baidu’s second-quarter profit growth rate was slower than the previous four quarters.

BIDU in the second quarter of FY 18 has reported the adjusted earnings of 21.06 yuan per ADS, beating the analysts’ estimates for the adjusted earnings of 16.46 yuan per ADS. The company had reported the adjusted revenue growth of 24.4 percent to 25.97 billion yuan in the second quarter of FY 18, beating the analysts’ estimates for revenue of 25.6 billion yuan. That marks the sixth straight quarter of revenue growth. However, the investors should not expect “any meaningful revenue” from its AI-driven driverless cars and personal assistants in the coming quarters. Baidu’s Netflix-style service, iQiyi Inc., also reported better-than-projected sales with its subscriber base increasing by 75 percent to 67.1 million users. The video-streaming company had projected revenue this quarter about 4 percent above estimates

Moreover, News feed and other AI-driven businesses now make up 20 percent of Baidu’s core search revenue, once spun-off units like financial services are excluded. The company is also expecting WeChat-style ‘mini-apps’ that give users access to third-party services without leaving Baidu’s main app will lead to a big jump in usage and advertisements.

The company expects third-quarter revenue to be in the rangeof 27.37 billion-28.77 billion yuan, representing an increase of 23-30 percent year-over-year, higher than an estimated 18.9 percent rise by 18 analysts, as per Thomson Reuters

Meanwhile, Baidu is spending heavily to boost its artificial intelligence (AI) and auto businesses, but its most promising bets in AI and autonomous driving are still at nascent stages meaning margin growth will be constrained for some time.

Additionally, as of June 30, 2018, cash, cash equivalents, restricted cash and short-term investments were RMB 128.3 billion ($19.38 billion). Net cash generated from operating activities was RMB 7.1 billion ($1.08 billion) and capital expenditures were RMB 1.5 billion ($227 million). In addition, BIDU has entered into definitive agreements to divest Du Xiaoman, which is the company’s financial services business.