Baidu released its latest quarterly earnings report after closing bell tonight, posting adjusted earnings of RMB11.19 per ADS or $1.81 per share on RMB16.58 billion ($2.673 billion) in revenue, a 38.8% year over year increase. Analysts had been looking for earnings of RMB10.58 or $1.88 per share on revenue of RMB16.57 billion for the second quarter.

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Key metrics from Baidu’s earnings report

Diluted earnings per ADS were RMB10.19 or $1.64 per share. Adjusted EBITDA increased 4.7% year over year to RMB7.7 billion ($759.1 million) for the quarter.

“With Baidu’s cornerstone search business delivering solid growth and enjoying ample runway ahead, and with powerful mobile gateways to leverage, we are ideally positioned to capture the O2O e-commerce opportunity and build the ‘Next Baidu’,” Baidu Chairman and CEO Robin Li said in a statement. “As we continue to connect people with services and enable closed loop transactions, we are creating a transactional business model as Baidu grows and evolves in the age of mobile.”

Baidu reports user growth

Baidu reported 629 million mobile search monthly active users, a 24% increase from last year. The company saw mobile maps monthly active users increase 48% year over year to 304 million. Baidu’s O2O gross merchandise volume increased 109% from last year to RMB40.5 billion.

Online marketing revenues increased 37.1% to RMB16.227 billion. Baidu said it had approximately 590,000 active online marketing customers, a 20.9% increase year over year. The Chinese search giant reported about RMB27,400 in revenue per online marketing customer, a 13.2% increase from last year.

Traffic acquisition costs were 12.7% of total revenues or RMB2.112 billion, while bandwidth costs were 5.4% of revenues or RMB896.2 million. Content costs made up 5.1% of total revenues or RMB840.2 million.

Baidu provides guidance

For the third quarter, Baidu projects revenue of between RMB18.17 billion ($2.93 billion) and RMB18.58 billion ($2.997 billion). That would be an increase of between 34.4% and 37.4% year over year.

U.S. shares of Baidu slipped by as much as 7.12% to $185.71 per share in after-hours trades.