Prime Highlights:
- Alibaba’s net income jumped 78% year-on-year, beating expectations, despite revenue slightly missing forecasts.
- Revenue in Alibaba’s cloud division rose 26%, driven by strong demand for cloud services.
Key Facts:
- Alibaba’s total revenue for Q1was 65 billion yuan ($34.6 billion), below the expected 252.9 billion yuan.
- Adjusted EBITA in the cloud unit increased 26% year-on-year, showing rising profitability.
Key Background:
Alibaba Group on Tuesday reported mixed quarterly results, with revenue slightly below expectations but a sharp rise in profits, driven by strong performance in its cloud computing division and a revival of its e-commerce business.
For the fiscal first quarter ending June, the Chinese tech giant posted revenue of 247.65 billion yuan ($34.6 billion), a 2% increase from the same period last year, but falling short of analysts’ forecast of 252.9 billion yuan. Even though the miss was in the revenue, net income increased 78% per annum to 43.11 billion yuan, which is considerably higher than the anticipated 28.5 billion yuan.
The stock has already climbed over 40% this year. Overall, although the total revenue was slightly underestimated, the positive profitability and expansion of Alibaba in its cloud-based business indicate that the company will start moving forward in the e-commerce and technology fields.
The standout performer was Alibaba’s Cloud Intelligence Group, with revenue rising 26% year-on-year to 33.4 billion yuan, faster than the 18% growth recorded in the previous quarter. CEO Eddie Wu said strong demand boosted cloud growth.
“AI-related products now account for a significant portion of revenue from external customers,” Wu said. Alibaba’s AI offerings have maintained triple-digit year-over-year growth for eight consecutive quarters, highlighting its growing influence in the global AI sector.
Although the company is facing difficulties due to the slowing Chinese economy, analysts are still optimistic that Alibaba can use its cloud platforms to facilitate future expansion.
Overall, although the total revenue was slightly underestimated, the positive profitability and expansion of Alibaba in its cloud-based business indicate that the company will start moving forward in the e-commerce and technology fields.
