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[Introduction] Alibaba’s financial report is released with revenue exceeding 243.2 billion yuan!

China Fund News reporter Wu Jun

On the evening of August 15, Alibaba Group released its first financial report of the new fiscal year. The latest operating conditions of Alibaba’s six core business segments, including Taobao, Cloud Intelligence, International Digital Commerce, Cainiao, Local Life, and Big Entertainment, were revealed.

After the financial report was released, Alibaba's stock price in the US stock market surged.

Revenue in the first quarter exceeded 243.2 billion yuan

Adjusted EBITA profit for the quarter was RMB 45 billion

The latest financial report data shows that in the first quarter of fiscal year 2025, Alibaba Group achieved revenue of RMB 243.236 billion, a year-on-year increase of 4%; adjusted EBITA profit was RMB 45.035 billion, exceeding market expectations; Non-GAAP net profit was RMB 40.691 billion.

Looking specifically at the six core business segments, Taotian Group's revenue was 113.373 billion yuan, down 1% year-on-year; Cloud Intelligence Group's revenue was 26.549 billion yuan, up 6% year-on-year; Alibaba International Digital Business Group's revenue was 29.293 billion yuan, a significant year-on-year increase of 32%; Cainiao Group's revenue was 26.811 billion yuan, up 16% year-on-year; Local Life Group's revenue was 16.229 billion yuan, up 12% year-on-year; and the Big Entertainment Group's revenue was 5.581 billion yuan, up 4% year-on-year.

In terms of cash, Alibaba's free cash flow was 17.372 billion yuan, down 56% from 39.089 billion yuan in the same period of 2023. Alibaba explained that the year-on-year decline in free cash flow mainly reflected other changes in working capital due to factors such as increased spending on Alibaba Cloud infrastructure and plans to reduce direct sales.

It is worth noting that in this fiscal quarter, Alibaba has invested $5.8 billion to repurchase 613 million common shares, which is more than in the past few quarters. According to statistics, in the past fiscal year 2024, Alibaba has invested a total of $12.5 billion in repurchases, and its repurchase scale ranks first among Chinese concept stocks.

In the first quarter earnings analyst conference call for fiscal year 2025, Alibaba Group CEO Wu Yongming said that the "user-first, AI-driven" strategy has shown results. Taobao Group's online GMV and order volume have grown steadily, and Taobao's market share has gradually stabilized; Alibaba Cloud's commercial revenue has returned to positive growth, with core public cloud and AI products driving significant growth.

Wu Yongming also said that in addition to the two core businesses of e-commerce and cloud, most of the important Internet technology businesses of Alibaba Group will gradually achieve break-even within 1 to 2 years and gradually begin to contribute to scale profitability.

Taotian Group's revenue is nearly 113.4 billion yuan

Focus on user experience and continuous growth of GMV

Let’s take a look at the development of Alibaba’s six core business segments in this fiscal quarter.

According to the financial report, Taobao and Tmall, known as the core group, had revenue of 113.373 billion yuan in this quarter, down 1% year-on-year; the total merchandise transaction volume (GMV) increased by a high single digit year-on-year, the number of buyers and the frequency of purchases continued to grow, and the order volume achieved a double-digit year-on-year growth.

Among them, the number of 88VIP members continued to grow, exceeding 42 million, compared with 35 million in the previous quarter. During Tmall's 618 event this year, 88VIP launched a monthly shopping card for the first time, which consumers can activate by spending RMB 8.8 in the first month, lowering the threshold for membership benefits.

In addition, Alibaba launched a new AI-driven full-platform marketing tool "Full Site Promotion" in April this year, which has the functions of automatic bidding, optimized target group positioning and effect dashboard visualization. Wu Yongming said that "Full Site Promotion" has recently been fully launched on the Taobao platform, and the market generally believes that it will drive GMV growth and increase monetization rate.

In the earnings analyst conference call, Wu Yongming emphasized that in Taobao's business strategy, great importance is attached to Taobao's rich and diversified supply, while focusing on investing in improving consumer experience. The company will continue to optimize the matching efficiency of user traffic and goods to achieve a stable growth trend.

He expects that in the next few quarters, the growth rate of Taotian Group's CMR (customer management revenue) will gradually match the growth rate of GMV.

Alibaba Cloud's profit surges this quarter

AI platform paid users increased by more than 200% month-on-month

Alibaba Cloud Intelligent Group has always attracted much attention from the market. In this fiscal quarter, it achieved revenue of 26.549 billion yuan, an increase of more than 6% year-on-year, driven by double-digit growth in public cloud business and increased adoption of AI-related products. At the same time, Alibaba Cloud's profits soared this quarter, with adjusted EBITA increasing by 155% year-on-year to 2.337 billion yuan; revenue from AI-related products continued to record triple-digit year-on-year growth.

Alibaba Cloud adheres to the "public cloud + AI" strategy, and Alibaba Cloud has been clearly recognized as China's preferred cloud service provider for artificial intelligence training and applications.

The financial report also disclosed that Alibaba Cloud launched the second-generation open source model of Tongyi Qianwen, which showed significant performance improvements in areas such as reasoning, code generation and mathematics, while enhancing security features and expanding support to 27 languages. The number of paying users using Alibaba Cloud AI Platform (Bai Lian) increased by more than 200% month-on-month.

Wu Yongming said that in the future, the company will continue to optimize its cloud product structure, focus on competitive public cloud products with sustainable gross profit and replicable revenue, and strengthen the synergy of cloud products in the AI ​​era, so as to help old customers implement new AI needs on Alibaba Cloud and enable AI-native enterprises to grow and succeed on Alibaba Cloud. "We are confident that Alibaba Cloud's revenue from customers outside the Alibaba Group will resume double-digit growth in the second half of the fiscal year and gradually accelerate. With high-intensity R&D investment, we will maintain sustained profitable growth and become an AI cloud service provider with healthy profitability and leading market share."

International business losses narrowed month-on-month

Promote collaboration between Cainiao and cross-border e-commerce businesses

Alibaba International's digital business has also developed rapidly in recent years. The latest financial report shows that Alibaba International Digital Business Group's revenue in this fiscal quarter was 29.293 billion yuan, a year-on-year increase of 32%; the adjusted EBITA was a loss of 3.706 billion yuan, compared with a loss of 420 million yuan in the same period last year. This quarter, Alibaba International's loss narrowed from 4.085 billion yuan in the previous quarter.

Specifically, Lazada's monetization rate and operating efficiency improved, and adjusted EBITDA turned positive in July, achieving profitability. AliExpress Choice's quarterly unit economic benefits improved significantly from the previous quarter.

Cainiao Group, a logistics company, saw its revenue increase by 16% year-on-year to RMB 26.811 billion in the quarter, mainly driven by growth in revenue from cross-border logistics fulfillment solutions.

Alibaba said that as Cainiao executes its strategy of strengthening end-to-end capabilities by developing a highly digital global logistics network, it will continue to drive synergy between Cainiao and its cross-border e-commerce business.

The revenue of the local life group increased by 12% year-on-year to RMB 16.229 billion, driven by the growth of orders from AutoNavi and Ele.me, as well as the growth of marketing service revenue. This quarter, the loss of the local life group narrowed significantly year-on-year, thanks to the improvement of operating efficiency and the expansion of business scale.

Alibaba said that due to the improvement of Ele.me's operating efficiency and the expansion of its business scale, the local life group achieved a significant reduction in losses. The quarterly operating results of Sun Art Retail, Hema, Alibaba Health and Lingxi Interactive Entertainment also improved.

Editor: Captain

Review: Xu Wen

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