Alibaba Group Announces September Quarter 2024 Results
HANGZHOU, China--(BUSINESS WIRE)--November 15, 2024--
Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988 (HKD Counter) and 89988 (RMB Counter), "Alibaba" or "Alibaba Group") today announced its financial results for the quarter ended September 30, 2024.
"This quarter we continued to invest in the user experience and strengthen product offerings to serve our consumers. We entered into long-term collaborations with industry peers to broaden payment and logistics services on Taobao and Tmall platforms, which we expect will accelerate our overall growth. Growth in our Cloud business accelerated from prior quarters, with revenues from public cloud products growing in double digits and AI-related product revenue delivering triple-digit growth. We are more confident in our core businesses than ever and will continue to invest in supporting long-term growth. Our other businesses continued to improve their operating efficiency, with most of them continuing to increase their profitability or reduce losses," said Eddie Wu, Chief Executive Officer of Alibaba Group.
"Our revenue growth this quarter was driven by improving monetization of Taobao and Tmall Group, which included GMV-based service fees and merchant adoption of our marketing tool Quanzhantui. Consistent with our strategy, we continue to invest in our core businesses while enhancing operational efficiency. During the quarter we repurchased US$4.1 billion of shares, achieving earnings accretion to our shareholders through a net 2.1% reduction in total shares outstanding since the end of June," said Toby Xu, Chief Financial Officer of Alibaba Group.
BUSINESS HIGHLIGHTS
In the quarter ended September 30, 2024:
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Revenue was RMB236,503 million (US$33,701 million), an increase of 5%
year-over-year.
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Income from operations was RMB35,246 million (US$5,023 million), an
increase of 5% year-over-year, primarily due to the decrease in non-cash
share-based compensation expense, partly offset by the decrease in
adjusted EBITA. We excluded non-cash share-based compensation expense
from our non-GAAP measurements. Adjusted EBITA, a non-GAAP measurement,
decreased 5% year-over-year to RMB40,561 million (US$5,780 million), was
primarily attributable to the increase in investments in our e-commerce
businesses, partly offset by revenue growth and improved operating
efficiency.
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Net income attributable to ordinary shareholders was RMB43,874 million
(US$6,252 million). Net income was RMB43,547 million (US$6,205 million),
an increase of 63% year-over-year, primarily attributable to the
mark-to-market changes from our equity investments, decrease in
impairment of our investments and increase in income from operations.
Non-GAAP net income in the quarter ended September 30, 2024 was RMB36,518
million (US$5,204 million), a decrease of 9% compared to RMB40,188
million in the same quarter of 2023.
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Diluted earnings per ADS was RMB18.17 (US$2.59). Diluted earnings per
share was RMB2.27 (US$0.32 or HK$2.52). Non-GAAP diluted earnings per ADS
was RMB15.06 (US$2.15), a decrease of 4% year-over-year. Non-GAAP diluted
earnings per share was RMB1.88 (US$0.27 or HK$2.08), a decrease of 4%
year-over-year.
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Net cash provided by operating activities was RMB31,438 million
(US$4,480 million), a decrease of 36% compared to RMB49,231 million in
the same quarter of 2023. Free cash flow, a non-GAAP measurement of
liquidity, was RMB13,735 million (US$1,957 million), a decrease of 70%
compared to RMB45,220 million in the same quarter of 2023. The decrease
in free cash flow was mainly attributed to our investments in Alibaba
Cloud infrastructure, refund to Tmall merchants after we cancelled the
annual service fee and other working capital changes related to factors
including scale down of certain direct sales businesses.
Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.
BUSINESS AND STRATEGIC UPDATES
Taobao and Tmall Group
During the quarter we increased investment in strategic initiatives such as price-competitive products, customer service, membership program benefits and technology, with the aim of enhancing user experience. These efforts led to higher purchase frequency and improved feedback regarding the overall shopping experience year-over-year.
We adopted a more open approach for payment and logistics services on our platforms to make shopping on our platforms more convenient to a larger base of consumers and improve merchants' operating efficiency. We have already observed much stronger momentum in new purchasers, and we believe our focus on user growth and retention will drive the overall growth of our platforms.
Starting from September 1, we implemented a software service fee based on the GMV of completed transactions on our platform, which puts us in line with the common practice of the e-commerce industry. In the meantime, we cancelled the annual service fee for Tmall merchants and provided software service fee rebates to certain small and medium-sized merchants. In addition, Quanzhantui, our AI-powered platform-wide marketing tool, saw steady increase in merchant adoption. Merchants benefit from the use of Quanzhantui through improvement of their marketing efficiency, and with higher efficiency we expect merchants to increase their marketing spending on our platform.
During the quarter, online GMV growth was supported by double-digit order growth year-over-year, mainly driven by the increase in purchase frequency, partly offset by the decline in average order value. In October and November, we had a successful 11.11 Global Shopping Festival, during which Taobao and Tmall achieved robust growth in GMV and a record number of purchasers.
The number of 88VIP members, our highest spending consumer group, continued to increase by double-digits year-over-year, reaching 46 million during the quarter. Our premium shoppers are loyal customers who increase our purchase frequency and drive GMV growth. Accordingly, we target to continue to grow the subscription of 88VIP membership by investing in improved benefits and services.
Cloud Intelligence Group
For the quarter ended September 30, 2024, revenue from Cloud Intelligence Group was RMB29,610 million (US$4,219 million), an increase of 7% year-over-year.
During this quarter, overall revenue excluding Alibaba-consolidated subsidiaries grew over 7% year-over-year, driven by double-digit public cloud growth, including increasing adoption of AI-related products. AI-related product revenue grew at triple-digits year-over-year for the fifth consecutive quarter. We will continue to invest in anticipation of customer growth and in technology, particularly in AI infrastructure, to capture the increasing trend of cloud adoption for AI and to maintain our market leadership.
Alibaba Cloud has gained notable recognition as the service provider of choice in China for public cloud and AI training and applications. According to The Forrester Wave$(TM)$: Public Cloud Platforms in China 2024 report, Alibaba Cloud was named a Leader, achieving the highest score possible in 23 out of 32 criteria, as well as the top scores in both the current offering and strategy categories. During the quarter, Alibaba Cloud was also recognized as a Leader in the Omdia Universe: Chinese Commercial Foundation Model 2024 report, ranking first in both strategy execution and technical capabilities. These achievements underscore Alibaba Cloud's leadership as the best-in-class public cloud and AI platform in China.
In September, we held our 16th annual cloud computing developer summit and exhibition, the Apsara Conference 2024, during which Cloud Intelligence Group unveiled new technologies, including:
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Qwen ( ) Large Model Family Upgrades: We introduced significant
upgrades across the Qwen large model family, including the release of the
open-source Qwen 2.5 series, which has become one of the leading models
in the global open-source ecosystem, with the flagship Qwen 2.5-72B
demonstrating strong results across benchmarks, outperforming industry
players. As of September 30, 2024, more than 70,000 derivative models
have been developed on Hugging Face based on the Qwen family of models
since it was first open-sourced in 2023, demonstrating its position as
one of the most widely adopted open-source models globally.
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Cost-efficient and Accessible AI: Alibaba Cloud remains committed to
providing customers with the best value in AI capabilities. During this
quarter, we significantly improved cost-efficiency for the customers of
Qwen models by reducing the charge rate for API calls, making advanced AI
technologies more affordable and accessible.
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Comprehensive AI Infrastructure Upgrades: To better position ourselves
to capture AI adoption, we have strengthened AI infrastructure to enhance
scalability and performance. Recently, we launched GPU container services,
and upgraded AI server as well as high-performance network products.
These improvements have significantly enhanced model training and
inference efficiency across various industries.
Alibaba International Digital Commerce Group ("AIDC")
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