After launching its "1+6+N" organizational transformation in March to maximize organizational vitality and productivity, Alibaba presented its first earnings report post-transformation, capturing significant market attention.
Impressive Revenue and 48% Surge in Net Profit
On Thursday, August 10, ahead of U.S. stock market opening, Alibaba released its Q1 2024 financial results for the period ending June 30, 2023. The figures showed a revenue of CNY 2.3416 trillion, marking a year-on-year increase of 14%, surpassing the market expectation of CNY 2.2375 trillion.
In terms of profits, the adjusted net profit for Alibaba during this quarter was CNY 449.2 billion, a year-on-year spike of 48%. Operating profit stood at CNY 424.9 billion, skyrocketing 70% from the previous year. The net profit attributed to ordinary shareholders was CNY 449.2 billion, up 63% from CNY 202.9 billion the previous year.
The adjusted earnings per ADS were CNY 17.37, compared to CNY 11.73 from the previous year. Adjusted EBITDA reached CNY 520.5 billion, a 27% annual increase, against the projected CNY 447.7 billion. The adjusted EBITDA profit margin was 22%, a slight increase from the previous year's 20%, and slightly above the forecasted 20.4%.
Alibaba also mentioned the continuation of its share buyback program. By June 30, the company had repurchased about 35.6 million U.S. depository shares (equivalent to 284.4 million ordinary shares) for approximately $3.1 billion. As of June 30, 2023, the outstanding ordinary shares for Alibaba were about 20.4 billion (equivalent to about 2.5 billion U.S. depository shares). With the current board's authorization, there's a buyback allowance of around $16.3 billion, valid until March 2025.
Alibaba's U.S. stock showed a pre-market uptick, surging nearly 4%.
12% Growth in TaoTian Group's Quarterly Revenue
Alibaba's core China retail business reported a quarterly revenue of CNY 1.098 trillion, an increase of 13% year-on-year. The revenue from e-commerce client management was CNY 796.6 billion, up 10% from the previous year, while the direct sales and other business segments pulled in CNY 301.6 billion, a 21% year-on-year surge.
The report highlighted a 6.5% year-on-year growth in daily active users on the Taobao app in June. Over the past year, Taobao has added 5.12 million new merchants, mostly small and medium-sized. New merchants on Tmall during this quarter have increased by 75% year-on-year. TaoTian Group's revenue has seen a 12% growth this quarter, with CMR growing by 10%.
30% Increase in Local Life Group's Revenue
Local life services, which mainly include "to home" and "to destination" services like Ele.me, Amap, and Fliggy, reported a 30% year-on-year increase in revenue to CNY 144.5 billion. The order growth surpassed 35%, primarily driven by robust revenue growth from Ele.me and Amap.
34% Yearly Growth in Cainiao's Revenue
Cainiao Group's quarterly revenue stood at CNY 231.64 billion, marking a 34% year-on-year growth.
Alibaba Cloud Grows 4%
Driven by the AI boom and the associated demand for computing and model services, the Cloud Intelligence Group reported a 4% year-on-year growth in revenue, reaching CNY 251.23 billion. Adjusted EBITA saw a staggering growth of 106% year-on-year.
Alibaba Group's Chairman and CEO, as well as the Chairman and CEO of Cloud Intelligence Group, Zhang Yong, shared that the demand for AI cloud services is very strong due to the development of the new generation of AI. However, the short-term GPU supply shortage in the Chinese market has limited this demand, suggesting that the growth opportunity driven by AI services is just starting.
The financial report also highlighted the launch of a series of generative AI model features this quarter. A platform called "Tongyi Tingwu" was launched in June, which can transcribe, search, summarize, and organize audio and video content, and can even automatically extract PPTs from videos. Recently, browser plugins and mobile support have been added, allowing users to record, generate bilingual subtitles in real-time, and browse video content more easily. To date, "Tongyi Tingwu" has accumulated over 550,000 users across all platforms.
