Alibaba Group Holding Limited (NYSE: BABA), a leading e-commerce and technology conglomerate, announced financial results for the quarter ended March 31, 2024.
The company posted moderate growth, with sales up 7% year-on-year to RMB221.874 billion (US$30.729 billion). The growth was driven by the company's China and international trade business, which saw double-digit year-on-year GMV growth, as well as accelerated growth in cloud computing revenues related to artificial intelligence products.
Despite the increase in revenue, Alibaba's operating profit fell 3% year-on-year to 14.765 billion yuan ($2.045 billion). Alibaba attributed the drop to increased investment in its e-commerce business and incentives to retain employees at Cainao. Adjusted EBITA also fell 5% to 23.969 billion yuan ($3.32 billion).
Net income attributable to shareholders amounted to ¥3.27 billion (US$453 million), down significantly from the previous year, mainly due to net losses on investments in listed companies.
Alibaba's results for fiscal 2024 were mixed compared to market expectations. Analysts expected earnings per share (EPS) of ¥10.27 and sales of ¥220.32 billion. Actual sales of ¥221.874 billion were slightly higher than expectations, demonstrating the company's ability to sustain growth in a fiercely competitive market. However, non-GAAP diluted earnings per share of ¥10.14 ($1.40) came in below expectations.
This divergence in earnings was mainly due to the company's increased investments and significant net losses on equity investments, which impacted the bottom line.
Reflecting the volatility in Alibaba's investment portfolio, quarterly net income fell 96% year-on-year to RMB 919 million (US$127 million). This sharp drop masked revenue growth, and investors are concerned about the sustainability of the company's short-term profitability.
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