Alibaba’s Q1 results showed a 7% increase in revenue to RMB221.87 billion, slightly above the consensus estimate of RMB220.32 billion. However, the earnings shortfall significantly impacted the company’s stock price, dropping by 3.4%. CEO Eddie Wu attributed the performance to the company’s strategic focus on customer experience and growth.
Alibaba’s revenue growth was driven by a 7% YoY increase, signaling a return to growth. However, the company reported a net income decrease of 96% YoY, primarily due to a net loss from investments in publicly-traded companies. Strategic investments in e-commerce businesses and retention incentives for Cainiao employees led to a 5% decrease in adjusted earnings before interest, taxes, and amortization (EBITA). Net cash provided by operating activities and free cash flow also saw significant decreases of 26% and 52% YoY, respectively.
Alibaba Group Holding beat analysts’ estimates for fourth-quarter revenue in the three-month period, with revenue of 221.87 billion yuan (S$41.5 billion) in the three months ended March 31, compared to a consensus estimate of 219.66 billion yuan.
Analysts expect strong growth from Alibaba’s international digital commerce arm. This expectation is due to Alibaba’s investment in building global market share and appetite for low-cost goods from China.
