Alibaba Group Announces June Quarter 2018 Results

Stocks and Financial Services Press Releases Friday August 24, 2018 13:35
Bangkok--24 Aug--124 Communications Consulting
Alibaba Group Holding Limited (NYSE: BABA) today announced its financial results for the quarter ended June 30, 2018.

"Alibaba had another excellent quarter, with significant user expansion and even more robust engagement across our growing ecosystem. Our China retail marketplace business continues to gain share, with New Retail initiatives driving further revenue growth and enabling our retail partners to seamlessly serve customers. We are executing our plan of providing more value and choice to users along the consumption continuum, with digital entertainment and local service offerings that tap into big addressable markets beyond core commerce," said Daniel Zhang, Chief Executive Officer of Alibaba Group. "We will continue to invest in strategic business opportunities and innovation to sustain our competitive advantage and for long-term growth."

"We delivered another great quarter with 61% revenue growth as well as strong profit growth, excluding one-time items. We are pleased with the strength and rapid growth of our business at such significant scale," said Maggie Wu, Chief Financial Officer of Alibaba Group. "The exceptional growth across our major segments of core commerce, cloud computing and digital media and entertainment validates our strategy of investing in customer experience, product, technology and infrastructure for the future. We remain confident in our ability to continue to gain market leadership by delivering unique value propositions to our business customers, partners and consumers."

BUSINESS HIGHLIGHTS
In the quarter ended June 30, 2018:
  • Revenue was RMB80,920 million (US$12,229 million), an increase of 61% year-over-year.
  • Revenue from core commerce increased 61% year-over-year to RMB69,188 million (US$10,456 million).
  • Revenue from cloud computing increased 93% year-over-year to RMB4,698 million (US$710 million).
  • Revenue from digital media and entertainment increased 46% year-over-year to RMB5,975 million (US$903 million).
  • Revenue from innovation initiatives and others increased 64% year-over-year to RMB1,059 million (US$160 million).
Annual active consumers on our China retail marketplaces reached 576 million, an increase of 24 million from the 12-month period ended March 31, 2018.
Mobile MAUs on our China retail marketplaces reached 634 million in June 2018, an increase of 17 million over March 2018.

Income from operations was RMB8,020 million (US$1,212 million), a decrease of 54% year-over-year due to a one-time increase in share-based compensation expense related to Ant Financial's awards to our employees, which was the result of a significant increase in the valuation of Ant Financial in its most recent round of equity fundraising (see "Costs and Expenses – Shares-based Compensation Expense" and "Business and Strategic Updates—Updates on Ant Financial" below). Excluding Ant Financial-related share-based compensation expense, our income from operations would have increased by 9%. Adjusted EBITA increased 13% year-over-year to RMB26,502 million (US$4,005 million).

Adjusted EBITA for core commerce was RMB32,797 million (US$4,956 million), an increase of 22% year-over-year, representing a margin of 47%. Margin in our core commerce segment has been and will continue to be influenced by several factors: (i) gradual revenue mix shift towards self-operated New Retail businesses where revenue is recorded on a gross basis including the cost of inventory, (ii) inclusion of the logistics technology business of Cainiao Network in our consolidated financial statements , (iii) aggressive investment in local services, such as Ele.me, which we acquired and consolidated into our financial statements this quarter and (iv) international expansion in regions such as Southeast Asia. Excluding the effects of the above-mentioned long-term investments, our adjusted EBITA margin in the core commerce segment remained stable as compared to the same period last year.

Net income attributable to ordinary shareholders was RMB8,685 million (US$1,313 million), and net income was RMB7,650 million (US$1,156 million), representing a year-on-year decrease of 41% and 45%, respectively. However, this decrease was attributable to a one-time increase in share-based compensation expense of RMB11,180 million relating to Ant Financial's awards to our employees discussed in "Income from operations" above. Excluding the effect of such Ant Financial-related share-based compensation expense, net income for the quarter would have increased by 33% on a year-on-year basis.

Non-GAAP net income was RMB20,101 million (US$3,038 million). Diluted EPS was RMB3.30 (US$0.50) and non-GAAP diluted EPS was RMB8.04 (US$1.22).
Net cash provided by operating activities was RMB36,117 million (US$5,458 million) and non-GAAP free cash flow was RMB26,358 million (US$3,983 million).
The full operating results report can be found at
https://www.alibabagroup.com/en/news/press_pdf/p180823.pdf
About Alibaba Group

Alibaba Group's mission is to make it easy to do business anywhere. The company aims to build the future infrastructure of commerce. It envisions that its customers will meet, work and live at Alibaba, and that it will be a company that lasts at least 102 years.


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