Alibaba misses revenue forecast

China's tech giant Alibaba (9988) posted a 29 percent fall in its April-June net profit to 24.3 billion yuan (HK$26.46 billion), above market estimates.

But the revenue grew only 4 percent to 243 billion yuan in the first financial quarter of the year ending March 2025, missing the forecast of 249.8 billion yuan, as it was left behind by rivals in the race to attract cautious consumers.

Alibaba's shares fell over 4 percent during the pre-trading in New York.

The e-commerce unit Taobao and Tmall Group saw revenues during the three months fall by 1 percent from a year ago to 113.4 billion yuan, though the wholesale segment rose 16 percent to 5.9 billion yuan over the same period.

After announcing the historic six-way spinoff last year, Alibaba has been adjusting its organization, including focusing on again the retail e-commerce and promoting the wholesale platform 1688 to attract consumers with lower-priced products.

The adjusted earnings before interest, taxes, and amortization of Taobao and Tmall Group also edged down by 1 percent to 48.8 billion yuan during the past quarter, to which the company attributed the increase in investments in user experience and technology infrastructure.

While revenue of the international e-commerce segment climbed by 32 percent year-on-year to 29.3 billion yuan in the past quarter, its negative adjusted EBITDA boomed 782 percent to 3.7 billion yuan due to the increased investments in AliExpress and Trendyol's cross-border businesses.

The cloud intelligence group recorded a 6 percent rise in revenues to 26.5 billion yuan and a 155 percent surge in the adjusted EBITDA to 2.34 billion yuan, thanks to the public cloud adoption and improved operating efficiency.

Cainiao Smart Logistics Network saw the quarterly revenue rise by 16 percent to 26.8 billion yuan on the increased investment in cross-border business, though the adjusted EBITDA shrank by 30 percent to 618 million yuan.

The local services segment, including Amap and Ele.me, saw revenue increasing by 12 percent to 16 billion yuan, and the negative adjusted EBITDA narrow by 81 percent to 386 million yuan on increased sales.

Themis Qi