Chinese e-commerce giant Alibaba (9988) reported a 72 percent decline in adjusted net profit in the quarter ended September, while its quarterly revenue beat analysts' estimates driven by robust growth in cloud division.
Net profit during the period recorded 20.99 billion yuan (HK$22.98 billion), down 52 percent.
Non-GAAP net income was 10.35 billion yuan – versus 36.5 billion yuan in the same quarter a year ago, falling short of 13.5 billion yuan in market forecast.
The company reported revenue of 247.80 billion yuan in the quarter, marking a growth of 5 percent year-on-year, compared with the estimates of 242.65 billion yuan, according to data compiled by LSEG.
By division, revenue from its Cloud Intelligence Group stood at 39.8 billion yuan, a growth of 34 percent. Alibaba attributed that to public cloud revenue growth, including the increasing adoption of AI-related products.
The company has been doubling down on artificial intelligence as a catalyst for growth across its cloud and consumer ecosystems, channeling billions of US dollars into AI infrastructure, model development and product innovation.
Over the past four quarters, capital expenditure on AI and cloud infrastructure has reached around 120 billion yuan, Alibaba said.
Concurrently, Alibaba E-Commerce Group reported revenue of 132.58 billion yuan. Customer management revenue grew 10 percent to 78.9 billion yuan.
Revenue of Alibaba International Digital Commerce Group saw a 10 percent rise to 34.8 billion yuan.
Major retailers in China are jostling for market share in the instant commerce space by offering big discounts and attractive deals.
Alibaba has also benefited from Beijing's appliance trade-in subsidies, which allow consumers to exchange older home appliances like refrigerators and TVs for newer models at discounted prices, though that scheme has begun winding down and officially ended on December 31.
Alibaba’s shares closed 2.14 percent higher in Hong Kong yesterday before the results were released.
They have climbed more than 96 percent this year.
