Alibaba Group, China’s e-commerce, entertainment and tech giant, reported a 5% increase in revenues to RMB237 billion ($33.7 billion) in the three months to September.
It reported a 63% increase in net profits to RMB43.7 billion ($6.25 billion), but said that the bottom line surge was primarily attributable to the mark-to-market changes from equity investments, decrease in impairment of investments and increase in income from operations. Indeed, non-GAAP net income, which in many years has been the group’s preferred indicator of profitability, was RMB36.5 billion ($5.204 billion), a decrease of 9% compared to the same quarter of 2023.
Revenue at its digital media and entertainment group was RMB5.69 billion ($811 million), a decrease of 1% year-over-year. Losses in the segment narrowed year-over-year, with long-form streaming platform Youku “progressively reducing its operating loss due to increased advertising revenue as well as improved content investment efficiency during the quarter.” Alibaba does not disclose Youku’s subscriber count.
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The media segment reported an EBITDA loss off RMB178 million ($25 million), compared with RMB201 million in the equivalent quarter. It has lost RMB281 million in the first six months of the group’s financial year, roughly double that of 2023.
“This quarter we continued to invest in the user experience and strengthen product offerings to serve our consumers. We entered into long-term collaborations with industry peers to broaden payment and logistics services on Taobao and Tmall platforms, which we expect will accelerate our overall growth.
Growth in our Cloud business accelerated from prior quarters, with revenues from public cloud products growing in double digits and AI-related product revenue delivering triple-digit growth. We are more confident in our core businesses than ever and will continue to invest in supporting long-term growth.
Our other businesses continued to improve their operating efficiency, with most of them continuing to increase their profitability or reduce losses,” said Eddie Wu, Alibaba CEO.
The group has become a bellwether for the mainland Chinese economy which has undergone a rocky period, but which is now responding to government stimulus measures.
Alibaba now has dual primary share listings in Hong Kong and on the New York Stock Exchange (in ADR form). In the year to date, the Hong Kong shares have gained 16.8% to HK87.2 per share. The ADRs are up 21% at $90.58 apiece and were up more than 3% in pre-market trading on Friday, following the quarterly results statement.