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Alibaba Group Holding Ltd Shares Jump After Earnings Beat

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Alibaba released its latest earnings report before opening bell this morning, posting adjusted earnings of 79 cents per share (RMB5.26 per share) on $5.142 billion (RMB34.3 billion) in revenue. Analysts had been expecting earnings of 69 cents per share and 5.003 billion in revenue. In last year’s September quarter, the company posted RMB22.17 billion in revenue and adjusted earnings of RMB3.61 per share.

Alibaba’s core retail business continues strong growth

Alibaba’s GAAP earnings were 45 cents per share (RMB2.97 per share, compared to RMB8.87 per share last year). The company had a one-time revaluation gain in the September quarter last year that contributed most of the year over year decline. Adjusted EBITDA was $2.4 billion (RMB15.9 billion, compared to RMB11.1 billion last year). The adjusted EBITDA margin was 46%, compared to 50% last year.

Core commerce revenue grew 41% to $4.3 billion, while cloud computing revenue increased 130% year over year to $224 million. Digital media and entertainment revenue skyrocketed by 302% to $541 million, while innovation and other revenue increased 78% to $104 million.

The company’s China retail marketplaces had 450 million mobile monthly active users in September, marking a 23 million increase from June. The number of active annual buyers on the China marketplaces jumped 5 million to reach 439 million.

Alibaba’s cloud business continues to grow

“Beyond the strong performance of our core commerce business, we are pleased with the continued rapid growth of our cloud computing business,” Alibaba CEO Daniel Zhang said in a statement. “We also see huge potential in our newly integrated digital media and entertainment unit. By combining engaging online experiences with highly relevant content, we delivered impressive financial and operational results in the quarter across the company.”

Alibaba had 651,000 paying customers for its cloud business, an increase from 577,000 in the previous quarter. The segment’s operating loss was $60 million, while its adjusted EBITDA loss narrowed to $8 million.

Shares of Alibaba surged in premarket trades, climbing by as much as 3.565 to $104.75 after this morning’s earnings release.

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