Alibaba Group Holding Ltd Shares Rise On Strong Sales, Increased Outlook

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Alibaba released its fourth quarter earnings results before opening bell this morning, posting $7.7 billion (53.2 billion yuan) in sales and $1 per share in net income. Analysts had been expecting 50.1 billion yuan. Non-GAAP earnings came in at $1.30 per share, versus the consensus of $1.13 per share. Non-GAAP earnings per share rose 38% year over year, while sales grew 54%.

Alibaba posts growth in all areas

Alibaba said its Core Commerce sales grew 45% year over year to $6.7 billion, while Cloud Computing and Digital Media & Entertainment revenue grew 115% to $254 million. The Core Commerce segment generated $4.3 billion in adjusted EBITDA on the back of a 64% adjusted EBITDA margin. Mobile revenue rose 73%, making up 80% of Alibaba’s commerce retail revenue. In the same quarter in 2015, the Chinese online retailer said mobile revenue made up 65% of its China commerce retail revenue.

Mobile monthly active users on Alibaba’s China retail marketplaces jumped 25% year over year to 493 million on the back of efforts to improve the mobile experience. Annual active buyers on the company’s China retail marketplaces rose 9% to 443 million. China commerce retail sales per annual active buyer rose to $35 from $32 in the previous quarter.

The number of paying Cloud Computing customers rose to 765,000 from 651,000 in the previous quarter. Digital Media & Entertainment sales rose 273% to $585 million after Alibaba consolidated Youku Tudou. Also the mobile services revenue from UCWeb contributed to the strong gain.

“The 11.11 Shopping Festival featured Alibaba at its best, integrating commerce, entertainment and social engagement, all happening globally at record scale,” Alibaba CEO Daniel Zhang said in a statement. “We are driving the age of ‘New Retail,’ which leverages big data and innovation to provide a seamless online and offline experience for nearly half a billion mobile monthly active users. This retail transformation will make it even easier and more efficient for brands and retailers to engage with these consumers anywhere, anytime.”

Alibaba boosts 2017 sales outlook

Alibaba also raised its revenue guidance for fiscal 2017. Management now expects a 53% increase, compared to their previous outlook of a 48% increase. In fiscal 2016, the online retailer recorded a 33% increase in revenue, so 2017’s growth is expected to accelerate due to its bigger user base.

Shares of Alibaba rose by as much as 4.46% to $102.80 in premarket trades this morning.

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