Alibaba Cloud Computing Revenue Jump 156%

AliCloud -computing business revenue from that business increased 156% year over year to $187 million competing in an arena dominated by Amazon Web Services and Microsoft Azure.

Alibaba Group Holding Ltd. said it would continue to step up its investments after reporting a better-than-expected 59% surge in fiscal first-quarter revenue, its biggest gain since its $25 billion initial public offering two years ago.

Revenue for the three months ended June 30 surged to 32.15 billion yuan ($4.84 billion) from 20.25 billion yuan, with revenue from its China retail marketplaces including Taobao and TMall rising 49% from a year earlier.

For its fiscal first quarter, GMV hit 837 billion yuan, a 24% increase from a year earlier. Mobile GMV accounted for 75%, Alibaba said. GMV (Gross merchandise value) is the total value of merchandise sold over a given period of time through an e-commerce site used to measure the growth of the business.

For the June quarter, Alibaba reported 434 million annual active buyers—defined as customers who place one or more orders on a platform during the year—up 18% from a year earlier. Mobile monthly active users rose 39% to 427 million, helping mobile revenue more than double.

Alibaba said its net income fell to 7.55 billion yuan from 30.84 billion yuan a year earlier.

The sharp drop in net income was due to a one-time investment in Alibaba Pictures, the company’s moviemaking business.

Alibaba said it earned an adjusted 4.90 yuan (74 cents) a share, above the 4.17 yuan a share projected by analysts in a poll from Thomson Reuters. Revenue beat the 30.17 billion yuan forecast.

The company’s cloud-computing business stood out. Alibaba said revenue from that business increased 156% year over year to $187 million, bringing its total of paying customers strong growth driver for Alibaba. AliCloud is competing in an arena currently dominated by U.S. brands including Amazon Web Services and Microsoft Azure.

However results also highlighted losses among some newer investments, such as its food-delivery service and logistics affiliate.

  • Food-delivery service Koubei generated a loss of $37 million in the fiscal first quarter.
  • Logistics network Cainiao—which delivered an average of 42 million packages a day—loss widened to 227 million yuan ($34 million) in the latest quarter from 59 million yuan a year earlier.



Alibaba’s results also reflected the consolidation of the company’s video-streaming site, Youku Tudou and Lazada Group, the $1 billion Southeast Asian e-commerce startup acquisition made recently.


Executives also highlighted the Taobao app, is becoming an entertainment platform, with the average user opening the app seven times a day; 75% of Taobao app users are under age 35.

On Wednesday, rival reported that its loss for the second quarter narrowed, helped by improved margins. In June, JD struck a deal with Wal-Mart Stores Inc. to expand its e-commerce business in China.

Full article at WSJ



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