Alibaba (BABA) earnings report Q1 2024

An Alibaba Group sign is seen at the World Artificial Intelligence Conference in Shanghai, July 6, 2023.

Aly Song | Reuters

Chinese e-commerce giant Alibaba on Thursday said revenue grew by 14% year on year in the quarter ended June 30. That’s the biggest annual increase in sales since the September 2021 quarter, according to Refinitiv data.

The company’s U.S.-traded shares rose by 4.5% in premarket trading.

Here’s how Alibaba did in the June quarter versus Refinitiv consensus estimates:

  • Revenue: 234.16 billion yuan ($32.29 billion) versus 224.92 billion yuan expected, up 14% year on year.
  • Net income attributable to ordinary shareholders: 34.33 billion yuan versus 28.66 billion yuan expected, up 51% year on year.

Alibaba’s main business, Taobao and Tmall Group, saw revenue rise 12% year on year to 114.95 billion yuan in the June quarter. The company noted that the Taobao app for online shopping saw daily active users rise in June by 6.5% from a year ago — and rose further to more than 7% in July.

The company’s push into overseas markets also bore results, with revenue from international commerce retail surging by 60% year on year to 17.14 billion yuan in the June quarter.

That international demand also helped drive revenue for Alibaba’s Cainiao logistics business up by 34% to 23.16 billion yuan during the same period.

Alibaba’s cloud business reported revenue growth of 4% to 25.12 billion yuan. Those results were dragged down by a drop in revenue from top customers as well as reduced need for remote work, streaming and education services in the wake of the coronavirus pandemic, the company said.

Investing more in AI

However, Alibaba said it saw “strong demand” in its cloud business for training artificial intelligence models and related services.

“We believe the growth opportunity driven by AI services have just begun. We believe the technology revolution built by AI not a short term opportunity but the beginning of a new era,” management said in a conference call with analysts Thursday.

They highlighted plans to invest further in AI development and business opportunities.

“The Taobao app has the greatest potential to become a one stop smart portal for life and consumption enabled by AI,” management said on the earnings call.

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Alibaba restructure

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Current CEO and Chairman Daniel Zhang will be stepping down in September, but remain head of Alibaba’s cloud computing business, as it pushes toward a public listing. Alibaba veteran Eddie Wu will succeed him as CEO, and Joe Tsai will take over as chairman, the company said in June.

“Alibaba delivered a solid quarter as we continue to execute our Reorganization, which is beginning to unleash new energy across our businesses,” Zhang said in a release Thursday.

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