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Alibaba stock climbs on Q3 profits

posted onJanuary 31, 2019

Shares of Chinese e-commerce giant Alibaba (NYSE: BABA) jumped over 3% in premarket trade on Wednesday (Jan.30), after the Hangzhou-based conglomerate reported better-than-expected fiscal third-quarter profit.

Revenue was RMB117,278 million (US$17,057 million), marking a 41% jump from the same three months a year ago. Core commerce revenue increased 40% to RMB102,843 million (US$14,958 million), cloud computing revenue grew 84% to RMB6,611 million (US$962 million) and digital media and entertainment revenue rose 20% to RMB6,491 million (US$944 million).

Revenue from innovation initiatives and others increased 73% to RMB1,333 million (US$193 million).
Mobile monthly active users (MAUs) reached 699 million in December 2018, an increase of 33 million over September 2018. 

“Alibaba had another strong quarter. Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of nearly 700 million consumers across retail, digital entertainment and local consumer services,”  Daniel Zhang, Chief Executive Officer of Alibaba Group said in a statement “Our growth is also driven by the power of Alibaba’s cloud and data technology that helps expedite the digital transformation of millions of enterprises.” 

Income from operations was RMB26,798 million (US$3,898 million), an increase of 3% from the same three months a year ago.  Adjusted EBITDA grew 13% to RMB40,708 million (US$5,921 million) and adjusted EBITA for core commerce was RMB46,079 million (US$6,702 million), an increase of 20%. Marketplace-based core commerce adjusted EBITA, a non-GAAP measurement, rose 31% to RMB54,303 million (US$7,898 million).

Net income attributable to ordinary shareholders was RMB33,052 million (US$4,807 million), and net income was RMB30,964 million (US$4,504 million), representing a year-over-year increase of 37% and 33%, respectively. 

Non-GAAP net income was RMB29,797 million (US$4,334 million). Diluted EPS was RMB12.64 (US$1.84) while non-GAAP diluted EPS was RMB12.19 (US$1.77).

Net cash provided by operating activities was RMB64,898 million (US$9,439 million) and nonGAAP free cash flow was RMB51,373 million (US$7,472 million). 

“In the December quarter, we delivered strong top-line growth of 41% year-over-year,” Maggie Wu, Chief Financial Officer of Alibaba Group said in a statement “The profitability of our marketplace-based core commerce business, as measured by adjusted EBITA, was RMB54.3 billion (US$7.9 billion), representing a 31% year over-year growth. This profitability and US$7.5 billion in free cash flow generated this quarter enable us to continue to invest in other important strategic businesses and technology to support the growth of our ecosystem.” 

Alibaba's stock has rallied 15% over the past three months through Tuesday Jan. 29.