Alibaba Group Announces December Quarter 2024 Results
HANGZHOU, China--(BUSINESS WIRE)--February 20, 2025--
Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988 (HKD Counter) and 89988 (RMB Counter), "Alibaba" or "Alibaba Group") today announced its financial results for the quarter ended December 31, 2024.
"This quarter's results demonstrated substantial progress in our 'user first, AI-driven' strategies and the re-accelerated growth of our core businesses. During this quarter, customer management revenue at Taobao and Tmall Group grew 9% as a result of initiatives to enhance user experience and effective monetization. Our Cloud revenue growth reignited to double digits at 13%, with AI-related product revenue achieving triple-digit growth for the sixth consecutive quarter. Looking ahead, revenue growth at Cloud Intelligence Group driven by AI will continue to accelerate. We will continue to execute against our strategic priorities in e-commerce and cloud computing, including further investment to drive long-term growth," said Eddie Wu, Chief Executive Officer of Alibaba Group.
"While we made substantial investments to spark growth re-acceleration in our core businesses, we maintained financial discipline with enhanced operational efficiency, achieving positive EBITA growth in Taobao and Tmall Group. During the quarter, we continued to actively manage our balance sheet with significant non-core asset sales, share buybacks, and extending our debt maturities at attractive rates," said Toby Xu, Chief Financial Officer of Alibaba Group.
BUSINESS HIGHLIGHTS
In the quarter ended December 31, 2024:
-- Revenue was RMB280,154 million (US$38,381 million), an increase of 8%
year-over-year.
-- Income from operations was RMB41,205 million (US$5,645 million), an
increase of 83% year-over-year, primarily due to the decrease in
impairment of intangible assets as well as the increase in adjusted
EBITA. We excluded impairment of intangible assets from our non-GAAP
measurements. Adjusted EBITA, a non-GAAP measurement, increased 4%
year-over-year to RMB54,853 million (US$7,515 million), primarily
attributable to revenue growth and improved operating efficiency, partly
offset by the increase in investments in our e-commerce businesses.
-- Net income attributable to ordinary shareholders was RMB48,945 million
(US$6,705 million). Net income was RMB46,434 million (US$6,361 million),
an increase of 333% year-over-year, primarily due to the increase in
income from operations, mark-to-market changes from our equity
investments, and the increase in share of results of equity method
investees, partly offset by the increase in impairment of our
investments. Non-GAAP net income in the quarter ended December 31, 2024
was RMB51,066 million (US$6,996 million), an increase of 6% compared to
RMB47,951 million in the same quarter of 2023.
-- Diluted earnings per ADS was RMB20.39 (US$2.79). Diluted earnings per
share was RMB2.55 (US$0.35 or HK$2.75). Non-GAAP diluted earnings per ADS
was RMB21.39 (US$2.93), an increase of 13% year-over-year. Non-GAAP
diluted earnings per share was RMB2.67 (US$0.37 or HK$2.88), an increase
of 13% year-over-year.
-- Net cash provided by operating activities was RMB70,915 million (US$9,715
million), an increase of 10% compared to RMB64,716 million in the same
quarter of 2023. Free cash flow, a non-GAAP measurement of liquidity was
RMB39,020 million (US$5,346 million), a decrease of 31% compared to
RMB56,540 million in the same quarter of 2023. The decrease in free cash
flow was mainly attributed to the increase in expenditure related to our
investments in cloud infrastructure, partly offset by changes in other
working capital.
Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.
BUSINESS AND STRATEGIC UPDATES
Taobao and Tmall Group
During the quarter, our customer management revenue grew 9% year-over-year to RMB100,790 million (US$13,808 million), driven by the growth in online GMV and improvement of take rate year-over-year. Our take rate benefited from the full-quarter impact of the software service fee and increasing adoption of Quanzhantui.
We increased efforts to grow our user base and continued to invest in strategic initiatives such as price-competitive products, customer service, membership program benefits and technology to enhance user experience. These efforts led to strong growth year-over-year in new consumers and orders.
On the merchant end, we focused on improving their operating environment and enhancing efficiency. To ensure merchants' sustainable development on our platform, we announced a series of merchant-friendly measures on January 20, 2025. In addition, Quanzhantui saw steady increase in merchant adoption, especially among small and medium-sized ones who benefit through its convenience of use and improvement of marketing efficiency.
The number of 88VIP members, our highest spending consumer group, continued to increase by double digits year-over-year, reaching 49 million during the quarter. We will continue to grow the subscription of 88VIP membership by providing attractive benefits and premium services.
Alibaba International Digital Commerce Group ("AIDC")
For the quarter ended December 31, 2024, revenue from AIDC grew 32% year-over-year to RMB37,756 million (US$5,173 million), primarily driven by strong performance of cross-border businesses. AIDC increased investments during overseas shopping festivals quarter-over-quarter, and continued to invest in select European markets and the Gulf region to acquire users, which resulted in increased losses. However, the unit economics of the AliExpress' Choice business improved on a sequential basis.
The AliExpress platform continued to enrich its product offerings and diversify its business models to meet the needs of local consumers. During the quarter, we announced a plan to form a joint venture with Shinsegae in South Korea, which will operate AliExpress Korea and Gmarket to better serve consumers in South Korea and enhance our competitiveness.
Cloud Intelligence Group
For the quarter ended December 31, 2024, revenue from Cloud Intelligence Group was RMB31,742 million (US$4,349 million), an increase of 13% year-over-year.
During this quarter, overall revenue excluding Alibaba-consolidated subsidiaries achieved double-digit year-over-year growth of 11%. This momentum was primarily driven by double-digit public cloud revenue growth, including the growing adoption of AI-related products. Notably, AI-related product revenue maintained triple-digit year-over-year growth for the sixth consecutive quarter. We will continue to invest in anticipation of customer growth and technology innovation, particularly in AI infrastructure, to increase cloud adoption for AI and maintain our market leadership.
Alibaba Cloud has gained notable recognition as the cloud service provider of choice for public cloud products. Alibaba Cloud has been named a Leader in the 2024 Gartner$(R)$ Magic Quadrant$(TM)$ for both Cloud Database Management Systems and Container Management as the only Chinese company consecutively. In The Forrester Wave(TM): Public Cloud Platforms Q4 2024 report, Alibaba was also named a leader as the only Chinese vendor.
We remain committed to advancing multi-modal AI technology and expanding our open-source initiatives. In January 2025, we open-sourced Qwen2.5-VL, our next-generation multi-modal model, and launched our flagship MoE-based model Qwen2.5-Max. Both models deliver globally leading results across recognized benchmarks and are available to users and enterprises through Qwen Chat and our Bailian platform. Since August 2023, we have open-sourced various large models under the Qwen family. As of January 31, 2025, more than 90,000 derivative models had been developed on Hugging Face based on the Qwen family of models, making it one of the largest AI model families worldwide.
Cainiao Smart Logistics Network Limited ("Cainiao")
For the quarter ended December 31, 2024, revenue of Cainiao was RMB28,241 million (US$3,869 million), a decrease of 1% year-over-year. This is the result of ongoing restructurings with our e-commerce businesses taking on certain logistics platform role. Cainiao will continue to focus on building its global smart logistics network and make its end-to-end logistics capabilities available to our own e-commerce businesses as well as third parties.
Local Services Group
For the quarter ended December 31, 2024, revenue from Local Services Group grew 12% year-over-year to RMB16,988 million (US$2,327 million), driven by the combined order growth of Amap and Ele.me, as well as revenue growth from marketing services.
During this quarter, Local Services Group's losses significantly narrowed year-over-year as unit economics improved due to operating efficiency and as scale increased.
Digital Media and Entertainment Group
For the quarter ended December 31, 2024, revenue of Digital Media and Entertainment Group was RMB5,438 million (US$745 million), an increase of 8% year-over-year, primarily driven by the increase in Youku's advertising revenue.
Loss of Digital Media and Entertainment Group continued to narrow year-over-year, primarily due to Youku's reducing operating loss as a result of increased advertising revenue as well as improved content investment efficiency during the quarter.
Strategic Divestments, Share Repurchases and Senior Notes Offering
We have been actively optimizing our balance sheet through strategic divestments of non-core assets, share buybacks and extending our debt maturities at attractive rates.
During the quarter, we entered into agreements to dispose all of our interests in (i) Sun Art for up to a maximum of HK$12.3 billion (US$1.6 billion) and (ii) Intime for approximately RMB7.4 billion (US$1 billion). These moves reflect our strategic shift to streamline operations and focus on our core businesses.
During the quarter, we repurchased a total of 119 million ordinary shares (equivalent to 15 million ADSs) for a total of US$1.3 billion. These purchases were made in the U.S. market under our share repurchase program. As of December 31, 2024, we had 18,517 million ordinary shares (equivalent to 2,315 million ADSs) outstanding, a net decrease of 103 million ordinary shares compared to September 30, 2024, or a 0.6% net reduction in our outstanding shares after accounting for shares issued under our ESOP. The remaining amount of Board authorization for our share repurchase program, which is effective through March 2027, was US$20.7 billion as of December 31, 2024.
We also completed an offering of approximately US$5 billion of U.S. dollar-denominated senior unsecured notes and RMB-denominated senior unsecured notes in November 2024 to repay offshore debt, repurchase shares and for other general corporate purposes. This transaction enhanced our capital structure and secured extended debt maturities at attractive rates.
DECEMBER QUARTER SUMMARY FINANCIAL RESULTS
Three months ended December 31,
------------------------------------------
2023 2024
------------- ---------------------------
YoY %
RMB RMB US$ Change
------------- ------------- ------------ -------------
(in millions, except percentages and per share amounts)
Revenue 260,348 280,154 38,381 8%
Income from
operations 22,511 41,205 5,645 83%(2)
Operating
margin 9% 15%
Adjusted
EBITDA(1) 59,572 62,054 8,501 4%(3)
Adjusted
EBITDA
margin(1) 23% 22%
Adjusted
EBITA(1) 52,843 54,853 7,515 4%(3)
Adjusted
EBITA
margin(1) 20% 20%
Net income 10,717 46,434 6,361 333%(4)
Net income
attributable
to ordinary
shareholders 14,433 48,945 6,705 239%(4)
Non-GAAP net
income(1) 47,951 51,066 6,996 6%(4)
Diluted
earnings per
share(5) 0.71 2.55 0.35 261%(4)(6)
Diluted
earnings per
ADS(5) 5.65 20.39 2.79 261%(4)(6)
Non-GAAP
diluted
earnings per
share(1)(5) 2.37 2.67 0.37 13%(4)(6)
Non-GAAP
diluted
earnings per
ADS(1)(5) 18.97 21.39 2.93 13%(4)(6)
(1) See the sections entitled "Non-GAAP Financial Measures" and
"Reconciliations of Non-GAAP Measures to the Nearest Comparable U.S.
GAAP Measures" for more information about the non-GAAP measures
referred to within this results announcement.
(2) The year-over-year increase was primarily due to the decrease in
impairment of intangible assets as well as the increase in adjusted
EBITA.
(3) The year-over-year increases were primarily attributable to revenue
growth and improved operating efficiency, partly offset by the increase
in investments in our e-commerce businesses.
(4) The year-over-year increases were primarily due to the increase in
income from operations, mark-to-market changes from our equity
investments, and the increase in share of results of equity method
investees, partly offset by the increase in impairment of our
investments, while net income attributable to ordinary shareholders and
earnings per share/ADS would further take into account the net loss
attributable to noncontrolling interests. We excluded non-cash
share-based compensation expense, gains/losses of investments,
impairment of goodwill and intangible assets, and certain other items
from our non-GAAP measurements.
(5) Each ADS represents eight ordinary shares.
(6) The year-over-year percentages as stated are calculated based on the
exact amount and there may be minor differences from the year-over-year
percentages calculated based on the RMB amounts after rounding.
DECEMBER QUARTER SEGMENT RESULTS
Revenue for the quarter ended December 31, 2024 was RMB280,154 million (US$38,381 million), an increase of 8% year-over-year compared to RMB260,348 million in the same quarter of 2023.
The following table sets forth a breakdown of our revenue by segment for the periods indicated:
Three months ended December 31,
-----------------------------------
2023 2024
----------- ----------------------
YoY %
RMB RMB US$ Change
----------- ----------- --------- -------
(in millions, except percentages)
Taobao and Tmall Group:
China commerce retail
-- Customer management 92,113 100,790 13,808 9%
-- Direct sales and
others(1) 31,649 28,726 3,935 (9)%
----------- ----------- ---------
123,762 129,516 17,743 5%
China commerce
wholesale 5,308 6,575 901 24%
----------- ----------- ---------
Total Taobao and Tmall
Group 129,070 136,091 18,644 5%
Alibaba International
Digital Commerce Group:
International commerce
retail 23,260 31,553 4,323 36%
International commerce
wholesale 5,256 6,203 850 18%
----------- ----------- ---------
Total Alibaba
International Digital
Commerce Group 28,516 37,756 5,173 32%
Cloud Intelligence Group 28,066 31,742 4,349 13%
Cainiao Smart Logistics
Network Limited 28,476 28,241 3,869 (1)%
Local Services Group 15,160 16,988 2,327 12%
Digital Media and
Entertainment Group 5,040 5,438 745 8%
All others(2) 47,023 53,102 7,275 13%
Unallocated 374 590 81
Inter-segment elimination (21,377) (29,794) (4,082)
----------- ----------- ---------
Consolidated revenue 260,348 280,154 38,381 8%
=========== =========== =========
(1) Direct sales and others revenue under Taobao and Tmall Group primarily
represents Tmall Supermarket, Tmall Global and other direct sales
businesses, where revenue and cost of inventory are recorded on a gross
basis.
(2) All others include Sun Art, Freshippo, Alibaba Health, Lingxi Games,
Intime, Intelligent Information Platform (which mainly consists of
UCWeb and Quark businesses), Fliggy, DingTalk and other businesses. The
majority of revenue within All others consists of direct sales revenue,
which is recorded on a gross basis.
The following table sets forth a breakdown of our adjusted EBITA by segment for the periods indicated:
Three months ended December 31,
-----------------------------------
2023 2024
------------ ---------------------
YoY %
RMB RMB US$ Change(3)
------------ ---------- --------- ----------
(in millions, except percentages)
Taobao and Tmall Group 59,930 61,083 8,368 2%
Alibaba International
Digital Commerce
Group (3,146) (4,952) (678) (57)%
Cloud Intelligence
Group 2,364 3,138 430 33%
Cainiao Smart Logistics
Network Limited 961 235 32 (76)%
Local Services Group (2,068) $(596.SI)$ (82) 71%
Digital Media and
Entertainment Group (517) (309) (42) 40%
All others(1) (3,172) (3,156) (432) 1%
Unallocated (2) (808) (165) (23)
Inter-segment
elimination (701) (425) (58)
------------ ---------- ---------
Consolidated adjusted
EBITA 52,843 54,853 7,515 4%
Less: Non-cash
share-based
compensation expense (6,222) (3,414) (468)
Less: Amortization and
impairment of
intangible assets (14,601) (2,062) (282)
Less: Impairment of
goodwill, and others (9,509) (8,172) (1,120)
------------ ---------- ---------
Income from operations 22,511 41,205 5,645 83%
============ ========== =========
(1) All others include Sun Art, Freshippo, Alibaba Health, Lingxi Games,
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