HANGZHOU, China–(BUSINESS WIRE)–$BABA #alibaba–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, 2023.
“We delivered a solid quarter as we are executing our focused strategies across the organization. Our top priority is to reignite the growth of our core businesses, e-commerce and cloud computing. We will step up investment to improve users’ core experiences to drive growth in Taobao and Tmall Group and strengthen market leadership in the coming year. We will also focus our resources on developing public cloud products and sustaining the strong growth momentum in international commerce business,” said Eddie Wu, Chief Executive Officer of Alibaba Group.
“Alibaba Group delivered a healthy quarter with revenue growth of 5% year-over-year. We increased our investment in strategic priorities and improved shareholder return by leveraging our strong balance sheet and cash flow. Our board of directors approved an increase of US$25 billion to our share repurchase program, demonstrating our confidence in the outlook of our business and cash flow. Our consistent share repurchase has also reduced outstanding share count while achieving EPS and cash flow per share accretion,” said Toby Xu, Chief Financial Officer of Alibaba Group.
BUSINESS HIGHLIGHTS
In the quarter ended December 31, 2023:
BUSINESS AND STRATEGIC UPDATES
Taobao and Tmall Group
We are in the process of revitalizing Taobao and Tmall Group and positioning it for future growth. Our growth strategy is to put users first, build ecosystem for brands and merchants to thrive on our platform, and realize technology-driven innovation. We are committed to building an e-commerce ecosystem where brands, merchants and manufacturers operate with high efficiency, thereby providing multi-tiered Chinese consumers with good products and services at attractive prices. In December 2023, we appointed a new management team to execute Taobao and Tmall Group’s strategy and drive business growth through technological innovation.
For the quarter ended December 31, 2023, revenue from Taobao and Tmall Group was RMB129,070 million (US$18,179 million), a growth of 2% year-over-year. During the quarter, online GMV achieved healthy growth year-over-year, with the number of transacting buyers and order volume growing strongly, partly offset by decrease in average order value. Under our user engagement and price-competitive strategies, we continued to increase interactive content and broaden the assortment of value-for-money products. Additionally, we continued our efforts to onboard a wider range of brands and merchants. The number of merchants operating on our platform during the quarter continued to grow at double digits year-over-year, and this double-digit growth trend has sustained over the past four quarters.
Following a successful 11.11 Global Shopping Festival, order volume grew double digits year-over-year during the second half of the quarter. This reflected increasing consumer demand and willingness to make purchases on our platform driven by our price-competitive strategy.
On the other hand, we have been successful in retaining and growing premium shoppers as the number of 88VIP members continued to increase double digits year-over-year, surpassing 32 million.
Cloud Intelligence Group
For the quarter ended December 31, 2023, revenue from Cloud Intelligence Group was RMB28,066 million (US$3,953 million), a growth of 3% year-over-year. We continue to improve revenue quality by reducing the revenue from low-margin project-based contracts. On the other hand, revenue from public cloud products and services grew healthily which contributed to profitability improvement.
Recent highlights of our proprietary products and technology include:
Alibaba International Digital Commerce Group (“AIDC”)
For the quarter ended December 31, 2023, revenue from AIDC grew 44% year-over-year to RMB28,516 million (US$4,016 million), and the combined orders of AIDC grew 24% year-over-year. The strong performance was driven by solid growth across all of AIDC’s retail platforms, especially from the cross-border AliExpress Choice business. Our cross-border businesses exhibited rapid year-over-year growth in response to increasing global demand for high-quality products at attractive prices. To sustain this momentum and provide differentiated services to customers, we increased investments during this quarter and will continue to invest in further growth.
During the quarter, AliExpress delivered over 60% year-over-year order growth, driven by Choice, which provides an enhanced experience to consumers by combining better product selection, price and quality with speed of logistics and great customer support. Choice represented about half of AliExpress’ total orders in January 2024 and continues to deliver rapid order growth.
During the quarter, Trendyol continued its robust double-digit order growth. While maintaining its leading e-commerce position in Türkiye, Trendyol has further extended its operations into the Middle East with a wide range of merchandise as well as speedy and reliable logistics experience.
Lazada continues to focus on optimizing its operating efficiency. With further increased monetization and decreased logistics costs, Lazada’s loss per order continued to narrow year-over-year during the quarter.
Cainiao Smart Logistics Network Limited (“Cainiao”)
For the quarter ended December 31, 2023, revenue from Cainiao grew 24% year-over-year to RMB28,476 million (US$4,011 million), primarily driven by revenue from cross-border fulfillment solutions.
Cainiao continues to execute its strategy of building a global smart logistics network, reinforcing comprehensive end-to-end capabilities in first-mile pick-up, line haul, customs clearance, sortation, and last-mile delivery. To support cross-border business development, with the upgrade of end-to-end capabilities, Cainiao further expanded its premium 5-day delivery service coverage, adding two more countries during the quarter. The order volume for the premium 5-day delivery service achieved robust triple-digit quarter-over-quarter growth.
Local Services Group
For the quarter ended December 31, 2023, revenue from Local Services Group grew 13% year-over-year to RMB15,160 million (US$2,135 million), driven by healthy growth of Ele.me and rapid growth of Amap. During this quarter, order growth of Local Services Group exceeded 20% year-over-year. Local Services Group’s annual active consumers reached over 390 million and their annual purchasing frequency grew strongly year-over-year for the twelve months ended December 31, 2023. For this quarter, its losses continued to narrow driven by improving business scale and efficiency.
Digital Media and Entertainment Group
During the quarter ended December 31, 2023, revenue of Digital Media and Entertainment Group was RMB5,040 million (US$710 million), an increase of 18% year-over-year, driven by strong revenue growth of offline entertainment businesses of Alibaba Pictures. During the quarter, Damai, a subsidiary of Alibaba Pictures, consolidated its industry-leading position by servicing almost all the major concerts in China, which contributed to rapid GMV growth year-over-year. Total box office of movies produced, promoted and distributed by Alibaba Pictures’ movie segment accounted for more than half of China’s total box office during the quarter.
Updates on ESG Initiatives
Progress in Decarbonization
We continue to accelerate our transition to clean energy. In November 2023, Bloomberg New Energy Finance released the “China’s Top Clean Energy Buyers and Sellers in 2023.” Alibaba Group, with a green electricity transaction volume of 1,610 gigawatt-hours, became the national leader for green electricity procurement for the first time.
In November 2023, Alibaba Group was the first Asian Internet technology company to join the World Business Council for Sustainable Development (WBCSD), a group of over 200 businesses, to support WBCSD’s drive to make global value chains more sustainable. At COP28, Alibaba Group together with WBCSD and other corporate members, advocated for “Scope 3+” carbon reduction actions by promoting the “Guidance on Avoided Emissions” report.
Upsize of Share Repurchase Program
As previously announced, during the quarter ended December 31, 2023, we repurchased a total of 292.7 million ordinary shares (equivalent of 36.6 million ADSs) for a total of US$2.9 billion, and a total of 897.9 million ordinary shares (equivalent of 112.2 million ADSs) for a total of US$9.5 billion during the 2023 calendar year. As of December 31, 2023, we had 20.0 billion ordinary shares (equivalent of 2.5 billion ADSs) outstanding. Our share repurchase program resulted in a net reduction of 3.3% in our outstanding shares in the 2023 calendar year after accounting for shares issued under our ESOP.
Our board of directors has approved an increase of US$25 billion to our share repurchase program through the end of March 2027. Following this upsize, we currently have US$35.3 billion available under our share repurchase program through the next three fiscal years. We have undertaken to update investors on our share repurchases immediately after the end of each quarter with the next update expected to be published in early April.
| DECEMBER QUARTER SUMMARY FINANCIAL RESULTS | ||||||||
|
| Three months ended December 31, |
|
| |||||
|
| 2022 |
| 2023 |
|
| |||
|
| RMB |
| RMB |
| US$ |
|
YoY % | |
|
| (in millions, except percentages and per share amounts) | |||||||
|
|
|
|
|
| ||||
| Revenue | 247,756 |
| 260,348 |
| 36,669 |
| 5% | |
|
|
|
|
|
|
|
|
| |
| Income from operations | 35,031 |
| 22,511 |
| 3,171 |
| (36)%(2) | |
| Operating margin | 14% |
| 9% |
|
|
|
| |
| Adjusted EBITDA(1) | 59,162 |
| 59,572 |
| 8,391 |
| 1%(3) | |
| Adjusted EBITDA margin(1) | 24% |
| 23% |
|
|
|
| |
| Adjusted EBITA(1) | 52,048 |
| 52,843 |
| 7,443 |
| 2%(3) | |
| Adjusted EBITA margin(1) | 21% |
| 20% |
|
|
|
| |
|
|
|
|
|
|
|
|
| |
| Net income | 45,746 |
| 10,717 |
| 1,509 |
| (77)%(4) | |
| Net income attributable to ordinary shareholders | 46,815 |
| 14,433 |
| 2,033 |
| (69)%(4) | |
| Non-GAAP net income(1) | 49,932 |
| 47,951 |
| 6,754 |
| (4)%(4) | |
|
|
|
|
|
|
|
|
| |
| Diluted earnings per share(5) | 2.24 |
| 0.71 |
| 0.10 |
| (68)%(4)(6) | |
| Diluted earnings per ADS(5) | 17.91 |
| 5.65 |
| 0.80 |
| (68)%(4)(6) | |
| Non-GAAP diluted earnings per share(1)(5) | 2.41 |
| 2.37 |
| 0.33 |
| (2)%(4)(6) | |
| Non-GAAP diluted earnings per ADS(1)(5) | 19.26 |
| 18.97 |
| 2.67 |
| (2)%(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 decrease was primarily attributable to impairment of intangible assets of Sun Art and impairment of goodwill of Youku. | |
| (3) | The year-over-year increases were primarily contributed by revenue growth and improved operating efficiency that was partly offset by the increase in investments in certain businesses. | |
| (4) | The year-over-year decrease in net income was primarily attributable to mark-to-market changes from our equity investments and the decrease in income from operations due to the impairment as mentioned above. We excluded share-based compensation expense, gains/losses of investments, impairment of intangible assets and goodwill, 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, 2023 was RMB260,348 million (US$36,669 million), an increase of 5% year-over-year compared to RMB247,756 million in the same quarter of 2022.
Starting from the quarter ended June 30, 2023, we have implemented a new organizational structure which includes six major business groups and various other businesses (the “Reorganization”). Our segment reporting has been updated to reflect our Reorganization and how our chief operating decision maker (“CODM”) review information under our new structure.
The following table sets forth a breakdown of our revenue by segment for the periods indicated(1):
|
| Three months ended December 31, |
|
| |||||
|
| 2022 |
| 2023 |
|
| |||
|
| RMB |
| RMB |
| US$ |
| YoY % Change | |
|
| (in millions, except percentages) | |||||||
| Taobao and Tmall Group: |
|
|
|
| ||||
| China commerce retail |
|
|
|
| ||||
| – Customer management | 91,694 |
| 92,113 |
| 12,974 |
| 0% | |
| – Direct sales and others(2) | 31,042 |
| 31,649 |
| 4,458 |
| 2% | |
|
| 122,736 |
| 123,762 |
| 17,432 |
| 1% | |
| China commerce wholesale | 4,329 |
| 5,308 |
| 747 |
| 23% | |
| Total Taobao and Tmall Group | 127,065 |
| 129,070 |
| 18,179 |
| 2% | |
|
|
|
|
|
|
|
|
| |
| Cloud Intelligence Group | 27,364 |
| 28,066 |
| 3,953 |
| 3% | |
|
|
|
|
|
|
|
|
| |
| Alibaba International Digital Commerce Group: |
|
|
|
|
|
|
| |
| International commerce retail | 14,954 |
| 23,260 |
| 3,276 |
| 56% | |
| International commerce wholesale | 4,870 |
| 5,256 |
| 740 |
| 8% | |
| Total Alibaba International Digital Commerce Group | 19,824 |
| 28,516 |
| 4,016 |
| 44% | |
|
|
|
|
|
|
|
|
| |
| Cainiao Smart Logistics Network Limited | 23,023 |
| 28,476 |
| 4,011 |
| 24% | |
| Local Services Group | 13,397 |
| 15,160 |
| 2,135 |
| 13% | |
| Digital Media and Entertainment Group | 4,261 |
| 5,040 |
| 710 |
| 18% | |
| All others(3) | 50,334 |
| 47,023 |
| 6,623 |
| (7)% | |
| Total segment revenue | 265,268 |
| 281,351 |
| 39,627 |
| 6% | |
| Unallocated | 225 |
| 374 |
| 53 |
|
| |
| Inter-segment elimination | (17,737) |
| (21,377) |
| (3,011) |
|
| |
| Consolidated revenue | 247,756 |
| 260,348 |
| 36,669 |
| 5% | |
|
| Nine months ended December 31, |
|
| |||||
|
| 2022 |
| 2023 |
|
| |||
|
| RMB |
| RMB |
| US$ |
| YoY % Change | |
|
| (in millions, except percentages) | |||||||
| Taobao and Tmall Group: |
|
|
|
| ||||
| China commerce retail |
|
|
|
| ||||
| – Customer management | 230,996 |
| 240,435 |
| 33,864 |
| 4% | |
| – Direct sales and others(2) | 78,599 |
| 85,715 |
| 12,073 |
| 9% | |
|
| 309,595 |
| 326,150 |
| 45,937 |
| 5% | |
| China commerce wholesale | 13,722 |
| 15,527 |
| 2,187 |
| 13% | |
| Total Taobao and Tmall Group | 323,317 |
| 341,677 |
| 48,124 |
| 6% | |
|
|
|
|
|
|
|
|
| |
| Cloud Intelligence Group | 78,755 |
| 80,779 |
| 11,377 |
| 3% | |
|
|
|
|
|
|
|
|
| |
| Alibaba International Digital Commerce Group: |
|
|
|
|
|
|
| |
| International commerce retail | 36,686 |
| 59,376 |
| 8,363 |
| 62% | |
| International commerce wholesale | 14,905 |
| 15,774 |
| 2,222 |
| 6% | |
| Total Alibaba International Digital Commerce Group | 51,591 |
| 75,150 |
| 10,585 |
| 46% | |
|
|
|
|
|
|
|
|
| |
| Cainiao Smart Logistics Network Limited | 58,597 |
| 74,463 |
| 10,488 |
| 27% | |
| Local Services Group | 37,909 |
| 45,174 |
| 6,363 |
| 19% | |
| Digital Media and Entertainment Group | 13,455 |
| 16,200 |
| 2,282 |
| 20% | |
| All others(3) | 143,812 |
| 140,873 |
| 19,841 |
| (2)% | |
| Total segment revenue | 707,436 |
| 774,316 |
| 109,060 |
| 9% | |
| Unallocated | 634 |
| 900 |
| 127 |
|
| |
| Inter-segment elimination | (47,583) |
| (55,922) |
| (7,877) |
|
| |
| Consolidated revenue | 660,487 |
| 719,294 |
| 101,310 |
| 9% | |
| ____________________ | ||
| (1) | During the nine months ended December 31, 2023, our segment reporting has been updated to reflect our Reorganization and the reclassification of the revenue of our DingTalk business, which was previously reported under Cloud Intelligence Group, to All others, the purpose of which was to provide DingTalk with greater autonomy to promote innovation and enhance competitiveness. Our CODM started to review information under this new reporting structure and segment reporting has been updated to conform to this change as well as the way we manage and monitor segment performance. Comparative figures were reclassified to conform to this presentation. | |
| (2) | 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. | |
| (3) | All others include Sun Art, Freshippo, Alibaba Health, Lingxi Games, Intime, Intelligent Information Platform (which mainly consists of UCWeb and Quark businesses), Fliggy, DingTalk (previously reported under Cloud Intelligence Group segment) and other businesses. The majority of revenue within All others consist 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(1):
|
| Three months ended December 31, |
|
| |||||
|
| 2022 |
| 2023 |
|
| |||
|
| RMB |
| RMB |
| US$ |
| YoY % Change (4) | |
|
| (in millions, except percentages) | |||||||
| Taobao and Tmall Group | 59,245 |
| 59,930 |
| 8,441 |
| 1% | |
| Cloud Intelligence Group | 1,269 |
| 2,364 |
| 333 |
| 86% | |
| Alibaba International Digital Commerce Group | (645) |
| (3,146) |
| (443) |
| (388)% | |
| Cainiao Smart Logistics Network Limited | (12) |
| 961 |
| 135 |
| N/A | |
| Local Services Group | (2,923) |
| (2,068) |
| (291) |
| 29% | |
| Digital Media and Entertainment Group | (391) |
| (517) |
| (73) |
| (32)% | |
| All others(2) | (1,698) |
| (3,172) |
| (447) |
| (87)% | |
| Total segment adjusted EBITA | 54,845 |
| 54,352 |
| 7,655 |
| (1)% | |
| Unallocated(3) | (2,173) |
| (808) |
| (114) |
|
| |
| Inter-segment elimination | (624) |
| (701) |
| (98) |
|
| |
| Consolidated adjusted EBITA | 52,048 |
| 52,843 |
| 7,443 |
| 2% | |
| Less: Share-based compensation expense | (8,773) |
| (6,222) |
| (876) |
|
| |
| Less: Amortization and impairment of intangible assets | (5,530) |
| (14,601) |
| (2,056) |
|
| |
| Less: Impairment of goodwill, and others | (2,714) |
| (9,509) |
| (1,340) |
|
| |
| Income from operations | 35,031 |
| 22,511 |
| 3,171 |
| (36)% | |
|
| Nine months ended December 31, |
|
| |||||
|
| 2022 |
| 2023 |
|
| |||
|
| RMB |
| RMB |
| US$ |
| YoY % Change (4) | |
|
| (in millions, except percentages) | |||||||
| Taobao and Tmall Group | 150,099 |
| 156,326 |
| 22,018 |
| 4% | |
| Cloud Intelligence Group | 3,114 |
| 4,689 |
| 660 |
| 51% | |
| Alibaba International Digital Commerce Group | (2,773) |
| (3,950) |
| (556) |
| (42)% | |
| Cainiao Smart Logistics Network Limited | (72) |
| 2,744 |
| 387 |
| N/A | |
| Local Services Group | (9,085) |
| (6,614) |
| (932) |
| 27% | |
| Digital Media and Entertainment Group | (1,660) |
| (655) |
| (92) |
| 61% | |
| All others(2) | (7,533) |
| (6,342) |
| (893) |
| 16% | |
| Total segment adjusted EBITA | 132,090 |
| 146,198 |
| 20,592 |
| 11% | |
| Unallocated(3) | (7,779) |
| (3,290) |
| (463) |
|
| |
| Inter-segment elimination | (1,680) |
| (1,849) |
| (261) |
|
| |
| Consolidated adjusted EBITA | 122,631 |
| 141,059 |
| 19,868 |
| 15% | |
| Less: Share-based compensation expense | (23,285) |
| (11,423) |
| (1,609) |
|
| |
| Less: Amortization and impairment of intangible assets | (11,010) |
| (19,511) |
| (2,748) |
|
| |
| Less: Impairment of goodwill, and others | (3,225) |
| (11,540) |
| (1,626) |
|
| |
| Income from operations | 85,111 |
| 98,585 |
| 13,885 |
| 16% | |
| ____________________ | ||
| (1) | During the nine months ended December 31, 2023, our segment reporting has been updated to reflect our Reorganization and the reclassification of the result of our DingTalk business, which was previously reported under Cloud Intelligence Group, to All others, the purpose of which was to provide DingTalk with greater autonomy to promote innovation and enhance competitiveness. Our CODM started to review information under this new reporting structure and segment reporting has been updated to conform to this change as well as the way we manage and monitor segment performance. Comparative figures were reclassified to conform to this presentation. | |
| (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 (previously reported under Cloud Intelligence Group segment) and other businesses. | |
| (3) | Unallocated primarily relates to certain costs incurred by corporate functions and other miscellaneous items that are not allocated to individual segments. | |
| (4) | For a more intuitive presentation, widening of loss in YoY% is shown in terms of negative growth rate, and narrowing of loss in YoY% is shown in terms of positive growth rate. | |
Taobao and Tmall Group
(i) Segment revenue
Revenue from our China commerce retail business in the quarter ended December 31, 2023 was RMB123,762 million (US$17,432 million), an increase of 1% compared to RMB122,736 million in the same quarter of 2022.
Customer management revenue remained stable year-over-year, primarily due to healthy growth in online GMV generated on Taobao and Tmall, excluding unpaid orders, partly offset by decline in overall take rate. The overall take rate decreased slightly year-over-year mainly because the increase in GMV came from Taobao merchants.
Direct sales and others revenue under China commerce retail business in the quarter ended December 31, 2023 was RMB31,649 million (US$4,458 million), an increase of 2% compared to RMB31,042 million in the same quarter of 2022.
Revenue from our China commerce wholesale business in the quarter ended December 31, 2023 was RMB5,308 million (US$747 million), an increase of 23% compared to RMB4,329 million in the same quarter of 2022, primarily due to an increase in revenue from value-added services provided to paying members.
(ii) Segment adjusted EBITA
Taobao and Tmall Group adjusted EBITA increased by 1% to RMB59,930 million (US$8,441 million) in the quarter ended December 31, 2023, compared to RMB59,245 million in the same quarter of 2022. The increase was primarily due to narrowing losses in certain businesses, partly offset by an increase in investment in content, user acquisition and retention of Taobao app, as well as technological innovation.
Cloud Intelligence Group
(i) Segment revenue
Revenue from Cloud Intelligence Group was RMB28,066 million (US$3,953 million) in the quarter ended December 31, 2023, an increase of 3% compared to RMB27,364 million in the same quarter of 2022.
Contacts
Investor Relations Contact
Rob Lin
Head of Investor Relations
Alibaba Group Holding Limited
investor@alibaba-inc.com
Media Contacts
Cathy Yan
cathy.yan@alibaba-inc.com
Ivy Ke
ivy.ke@alibaba-inc.com
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