HANGZHOU, China--(BUSINESS WIRE)--Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988, �Alibaba� or �Alibaba Group�) today announced its financial results for the quarter ended June 30, 2020.

�Alibaba delivered excellent results this past quarter. We were well positioned to capture growth from the ongoing digital transformation, which has been accelerated by the pandemic, in both consumption and enterprise operations,� said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. �We mobilized our entire digital infrastructure to support the economic recovery of businesses across a wide range of sectors, while broadening and diversifying our consumer base by addressing their changing preferences in a post-COVID-19 environment. Despite these unusual times, we remain focused on the long term, on fulfilling our mission, and on creating true value for our consumers and business customers.�

�We delivered a very strong start to our new fiscal year, with revenue growing 34% year-over-year and adjusted EBITDA growing 30% year-over-year,� said Maggie Wu, Chief Financial Officer of Alibaba Group. �Our domestic core commerce business has fully recovered to pre-COVID-19 levels across the board, while cloud computing revenue grew 59% year-over-year. Our strong profit growth and cash flow enable us to continue to strengthen our core business and invest for long term growth.�

BUSINESS HIGHLIGHTS

In the quarter ended June 30, 2020:

• Revenue was RMB153,751 million (US$21,762 million), an increase of 34% year-over-year.
• Annual active consumers on our China retail marketplaces reached 742 million, an increase of 16 million from the 12-month period ended March 31, 2020.
• Mobile MAUs on our China retail marketplaces reached 874 million in June 2020, an increase of 28 million over March 2020.
• Income from operations was RMB34,705 million (US$4,912 million), an increase of 42% year-over-year. Adjusted EBITDA, a non-GAAP measurement, increased 30% year-over-year to RMB51,039 million (US$7,224 million). Adjusted EBITA, a non-GAAP measurement, increased 31% year-over-year to RMB45,372 million (US$6,422 million).
• Net income attributable to ordinary shareholders was RMB47,591 million (US$6,736 million), and net income was RMB46,437 million (US$6,573 million). Non-GAAP net income was RMB39,474 million (US$5,587 million), an increase of 28% year-over-year.
• Diluted earnings per ADS was RMB17.36 (US$2.46) and non-GAAP diluted earnings per ADS was RMB14.82 (US$2.10), an increase of 18% year-over-year. Diluted earnings per share was RMB2.17 (US$0.31 or HK$2.38) and non-GAAP diluted earnings per share was RMB1.85 (US$0.26 or HK$2.03), an increase of 18% year-over-year.
• Net cash provided by operating activities was RMB50,099 million (US$7,091 million) and non-GAAP free cash flow was RMB36,570 million (US$5,176 million).

Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.

BUSINESS AND STRATEGIC UPDATES

Core Commerce

China Retail Marketplaces � broad product selection and engaging user experience drive consumer growth and higher purchase frequency

Consumers � the largest consumer platform in China continues rapid growth while increasing penetration in less developed areas

In June 2020, our China retail marketplaces had 874 million mobile MAUs, representing a quarterly net increase of 28 million. Annual active consumers on our China retail marketplaces was 742 million for the twelve months ended June 30, 2020, representing a quarterly net increase of 16 million. We continue to acquire new users and consumers from less developed areas, reflecting our ongoing success in broadening product offerings to meet diverse demands. For example, Taobao Deals (???), which enables merchants and manufacturers to sell directly to value conscious consumers, has been growing rapidly since we launched a new version in March 2020. In June 2020, Taobao Deals had approximately 40 million MAUs.

Product Supply � fast growing platform delivers the most comprehensive product offering

Tmall online physical goods GMV, excluding unpaid orders, grew 27% year-over-year during the June 2020 quarter, with all major categories growing at similar or faster rates compared to the December 2019 quarter, before the onset of the COVID-19 pandemic. This solid growth was primarily driven by higher purchase frequency and increased new consumer acquisitions, reflecting the success of our consumer segmentation and category expansion strategies. Fast-moving consumer goods (�FMCG�), home furnishings and consumer electronics categories were the fastest growing categories during the quarter.

Tmall Global is the premier platform that helps overseas brands and merchants reach Chinese consumers directly, build brand awareness and gain unparalleled consumer insights. During the quarter, Tmall Global GMV, excluding unpaid orders, grew over 40% year-over-year, reflecting strong consumer demand for high quality, branded products from overseas, as well as increasing online purchases due to the impact of the COVID-19 pandemic on international travel.

Engagement � multiple engaging and interactive formats drive higher consumer spending

In the June 2020 quarter, our China retail marketplaces exhibited solid GMV growth. This growth was driven by increased consumption through effective marketing campaigns and our ongoing success in increasing spend per consumer through interactive formats and features. Annual spending per consumer continues to exhibit strong growth reflecting higher engagement among our consumers.

We achieved another record 6.18 Mid-Year Shopping Festival in scale and reach. We offered interactive promotions and tailor-made deals for different categories that were popular among consumers. As part of the festival, our China retail marketplaces, together with local governments and merchant partners, distributed billions of RMB in consumer coupons and subsidies to stimulate domestic consumption and revitalize businesses across China.

Taobao Live�s ecosystem continues to strengthen with broader adoption by brands, retailers and merchants across all product categories. Taobao Live�s KOLs (key opinion leaders) continue to generate robust GMV growth on the platform. At the same time, brands, retailers and merchants are also increasingly hosting live streaming sessions by themselves to connect directly with consumers. During the June 2020 quarter, Taobao Live GMV continued to grow over 100% year-over-year. In addition, live streaming sessions hosted by merchants accounted for approximately 60% of Taobao Live GMV (excluding unpaid orders).

New Retail � increasing value through new business models enabled by the digital transformation of brick-and-mortar retailing

Our New Retail operations continue to accelerate digitalization of our offline retail partners and enable them to offer a seamless omni-channel experience for consumers. Businesses within our New Retail grocery vertical are benefitting from Chinese consumers� increasing adoption of online shopping for groceries and daily necessities.

Creating the New � Our self-operated grocery retail chain Freshippo (known as �Hema� in Chinese) continues to expand its footprint, achieve robust same-store sales growth, optimize its store operations and improve customer experience. For the June 2020 quarter, online penetration of Freshippo�s GMV continued to be above 60%. As of June 30, 2020, we self-operated 214 Freshippo stores in China, primarily located in tier 1 and tier 2 cities.

Transforming the Old � Tmall Supermarket continues to deepen its collaboration with Sun Art through our omni-channel solutions for retail grocery partners. Since its launch in September 2019, our half-day delivery service that use Sun Art�s store-based inventories has seen tremendous growth as consumers enjoy greater product selection and faster delivery. Our half-day delivery service helped Sun Art capture new online consumers living within a 20 kilometer radius from its stores. In the June 2020 quarter, Alibaba enabled approximately 15% of Sun Art�s total revenue.

Local Consumer Services � increased investment in market penetration with focus on operational efficiency

Ele.me food delivery GMV growth turned positive in April and improved during the quarter as lockdown measures for the pandemic in China were lifted. Unit economics per order for the on-demand delivery business was positive during the quarter, reflecting improved delivery network efficiency as well as enhanced marketing efficiency that leverages our consumer insights technology.

We are attracting many high-quality restaurant chains and local service merchants throughout China with our digital technology and the value added services of the Alibaba digital economy. As a result, merchant acquisition continued to accelerate, with the number of registered merchants of Ele.me as of June 30, 2020 growing 30% year-over-year. We also continue to acquire new users for our local consumer services business by leveraging the Alibaba digital economy. For the June 2020 quarter, approximately 45% of new customers ordering food delivery came from the Alipay app.

Cainiao Network � progress in last-mile solutions as well as international and cross-border fulfillment

Cainiao Network continues to improve the efficiency of its partners and China�s logistics industry overall through its data technology and infrastructure investments. In urban areas, Cainiao Post (neighborhood and campus stations and residential self- pick-up stations) continues to see robust adoption by third party logistics players to optimize their last-mile delivery. In June 2020, Cainiao Post recorded over 100% year-over-year growth in average daily package volume.

The COVID-19 pandemic has caused significant disruptions to the import and export of goods by foreign businesses and organizations with operations in China. During the quarter, Cainiao Network enabled organizations and businesses to utilize its robust import and export fulfillment solutions that leverage its dedicated worldwide warehouse network and Smart Customs Clearance System. For example, in April 2020, the United Nations World Food Programme selected Cainiao Network to provide commercial hub, customs declaration and cross-border transportation services as part of its global response to the COVID-19 pandemic.

International � strong growth in Southeast Asia

Lazada, our Southeast Asian e-commerce platform, continues to deliver strong growth momentum. For the June 2020 quarter, Lazada achieved over 100% quarterly order growth, reflecting strong consumer demand in general merchandise, FMCG and electronics categories. The robust growth reflects an accelerating shift to online consumption in this region. During the quarter, Lazada also saw solid merchant growth and greater increases in product supplies. Brands and merchants are also leveraging interactive engagement formats such as live-streaming and mini-games on Lazada to connect with online consumers.

Cloud Computing

Alibaba Cloud leads the Asia Pacific cloud computing market by developing technology and business solutions that enable the digital transformation of businesses across industries. According to IDC (July 2020), Alibaba Cloud was the largest public cloud service provider in China, as measured by market share for IaaS (Infrastructure as a Service) as well as PaaS (Platform as a Service) for the quarter ended March 31, 2020.

We continue to expand and upgrade our PaaS offerings, such as data analytics and database management. According to the Transaction Processing Performance Council, AnalyticDB, our ultra-large-scale database, has been ranked the world�s fastest real-time data warehouse solution for the second straight year. AnalyticDB allows businesses to perform real-time petabyte-level data analysis and has been widely adopted by businesses in different industries, including e-commerce, finance, logistics, public transportation and entertainment.

In the June 2020 quarter, cloud computing revenue grew 59% year-over-year to RMB12,345 million (US$1,747 million), primarily driven by increased revenue contribution from both our public cloud and hybrid cloud businesses, reflecting higher average revenue per customer.

Digital Media and Entertainment

Youku continues to focus on increasing paying subscribers and delivering a superior user experience by offering more original and exclusive content. Youku�s daily average subscriber base increased by over 60% year-over-year during the quarter. The increase was primarily driven by Youku�s more effective targeting of new subscribers and increased contribution from the 88VIP membership program on our China retail marketplaces. Additionally, as we continue to focus on return on investments and cost efficiencies for the Youku business, loss year-over-year further narrowed during the quarter.

Cash Flow from Operating Activities and Free Cash Flow

In the June 2020 quarter, net cash provided by operating activities was RMB50,099 million (US$7,091 million), an increase of 45% compared to RMB34,612 million in the same quarter of 2019. Free cash flow, a non-GAAP measurement of liquidity, increased by 39% to RMB36,570 million (US$5,176 million), from RMB26,361 million in the same quarter of 2019, mainly due to our robust profit growth. A reconciliation of net cash provided by operating activities to free cash flow is included at the end of this results announcement.

JUNE QUARTER INFORMATION BY SEGMENTS

The table below sets forth selected financial information of our operating segments for the periods indicated:

JUNE QUARTER OPERATIONAL AND FINANCIAL RESULTS

Revenue

Revenue for the quarter ended June 30, 2020 was RMB153,751 million (US$21,762 million), an increase of 34% compared to RMB114,924 million in the same quarter of 2019. The increase was mainly driven by the robust revenue growth of our China commerce retail and cloud computing businesses.

The following table sets forth a breakdown of our revenue by segment for the periods indicated:

Core commerce

• China commerce retail business

  Revenue from our China commerce retail business in the quarter ended June 30, 2020 was RMB101,321 million (US$14,341 million), an increase of 34% compared to RMB75,601 million in the same quarter of 2019. Revenue from our China retail marketplaces recorded a strong recovery compared to March 2020 quarter. Combined customer management and commission revenues grew 21% year-over-year, reflecting an increase of 23% in customer management revenue and an increase of 17% in commission revenue. The growth of customer management revenue was primarily due to increased revenue contribution from new monetization formats, including recommendation feeds, as well as the increase in volume of paid clicks in search monetization.

  The growth of commission revenue was primarily due to strong 27% year-over-year growth of Tmall online physical goods GMV, excluding unpaid orders. Commission revenue did not grow in proportion to the growth of Tmall online physical goods GMV (excluding unpaid orders), mainly because of faster growth in FMCG and consumer electronics categories that have lower blended commission rates, and also because of our initiatives to support our merchant customers, including our waiver of annual services fees for the first half of 2020.

  �Others� revenue under China commerce retail business was RMB30,106 million (US$4,261 million), achieving year-on-year growth of 80% compared to RMB16,745 million in the same quarter of 2019. The increase was primarily driven by contributions from our direct sales businesses, including Tmall Supermarket and Freshippo, as well as our consolidation of Kaola starting in September 2019.

  We expect that the proportion of revenue of our direct sales businesses will continue to increase as we further implement our New Retail strategy.

• China commerce wholesale business

  Revenue from our China commerce wholesale business in the quarter ended June 30, 2020 was RMB3,484 million (US$493 million), an increase of 16% compared to RMB2,992 million in the same quarter of 2019. The increase was primarily due to an increase in average revenue from paying members on 1688.com, as well as an increase in revenue from Lingshoutong (???), our platform that connects FMCG brands and their distributors directly with small retailers.

• International commerce retail business

  Revenue from our international commerce retail business in the quarter ended June 30, 2020 was RMB7,012 million (US$992 million), an increase of 26% compared to RMB5,567 million in the same quarter of 2019.

Contacts

Investor Relations Contact:
Rob Lin

[email protected]

Media Contacts:
Brion Tingler

[email protected]

Cathy Yan

[email protected]

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