Alibaba earnings growth slows: December quarterly results
Alibaba Group (HK: 9988) (NYSE: BABA) has posted revenue for the quarter ending December 31, 2021, of 242.6 billion yuan (US$38.37 billion).
It is a 10% revenue increase year-over-year, representing the Chinese internet giant’s slowest quarterly earnings growth since the company listed in Hong Kong on 2014.
In what was a mediocre result, but one anticipated by the market, the Group also reported net income attributable to ordinary shareholders of RMB20,429 million (US$3,206 million) – a year-over-year decrease of 74%.
This was primarily due to the impairment of goodwill and decreases in net gains arising from the changes in fair value of equity investments.
Here’s what Chairman and CEO of Alibaba Group had to say about the results:
“Alibaba delivered steady progress this quarter as we continued to execute our multi-engine growth strategy in a complex and volatile market environment. We achieved positive momentum in key strategic businesses through a disciplined focus on capacity building and value creation to fuel our future growth. Our global annual active consumers grew at a solid pace, reaching 1.28 billion on the strength of a quarterly net increase of 43 million.
“We believe a clear ESG strategy is instrumental to Alibaba’s future, and announced our goal to realize carbon neutrality in our operations by 2030 along with a commitment to an additional 1.5 gigatons of decarbonization in 2035 by working with consumers, customers and partners across our ecosystem.”
Active users show strong growth
Alibaba provided an update on user growth.
The company reported the number of annual active consumers on Alibaba’s platforms has now reached approximately 1.28 billion for the twelve months to December 31, 2021.
This is an increase of approximately 43 million from the twelve months ended September 30, 2021.
A geographic breakdown of users shows 979 million consumers are in China and 301 million consumers overseas. Net Chinese users during the quarter increased by over 26 million, with an additional 16 million net users added in other parts of the world.
Cloud business expansion
Alibaba also revealed new details on the expansion of its cloud business.
The company added two data centers in the Asia Pacific region, one in South Korea and one in Thailand.
Currently, Alibaba Cloud offers computing services in 25 regions globally, including Malaysia, Singapore, Indonesia, Japan, Germany and Dubai.
In the December quarter, total revenue from the Cloud business was RMB26,431 million (US$4,148 million), an increase of 19% compared to RMB22,175 million in the same quarter of 2020.
“The solid 20% year-over-year growth reflected robust growth from financial and telecommunication industries, partially offset by the continuing impact of a top cloud customer’s decision to stop using our overseas cloud services for its international business due to non-product related requirements and slowing demand from customers in the Internet industry such as online entertainment and education,” said Alibaba.
“Alibaba Cloud’s revenue is becoming more diversified with revenue contribution from non-Internet industries steadily increasing. Revenue from non-Internet industries accounted for 52% of Alibaba Cloud’s post-inter-segment elimination revenue for the quarter ended December 31, 2021.”