Benefiting from the changes in private equity valuation at market cap, the reduction in investment impairment, and the improvement in the company's operation profit, the net income attributable to ordinary shareholders increased by 63% year-on-year. During this year's november 11 shopping festival-related period, Taobao and Tmall's GMV achieved strong growth, with the number of buyers reaching a historical high.
In the second quarter, Alibaba's revenue fell short of expectations, but thanks to the change in the valuation of equity investments, a decrease in investment impairment, and an increase in operating profit, the net income attributable to ordinary shareholders increased by 63% year-on-year.
On November 15, Alibaba Group released its Q2 financial report for the 2025 fiscal year:
1) Main financial data
- Revenue: Revenue was 236.503 billion yuan, a 5% increase year-on-year, lower than the expected 239.43 billion yuan.
- Net Income: Net income was 43.547 billion yuan, a 63% increase year-on-year.
- Net Income attributable to ordinary shareholders: It was 43.874 billion yuan, a 58% increase year-on-year.
- EBITA: Adjusted EBITA decreased by 5% to 40.561 billion yuan.
- Earnings per share: 15.06 RMB, higher than the expected 14.93 RMB.
- Cash flow: Net cash flow from operating activities was 31.438 billion RMB, a decrease of 36% compared to 49.231 billion RMB in the same period in 2023.
2) Business revenue data:
- Taotian Group: Revenue of 98.994 billion RMB, a 1% year-on-year growth, with a China wholesale business revenue growth of 18%.
- Alibaba Cloud: Revenue of 29.61 billion RMB, a 7% year-on-year growth compared to 26.549 billion RMB in the previous quarter, a 11.5% increase quarter-on-quarter.
- International Digital Business Group: Revenue of 31.672 billion RMB, a 29% year-on-year growth.
- Cainiao Group: Revenue of 24.647 billion RMB, an 8% year-on-year growth.
- Local Life Group: Revenue of 17.725 billion yuan, a year-on-year increase of 14%.
Alibaba Group's Chief Financial Officer Xu Hong said:
"The revenue growth this quarter was driven by Taotian Group's rhythmic increase in monetization rate, including service fees based on GMV and merchants using our marketing tools for site-wide promotion. In line with our global strategy, we continue to invest in core businesses and improve operational efficiency.
This quarter, we repurchased $4.1 billion worth of shares, further reducing outstanding shares by 2.1% compared to the end of June, to achieve better returns for shareholders.
After the financial report was released, Alibaba's pre-market trading in the U.S. surged, rising by over 4%.
Alibaba Cloud's growth rate has risen for the fourth consecutive quarter, with profits soaring by 89%.
In the second quarter, Alibaba Cloud's commercial revenue growth accelerated, with quarterly revenue increasing by 7% year-on-year, driven by double-digit growth in public cloud, and AI-related product revenue achieving triple-digit year-on-year growth for five consecutive quarters; Adjusted EBITA increased by 89% year-on-year.
This quarter, Tongyi Q&A released the new generation open-source model Qwen2.5. As of September, the cumulative download volume of Tongyi Q&A open-source models has exceeded 40 million, making it the world's largest family of generative language models.
The financial report shows that from the first open source in 2023 to September 30, 2024, there are over 0.07 million derivative models based on the Tongyi family developed in the Hugging Face community.
Alibaba Group CEO Wu Yongming said:
"Cloud business accelerated growth compared to previous quarters, with public cloud product revenue achieving double-digit growth, and AI-related product revenue achieving triple-digit growth.
We are more confident in the prospects of our core business than before and will continue to invest to support long-term growth. The operating efficiency of other businesses continues to improve, with most businesses continuously improving profitability or reducing losses.
November 11 buyers set a new record high, with 88VIP memberships reaching 46 million.
From July to September, Taotian's order volume increased by double digits year-on-year, driving online GMV growth, with 88VIP membership continuously growing by double digits to 46 million. During this year's November 11, Taobao and Tmall GMV achieved strong growth, the number of buyers reached a historical high, and a total of 589 brands had sales exceeding one billion throughout the period, breaking historical records.
Wu Yongming said:
"This quarter, Taotian continues to invest in user experience, enrich product supply, to better serve consumers. We have established long-term partnerships with technology peers to expand payment and logistics services on the Taobao and Tmall platforms, expecting to bring significant incremental effects to the overall platform."
The strong performance of active users and online GMV lays a solid foundation for the platform's commercialization level. The financial report shows that Taotian Group's take rate remained stable year-on-year this quarter. The penetration rate of the AI-driven marketing tool '站全搜推广' steadily increased, helping merchants improve market marketing efficiency and further rhythmically enhance commercialization level.
