On November 16, the Star reported (Reporter Xu Cihua, Researcher Liang Youyun) that Alibaba Group released its financial report for the second quarter of the 2025 fiscal year on the evening of November 15.

The financial report shows that revenue for the quarter was 236.503 billion yuan (the same below), an increase of 5% year-on-year; net income was 43.547 billion yuan, up 63% year-on-year; adjusted EBITA decreased by 5% year-on-year to 40.561 billion yuan.

According to Alibaba's chief financial officer Xu Hong, "The revenue growth this quarter was driven by the Taotian Group's orderly increase in monetization rate, including service fees based on GMV and merchants adopting our marketing tools for complete site promotions. We continue to invest in core business and improve operational efficiency."

Regarding the overall adjusted EBITA decline, Alibaba's financial report explained that it was mainly due to increased investment in the e-commerce business, which was partially offset by revenue growth and improved operational efficiency.

It is worth mentioning that regarding the performance expectations after Taotian's integration with WeChat Pay, Alibaba CEO Wu Yongming stated during the earnings conference call, "After this cooperation, we believe there is still considerable potential for user growth. We think there will be a significant increase in the monthly trading user base, but this requires a combination of mid-to-long-term investment and user growth strategy. Therefore, we hope that through mid-to-long-term investment, these users can remain on our platform, matching the increase in our current market share GMV."

88VIP membership has reached 46 million, and cross-border business has grown by 29% year-on-year.

Specifically for Alibaba's core business areas, domestic commerce has reversed the decline from the previous quarter. This fiscal quarter, the Taotian Group's China retail business achieved revenue of 93.001 billion yuan, an increase of 0.48% year-on-year. Among them, customer management revenue was 70.36 billion yuan, an increase of 2% year-on-year. Wholesale business revenue grew by 18% year-on-year. Direct sales also narrowed the decline from 9% in the previous quarter to a 5% year-on-year drop.

During the earnings conference, alibaba's CEO Wu Yongming further revealed that in the recently concluded 2024 november 11 shopping festival, the GMV of Taobao and Tmall saw strong growth, with a recent monthly transaction user base reaching a historical high. "In the past few months, amidst the intensifying market competition in the e-commerce industry, Taotian has made breakthroughs in retaining core users and increasing new user growth. We will continue to invest in core business and improve the operational quality of each business and are confident about future development."

As of the end of this quarter, the number of 88VIP members has reached 46 million, making it the largest paid membership system for e-commerce in the country.

While Taotian's core revenue and company business data have reached new highs, the increased investment in user experience has led to its adjusted EBITA being 44.59 billion yuan, a decrease of 5% year-on-year.

"For Taotian, the current strategy is to enhance profitability while increasing investment in user experience and for merchants in all aspects. There will be various ways to broaden supply advantages, and there are many R&D investments in technology platforms and computing power, which are long-term investments," Wu Yongming stated during the earnings conference, indicating that currently, there are many AI-related products under development in the e-commerce sector.

Similarly, alibaba's international digital commerce business, that is, the cross-border e-commerce business, has also shown significant growth. In this fiscal quarter, the cross-border e-commerce business achieved revenue of 31.672 billion yuan, a year-on-year increase of 29%. Cainiao Group's revenue for this quarter reached 24.647 billion yuan, an increase of 8% year-on-year.

It is worth noting that the growth in revenue for cross-border e-commerce and Cainiao cross-border logistics comes with more investment costs. However, due to the increase in cross-border logistics fulfillment investments, Cainiao's adjusted EBITA for this quarter fell 94% year-on-year to 55 million yuan. The adjusted EBITA loss for the cross-border e-commerce business this quarter reached 2.905 billion yuan, a year-on-year expansion of 657%, partially offset by the substantial reduction of operating losses driven by Lazada's monetization rate and operational efficiency improvements.

AI-related income has seen a continuous surge, with alibaba cloud profits increasing by 89% year-on-year.

Focusing on the integrated development of "cloud + AI", alibaba cloud's commercial revenue growth has accelerated. The earnings report shows that during the reporting period, alibaba cloud's quarterly revenue was 29.61 billion yuan, a year-on-year increase of 7%. Compared to the previous quarter's 26.549 billion yuan, it grew by 11.5% quarter-on-quarter.

This is also the fourth consecutive quarter for alibaba cloud to achieve an increase in growth. In this quarter, alibaba cloud's adjusted EBITA profit reached 2.661 billion yuan, a year-on-year increase of 89%, surpassing the analyst's expectation of 2.493 billion yuan.

According to the financial report, the growth in revenue from cloud intelligence comes from double-digit growth in public cloud business, especially the revenue from AI-related products which has achieved triple-digit year-on-year growth for five consecutive quarters. At the same time, the optimization and adjustment of the product structure in cloud intelligence have improved the public cloud products, including AI-related products as well as operational efficiency.

"In the future, alibaba cloud will continue to invest in customer growth and technology, especially in ai infrastructure, to drive the penetration rate of AI in cloud computing and consolidate alibaba cloud's market-leading position," stated alibaba in its financial report.

Furthermore, Tongyi Qianwen has become one of the most widely adopted open-source models globally. The financial report shows that since its first open-source release in 2023 until September 30, 2024, the cumulative download of the Tongyi Qianwen open-source model has surpassed 40 million, and the number of derivative models of Qwen in domestic and international open-source communities has exceeded 0.0743 million.

Additionally, following a significant price cut in May, the three main models of Tongyi Qianwen on the alibaba cloud Bailing platform have been reduced in price again. The price of Qwen-Turbo has dropped by 85%, to as low as 0.3 yuan per million tokens, while Qwen-Plus and Qwen-Max have seen further price reductions of 80% and 50% respectively. Qwen-Plus, with its inference capability matching GPT-4, can be applied to complex tasks and is the optimal choice balancing performance, speed, and cost. After the price reduction, Qwen-Plus has achieved the highest cost-performance ratio in the industry, being 84% lower than the industry price for the same scale.

"This is a means of user growth or user acquisition; the demand for AI is still very early-stage. In this field, we will continue to expand from the perspective of user acquisition in pricing these products," stated an alibaba executive regarding the price war of domestic large models during the earnings conference, mentioning that from the perspective of cloud business, it is actually a business model where both technology and scale effects coexist.

It is worth mentioning that since the implementation of the "AI-driven" strategy one year ago, multiple businesses under alibaba have been focusing on AI. Taobao has launched an AI product called "Business Butler" for all merchants, which has served a total of 4 million merchants during this year's november 11 shopping festival-related, helping small and medium-sized merchants generate over 0.1 billion items and marketing materials.

The local life group's revenue grew by 14% year-on-year, while the losses of the larger cultural and entertainment group narrowed year-on-year.

During the reporting period, alibaba local life group's revenue increased by 14% year-on-year to 17.725 billion yuan, driven by the growth of orders from Amap and Ele.me, as well as increased income from marketing services.

Benefiting from improvements in operational efficiency and an increase in business scale, the local life group's quarterly adjusted EBITA (operating profit and loss) loss significantly narrowed year-on-year, from 2.564 billion yuan in the same period last year to 0.391 billion yuan, exceeding market expectations. During the National Day holiday in October this year, Amap's daily active user peak exceeded 0.3 billion, setting a historical record.

In addition, during the reporting period, the big entertainment group's revenue was 5.694 billion yuan, a decrease of 1% year-on-year. The big entertainment group's losses narrowed year-on-year, benefiting from an increase in advertising revenues and improved efficiency in content investment, while Youku's operating losses gradually decreased.

It is worth noting that the financial report shows alibaba has been continuously repurchasing shares, investing 4.1 billion dollars this quarter to repurchase 0.414 billion shares of common stock, with circulating shares further decreasing by 2.1% compared to the end of June. As of the end of the quarter on September 30, alibaba had 18.62 billion shares of common stock in circulation, with a net decrease of 0.405 billion shares this quarter.

It is reported that under the share repurchase plan authorized by the board of directors, alibaba still has a repurchase quota of 22 billion dollars, valid until March 2027. On August 28, alibaba released a voluntary announcement stating that it had officially completed the dual primary listing in Hong Kong. With this, alibaba has become a company with a dual primary listing on the hong kong stock exchange and the nyse.

"Executing share buybacks is common in both the usa and the hong kong markets, but mainly in the us stock market," said alibaba executives during the earnings conference regarding investors' concerns about the repurchase market, indicating that alibaba is also actively exploring other avenues to increase the scale of repurchases.

In addition, as of September 30, the net cash flow from operating activities for the three months was 31.438 billion yuan, a decrease of 36% year-on-year. Free cash flow (a non-GAAP financial liquidity metric) was 13.735 billion yuan, down 70% year-on-year.

Alibaba stated in the financial report that the decrease in free cash flow was primarily due to investments in alibaba cloud infrastructure, refunds to Tmall merchants after canceling annual service fees, as well as other changes in operating capital caused by scaling down certain direct-operated businesses.