2022-12-16 11:35Revenue and Profitability - Revenue for the six months ended September 30, 2022, was RMB 412.73 billion (USD 58.02 billion), representing a year-over-year increase of 2%[4] - Net profit attributable to ordinary shareholders was RMB 2.18 billion (USD 306 million), a significant decline of 96% compared to RMB 46.21 billion in the same period last year[4] - Non-GAAP net profit decreased by 11% year-over-year to RMB 64.07 billion (USD 9.01 billion)[4] - Diluted earnings per American depositary share were RMB 0.82 (USD 0.12), down 96% from RMB 2.30 in the prior year[4] - The decline in net profit was primarily attributed to a decrease in the market value of equity investments held by the company[7] - The net loss for the six months ended September 30, 2022, was RMB 2,169 million (USD 305 million), a decrease from a net profit of RMB 46,212 million in the same period in 2021[42] - The diluted earnings per American Depositary Share for the six months ended September 30, 2022, was RMB 0.82 (USD 0.12), a 96% decrease from RMB 18.44 in the same period of 2021[44] Cash Flow and Investments - Free cash flow increased by 35% year-over-year to RMB 57.88 billion (USD 8.14 billion), reflecting the collection of dividends from Ant Group amounting to RMB 3.95 billion (USD 0.55 billion)[4] - The net cash flow from operating activities for the six months ended September 30, 2022, was RMB 80,981 million (USD 11,384 million), a 17% increase from RMB 69,433 million in the same period of 2021[46] - The net cash used in investing activities for the six months ended September 30, 2022, was RMB 35,755 million (USD 5,026 million), primarily reflecting capital expenditures of RMB 23,955 million (USD 3,368 million)[47] - Alibaba's cash flow from investing activities for the six months ended September 30, 2022, was a net outflow of RMB 35,755 million, compared to a net outflow of RMB 77,548 million for the same period in 2021, indicating a reduction in cash outflow by approximately 54.0%[57] Operating Performance - Operating profit increased by 9% year-over-year to RMB 50.08 billion (USD 7.04 billion), primarily due to a decrease in share-based compensation expenses[4] - The operating margin improved to 12% from 11% year-over-year[6] - Operating costs amounted to RMB 260,867 million (USD 36,672 million), representing 64% of revenue, compared to RMB 253,847 million (63%) for the same period in 2021[30] - Product development expenses for the same period were RMB 29,343 million (USD 4,125 million), maintaining a 7% revenue share, consistent with the previous year[30] - Sales and marketing expenses decreased to RMB 47,937 million (USD 6,740 million), accounting for 11% of revenue, down from 14% in the prior year[30] - General and administrative expenses increased to RMB 19,024 million (USD 2,674 million), representing 5% of revenue, up from 4% in the previous year[30] Segment Performance - Revenue from the China retail business was RMB 268,199 million (USD 37,703 million), a 1% decrease from RMB 272,051 million in the same period of 2021[12] - Customer management revenue in the China retail business decreased by 8% due to COVID-19 disruptions and increased competition, leading to a decline in GMV for Taobao and Tmall[12] - Direct sales and other revenue in the China retail business increased by 7% to RMB 129,439 million (USD 18,196 million), driven by growth in Hema and Alibaba Health[12] - Revenue from the China wholesale business grew by 13% to RMB 9,167 million (USD 1,289 million), attributed to increased value-added services for wholesale buyers and paid members[13] - International business revenue increased by 3% to RMB 31,198 million (USD 4,386 million)[11] - Local services revenue rose by 13% to RMB 23,705 million (USD 3,332 million)[11] - Cainiao revenue increased by 19% to RMB 25,509 million (USD 3,586 million)[11] - Cloud business revenue grew by 7% to RMB 38,442 million (USD 5,404 million)[11] - Digital media and entertainment revenue decreased by 3% to RMB 15,623 million (USD 2,196 million)[11] Financial Metrics and Non-GAAP Measures - The company reported adjusted EBITDA, adjusted EBITA, and non-GAAP net profit as key performance indicators to identify underlying business trends[52] - Adjusted EBITDA excludes interest income, interest expenses, income tax expenses, and certain non-cash expenses, reflecting core operational performance[52] - Non-GAAP net profit excludes stock-based compensation, intangible asset amortization, and other specific items, providing a clearer view of profitability[53] - Free cash flow is defined as net cash generated from operating activities minus capital expenditures, indicating liquidity available for strategic investments[53] - The company emphasizes the importance of non-GAAP financial metrics for enhancing understanding of past performance and future outlook[52] - Adjusted EBITDA margin and adjusted EBITA margin are also presented to provide insights into operational efficiency[51] Future Outlook and Strategic Focus - The company aims to maintain or increase revenue and expand its international and cross-border operations[50] - Future outlook includes potential risks related to geopolitical tensions and regulatory uncertainties impacting business operations[50] - The company is focused on strategic investments and acquisitions to enhance its financial position and operational capabilities[52]