2022-08-04 10:39Financial Performance - Revenue for the quarter ended June 30, 2022, was RMB 205.55 billion (USD 30.69 billion), remaining stable year-over-year, primarily due to a 1% decline in revenue from the China commerce segment to RMB 141.93 billion (USD 21.19 billion) offset by a 10% increase in cloud business revenue to RMB 17.68 billion (USD 2.64 billion) [3] - Operating profit was RMB 24.94 billion (USD 3.72 billion), a decrease of 19% year-over-year, while adjusted EBITA fell 18% to RMB 34.42 billion (USD 5.14 billion) [4] - Net profit attributable to ordinary shareholders was RMB 22.74 billion (USD 3.39 billion), with a non-GAAP net profit of RMB 30.25 billion (USD 4.52 billion), representing a 30% year-over-year decline [4] - The diluted earnings per American depositary share were RMB 8.51 (USD 1.27), with a non-GAAP diluted earnings per share of RMB 11.73 (USD 1.75), both down 29% year-over-year [4] - For the quarter ending June 30, 2022, total revenue was RMB 205,555 million, a slight decrease of 0% year-over-year [21] - Operating profit decreased by 19% year-over-year to RMB 24,943 million, with an operating margin of 12% [21] - Net profit attributable to Alibaba Group shareholders for the three months ended June 30, 2022, was RMB 22,659 million, a significant decrease of 49.7% compared to RMB 45,068 million in the same period of 2021 [72] - Basic earnings per share for ordinary shareholders was RMB 1.07 for the three months ended June 30, 2022, down from RMB 2.08 in the same period of 2021, reflecting a decline of approximately 48.8% [72] Cash Flow and Investments - Cash flow from operating activities was RMB 33.87 billion (USD 5.06 billion), a 1% increase compared to RMB 33.60 billion in the same period last year, while free cash flow was RMB 22.17 billion (USD 3.31 billion), up 7% year-over-year [4] - Free cash flow for the three months ended June 30, 2022, was RMB 22,173 million (USD 3,310 million), an increase of 7% compared to RMB 20,683 million in the same period of 2021 [61] - Cash, cash equivalents, and short-term investments amounted to RMB 453,193 million (USD 67,660 million) as of June 30, 2022, an increase from RMB 446,412 million as of March 31, 2022, primarily due to free cash flow generated from operating activities [60] - Net cash used in investing activities for the three months ended June 30, 2022, was RMB 27,607 million (USD 4,122 million), reflecting increases in short-term investments and capital expenditures [62] - Net cash used in financing activities for the three months ended June 30, 2022, was RMB 21,022 million (USD 3,139 million), primarily due to cash spent on share repurchases [63] Business Segments Performance - The GMV (Gross Merchandise Volume) for Taobao and Tmall saw a mid-single-digit decline year-over-year, primarily due to disruptions in supply chains and logistics caused by COVID-19 [5] - For the quarter ended June 30, 2022, the company's direct sales and other revenue increased by 8% year-over-year to RMB 64.714 billion (USD 9.661 billion), driven by strong online sales growth in Hema, Tmall Supermarket, and Sun Art Retail, partially offset by weak offline sales due to COVID-19 [6] - In the international retail business, overall order volume from Lazada, AliExpress, Trendyol, and Daraz decreased by 4% year-over-year, primarily due to changes in EU VAT regulations, depreciation of the Euro against the USD, and ongoing supply chain disruptions from the Russia-Ukraine conflict [7] - The international wholesale business revenue grew by 12% year-over-year, with Alibaba.com transaction volume increasing by 16%, benefiting from robust industrial goods trading [8] - The local life services segment saw a 5% year-over-year decline in overall orders, mainly due to the recurring impact of COVID-19, although there was strong growth in non-food delivery orders [9] - The cloud business segment's total revenue for the quarter was RMB 23.938 billion (USD 3.574 billion), with a year-over-year increase of 10% after eliminating inter-segment transactions [13] - The digital media and entertainment segment generated revenue of RMB 7,231 million (USD 1,080 million), a decrease of 10% compared to the previous year [26] Strategic Initiatives and Future Outlook - Alibaba plans to expand its investor base by applying for a secondary listing in Hong Kong, aiming to enhance its market presence [3] - The company aims to build future business infrastructure and envisions a 102-year lifespan as a successful company [66] - Alibaba Cloud aims to achieve carbon neutrality for Scope 1 to 3 greenhouse gas emissions by 2030, focusing on energy-efficient servers and advanced technologies [15] - The company reported a significant decrease in interest income and investment gains, which fell to RMB 5,369 million from RMB 14,101 million year-over-year, a decline of approximately 61.9% [72] Corporate Governance - The company appointed two independent directors, increasing the board to 12 members, including 7 independent directors [19] - The effective tax rate for the three months ended June 30, 2022, was 21% [54] - The total number of employees as of June 30, 2022, was 245,700, down from 254,941 as of March 31, 2022 [64] Miscellaneous - The announcement contains forward-looking statements as per the U.S. Private Securities Litigation Reform Act of 1995, which may involve risks and uncertainties [67] - Alibaba uses non-GAAP financial metrics such as adjusted EBITDA and adjusted EBITA to provide insights into business trends and performance [68] - The company considers free cash flow as a liquidity indicator to assess the cash available for strategic investments and acquisitions [68]