2023-05-18 11:22Cloud Services - Alibaba Cloud launched its latest large language model, Tongyi Qianwen, receiving over 200,000 enterprise user requests for access since its release[1]. - Alibaba Cloud announced a new instance series with cost savings of up to 40% while maintaining stability, and reduced prices of core products by up to 50%[2]. - The cloud business segment's revenue for the quarter was RMB 18.582 billion (USD 2.706 billion), a year-over-year decline of 2%[18]. - The contribution from non-internet industries to the cloud business revenue was 55%, driven primarily by financial services, retail, media, and automotive sectors[18]. - The cloud business revenue decline was attributed to normalization following mixed cloud project impacts and a major client's reduced use of overseas cloud services[18]. - The board approved the complete spin-off of the cloud intelligence group, aiming for it to become an independent publicly listed company within the next 12 months[24]. - In the fiscal year 2023, the adjusted EBITA for the cloud business segment was RMB 1,422 million (USD 207 million), an increase from RMB 1,146 million in fiscal year 2022[149]. - Adjusted EBITA for the cloud business segment for the three months ended March 31, 2023, was RMB 385 million (USD 56 million), an increase from RMB 276 million in the same period of 2022[73]. Financial Performance - Alibaba Group's revenue for the quarter ending March 31, 2023, was RMB 208.2 billion (USD 30.316 billion), representing a year-over-year growth of 2%[29]. - Net profit attributable to ordinary shareholders was RMB 235.16 billion (USD 34.24 billion), compared to a net loss of RMB 183.57 billion in the same period last year, primarily due to gains from equity investments[30]. - Non-GAAP net profit was RMB 273.75 billion (USD 39.86 billion), representing a year-over-year increase of 38%[30]. - Revenue reached RMB 868.69 billion (USD 126.49 billion), with a year-over-year growth of 2%[32]. - Operating profit was RMB 100.35 billion (USD 14.61 billion), showing a significant year-over-year increase of 44%[32]. - Adjusted EBITDA increased by 13% year-over-year to RMB 147.91 billion (USD 21.54 billion)[32]. - Free cash flow was RMB 322.67 billion (USD 46.98 billion) for the period[31]. - The diluted earnings per American depositary share were RMB 9.00 (USD 1.31), reflecting a year-over-year increase of 35%[40]. - For the three months ended March 31, 2023, total revenue was RMB 208,200 million (USD 30,316 million), representing a 2% increase compared to RMB 204,052 million in the same period of 2022[55]. - The operating profit for the three months ended March 31, 2023, was RMB 15,240 million (USD 2,219 million), representing 7% of revenue, down from RMB 16,717 million or 8% in the same period of 2022[92]. - Adjusted EBITDA for the three months ended March 31, 2023, was RMB 32,123 million (USD 4,677 million), an increase of 37% compared to RMB 23,373 million in the same period of 2022[93]. - Net profit for the three months ended March 31, 2023, was RMB 21,996 million (USD 3,203 million), a significant increase from a net loss of RMB 18,357 million in the same period of 2022[102]. - The total revenue for the fiscal year 2023 was RMB 868,687 million (USD 126,491 million), reflecting a 2% growth compared to RMB 853,062 million in fiscal year 2022[127]. - Net profit for fiscal year 2023 was RMB 65,573 million (USD 9,548 million), a 39% increase from RMB 47,079 million in fiscal year 2022[177]. Business Segments - Youku's total subscription revenue grew by 13% year-over-year, driven by increased average revenue per user and high-quality original content[4]. - Cainiao's revenue increased by 15% year-over-year to RMB 18.915 billion (approximately $2.754 billion) for the quarter ending March 31, 2023, with 72% of total revenue coming from external customers[16]. - The international business segment, AliExpress, launched a new service called Choice, leading to double-digit growth in orders for the quarter[13]. - The international business revenue for the three months ended March 31, 2023, was RMB 14,335 million (USD 2,700 million), a 29% increase compared to the previous year[55]. - The local life services segment reported revenue of RMB 12,549 million (USD 1,827 million), marking a 17% increase year-over-year[55]. - The digital media and entertainment segment generated revenue of RMB 8,273 million (USD 1,204 million), which is a 3% increase year-over-year[55]. - The revenue for the Cainiao segment for the three months ended March 31, 2023, was RMB 13,619 million (USD 1,983 million), an 18% increase from RMB 11,582 million in the same period of 2022[69]. - The revenue from the digital media and entertainment segment in fiscal year 2023 was RMB 31,482 million (USD 4,584 million), a decrease of 2% compared to RMB 32,272 million in fiscal year 2022[150]. Organizational Changes - The restructuring of Alibaba's organizational framework aims to enhance agility and responsiveness to market changes, potentially increasing shareholder value[9]. - The establishment of a new capital management committee was approved to enhance shareholder value through various capital market transactions and shareholder return plans[21]. - The board initiated plans for the listing of Cainiao Group, which provides supply chain, logistics, and delivery services, targeting completion within 12 to 18 months[26]. - The board also approved the listing process for Hema, expecting completion within 6 to 12 months[27]. - The company plans to refine its strategic positioning in the all-in-one supermarket business, focusing on user consumption mindset through the Ele.me platform[51]. - The company plans to implement a new organizational structure to enhance reporting and performance monitoring across segments[125]. Cash Flow and Investments - Free cash flow for the three months ended March 31, 2023, was RMB 32,267 million (USD 4,698 million), compared to a cash outflow of RMB 15,070 million in the same period of 2022[106]. - Cash used in investing activities for the three months ended March 31, 2023, was RMB 26,808 million (USD 3,904 million), reflecting increases in other financial investments and short-term investments[107]. - Cash used in financing activities for the three months ended March 31, 2023, was RMB 9,319 million (USD 1,357 million), primarily due to share repurchase expenditures of RMB 12,611 million (USD 1,836 million)[108]. - The increase in cash and cash equivalents was primarily driven by free cash flow of RMB 171,663 million (USD 24,996 million) and foreign exchange gains of RMB 12,332 million (USD 1,796 million) due to the appreciation of the USD against the RMB[181]. - The company received dividends from Ant Group amounting to RMB 14,464 million (USD 2,106 million), contributing to the increase in free cash flow[182]. - Cash used in investing activities for fiscal year 2023 was RMB 135,506 million (USD 19,731 million), primarily due to an increase in short-term investments of RMB 61,086 million (USD 8,895 million)[183]. Compliance and Risk Management - The company established a new Compliance and Risk Committee to oversee compliance and risk management beyond financial reporting[38]. - The company emphasizes the importance of non-GAAP financial metrics for enhancing transparency and understanding of operational performance[193]. Market Outlook - Future outlook includes a focus on market expansion and new product development to drive revenue growth in upcoming quarters[200].