BABA(BABA) - 2026 Q1 - Quarterly Results

Executive Summary & Business Highlights Overall Performance & Strategic Focus Alibaba Group reported strong growth in Q1 2025, driven by strategic focus on consumption and AI + Cloud. Key milestones were achieved in quick commerce, leading to increased consumer engagement and daily order volume. Cloud Intelligence Group saw accelerated revenue growth due to robust AI demand, with AI-related product revenue becoming a significant portion of external customer revenue. The company also made significant investments in quick commerce and AI initiatives while improving operating efficiency, notably narrowing losses in AIDC - Strategic focus on consumption and AI + Cloud delivered strong growth, with quick commerce achieving key milestones and Cloud Intelligence Group experiencing accelerated revenue growth[2] - Customer management revenue grew 10% and Cloud Intelligence Group revenue grew 26%, with AI-related product revenue achieving triple-digit growth for the eighth consecutive quarter[3] - Significant investments were made in quick commerce and AI initiatives, while AIDC significantly narrowed its loss, approaching breakeven[3] Key Financial Highlights (Consolidated) For the quarter ended June 30, 2025, Alibaba Group reported a 2% year-over-year revenue increase, or 10% on a like-for-like basis excluding disposed businesses. Income from operations decreased by 3%, primarily due to lower adjusted EBITA, which saw a 14% decrease. Net income attributable to ordinary shareholders surged by 78%, mainly due to mark-to-market changes from equity investments and a gain from the disposal of Trendyol's local consumer service business. Non-GAAP net income, however, decreased by 18% Consolidated Financial Highlights (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Revenue | 243,236 | 247,652 | 34,571 | 2% | | Income from operations | 35,989 | 34,988 | 4,884 | (3)% | | Operating margin | 15% | 14% | | | | Adjusted EBITDA | 51,161 | 45,735 | 6,384 | (11)% | | Adjusted EBITA | 45,035 | 38,844 | 5,422 | (14)% | | Net income | 24,022 | 42,382 | 5,916 | 76% | | Net income attributable to ordinary shareholders | 24,269 | 43,116 | 6,019 | 78% | | Non-GAAP net income | 40,691 | 33,510 | 4,678 | (18)% | | Diluted earnings per share | 1.24 | 2.25 | 0.31 | 82% | | Diluted earnings per ADS | 9.89 | 17.98 | 2.51 | 82% | | Non-GAAP diluted earnings per share | 2.05 | 1.84 | 0.26 | (10)% | | Non-GAAP diluted earnings per ADS | 16.44 | 14.75 | 2.06 | (10)% | - The decrease in income from operations and adjusted EBITA was primarily due to investment in "Taobao Instant Commerce," user experiences, user acquisition, and technology, partly offset by double-digit revenue growth in Alibaba China E-commerce Group and improved operating efficiencies[4][20] - The increase in net income and EPS was primarily driven by mark-to-market changes from equity investments and a gain from the disposal of Trendyol's local consumer service business[4][21] Business and Strategic Updates Segment Re-alignment Alibaba Group strategically combined Taobao and Tmall Group, Ele.me, and Fliggy into Alibaba China E-commerce Group to enhance user experience. The financial reporting structure was simplified by reclassifying Cainiao, Amap, and Digital Media and Entertainment Group into "All others." The new segment reporting structure now includes Alibaba China E-commerce Group, Alibaba International Digital Commerce Group, Cloud Intelligence Group, and All others - Strategic combination of Taobao and Tmall Group, Ele.me, and Fliggy into Alibaba China E-commerce Group[6] - Reclassification of Cainiao, Amap, and Digital Media and Entertainment Group into "All others" to simplify financial reporting[6] - New segment reporting structure: (1) Alibaba China E-commerce Group, (2) Alibaba International Digital Commerce Group, (3) Cloud Intelligence Group, and (4) All others[6] Alibaba China E-commerce Group Initiatives The Alibaba China E-commerce Group launched "Taobao Instant Commerce" for on-demand delivery, significantly increasing monthly active consumers on the Taobao app by 25% in early August. Customer management revenue grew 10% year-over-year, driven by improved take rates and increased penetration of Quanzhantui. The 6.18 Shopping Festival was successful, and 88VIP members, the highest spending consumer group, continued double-digit growth, surpassing 53 million - Launched "Taobao Instant Commerce" service on the Taobao app for on-demand delivery, strengthening leadership in China's e-commerce[7] - Monthly active consumers on the Taobao app increased by 25% year-over-year in the first three weeks of August[7] - Customer management revenue grew 10% year-over-year to RMB89,252 million, driven by improved take rate and Quanzhantui penetration[8] - The number of 88VIP members surpassed 53 million, continuing double-digit year-over-year growth[10] Alibaba International Digital Commerce Group (AIDC) Initiatives AIDC's revenue grew 19% year-over-year to RMB34,741 million, primarily from strong cross-border business performance. The group significantly narrowed losses year-over-year and quarter-over-quarter due to improved operating efficiency, particularly in AliExpress' Choice and Trendyol's International business. International commerce retail businesses diversified product offerings, while the international wholesale platform saw broader adoption of AI-powered tools for marketing, procurement, and product listing - Revenue from AIDC grew 19% year-over-year to RMB34,741 million, driven by strong cross-border businesses[12] - AIDC significantly narrowed losses year-over-year and quarter-over-quarter due to improved operating efficiency, especially in AliExpress' Choice and Trendyol's International business[12] - International wholesale platform saw broader adoption of AI-powered tools for marketing, procurement, and product listing, enhancing monetization[13] Cloud Intelligence Group Initiatives Cloud Intelligence Group's revenue increased by 26% year-over-year to RMB33,398 million, with public cloud revenue growth and increasing adoption of AI-related products as primary drivers. AI-related product revenue maintained triple-digit year-over-year growth for the eighth consecutive quarter, reflecting rapidly growing AI demand. Alibaba Cloud was recognized for its strong position in providing critical infrastructure for the GenAI market, offering full-stack GenAI solutions and a developer-friendly AI platform - Revenue from Cloud Intelligence Group increased by 26% year-over-year to RMB33,398 million, driven by public cloud revenue growth and AI-related product adoption[14] - AI-related product revenue maintained triple-digit year-over-year growth for the eighth consecutive quarter, indicating rapid AI demand[15] - Alibaba Cloud was highlighted in Omdia's "Market Radar: GenAI Cloud Titans in Asia & Oceania 2025" report for its full-stack GenAI solutions and developer-friendly AI platform[16] Share Repurchases During the quarter ended June 30, 2025, Alibaba Group repurchased 56 million ordinary shares (equivalent to 7 million ADSs) for a total of US$815 million under its share repurchase program. As of June 30, 2025, the remaining authorization for the program, effective through March 2027, was US$19.3 billion - Repurchased 56 million ordinary shares (7 million ADSs) for US$815 million in Q1 2025[17] - Remaining Board authorization for share repurchase program was US$19.3 billion as of June 30, 2025, effective through March 2027[17] June Quarter Summary Financial Results (Consolidated) Consolidated Income Statement Highlights Alibaba Group's consolidated revenue for the quarter ended June 30, 2025, increased by 2% year-over-year to RMB247,652 million. Income from operations decreased by 3% to RMB34,988 million, resulting in a slight dip in operating margin from 15% to 14% Consolidated Income Statement Highlights (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Revenue | 243,236 | 247,652 | 34,571 | 2% | | Income from operations | 35,989 | 34,988 | 4,884 | (3)% | | Operating margin | 15% | 14% | | | Consolidated Adjusted Profitability (EBITDA & EBITA) Adjusted EBITDA decreased by 11% year-over-year to RMB45,735 million, with the margin falling from 21% to 18%. Adjusted EBITA also decreased by 14% to RMB38,844 million, and its margin declined from 19% to 16%. These decreases were primarily attributed to investments in "Taobao Instant Commerce" and user acquisition Consolidated Adjusted Profitability (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :-------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Adjusted EBITDA | 51,161 | 45,735 | 6,384 | (11)% | | Adjusted EBITDA margin | 21% | 18% | | | | Adjusted EBITA | 45,035 | 38,844 | 5,422 | (14)% | | Adjusted EBITA margin | 19% | 16% | | | - The year-over-year decreases in Adjusted EBITDA and Adjusted EBITA were primarily due to investments in "Taobao Instant Commerce," user experiences, user acquisition, and technology, partly offset by double-digit revenue growth in Alibaba China E-commerce Group and improved operating efficiencies[20] Consolidated Net Income & EPS Net income increased significantly by 76% to RMB42,382 million, and net income attributable to ordinary shareholders rose by 78% to RMB43,116 million, largely due to mark-to-market changes in equity investments and a gain from the Trendyol disposal. However, non-GAAP net income decreased by 18% to RMB33,510 million. Diluted earnings per ADS increased by 82% to RMB17.98, while non-GAAP diluted earnings per ADS decreased by 10% to RMB14.75 Consolidated Net Income & EPS (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Net income | 24,022 | 42,382 | 5,916 | 76% | | Net income attributable to ordinary shareholders | 24,269 | 43,116 | 6,019 | 78% | | Non-GAAP net income | 40,691 | 33,510 | 4,678 | (18)% | | Diluted earnings per share | 1.24 | 2.25 | 0.31 | 82% | | Diluted earnings per ADS | 9.89 | 17.98 | 2.51 | 82% | | Non-GAAP diluted earnings per share | 2.05 | 1.84 | 0.26 | (10)% | | Non-GAAP diluted earnings per ADS | 16.44 | 14.75 | 2.06 | (10)% | - The significant increase in net income and EPS was primarily due to mark-to-market changes from equity investments and a gain from the disposal of Trendyol's local consumer service business[21] June Quarter Segment Results Alibaba China E-commerce Group Alibaba China E-commerce Group reported a 10% year-over-year revenue increase to RMB140,072 million, driven by growth in customer management, quick commerce, and China commerce wholesale. However, its adjusted EBITA decreased by 21% to RMB38,389 million, primarily due to significant investments in "Taobao Instant Commerce" and user acquisition Segment Revenue Alibaba China E-commerce Group Revenue (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | E-commerce - Customer management | 81,088 | 89,252 | 12,459 | 10% | | E-commerce - Direct sales, logistics and others | 27,434 | 29,325 | 4,093 | 7% | | Total E-commerce | 108,522 | 118,577 | 16,552 | 9% | | Quick commerce | 13,196 | 14,784 | 2,064 | 12% | | China commerce wholesale | 5,952 | 6,711 | 937 | 13% | | Total Alibaba China E-commerce Group | 127,670 | 140,072 | 19,553 | 10% | - Customer management revenue increased by 10% year-over-year, primarily driven by improved take rate[28] - Quick commerce revenue increased by 12% due to order growth from the rollout of "Taobao Instant Commerce"[30] - China commerce wholesale revenue increased by 13%, primarily due to increased revenue from value-added services to paying members[31] Segment Adjusted EBITA Alibaba China E-commerce Group Adjusted EBITA (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Alibaba China E-commerce Group Adjusted EBITA | 48,753 | 38,389 | 5,359 | (21)% | - Adjusted EBITA decreased by 21%, primarily due to investments in "Taobao Instant Commerce," user experiences, user acquisition, and technology, partly offset by double-digit revenue growth[32] Alibaba International Digital Commerce Group Alibaba International Digital Commerce Group (AIDC) saw its revenue grow by 19% year-over-year to RMB34,741 million, driven by strong performance in international commerce retail and wholesale. The group significantly narrowed its adjusted EBITA loss from RMB3,706 million to RMB59 million, reflecting substantial improvements in operating efficiency across its businesses Segment Revenue Alibaba International Digital Commerce Group Revenue (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | International commerce retail | 23,691 | 28,395 | 3,964 | 20% | | International commerce wholesale | 5,602 | 6,346 | 886 | 13% | | Total Alibaba International Digital Commerce Group | 29,293 | 34,741 | 4,850 | 19% | - International commerce retail revenue increased by 20%, primarily driven by AliExpress and Trendyol[33] - International commerce wholesale revenue increased by 13%, primarily due to increased revenue from cross-border related value-added services[34] Segment Adjusted EBITA Alibaba International Digital Commerce Group Adjusted EBITA (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Alibaba International Digital Commerce Group Adjusted EBITA | (3,706) | (59) | (8) | 98% | - Adjusted EBITA loss significantly narrowed from RMB3,706 million to RMB59 million, primarily due to substantial improvements in AliExpress' operating efficiency and enhanced efficiency across various businesses including Alibaba.com, Lazada, and Trendyol[35] Cloud Intelligence Group Cloud Intelligence Group's revenue grew by 26% year-over-year to RMB33,398 million, driven by public cloud growth and increasing adoption of AI-related products. Its adjusted EBITA also increased by 26% to RMB2,954 million, benefiting from revenue growth and improved operating efficiency, despite increased investments in customer growth and technology innovation Segment Revenue Cloud Intelligence Group Revenue (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Cloud Intelligence Group Revenue | 26,549 | 33,398 | 4,662 | 26% | - Revenue increased by 26% year-over-year, primarily driven by public cloud revenue growth, including increasing adoption of AI-related products[36][37] Segment Adjusted EBITA Cloud Intelligence Group Adjusted EBITA (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Cloud Intelligence Group Adjusted EBITA | 2,337 | 2,954 | 412 | 26% | - Adjusted EBITA increased by 26%, primarily due to public cloud revenue growth and improving operating efficiency, partly offset by increasing investments in customer growth and technology innovation[38] All Others The "All others" segment experienced a 28% decrease in revenue to RMB58,599 million, mainly due to the disposal of Sun Art and Intime businesses and a decrease in Cainiao's revenue, partially offset by growth in Freshippo, Alibaba Health, and Amap. The adjusted EBITA loss widened by 31% to RMB1,415 million, driven by increased investment in technology businesses, despite improved operating results from several entities within the segment Segment Revenue All Others Segment Revenue (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | All others Revenue | 81,354 | 58,599 | 8,180 | (28)% | - Revenue decreased by 28%, primarily due to the disposal of Sun Art and Intime businesses and a decrease in revenue from Cainiao, partly offset by increases from Freshippo, Alibaba Health, and Amap[25][39] Segment Adjusted EBITA All Others Segment Adjusted EBITA (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | All others Adjusted EBITA | (1,077) | (1,415) | (198) | (31)% | - Adjusted EBITA loss widened by 31%, primarily due to increased investment in technology businesses, partly offset by improved operating results of Freshippo, Amap, Hujing DME, and Alibaba Health[40] June Quarter Other Financial Results Costs and Expenses Analysis Alibaba Group's total costs and expenses increased to RMB212,813 million in Q1 2025. Cost of revenue decreased as a percentage of revenue, while sales and marketing expenses significantly increased, primarily due to investments in "Taobao Instant Commerce" and user acquisition. General and administrative expenses decreased due to a one-time provision in the prior year Cost of Revenue Cost of Revenue (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | % of Revenue | Q1 2025 (RMB millions) | % of Revenue | YoY % Change | | :---------------- | :--------------------- | :----------- | :--------------------- | :----------- | :----------- | | Cost of revenue | 146,106 | 60.1% | 136,429 | 55.1% | (5.0)% | - Cost of revenue as a percentage of revenue decreased from 60.1% to 55.1%, primarily due to the disposal of Sun Art and Intime businesses, a decrease in low-margin direct sales businesses, and improved monetization and operating efficiency[42] Product Development Expenses Product Development Expenses (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | % of Revenue | Q1 2025 (RMB millions) | % of Revenue | YoY % Change | | :-------------------------- | :--------------------- | :----------- | :--------------------- | :----------- | :----------- | | Product development expenses | 13,373 | 5.5% | 15,001 | 6.1% | 0.6% | - Product development expenses as a percentage of revenue increased from 5.5% to 6.1%[43] Sales and Marketing Expenses Sales and Marketing Expenses (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | % of Revenue | Q1 2025 (RMB millions) | % of Revenue | YoY % Change | | :------------------------ | :--------------------- | :----------- | :--------------------- | :----------- | :----------- | | Sales and marketing expenses | 32,696 | 13.4% | 53,178 | 21.5% | 8.1% | - Sales and marketing expenses as a percentage of revenue increased from 13.3% to 21.3%, primarily attributable to investments in "Taobao Instant Commerce," user experiences, and user acquisition of Alibaba China E-commerce Group[44] General and Administrative Expenses General and Administrative Expenses (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | % of Revenue | Q1 2025 (RMB millions) | % of Revenue | YoY % Change | | :-------------------------------- | :--------------------- | :----------- | :--------------------- | :----------- | :----------- | | General and administrative expenses | 13,280 | 5.5% | 7,398 | 3.0% | (2.5)% | - General and administrative expenses as a percentage of revenue decreased from 4.9% to 2.5%, primarily due to a one-time provision for shareholder class action lawsuits in the same quarter last year[45] Share-based Compensation Expense Total share-based compensation expense decreased by 14% year-over-year to RMB3,545 million, primarily due to a decrease in Alibaba Group share-based awards granted. This change reflects an increased proportion of long-term cash incentives, considering the macroeconomic environment and talent market trends Share-based Compensation Expense (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Alibaba Group share-based awards | 3,091 | 2,321 | 324 | (25)% | | Others | 1,040 | 1,224 | 171 | 18% | | Total share-based compensation expense | 4,131 | 3,545 | 495 | (14)% | - The decrease was primarily due to a reduction in the number of Alibaba Group share-based awards granted, as the company increased the proportion of long-term cash incentives[48] Amortization and Impairment of Intangible Assets Amortization and impairment of intangible assets decreased significantly by 55% to RMB807 million in Q1 2025, primarily due to the full amortization of certain intangible assets Amortization and Impairment of Intangible Assets (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Amortization and impairment of intangible assets | 1,792 | 807 | 113 | (55)% | - The decrease was primarily due to the full amortization of certain intangible assets[49] Income from Operations and Operating Margin Income from operations for Q1 2025 was RMB34,988 million, a 3% decrease year-over-year, with the operating margin at 14%. This decline was mainly due to a decrease in adjusted EBITA, partially offset by lower amortization of intangible assets, non-cash share-based compensation expense, and the absence of a one-time provision from the prior year Income from Operations (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | % of Revenue | Q1 2025 (RMB millions) | % of Revenue | YoY % Change | | :--------------------- | :--------------------- | :----------- | :--------------------- | :----------- | :----------- | | Income from operations | 35,989 | 15% | 34,988 | 14% | (3)% | - The decrease was primarily due to the decrease in adjusted EBITA, partly offset by the decrease in amortization of intangible assets, non-cash share-based compensation expense, and a one-time provision in the same quarter last year[50] Interest and Investment Income, Net Interest and investment income, net, swung from a loss of RMB1,478 million in Q1 2024 to a gain of RMB17,376 million in Q1 2025. This significant improvement was primarily driven by mark-to-market changes from equity investments and a gain from the disposal of Trendyol's local consumer service business Interest and Investment Income, Net (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | | :-------------------------------- | :--------------------- | :--------------------- | :--------------------- | | Interest and investment income, net | (1,478) | 17,376 | 2,426 | - The shift from a loss to a gain was primarily due to mark-to-market changes from equity investments and a gain from the disposal of Trendyol's local consumer service business[53] Other Income, Net Other income, net, increased by 35% year-over-year to RMB348 million in Q1 2025 Other Income, Net (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Other income, net | 257 | 348 | 48 | 35% | Income Tax Expenses Income tax expenses decreased to RMB8,865 million in Q1 2025 from RMB10,063 million in the same quarter of 2024 Income Tax Expenses (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | | :---------------- | :--------------------- | :--------------------- | :--------------------- | | Income tax expenses | 10,063 | 8,865 | 1,237 | Share of Results of Equity Method Investees Share of results of equity method investees decreased by 33% year-over-year to RMB1,013 million. This was primarily due to a decrease in the share of profit from Ant Group, attributable to investments in new growth initiatives and technologies, and a decrease in the fair value of certain investments Share of Results of Equity Method Investees (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | | :--------------------------------------- | :--------------------- | :--------------------- | :--------------------- | | Share of profit (loss) of equity method investees - Ant Group | 3,917 | 1,547 | 216 | | Share of profit (loss) of equity method investees - Others | (588) | 455 | 63 | | Impairment loss | (2,157) | – | – | | Others | 333 | (989) | (138) | | Total | 1,505 | 1,013 | 141 | - The year-over-year decrease was mainly attributable to a decrease in the share of profit of Ant Group, driven by investments in new growth initiatives and technologies, and a decrease in the fair value of certain investments[58] Net Income and Non-GAAP Net Income (Detailed) Net income for Q1 2025 was RMB42,382 million, a 76% increase year-over-year, primarily due to mark-to-market changes from equity investments and a gain from the disposal of Trendyol's local consumer service business. Conversely, non-GAAP net income decreased by 18% to RMB33,510 million, after excluding non-cash share-based compensation, investment gains/losses, and other items Net Income and Non-GAAP Net Income (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Net income | 24,022 | 42,382 | 5,916 | 76% | | Non-GAAP net income | 40,691 | 33,510 | 4,678 | (18)% | - The increase in net income was primarily due to mark-to-market changes from equity investments and a gain from the disposal of Trendyol's local consumer service business, partly offset by the decrease in income from operations[59] Net Income Attributable to Ordinary Shareholders Net income attributable to ordinary shareholders increased by 78% to RMB43,116 million in Q1 2025, driven by mark-to-market changes from equity investments and the gain from the Trendyol disposal, partially offset by a decrease in income from operations Net Income Attributable to Ordinary Shareholders (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Net income attributable to ordinary shareholders | 24,269 | 43,116 | 6,019 | 78% | - The increase was primarily due to mark-to-market changes from equity investments and a gain from the disposal of Trendyol's local consumer service business, partly offset by the decrease in income from operations[61] Diluted Earnings Per ADS/Share and Non-GAAP Diluted Earnings Per ADS/Share Diluted earnings per ADS increased by 82% to RMB17.98, while non-GAAP diluted earnings per ADS decreased by 10% to RMB14.75. Similarly, diluted earnings per share rose by 82% to RMB2.25, but non-GAAP diluted earnings per share decreased by 10% to RMB1.84 Diluted Earnings Per ADS/Share (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB) | Q1 2025 (RMB) | Q1 2025 (US$) | YoY % Change | | :--------------------------------------- | :------------ | :------------ | :------------ | :----------- | | Diluted earnings per ADS | 9.89 | 17.98 | 2.51 | 82% | | Non-GAAP diluted earnings per ADS | 16.44 | 14.75 | 2.06 | (10)% | | Diluted earnings per share | 1.24 | 2.25 | 0.31 | 82% | | Non-GAAP diluted earnings per share | 2.05 | 1.84 | 0.26 | (10)% | Cash Flow and Liquidity Cash and Other Liquid Investments As of June 30, 2025, cash and other liquid investments totaled RMB585,663 million, a decrease of RMB11,469 million from March 31, 2025. This decrease was primarily due to free cash flow outflow, cash used for investment and acquisition activities, and share repurchases, partially offset by cash inflow from disposal of investments and net proceeds from bank borrowings Cash and Other Liquid Investments (as of June 30, 2025) | Metric | As of March 31, 2025 (RMB millions) | As of June 30, 2025 (RMB millions) | As of June 30, 2025 (US$ millions) | | :--------------------------------------- | :---------------------------------- | :--------------------------------- | :--------------------------------- | | Cash and other liquid investments | 597,132 | 585,663 | 81,755 | - The decrease of RMB11,469 million was primarily due to free cash flow outflow (RMB18,815 million), cash outflow for investment and acquisition activities (RMB8,429 million), and cash used in share repurchases (RMB5,840 million)[65] - Partially offset by cash inflow from disposal of investments (RMB17,457 million) and net proceeds from bank borrowings (RMB3,287 million)[65] Net Cash Provided by Operating Activities and Free Cash Flow Net cash provided by operating activities decreased by 39% year-over-year to RMB20,672 million. Free cash flow, a non-GAAP liquidity measure, was an outflow of RMB18,815 million, a significant change from an inflow of RMB17,372 million in the prior year. This decrease was mainly attributed to increased cloud infrastructure expenditure and investments in "Taobao Instant Commerce" Net Cash Provided by Operating Activities and Free Cash Flow (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | YoY % Change | | :--------------------------------------- | :--------------------- | :--------------------- | :--------------------- | :----------- | | Net cash provided by operating activities | 33,636 | 20,672 | 2,886 | (39)% | | Free cash flow | 17,372 | (18,815) | (2,626) | (Negative swing) | - The decrease in free cash flow was mainly attributed to the increase in cloud infrastructure expenditure and investment in "Taobao Instant Commerce"[11][66] Net Cash Provided by Investing Activities Net cash provided by investing activities was RMB18,328 million, primarily reflecting a decrease in short-term investments and other treasury investments, along with cash inflow from disposal of investments. These inflows were partially offset by significant capital expenditures and cash outflow for investment and acquisition activities Net Cash Provided by Investing Activities (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | | :--------------------------------------- | :--------------------- | :--------------------- | :--------------------- | | Net cash (used in) provided by investing activities | (35,829) | 18,328 | 2,558 | - Primarily reflected a decrease in short-term investments (RMB35,652 million) and other treasury investments (RMB12,364 million), and cash inflow from disposal of investments (RMB17,457 million)[67] - Partly offset by capital expenditures of RMB38,676 million and cash outflow of RMB8,429 million for investment and acquisition activities[67] Net Cash Used in Financing Activities Net cash used in financing activities was RMB2,731 million, primarily due to cash used in repurchase of ordinary shares (RMB5,840 million), partially offset by net proceeds from bank borrowings (RMB3,287 million) Net Cash Used in Financing Activities (Q1 2025 vs. Q1 2024) | Metric | Q1 2024 (RMB millions) | Q1 2025 (RMB millions) | Q1 2025 (US$ millions) | | :--------------------------------------- | :--------------------- | :--------------------- | :--------------------- | | Net cash used in financing activities | (19,582) | (2,731) | (381) | - Primarily reflected cash used in repurchase of ordinary shares of RMB5,840 million, partly offset by net proceeds from bank borrowings of RMB3,287 million[68] Other Information Employees As of June 30, 2025, Alibaba Group had a total of 123,711 employees, a slight decrease from 124,320 as of March 31, 2025 Employee Headcount | Date | Employees | | :----------- | :---------- | | March 31, 2025 | 124,320 | | June 30, 2025 | 123,711 | Webcast and Conference Call Information Alibaba Group's management held a conference call on August 29, 2025, to discuss the financial results. Pre-registration links and dial-in details were provided for both English and Chinese participants, with a live webcast and archived replay available on the investor relations website - Conference call held on August 29, 2025, at 7:30 a.m. U.S. Eastern Time[70] - Pre-registration required for participants, with dial-in numbers, passcode, and unique access PIN provided[70] - Live webcast and archived replay available on Alibaba Group's Investor Relations website[71][72] About Alibaba Group Alibaba Group is a global technology company specializing in e-commerce and cloud computing. It provides digital and logistics infrastructure, efficiency tools, and marketing reach to merchants, brands, and retailers, while empowering enterprises with cloud infrastructure and services for digital transformation - Alibaba Group is a global technology company focused on e-commerce and cloud computing[73] - Enables merchants, brands, and retailers with digital and logistics infrastructure, efficiency tools, and marketing reach[73] - Empowers enterprises with leading cloud infrastructure, services, and work collaboration capabilities for digital transformation[73] Investor Relations & Media Contacts Contact information for Alibaba Group's Investor Relations, led by Lydia Liu, and Media Contacts, Cathy Yan and Ivy Ke, is provided for inquiries - Investor Relations Contact: Lydia Liu, Head of Investor Relations (investor@alibaba-inc.com)[74] - Media Contacts: Cathy Yan (cathy.yan@alibaba-inc.com) and Ivy Ke (ivy.ke@alibaba-inc.com)[74] Exchange Rate Information The report provides translations of Renminbi (RMB) amounts into U.S. dollars (US$) and Hong Kong dollars (HK$) for convenience. The exchange rate used for RMB to US$ was RMB7.1636 to US$1.00, and for RMB to HK$ was RMB0.91195 to HK$1.00, both as of June 30, 2025 - RMB to US$ exchange rate: RMB7.1636 to US$1.00 (as of June 30, 2025)[75] - RMB to HK$ exchange rate: RMB0.91195 to HK$1.00 (as of June 30, 2025)[75] Safe Harbor Statements This section includes forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. It cautions that actual results may differ materially due to various risks and uncertainties, including competition, strategic investments, economic conditions, geopolitical tensions, and changes in shareholder return initiatives. Alibaba Group does not undertake to update these statements unless required by law - Contains forward-looking statements under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995[76] - Actual results may differ materially due to factors such as competition, strategic investments, economic conditions, geopolitical tensions, and changes to shareholder return initiatives[76] - Alibaba does not undertake any obligation to update forward-looking statements, except as required under applicable law[76] Non-GAAP Financial Measures (Definitions) This section defines the non-GAAP financial measures used in the report, including adjusted EBITDA, adjusted EBITA, non-GAAP net income, non-GAAP diluted earnings per share/ADS, and free cash flow. These measures are presented to provide insights into core operating results, enhance understanding of performance, and aid management's decision-making, but are not intended as substitutes for GAAP measures and may not be comparable to similarly titled measures from other companies - Non-GAAP measures include adjusted EBITDA, adjusted EBITA, non-GAAP net income, non-GAAP diluted earnings per share/ADS, and free cash flow[77] - These measures help identify underlying business trends, provide useful information about core operating results, and enhance understanding of performance[78] - Non-GAAP measures should not be considered in isolation or as alternatives to GAAP measures and may not be comparable to those of other companies[81] Unaudited Consolidated Financial Statements Consolidated Income Statements (GAAP) This section presents the unaudited consolidated income statements prepared in accordance with U.S. GAAP for the three months ended June 30, 2024, and 2025, detailing revenue, costs, expenses, and various income and profit metrics - The table provides a detailed breakdown of revenue, cost of revenue, operating expenses (product development, sales and marketing, general and administrative), amortization and impairment of intangible assets, other gains/losses, income from operations, interest and investment income/expense, income tax expenses, share of results of equity method investees, net income, and earnings per share/ADS[88] Consolidated Balance Sheets (GAAP) This section provides the unaudited consolidated balance sheets prepared in accordance with U.S. GAAP as of March 31, 2025, and June 30, 2025, outlining the company's assets, liabilities, mezzanine equity, and shareholders' equity - The tables present current and non-current assets (cash, investments, receivables, property and equipment, intangible assets, goodwill) and liabilities (bank borrowings, income tax payable, accrued expenses, deferred revenue, senior notes, other liabilities), along with mezzanine equity and shareholders' equity[89][90] Condensed Consolidated Statements of Cash Flows (GAAP) This section presents the unaudited condensed consolidated statements of cash flows prepared in accordance with U.S. GAAP for the three months ended June 30, 2024, and 2025, detailing cash flows from operating, investing, and financing activities - The table summarizes net cash provided by operating activities, net cash (used in) provided by investing activities, net cash used in financing activities, and the effect of exchange rate changes on cash and cash equivalents, restricted cash, and escrow receivables[91] Reconciliations of Non-GAAP Measures to GAAP Net Income to Adjusted EBITA and Adjusted EBITDA This section provides a reconciliation of net income (GAAP) to adjusted EBITA and adjusted EBITDA (non-GAAP) for the three months ended June 30, 2024, and 2025, detailing the adjustments made to arrive at these non-GAAP profitability metrics - The table reconciles net income by adding back interest and investment income, net, interest expense, other income, income tax expenses, share of results of equity method investees, non-cash share-based compensation expense, amortization and impairment of intangible assets, and provision for shareholder class action lawsuits to derive Adjusted EBITA and further adding depreciation and impairment of property and equipment to derive Adjusted EBITDA[92] Net Income to Non-GAAP Net Income This section presents the reconciliation of net income (GAAP) to non-GAAP net income for the three months ended June 30, 2024, and 2025, outlining specific adjustments for non-cash and non-recurring items - The table reconciles net income by adding back non-cash share-based compensation expense, amortization and impairment of intangible assets, provision for shareholder class action lawsuits, loss (gain) on deemed disposals/disposals/revaluation of investments, impairment of investments, and adjusting for tax effects to arrive at non-GAAP net income[93] Diluted Earnings Per Share/ADS to Non-GAAP Diluted Earnings Per Share/ADS This section provides a reconciliation of diluted earnings per share/ADS (GAAP) to non-GAAP diluted earnings per share/ADS for the three months ended June 30, 2024, and 2025, detailing the adjustments made to exclude non-cash and non-recurring items - The table reconciles diluted earnings per share/ADS by adjusting for dilution effect from non-cash share-based awards, interest expense attributable to convertible unsecured senior notes, and other non-GAAP adjustments to net income attributable to ordinary shareholders[94] Net Cash Provided by Operating Activities to Free Cash Flow This section reconciles net cash provided by operating activities (GAAP) to free cash flow (non-GAAP) for the three months ended June 30, 2024, and 2025, highlighting adjustments for capital expenditures and buyer protection fund deposits - The table reconciles net cash provided by operating activities by deducting purchases of property and equipment (excluding land use rights and construction in progress relating to office campuses) and changes in buyer protection fund deposits to arrive at free cash flow[97]