Di Yi Cai Jing·2025-08-29 11:21Core Insights - Alibaba Group reported a revenue of 247.65 billion RMB for Q2 of FY2026, representing a 2% year-over-year increase, and a 10% increase when excluding divested businesses [1][2] - The company experienced a decline in operating profit to 34.99 billion RMB, down 3% year-over-year, with adjusted EBITA decreasing by 14% due to increased investments in Taobao Flash Sale and user experience [1][2] - The restructuring of business segments included the integration of Ele.me and Fliggy into Alibaba's China e-commerce group, with Taobao Flash Sale and Ele.me moving into the instant retail segment [1] Financial Performance - The free cash flow for the quarter was a net outflow of 18.82 billion RMB, a significant drop from a net inflow of 17.37 billion RMB in the same period last year, resulting in a difference of 36.19 billion RMB [2] - Sales and marketing expenses reached 53.18 billion RMB, accounting for 21.5% of revenue, up from 13.4% in the previous year, driven by investments in Taobao Flash Sale and customer acquisition [3] - Instant retail revenue grew to 14.78 billion RMB, a 12% year-over-year increase, largely attributed to the order volume growth from Taobao Flash Sale [3] Business Segment Insights - Alibaba Cloud's revenue increased by 26% year-over-year, marking the highest growth rate in three years, with AI-related revenue growing for eight consecutive quarters [4] - The international digital commerce group saw a revenue increase of 19%, with adjusted EBITA losses narrowing significantly to 5.9 million RMB compared to a loss of 3.706 billion RMB in the same period last year [5] - The total number of employees at Alibaba decreased to 123,711 as of June 30, 2025, down from 124,320 in the previous quarter [5]