ZACKS·2025-09-01 16:56Core Insights - Alibaba (BABA) reported non-GAAP earnings of $2.06 per ADS for Q1 fiscal 2026, missing the Zacks Consensus Estimate by 3.29% and showing a 10% year-over-year decline in domestic currency [1][11] - The company achieved revenues of $34.6 billion, slightly exceeding the Zacks Consensus Estimate by 0.9%, with a 2% year-over-year increase in domestic currency [2][11] - BABA shares rose 6.76% in pre-market trading following the earnings release, with a year-to-date increase of 59.2%, outperforming the Zacks Retail and Wholesale sector's 10.4% return [3] Revenue Breakdown - Alibaba China E-commerce Group generated RMB 140.1 billion ($19.6 billion), a 10% increase year-over-year, contributing 56.6% of total revenues [5] - The core e-commerce vertical saw revenues of RMB 118.6 billion ($16.6 billion), reflecting a 9% increase from the previous year [6] - The Cloud Intelligence Group reported revenues of RMB 33.4 billion ($4.7 billion), up 26% year-over-year, driven by public cloud growth and AI-related product adoption [13][14] Segment Performance - Quick Commerce generated revenues of RMB 14.8 billion ($2.1 billion), growing 12% year-over-year, attributed to the launch of "Taobao Instant Commerce" [7] - International Digital Commerce Group revenues reached RMB 34.7 billion ($4.9 billion), a 19% increase year-over-year, primarily from strong cross-border business performance [9] - The All Others segment saw a revenue decline of 28% year-over-year to RMB 58.6 billion ($8.2 billion), mainly due to the disposal of certain businesses [15] Operating Expenses - Sales and marketing expenses rose 62.6% year-over-year to RMB 53.2 billion ($7.4 billion), significantly increasing as a percentage of total revenues [16] - General and administrative expenses decreased by 48% year-over-year to RMB 7.4 billion ($1.0 billion) [17] - Adjusted EBITDA fell 11% year-over-year to RMB 45.7 billion ($6.4 billion), with a margin contraction to 18% from 21% [18] Cash Flow and Balance Sheet - As of June 30, 2025, cash and cash equivalents increased to RMB 183.1 billion ($25.6 billion) from RMB 145.5 billion ($20.3 billion) [19] - Cash generated from operations was RMB 20.7 billion ($2.9 billion), down from RMB 33.6 billion ($4.7 billion) in the prior quarter [20] - Free cash flow was an outflow of RMB 18.8 billion ($2.6 billion), compared to an inflow of RMB 17.4 billion ($2.4 billion) in the prior year quarter [21]