Alibaba Q2 Profit Down, Revenues Rise; Stock Gains In Pre-market

Core Viewpoint - Alibaba Group reported a significant decline in net income despite revenue growth, indicating challenges in operational performance and profitability [1][2][3]. Financial Performance - Net income attributable to ordinary shareholders decreased by 52% to RMB20.99 billion ($2.95 billion) from RMB43.87 billion the previous year [2]. - Earnings per share fell to RMB1.09 ($0.15) from RMB2.27 a year ago, while earnings per ADS dropped to RMB8.75 ($1.23) from RMB18.17 [2]. - Adjusted net income was RMB10.35 billion ($1.45 billion), down 71% from RMB36.52 billion last year [3]. - Adjusted earnings per share decreased to RMB0.55 ($0.08) from RMB1.88, and adjusted earnings per ADS fell to RMB4.36 ($0.61) from RMB15.06 [3]. Revenue Insights - Total revenue increased by 5% to RMB247.80 billion ($34.81 billion) from RMB236.50 billion a year earlier, with a 15% improvement on a like-for-like basis excluding disposed businesses [4]. - Alibaba China E-commerce Group's revenues rose by 16% to RMB132.58 billion ($18.62 billion) [5]. - Revenue from Alibaba International Digital Commerce Group grew by 10% to RMB34.80 billion ($4.89 billion) [5]. - Cloud Intelligence Group's revenue surged by 34% to RMB39.82 billion ($5.59 billion), driven by public cloud revenue growth and AI-related product adoption [5]. Operational Challenges - Income from operations plummeted by 85% year-over-year to RMB5.37 billion ($754 million) [3]. - Adjusted EBITA decreased by 78% to RMB9.07 billion ($1.27 billion), primarily due to investments in quick commerce and user experiences [4]. Share Repurchase Program - The remaining amount of Board authorization for the share repurchase program was $19.1 billion as of September 30, 2025, effective through March 2027 [6].