ZACKS·2025-11-26 17:16Core Insights - Alibaba (BABA) reported non-GAAP earnings of 61 cents per ADS for Q2 fiscal 2026, missing the Zacks Consensus Estimate by 7.58% and showing a 71% year-over-year decline in domestic currency [1] - The company achieved revenues of $34.8 billion for the same quarter, surpassing the Zacks Consensus Estimate by 1.09%, with a 5% year-over-year increase in domestic currency [2] Revenue Performance - Revenue growth was primarily driven by the Cloud Intelligence Group and the domestic e-commerce platform, while aggressive investments in quick commerce pressured margins [3] - Alibaba's China E-commerce Group generated RMB 132.6 billion ($18.6 billion), a 16% increase year-over-year, with customer management revenues growing 10% [4] - The core e-commerce vertical generated RMB 102.9 billion ($14.5 billion), reflecting a 9% increase year-over-year [5] - Quick commerce revenues surged 60% year-over-year to RMB 29.7 billion ($4.2 billion), significantly contributing to user engagement [6] - The International Digital Commerce Group generated RMB 32.4 billion ($4.6 billion), a 10% increase from the previous year [7] Segment Analysis - Cloud Intelligence Group revenues increased by 34% year-over-year to RMB 39.8 billion ($5.6 billion), driven by public cloud growth and AI adoption [9] - AI-related product revenues maintained triple-digit growth for nine consecutive quarters, now representing over 20% of revenues from external customers [10] Operating Expenses - Sales and marketing expenses rose to RMB 75.0 billion ($10.5 billion), accounting for 30.3% of total revenues due to investments in quick commerce [13] - Adjusted EBITDA fell 78% year-over-year to RMB 9.1 billion ($1.3 billion), with the adjusted EBITDA margin contracting to 3.7% from 17.4% [15] Financial Position - As of September 30, 2025, cash and cash equivalents were RMB 188.4 billion ($26.5 billion), an increase from RMB 183.1 billion ($25.6 billion) [16] - The company generated RMB 10.1 billion ($1.4 billion) in cash from operations, down 68% year-over-year [17] - Free cash flow was an outflow of RMB 21.8 billion ($3.1 billion), attributed to increased CapEx investments in AI and cloud infrastructure [18]