Alibaba Earnings: Mobile Growth In Retail, Cloud Computing Drive Results

May 6th, 2016 by Trefis Team
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Alibaba (NYSE:BABA) announced its fiscal Q4 and full year results this week, reporting a significant 39% jump in net revenues to RMB 24 billion (roughly $3.8 billion). [1] The company’s cost of revenue increased in absolute terms and as a percentage of net revenue due to new business initiatives that included mobile operating system, entertainment and OTT service costs. As a result, its gross margin compressed by over 4 percentage points compared to the previous year quarter. On the other hand, a limited increase in operating expenses led operating income and net income to grow at a higher rate. [2]

Q416 Earnings5Alibaba’s Q4 results largely mirrored its full year fiscal 2016 results, as evidenced from the table below.

Q416 Earnings2

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Within Alibaba’s various divisions, revenue generated by Cloud Computing and Internet Infrastructure witnessed the most growth – a trend consistent over the last few quarters. AliCloud is one of the largest cloud computing businesses across the globe, with a strong presence in services that span across enterprise resource planning (ERP) and client relationship management (CRM) solutions.

Q416 Earnings3Alibaba’s core retail business in China also continued to grow at a solid rate, with much of the growth resulting from an increase in the number of active buyers and monthly active users (MAUs). Within the retail business, Alibaba witnessed the most growth from its mobile platform with the gross merchandise volume (GMV) via mobile growing by 78% y-o-y to RMB 541 billion (or $84 billion). Moreover, internet penetration (particularly through mobile platforms) in lower-tier cities across China has contributed significantly to growth in this domain. [3]

Q416 Earnings4

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to  Our Full Analysis For Alibaba.

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Notes:
  1. Alibaba Group Announces March Quarter 2016 and Full Fiscal Year 2016 Results, Alibaba Press Release [↩]
  2. Alibaba Q4 2016 Earnings Call Transcript, Seeking Alpha, May 2016 [↩]
  3. Alibaba Q4’16 6-K Filings, SEC, May 2016 [↩]