Alibaba Group recently announced its financial results for the quarter ending 30 June 2024. The Chinese e-commerce giant reported a mixed performance, highlighting both challenges and areas of growth.
For the quarter, Alibaba reported revenue of 243.24 billion yuan renminbi (€31.13bn), an increase of 6 percent year-on-year. This growth was primarily driven by the company’s Cloud Intelligence Group, whose revenue increased by 6 percent to RMB 26.55 billion (€3.40bn). This underlines the growing demand for cloud services, particularly in the areas of public cloud and artificial intelligence (AI) applications.
Despite the revenue growth, Alibaba suffered setbacks in terms of profitability. The company’s net profit fell significantly by 29 percent year-on-year to RMB 24.74 billion (€3.17bn). In addition, the company’s free cash flow, a key indicator of liquidity, fell by 56 percent to RMB 17.37 billion (€2.22bn), primarily due to increased spending on Alibaba Cloud infrastructure and other investments.
Capital expenditure also saw significant outflows totaling RMB 35.83 billion (€4.59bn). This included significant capital expenditures and treasury investments, although some of these outflows were offset by cash inflows from the sale of short-term investments.
Alibaba reported a decrease in headcount, with the total number of employees standing at 198,162 as of 30 June 2024, down from 204,891 at the end of the previous quarter. The company also emphasized its ongoing share buyback efforts: RMB 42.7 billion (€5.47bn) was spent on share buybacks in the quarter.
Looking ahead, Alibaba’s management continues to focus on improving the user experience and expanding its cloud and AI capabilities, although the company faces ongoing challenges to navigate the complex macroeconomic environment.
