Alibaba announces Q2 results, suffered loss due to China’s crackdown

Alibaba Group Holding limited released its Q2 earnings report on Thursday before the market opened. They reported a revenue of $31.4 billion and non-GAAP diluted EPS of $1.40.

It’s U.s. listed shares went down by 5% in the pre market hour.

Key Highlights

  • Revenue was $31,147 million, an increase of 29% year-over-year.
  • Annual active consumers (“AACs”) of the Alibaba Ecosystem across the world reached approximately 1.24 billion for the twelve months ended September 30, 2021, an increase of approximately 62 million from the twelve months ended June 30, 2021.
  • Income from operations was $2,329 million, an increase of 10% year-over-year.
  • Adjusted EBITDA, a non-GAAP measurement, decreased 27% year-over-year to $5,407 million.
  • Adjusted EBITA, a non-GAAP measurement, decreased 32% year-over-year to $4,351 million.
  • Net cash provided by operating activities was $5,561 million.
  • Diluted earnings per ADS was $0.31 and diluted earnings per share was $0.04.

“This quarter, Alibaba continued to firmly invest into our three strategic pillars of domestic consumption, globalization, and cloud computing to establish solid foundations for our long-term goal of sustainable growth in the future. Our global annual active consumers across the Alibaba Ecosystem reached approximately 1.24 billion, with a quarterly net increase of 62 million consumers, and we are on track to achieve our longer-term target of serving two billion consumers globally.”

Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group

Analysts Estimates

EPS: $1.52

Revenue: $42.22 billion

Earnings History

Alibaba last announced its FY 2020 Q1 earnings report on August 3rd, 2021. It reported net income of US$6,634 million and revenue of US$31,865 million, an increase of 34% YOU. Income from operations was US$4,778 million, a decrease of 11% YOY.  Annual active consumers of the company across the globe reached around 1.18 billion for the twelve months ended June 30, 2021.

Annual Forecast

Analysts have estimated an EPS of $9.3 and revenue of  $141.67 billion for 2022. Stock price is predicted to hover around $242.64, the median estimate is up by 45.72% from $166.51. Sales growth for the company is predicted around 27.90%.

Plans

Alibaba on 3rd September, 2021 announced an investment of $ 15.5 billion spanning five key areas; technology innovation, economic development, high quality employment creation, care for vulnerable groups, and a common prosperity development fund. It envisions serving 2 billion consumers globally by 2036.

Alibaba Q2 earnings webcast live

Company Profile

Alibaba Group Holding Limited is a Chinese multinational technology company. Also known as Alibaba Group and Alibaba.com the company holds specialization in e-commerce, retail, internet and technology. 

Founded by Jack Ma on 28th June, 1999 in Hangzhou, Zhejiang, it operates and own a diverse portfolio of business including providing consumer-to-consumer, business-to-consumer and business-to-business sales via web portals. 

“Alibaba Group’s mission is to make it easy to do business anywhere. The company aims to build the future infrastructure of commerce. It envisions that its customers will meet, work and live at Alibaba, and that it will be a good company that lasts for 102 years, “as per the company’s website. 

Why did China Crackdown on Alibaba? 

Alibaba founder Jack Ma faced Chinese Government’s wrath after he made defiant attacks on the financial regulators of China. $37 billion IPO of Ant Group, a subsidiary of  China’s biggest e-commerce platform Alibaba, was abruptly suspended by regulators in November 2020. Later Alibaba was fined $2.75 billion for abusing its market dominance and their use of algorithms, to consumer privacy and worker protections. 

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