Alibaba (BABA) Tops Q4 EPS by 10c, Revenues Miss

Alibaba (NYSE: BABA) reported Q4 EPS of $1.77, $0.10 better than the analyst estimate of $1.67. Revenue for the quarter came in at $17.06 billion versus the consensus estimate of $17.64 billion.

• Revenue was RMB117,278 million (US$17,057 million), an increase of 41% year-over-year.
• Revenue from core commerce increased 40% year-over-year to RMB102,843 million (US$14,958 million).
• Revenue from cloud computing increased 84% year-over-year to RMB6,611 million (US$962 million).
• Revenue from digital media and entertainment increased 20% year-over-year to RMB6,491 million (US$944 million).
• Revenue from innovation initiatives and others increased 73% year-over-year to RMB1,333 million (US$193 million).
• Annual active consumers on our China retail marketplaces reached 636 million, an increase of 35 million from the 12-month period ended September 30, 2018.
• Mobile MAUs on our China retail marketplaces reached 699 million in December 2018, an increase of 33 million over September 2018.
• Income from operations was RMB26,798 million (US$3,898 million), an increase of 3% year-over-year. Adjusted EBITDA increased 13% year-over-year to RMB40,708 million (US$5,921 million).
• Adjusted EBITA for core commerce was RMB46,079 million (US$6,702 million), an increase of 20% year-over-year. Our marketplace-based core commerce adjusted EBITA (see definition at the end of this results announcement), a non-GAAP measurement, increased 31% year-over-year to RMB54,303 million (US$7,898 million).
• Net income attributable to ordinary shareholders was RMB33,052 million (US$4,807 million), and net income was RMB30,964 million (US$4,504 million), representing a year-over-year increase of 37% and 33%, respectively.
• Non-GAAP net income was RMB29,797 million (US$4,334 million). Diluted EPS was RMB12.64 (US$1.84) and non-GAAP diluted EPS was RMB12.19 (US$1.77).
• Net cash provided by operating activities was RMB64,898 million (US$9,439 million) and non-GAAP free cash flow was RMB51,373 million (US$7,472 million).

“Alibaba had another strong quarter. Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of nearly 700 million consumers across retail, digital entertainment and local consumer services,” said Daniel Zhang, Chief Executive Officer of Alibaba Group. “Our growth is also driven by the power of Alibaba’s cloud and data technology that helps expedite the digital transformation of millions of enterprises.”

“In the December quarter, we delivered strong top-line growth of 41% year-over-year,” said Maggie Wu, Chief Financial Officer of Alibaba Group. “The profitability of our marketplace-based core commerce business, as measured by adjusted EBITA, was RMB54.3 billion (US$7.9 billion), representing a 31% year-over-year growth. This profitability and US$7.5 billion in free cash flow generated this quarter enable us to continue to invest in other important strategic businesses and technology to support the growth of our ecosystem.”

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