Alibaba Cheat Sheet: Revenue Beats Estimates, Cloud Gains Cloutby
Alibaba Group Holding Ltd. reported a 32 percent increase in revenue after the company attracted more advertisers to spend on its platform. The following key numbers from the latest results offer hints of what’s to come:
REVENUE: 22.2 billion yuan
Revenue exceeded analysts estimates at a time China’s economy is headed for its slowest pace of growth in a quarter century. Alibaba shares rose in pre-market trading after the company reported results.
OVERSEAS SALES: 8 percent
The proportion of revenue Alibaba gets from abroad reached 8 percent, compared with 9 percent in the previous quarter. Co-founder Jack Ma has said he wants half of the company’s sales to originate outside China.
The company named Michael Evans, a former Goldman Sachs Group Inc. partner, as president in August to spearhead a global expansion into regions such as Russia and Brazil. The company is also looking to make forays into Italy, France, Australia and New Zealand, Evans said in October.
CLOUD COMPUTING: 649 million yuan
Revenue from cloud computing more than doubled from a year earlier.
The e-commerce giant is betting on Internet-based computing and big data to boost growth for the next decade thanks to demand for processing and storage from governments, finance and online gaming companies. AliCloud could account for more than $1 billion of Alibaba’s revenue by 2018 and the public cloud presents a $120 billion global market opportunity, SunTrust Robinson Humphrey Inc. estimates.
GMV: 713 billion yuan
That’s the gross merchandise value, or total amount of all transactions, on Alibaba’s clutch of Chinese retail marketplaces from Taobao to Tmall.
An important measure of the scale and growth of the company’s fundamental business, GMV rose 28 percent from a year ago, down from 34 percent during the previous quarter. It’s also in line with the 28 percent four analysts had expected on average. Mobile GMV accounted for 62 percent of the total.
Ahead of the earnings, investors relations chief Jane Penner had unnerved investors by saying GMV growth could come in lower than the company had forecast internally. Alibaba’s GMV growth is expected to slow gradually as the Chinese economy decelerates and competition from JD.com Inc and Tencent Holdings Ltd. intensifies.
COMPENSATION: 3.16 billion yuan
Alibaba paid that much to cover share-based compensation to employees last quarter.
This has eaten into profits in each of the previous four quarters since last year’s record initial public offering. The expense fell from the previous quarter, when it paid out 4 billion yuan to retain staff and keep them motivated.