Chinese conglomerate Alibaba announced its financial results for the quarter ended December 31, 2019, beating analyst expectations. Its Chairman and CEO Daniel Zhang praised “robust growth” and “new heights” reached by its digital economy.
Analysts had estimated revenue of $22.8 billion but the Hangzhou-based firm generated $23.2 billion in the quarter, an increase of 38% year-over-year. Alibaba also posted net income of 50.1 billion yuan ($7.2 billion), a 62% year-over-year growth. Adjusted earnings per share for the quarter beat expectations with 18.19 yuan ($2.61), up from 12.19 yuan in the same period of 2018.
The company also revealed that the total annual active consumers on its Chinese retail marketplaces reached 711 million, an increase of 18 million from the 12-month period ended September 31, 2019. Mobile MAUs reached 824 million in December 2019, an increase of 39 million since September.
In addition, the report highlighted its fastest growing selling format “Taobao Live” and record-breaking 11.11 Global Shopping Festival. GMV and users from Taobao Live, a live-broadcast feature for merchants and influencers to market their products, both grew over 100% year-over-year in December. The annual double 11 shopping festival generated 268.4 billion yuan ($38.4 billion) in GMV, marking a 26% year-over-year growth. Notably, consumers from less developed areas accounted for 54% of the GMV during the festival.
Besides its core e-commerce business, Alibaba posted revenue of 10.7 billion (US$1.5 billion) in cloud computing, which was the first time its cloud computing services generated revenue of over 10 billion yuan in a single quarter. Average daily subscribers of Youku, its video service subsidiary, grew 59% year-over-year, mainly attributable to its new user acquisition strategy, an increase of auto-renewal subscribers and a greater contribution from its VIP membership program according to the company.
“Alibaba Group experienced robust growth across our business this past quarter,” said Daniel Zhang, Chairman and CEO of Alibaba Group. “Continued investment in user engagement, especially through social commerce content, contributed to our strong gains in annual active consumers.”
In response to the coronavirus, Zhang said Alibaba mobilized its ecosystem to fully support the fight against the outbreak and will support its merchants to overcome this challenging time together.
Despite better-than-expected results for the previous quarter, shares of Alibaba fell by 1.76% after the report came out on Thursday, which might indicate a strong negative impact of the coronavirus.