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Shares of Alibaba Group Holding traded modestly lower on Thursday despite posting results in June that were slightly better than Wall Street expectations.
For the four-year period, the China-based e-commerce giant posted revenue of $ 21.8 billion, up 34% from a year ago, and somewhat to the consensus of Street analyst at $ 21.3 billion. Non-GAAP earnings were $ 2.10 per share, hitting the Street Consensus at $ 1.99. Adjusted Ebitda (revenue before interest, taxes, depreciation and amortization) was $ 7.2 billion, up 30%.
Alibaba (ticker: BABA) said annual active consumers at its China retail markets reached 742 million, up 16 million from the 12-month rolling period ending March 30. Mobile monthly active users reached 874 million, 28 million up from the March quarter. The company said its cloud computing revenue was $ 1.7 billion, up 59% year-on-year. Alibaba’s core e-commerce company, which accounts for about two-thirds of revenue, was up 34% from a year ago.
“Alibaba delivered excellent results this past quarter,” CEO Daniel Zhang said in a statement. “We were well placed to accelerate the growth of the ongoing digital transformation accelerated by the pandemic in both consumer and business enterprises. We are mobilizing our entire digital infrastructure to support the economic recovery of businesses across a wide range of sectors, while expanding and diversifying our consumer base by addressing their changing preferences in a post-Covid-19 environment.
CFO Maggie Wu added in the statement that the company’s domestic core business “has fully recovered to pre-Covid-19 levels across the board … our strong profit growth and cash flow can continue to strengthen and strengthen our core business investing for long-term growth. ”
Atlantic Equities analyst James Cordwell wrote Thursday morning in a brief note that both turnover and adjusted Ebitda were “well ahead” of estimates, “driven by a solid performance of the core e-commerce business and a continued reduction in losses from investment areas. ”
He added that a persistent gap between growth in gross merchandise (GMV) and growth in e-commerce revenue “will likely mean that competitive concerns remain”, noting that GMVs for physical goods increased by 27%, while growth in commission- income was a more moderate 21%. He noted that the company said the gap reflected category mix and continued promotional incentives for buyers.
But Cordwell said he saw these concerns as offset by a resurgence in cloud, “where Alibaba is well positioned to capitalize on the structural shift in computing.”
Alibaba shares were up 1.6% to $ 256.35 on Thursday morning, while the Nasdaq Composite rose 0.5%, the S&P 500 has not changed much, and the Dow Jones Industrial Average is down 0.2%. Alibaba stock is up 21%.
Write to Eric J. Savitz by [email protected]
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