Alibaba's underlying profit drops as tech investments offset top-line growth.


Underlying profits at Alibaba plunged over 80% in its final quarter on the back of significant tech and ecommerce investments, though revenues at the Chinese tech titan headed higher due to strong demand in the cloud and AI sectors.

Alibaba Group

Source: Sharecast

The Hong Kong stock finished the day down 0.4% at HKD132.80, though US-listed shares were trading 3.2% lower at $130.50 in pre-market trade on Wall Street.

Group revenues rose 3% year-on-year to RMB243.4bn ($35.3bn) in the fourth quarter ended 31 March, though like-for-like growth would have been 11% excluding revenues from the Sun Art and Intime businesses that have now been disposed.

One bright spark was revenue growth at the Cloud Intelligence Group arm which picked up to 40%, with AI-related product revenue achieving triple-digit growth for the 11th straight quarter.

However, group adjusted EBITDA fell by 84% to RMB5.1bn, "primarily attributable to the investment in technology businesses, quick commerce and user experiences", the company said.

For the full year, revenues rose 3% to RMB1.023trn, while adjusted EBITDA fell 56% to RMB76.4bn.

“Alibaba’s full-stack AI investments have progressed from incubation to commercialisation at scale. This quarter, we achieved accelerated breakthroughs across models, cloud infrastructure, and applications,” said chief executive Eddie Wu.

Also commenting on the results, chief financial officer Toby Xu said: " We are confident in our business outlook and will continue to invest in AI + Cloud to strengthen our competitive advantages."

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