Alibaba Group Holding posted mixed results for the period that ended in December, slightly missing top line expectations while beating bottom line projections. The company logged gains in user count and other metrics, which came despite evidence of an economic slowdown in China — yet management pointed to the continued buoyancy of the Chinese consumer.
The economic climate is one of uncertainty, said CEO Daniel Zhang, and he pointed to the initiatives that should help the firm realize new opportunities that would counter such slowdown. Consumption, he said, remains “strong.”
In terms of the headline numbers, adjusted earnings per share came in at 12.2 yuan, better than the 11.2 yuan that had been estimated.
Revenue grew year over year, though at a pace that showed continued deceleration. Recall that in recent years that top line growth rate had come in at 60 percent or more (as measured year over year); in the most recent quarter, that pace slowed to 43 percent. Management cautioned analysts on the earnings call not to focus too much on that pace, given the impact of the “law of large numbers.”
Revenue was up 41 percent to 117.3 billion yuan, which was below the 119 billion yuan that the Street had sought to see. Core commerce sales — including the Taobao and Tmall sites — were up 40 percent to 102.8 billion yuan. International commerce at the retail level was up 5 percent to 5.8 billion yuan.
Drilling down into the results, the company said that annual active consumers totaled 636 million at the end of the year, which reflects net additions of 35 million users, and a more than 23 percent growth rate from the 515 million tally at the end of 2017.
Turning to mobile monthly active users, net additions were 33 million users, and the count at the end of the year was 699 million.
Cloud revenue growth outpaced the above segments, and was up 84 percent year over year to 6.6 billion yuan. The company also spotlighted its efforts to expand into meals on demand and other business models. In terms of other revenue streams, the digital-media and entertainment divisions — spanning the browser UCWeb, video-streaming site Youku Tudou and Alibaba Pictures Group — were up about 20 percent to 6.5 billion yuan.