Alibaba Group Q1 2026 Earnings Call Transcript: CFO Hong Xu, CEO Yongming Wu, and IR Head Lydia Lu Discuss Results

Alibaba Group Holding Limited reported Q1 2026 earnings, with CFO Hong Xu and CEO Yongming Wu leading the call. The company's revenue decreased by 7.7% YoY to $29.1bn, with a non-GAAP net income of $10.7bn, down 11.6% YoY. The e-commerce business segment's revenue fell 5.7% YoY to $24.8bn. Alibaba's CEO emphasized the company's efforts to adapt to a slowing economy and emphasized the importance of innovation and efficiency.

Alibaba Group Holding Limited (BABA) reported its Q1 2026 earnings, with CFO Hong Xu and CEO Yongming Wu leading the call. The company's revenue decreased by 7.7% year-over-year (YoY) to $29.1 billion, while non-GAAP net income stood at $10.7 billion, down 11.6% YoY. The e-commerce business segment's revenue fell 5.7% YoY to $24.8 billion.

The earnings report highlighted Alibaba's strategic focus on cloud computing and artificial intelligence (AI), which has been a key driver of growth despite overall revenue shortfalls. The Cloud Intelligence Group revenue rose 26% YoY to $4.66 billion, driven by triple-digit expansion in AI-related product revenue [3]. This growth underscores Alibaba's ability to monetize cutting-edge technologies and reduce reliance on U.S. hardware.

Alibaba's strategic investments in AI infrastructure totaled $53 billion over three years, positioning the company to capture a significant portion of the $1.8 trillion AI market by 2030 [1]. The company's net income surged 76% YoY to $6.019 billion, fueled by gains from equity investments and the disposal of Trendyol, indicating a willingness to tolerate short-term revenue pressures for long-term gains [1].

The company's stock rose 3% in pre-market trading, reflecting investor confidence in its strategic direction [3]. Analysts project revenue of $252.7 billion for the September quarter and $1.07 trillion for fiscal 2026, with an average price target implying a 26.81% upside [6].

Conclusion: Alibaba's Q1 earnings highlight a company willing to sacrifice short-term revenue visibility for long-term dominance in AI and cloud computing. By redirecting capital toward high-margin, high-growth segments, it is transforming from an e-commerce-centric business into a diversified tech leader.

References:
[1] Alibaba (BABA) June quarter 2025 earnings report [https://www.cnbc.com/2025/08/29/alibaba-baba-june-quarter-2025-earnings-report.html]
[2] BABA Earnings: Alibaba Stock Climbs on Q1 Profit and AI ... [https://www.tipranks.com/news/baba-earnings-alibaba-stock-climbs-on-q1-profit-and-ai-push-despite-revenue-miss]
[3] Alibaba Stock Gains Despite Revenue Miss, Plans Nvidia ... [https://www.investors.com/news/technology/alibaba-stock-baba-news-earnings-nvidia-2025/]
[4] Alibaba misses on overall revenue and earnings, but AI sales were higher than [https://sherwood.news/tech/alibaba-misses-on-overall-revenue-and-earnings-but-ai-sales-were-higher-than/]
[5] Alibaba Group Announces June Quarter 2025 Results [https://www.businesswire.com/news/home/20250829875486/en/Alibaba-Group-Announces-June-Quarter-2025-Results]
[6] Alibaba (BABA) Q1 Earnings Disappoint with Revenue Miss [https://www.gurufocus.com/news/3086878/alibaba-baba-q1-earnings-disappoint-with-revenue-miss]