Alibaba Group 1Q adjusted net profit drops 18% on year

Alibaba Group 1Q adjusted net profit drops 18% on year

Alibaba Group Holding Limited (NYSE: BABA) reported its financial results for the quarter ended June 30, 2025, showing a 18% year-over-year decline in adjusted net income. Despite this, the company achieved significant milestones in its strategic initiatives, particularly in the quick commerce and AI + Cloud sectors.

The company's revenue for the quarter was RMB247,652 million (US$34,571 million), an increase of 2% year-over-year. However, excluding revenue from disposed businesses of Sun Art and Intime, revenue on a like-for-like basis would have grown by 10% year-over-year. This growth was driven by strong performance in Alibaba China E-commerce Group, which saw a 10% increase in customer management revenue to RMB89,252 million (US$12,459 million).

Alibaba's Cloud Intelligence Group also reported robust growth, with revenue increasing by 26% year-over-year to RMB33,398 million (US$4,662 million). This growth was primarily attributed to the increasing adoption of AI-related products, which maintained triple-digit year-over-year growth for the eighth consecutive quarter.

The company's quick commerce initiative, "Taobao Instant Commerce," contributed to a 25% year-over-year increase in monthly active consumers on the Taobao app. This service expanded its product offerings and front warehouse coverage for non-food categories, demonstrating Alibaba's commitment to enhancing user experience and business scale.

However, the company faced challenges in its Alibaba International Digital Commerce Group (AIDC), which saw a 19% year-over-year revenue growth to RMB34,741 million (US$4,850 million). The unit economics of AliExpress and Trendyol improved quarter-over-quarter, but the group still reported a loss, albeit significantly narrowed year-over-year.

Alibaba's adjusted EBITA decreased by 14% year-over-year to RMB38,844 million (US$5,422 million), primarily due to investments in "Taobao Instant Commerce" and user experiences. This investment was offset by double-digit revenue growth in Alibaba China E-commerce Group and improved operating efficiencies.

The company's net income attributable to ordinary shareholders was RMB43,116 million (US$6,019 million), an increase of 76% year-over-year. This growth was driven by mark-to-market changes from equity investments and the gain from the disposal of local consumer service business of Trendyol. However, non-GAAP net income decreased by 18% to RMB33,510 million (US$4,678 million) compared to the same quarter last year.

Alibaba's cash and other liquid investments stood at RMB585,663 million (US$81,755 million) as of June 30, 2025. The company repurchased a total of 56 million ordinary shares (equivalent to 7 million ADSs) for a total of US$815 million during the quarter.

Alibaba's strategic focus on consumption and AI + Cloud has delivered strong growth, but the company continues to face challenges in its international commerce and operating efficiency. The company remains committed to investing in these areas to capture historic opportunities and drive long-term growth.

References:
[1] https://www.businesswire.com/news/home/20250828875486/en/Alibaba-Group-Announces-June-Quarter-2025-Results