Alibaba Group Reports September Quarter and Interim Results

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11/25/2025 – 05:32 AM

Hong Kong – Alibaba Group Holding Limited (BABA) released its financial results for the quarter and six-month period ending September 30, 2025, revealing both significant investments in strategic growth areas and solid revenue gains in its core businesses.

“We have entered into an investment phase to build long-term strategic value in AI technologies and infrastructure, and a consumption platform integrating daily life services and e-commerce,” stated Eddie Wu, Chief Executive Officer of Alibaba Group. “With our significant strategic investments in these areas, our two core businesses of AI + Cloud and consumption continued to deliver strong growth this quarter. Robust AI demand further accelerated our Cloud Intelligence Group business.”

Wu noted that AI-related product revenue achieved triple-digit year-over-year growth for the ninth consecutive quarter, and further stated that in Alibaba’s consumption business, “quick commerce continued to scale with significant improvement in unit economics and drove rapid growth in monthly active consumers on the Taobao app.”

Toby Xu, Chief Financial Officer of Alibaba Group, commented on the company’s commitment to future growth. “Our core businesses continued to deliver solid revenue growth, with AI revenue contributing to an expanding share of our cloud revenues from external customers, and customer management revenue up 10%. We are re-investing our profits and free cash flow for the future while near-term profitability is expected to fluctuate. Over the past four quarters, we have deployed approximately RMB120 billion in capital expenditure toward AI and cloud infrastructure,” said Xu, signaling a long-term vision despite potential short-term earnings volatility.

Key Financial Highlights for the Quarter Ended September 30, 2025:

• Revenue: RMB247,795 million ($34,808 million), a 5% year-over-year increase. On a like-for-like basis, excluding revenue from disposed businesses, revenue would have grown by 15%.
• Income from Operations: RMB5,365 million ($754 million), down 85% year-over-year.
• Adjusted EBITA: RMB9,073 million ($1,274 million), a 78% decrease year-over-year. This decrease is attributed to investments in quick commerce, user experiences, and technology.
• Net Income Attributable to Ordinary Shareholders: RMB20,990 million ($2,948 million).
• Net Income: RMB20,612 million ($2,895 million), a 53% decrease year-over-year.
• Non-GAAP Net Income: RMB10,352 million ($1,454 million), a 72% decrease compared to the same quarter of 2024.
• Diluted Earnings per ADS: RMB8.75 ($1.23).
• Non-GAAP Diluted Earnings per ADS: RMB4.36 ($0.61), a 71% year-over-year decrease.
• Net Cash Provided by Operating Activities: RMB10,099 million ($1,419 million), a 68% decrease.
• Free Cash Flow: Outflow of RMB21,840 million ($3,068 million), compared to an inflow of RMB13,735 million in the same quarter of 2024.
• Cash and Other Liquid Investments: RMB573,889 million ($80,614 million) as of September 30, 2025.

Key Financial Highlights for the Six Months Ended September 30, 2025:

• Revenue: RMB495,447 million ($69,595 million), a 3% year-over-year increase. Excluding revenue from disposed businesses, revenue on a like-for-like basis would have grown by 12%.
• Income from Operations: RMB40,353 million ($5,668 million), down 43% year-over-year.
• Adjusted EBITA: RMB47,917 million ($6,731 million), a 44% decrease year-over-year, mainly due to investments in quick commerce and technology.
• Net Income Attributable to Ordinary Shareholders: RMB64,106 million ($9,005 million).
• Net Income: RMB62,994 million ($8,849 million), a 7% decrease year-over-year.
• Non-GAAP Net Income: RMB43,862 million ($6,161 million), a 43% decrease compared to the same period of 2024.
• Diluted Earnings per ADS: RMB26.73 ($3.75).
• Non-GAAP Diluted Earnings per ADS: RMB19.10 ($2.68), a 39% year-over-year decrease.
• Net Cash Provided by Operating Activities: RMB30,771 million ($4,322 million), a 53% decrease.
• Free Cash Flow: Outflow of RMB40,655 million ($5,711 million), compared to an inflow of RMB31,107 million in the same period of 2024.
• Cash and Other Liquid Investments: RMB573,889 million ($80,614 million) as of September 30, 2025.

The results indicate that while topline growth continues, profitability is being impacted by substantial long-term investments. This strategic shift reflects Alibaba’s determination to solidify its position in emerging technologies like AI and expand its reach in the increasingly competitive e-commerce landscape.

Business Segment Performance:

Alibaba China E-commerce Group: Revenue increased 16% to RMB132,578 million ($18,623 million), driven by customer management revenue growth and scaling of quick commerce.

Alibaba International Digital Commerce Group (AIDC): Revenue grew 10% to RMB34,799 million ($4,888 million), showing diversification and enrichment of product offerings through localization and AI-powered B2B procurement engines.

Cloud Intelligence Group: Revenue surged 34% to RMB39,824 million ($5,594 million), fueled by public cloud adoption and AI-related products. The AI products are seeing increased use across a diverse range of enterprise customers, particularly in value-added applications like coding assistants.

Notably, Alibaba Cloud is positioning itself at the forefront of China’s AI cloud market with its full-stack AI capabilities. “AI-related product revenue continued to show strong momentum, delivering another quarter of triple-digit year-over-year growth, “ the company reported, further emphasizing the growing importance of artificial intelligence to Alibaba. The company states that more than 180,000 derivative models had been developed based on its Qwen family of models on Hugging Face as of October 31, 2025.

Share Repurchases: In the reported quarter, Alibaba repurchased 17 million ordinary shares for $253 million. As of September 30, 2025, the company had $19.1 billion remaining under its share repurchase program, set to be effective through March 2027.

While Alibaba’s financials reveal a company in transition, prioritizing strategic investments over immediate profits, its leadership remains optimistic about its long-term prospects in AI, cloud computing, and evolving e-commerce models.

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