BABA · Alibaba Group Holding Limited

Alibaba Group reported its March quarter 2026 results, showing a mixed performance. Revenue grew 3% year-over-year to RMB243,380 million, but like-for-like revenue (excluding disposed businesses Sun Art and Intime) increased 11%. Customer management revenue rose only 1% (8% like-for-like) due to a new contra revenue program for merchant subsidies. The highlight was Cloud Intelligence Group, with revenue up 38% to RMB41,626 million and external customer revenue accelerating to 40% growth, driven by AI-related products which achieved triple-digit growth for the eleventh consecutive quarter. However, profitability was severely impacted by heavy investments: adjusted EBITA plunged 84% to RMB5,102 million, and GAAP income from operations turned to a loss of RMB848 million. Net income surged 96% to RMB23,502 million, primarily due to mark-to-market gains on equity investments and prior-year disposal losses. Non-GAAP net income collapsed 100% to just RMB86 million. Free cash flow was negative RMB17,300 million, reflecting investments in quick commerce, Qwen app user acquisition, and cloud infrastructure. Management emphasized AI commercialization at scale, with CEO Eddie Wu stating that AI investments have progressed from incubation to commercialization. CFO Toby Xu highlighted confidence in the business outlook and continued investment in AI+Cloud. The results underscore Alibaba's strategic pivot toward AI and cloud, sacrificing near-term profitability for long-term growth.