Alibaba-W's net profit attributable to shareholders in the first quarter decreased by 75.56% year-on-year, while revenue from AI-related products has achieved triple-digit year-on-year growth for twelve consecutive quarters

According to the Zhitong Finance APP, Alibaba-W (09988) announced its quarterly results for the period ending June 30, 2026, with revenue of 268.953 billion yuan (39.639 billion USD), a year-on-year increase of 9%. Operating profit was 15.161 billion yuan (2.234 billion USD), a year-on-year decrease of 57%. Net profit attributable to ordinary shareholders was 10.537 billion yuan (1.553 billion USD), a year-on-year decrease of 75.56%; non-GAAP net profit was 20.715 billion yuan (3.053 billion USD), a year-on-year decrease of 38%. The net cash flow from operating activities was 22.945 billion yuan (3.382 billion USD), an 11% increase compared to the same period in 2025. Free cash flow (a non-GAAP financial liquidity metric) was a net outflow of 44.670 billion yuan (6.584 billion USD), compared to a net outflow of 18.815 billion yuan in the same period of 2025.

Among them, revenue from AI cloud and computing services was 48.437 billion yuan (7.139 billion USD), with total revenue and external customer revenue both accelerating to a year-on-year growth of 45%. This growth momentum was primarily driven by the increased adoption of AI-related products. Revenue from AI-related products continued to maintain strong momentum, reaching 12.376 billion yuan (1.824 billion USD), achieving a year-on-year growth of triple digits for the twelfth consecutive quarter.

For the quarter ending June 30, 2026, capital expenditures were 67.678 billion yuan (9.975 billion USD), a 75% increase compared to 38.676 billion yuan in the same period of 2025, driven by the group's continued investment in AI infrastructure to meet strong and growing customer demand. The significant year-on-year growth was driven by multiple factors, including fluctuations in procurement cycles, expected increases in CPU computing power driven by the continued adoption of AI intelligent agents by customers, and rising prices of various chip components.

The announcement stated that the decrease in operating profit was mainly due to the reduction in adjusted EBITA, goodwill impairment recognized this year, and a provision related to a €550 million fine imposed by the EU regarding the Digital Services Act. The decrease in net profit was primarily attributed to the reduction in operating profit, a decrease in net gains from the disposal of investments, and a decrease in net gains from the valuation changes of equity investments held.

Alibaba Group CEO Eric Wu stated, "We achieved strong performance this quarter, with the continuous improvement of commercialization returns from our full-stack AI capabilities. Among them, Alibaba Cloud's external commercialization revenue accelerated to a growth of 45%, and revenue from AI-related products has achieved triple-digit year-on-year growth for the twelfth consecutive quarter. The recently released cutting-edge models for language, programming, video, voice, image, and music all rank in the top tier. We launched the AI productivity platform Qianwen Office to enhance enterprise productivity and capabilities. Thanks to our full-stack AI strategy, Alibaba is in a very favorable position to seize the tremendous growth opportunities in the artificial intelligence and AI computing power markets." Alibaba Group Chief Financial Officer Xu Hong stated: "In this quarter, the group's revenue achieved strong growth, and the profit margin of core businesses continued to improve. Among them, the revenue of the cloud division continued to accelerate, with high-quality earnings and operational leverage increasing the EBITA profit margin to 12%; instant retail maintained market share while continuously optimizing efficiency, and the overall profitability of e-commerce remained robust. As the synergies of core businesses are further released and more AI commercialization gradually takes shape, we will have greater flexibility in strategic and financial resources, and continue to invest in full-stack AI capabilities with discipline."