BABA-W 1FQ Adjusted Net Profit Drops 38% YoY to RMB20.72 billion, Missing Estimates; Alibaba Group Holding Limited Down 1.4% Pre-Market

BABA-W (09988.HK) +2.000 (+1.610%) Short selling $2.48B; Ratio 21.279% announced its results for the first fiscal quarter ended June 30, 2026. Net profit amounted to RMB10.537 billion, down 75.5% YoY. Diluted EPS was RMB0.46, while diluted earnings per ADS were RMB3.71. Under non-GAAP measures, net profit was RMB20.715 billion, down 38.2% YoY and below market forecasts of RMB25.58 billion. Diluted EPS was RMB1.07, while diluted earnings per ADS were RMB8.52.

Quarterly revenue increased 8.6% YoY to RMB268.953 billion, slightly above market forecasts of RMB268.52 billion. Adjusted EBITA declined 29.6% YoY to RMB27.329 billion. The group attributed the decline to investments in Tech, partly offset by improved operating performance in the cloud business and enhanced operational efficiency across multiple businesses. Operating profit was RMB15.161 billion, down 56.7% YoY.

Revenue from Alibaba Group's core businesses reached RMB205.862 billion for the quarter, up 4% YoY. Among them, revenue from China e-commerce business fell 8% YoY to RMB110.9 billion. Quarterly customer management revenue decreased 7% YoY. Excluding the impact of deemed revenue reductions generated by marketing development programs, comparable customer management revenue increased 1% from the same period last year. The number of 88VIP members continued to record double-digit YoY growth, reaching 64 million as of the end of June. The group said it will continue focusing on expanding and retaining 88VIP members.

Revenue from AI cloud and computing power services increased 45% YoY to RMB48.437 billion, while YoY growth in revenue from external customers accelerated to 45%. Revenue from AI-related products maintained strong momentum at RMB12.376 billion, achieving triple-digit YoY growth for the twelfth consecutive quarter. Alibaba said that since the launch of the Qwen app, 250 million users have used its AI agent functions to experience AI-driven shopping for the first time across e-commerce and other service scenarios.

Capital expenditure surged 75% YoY to RMB67.678 billion. The group explained that the increase was driven by procurement cycle fluctuations, rising CPU computing power demand due to expected continued customer adoption of AI agents, and higher prices for various chip components. During the quarter, Alibaba repurchased 13.4 million ordinary shares, equivalent to 1.7 million ADSs, involving USD162 million.

Alibaba Group Holding Limited (BABA.US) fell 1.4% in US pre-market trading at USD127.16. (gc/a)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-20 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)