HANGZHOU, China--(BUSINESS WIRE)--#alibaba--Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988, �Alibaba� or �Alibaba Group�) today announced its financial results for the quarter ended June 30, 2021.
�Alibaba started the new fiscal year by delivering a healthy quarter. For the June quarter, global annual active consumers across the Alibaba Ecosystem reached 1.18 billion, an increase of 45 million from the March quarter, which includes 912 million consumers in China. Over more than twenty years of growth, we have developed a company that spans across both consumer and industrial Internet, with multiple engines driving our long-term growth,� said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. �We believe in the growth of the Chinese economy and long-term value creation of Alibaba, and we will continue to strengthen our technology advantage in improving the consumer experience and helping our enterprise customers to accomplish successful digital transformations.�
�We delivered strong revenue growth of 34% year-over-year. As we said in last quarter's results announcement, we are investing our excess profits and additional capital to support our merchants and invest in strategic areas to better serve customers and penetrate into new addressable markets,� said Maggie Wu, Chief Financial Officer of Alibaba Group. �We are increasing our share repurchase program from US$10 billion to US$15 billion, the largest share repurchase program in the Company�s history, because we are confident of our long-term growth prospects. Our net cash position remains strong and we have repurchased approximately US$3.7 billion of our ADSs since April 1, 2021.�
BUSINESS HIGHLIGHTS
In the quarter ended June 30, 2021:
- Revenue was RMB205,740 million (US$31,865 million), an increase of 34% year-over-year. Excluding the consolidation of Sun Art, our revenue would have grown 22% year-over-year to RMB187,306 million (US$29,010 million).
- Annual active consumers of the Alibaba Ecosystem across the world reached approximately 1.18 billion for the twelve months ended June 30, 2021, an increase of 45 million from the twelve months ended March 31, 2021. This includes 912 million consumers in China1 and 265 million consumers overseas served by Lazada, AliExpress, Trendyol and Daraz.
- Income from operations was RMB30,847 million (US$4,778 million), a decrease of 11% year-over-year. Adjusted EBITDA, a non-GAAP measurement, decreased 5% year-over-year to RMB48,628 million (US$7,532 million). Adjusted EBITA, a non-GAAP measurement, decreased 8% year-over-year to RMB41,731 million (US$6,463 million). The year-over-year decreases were primarily due to our investments in strategic areas to capture incremental opportunities, such as Community Marketplaces, Taobao Deals, Local Consumer Services and Lazada, as well as our increased spending on growth initiatives within China retail marketplaces, such as Idle Fish and Taobao Live, and our support to merchants.
- Net income attributable to ordinary shareholders was RMB45,141 million (US$6,991 million), and net income was RMB42,835 million (US$6,634 million). Non-GAAP net income was RMB43,441 million (US$6,728 million), an increase of 10% year-over-year, mainly due to an increase in share of profit of equity method investees.
- Diluted earnings per ADS was RMB16.38 (US$2.54) and diluted earnings per share was RMB2.05 (US$0.32 or HK$2.46). Non-GAAP diluted earnings per ADS was RMB16.60 (US$2.57), an increase of 12% year-over-year and non-GAAP diluted earnings per share was RMB2.08 (US$0.32 or HK$2.50), an increase of 12% year-over-year.
- Net cash provided by operating activities was RMB33,603 million (US$5,204 million). Non-GAAP free cash flow was RMB20,683 million (US$3,203 million), a decrease compared to RMB36,570 million in the same quarter of 2020, mainly due to the partial settlement in the amount of RMB9,114 million (US$1,412 million) of the RMB18,228 million fine levied earlier this year by China�s State Administration for Market Regulation pursuant to China�s Anti-monopoly Law (the �Anti-monopoly Fine�) and a decrease in profit as a result of our investments in key strategic areas.
Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.
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1 | Including 828 million annual active consumers on our China retail marketplaces, and additional unique annual active consumers primarily from Local Consumer Services, Digital Media and Entertainment and Freshippo, for the twelve months ended June 30, 2021. | |
BUSINESS AND STRATEGIC UPDATES
Commerce
China Retail Marketplaces � comprehensive product supply and engaging user experience to target the diverse demands of consumers in China
In June 2021, our China retail marketplaces had 939 million mobile MAUs, representing a quarterly net increase of 14 million. We continue to increase penetration in less-developed areas, reflecting our success in broadening product offerings to meet diverse consumer demand.
During the quarter ended June 30, 2021, our China retail marketplaces recorded solid physical goods GMV growth that reflected strengths in categories such as apparel and accessories, home furnishing and consumer electronics.
Value for Money � Taobao Deals (??) continues to experience robust user growth by providing consumers with more high quality, value-for-money products. We are deepening our direct collaboration with original manufacturers to design, produce and distribute products that are innovative, cost-effective and quality-assured. For the twelve months ended June 30, 2021, annual active consumers of Taobao Deals grew to over 190 million.
Secondhand Consumption � Our consumer-to-consumer community and marketplace in China, Idle Fish (??), continues its robust growth with MAU reaching over 100 million throughout the quarter. Through Idle Fish, users can find a rich variety of secondhand, recycled, refurbished, for-rent and vintage products.
6.18 Mid-Year Shopping Festival � This year�s 6.18 Mid-Year Shopping Festival helped brands and merchants to launch new products and acquire as well as retain customers. We also used the shopping festival opportunity to strengthen our 88VIP membership program. Around 250,000 merchants and brands participated in this year�s festival, more than double the number from last year, launching over 1 million new products. During the festival, brands and merchants acquired tens of millions of brand memberships through our China retail marketplaces. Once consumers become members of a brand, that brand can directly engage them with exclusive offers and privileges.
New Retail � multi-format New Retail businesses built on an expanding digital supply chain and increasingly diversified fulfillment services
We are addressing multiple consumer needs through a full range of high-frequency fulfillment services that include one-hour delivery, half-day delivery and next day delivery. We deepened the development of our Community Marketplaces business that offers next-day pickup in select regions. This new retail format will help to further expand our user base in less-developed and rural areas, and it is an important channel for serving price-sensitive consumers within our multi-dimensional New Retail matrix. The combined capabilities that we have accumulated over the years � product and supply chain; fulfillment and delivery; consumer management; and social commerce channel development and operations � positions Alibaba for improving consumer experience and building a solid foundation to support our entire commerce business.
Community Marketplaces � Our Community Marketplaces business continues to exhibit rapid growth, with GMV and gross floor area of our regional distribution centers (RDC) growing around 200% and 260% quarter over quarter, respectively. We continue to strengthen the consumer experience by enhancing quality product supply and on-time delivery. In this business, we are able to leverage the supply chain capabilities of Sun Art to ensure product quality, availability and price competitiveness.
Sun Art � During the June quarter, Sun Art achieved approximately 28% year-over-year growth in online orders, with the shared inventory initiative with Tmall Supermarket being the biggest growth contributor. In addition, Sun Art is the top supplier of our Community Marketplaces business. As of June 30, 2021, Sun Art has stores in 235 cities across 29 provinces in China, which is supported by its expertise in building strong regional procurement and supply chain capabilities in perishables, FMCG and general merchandise categories.
Local Consumer Services � Reaccelerating order growth supported by improving merchant base
We have stepped up our investment in Ele.me�s user acquisition and user experience enhancement, resulting in strong order growth of over 50% year-over-year during the quarter ended June 30, 2021. To meet increasing demand from new users, we took measures to ensure improvements in our quality merchant base, as evidenced by a year-over-year increase in the portion of GMV contributed by national and regional chains.
Cainiao Network � improving efficiency across the Alibaba Ecosystem and the logistics industry in China and internationally
Cainiao Network continues to expand both its domestic services and global smart logistics network by deepening integration with logistics partners as well as offering more products and services. Increasing merchant adoption of �Fulfilled by Cainiao� services on our fast growing cross-border businesses, including AliExpress and Tmall Global, drove Cainiao Network�s solid revenue growth of 50% year-over-year during the June quarter. We have also seen fast development of Cainiao Network�s domestic business. For example, users are increasingly adopting Cainiao Guoguo, our crowd source delivery platform, with the number of orders in the June quarter growing 63% year-over-year.
International � consistent strong growth
Lazada � Lazada recorded over 90% year-over-year order growth for the quarter ended June 30, 2021. Lazada continued to focus on its localization strategy that increases product supply to address the local consumers� needs and preferences in different markets of Southeast Asia. Additionally, Lazada�s investments in technologies to improve user experience and recommendations on its mobile app have resulted in stronger consumer mindshare and user stickiness, as evidenced by improving frequency of visits by users for the last six consecutive quarters.
Cloud Computing
In the June 2021 quarter, our cloud computing revenue grew 29% year-over-year to RMB16,051 million (US$2,486 million), primarily driven by robust growth in revenue from customers in the Internet, financial services and retail industries. Year-on-year revenue growth began to moderate since the last quarter primarily because of revenue decline from a top cloud customer in the Internet industry that has stopped using our overseas cloud services with respect to their international business due to non-product related requirements. Going forward, we believe that our cloud computing revenue will be further diversified across customers and industries.
DingTalk is an application development platform as well as collaboration platform for enterprise customers. A key strategic initiative is the integration of DingTalk and its adoption by Alibaba Cloud customers. Since we integrated DingTalk into Alibaba Cloud early this year, more customers have adopted both cloud and DingTalk, including large enterprises such as Fosun Group, Shandong Energy and Mengniu Dairy. Starting in the June 2021 quarter, we reclassified the financial performance of DingTalk, which was previously reported under the innovation initiatives and others segment, to the cloud computing segment. Because DingTalk remains in the investment phase, the reclassification of DingTalk�s financials resulted in a lowering of cloud computing profitability and did not materially add to revenue during the quarter.
Digital Media and Entertainment
For the quarter ended June 30, 2021, Youku�s daily average subscriber base increased 17% year-over-year, which is driven primarily by our quality content offerings. Youku has also continued to improve its operational efficiency through disciplined investment in content and optimization of subscriber membership programs that resulted in narrowing of losses year-over-year during the quarter.
Cash Flow from Operating Activities and Free Cash Flow
In the quarter ended June 30, 2021, net cash provided by operating activities was RMB33,603 million (US$5,204 million), a decrease compared to RMB50,099 million in the same quarter of 2020. Free cash flow, a non-GAAP measurement of liquidity, decreased to RMB20,683 million (US$3,203 million), from RMB36,570 million in the same quarter of 2020. The year-over-year decreases were mainly due to the partial settlement in the amount of RMB9,114 million (US$1,412 million) of the RMB18,228 million Anti-monopoly Fine and a decrease in profit as a result of our investments in key strategic areas. A reconciliation of net cash provided by operating activities to free cash flow is included at the end of this results announcement.
Increasing Share Repurchases
Since April 1, 2021 and through the publication of this results announcement, we repurchased approximately 18.1 million of our ADSs (the equivalent of approximately 144.5 million of our ordinary shares) for approximately US$3,680 million under our share repurchase program. In addition, on August 2, 2021, our board of directors authorized the Company to upsize our Company's share repurchase program from US$10 billion to US$15 billion. This share repurchase program will be effective through the end of 2022.
JUNE QUARTER SUMMARY FINANCIAL RESULTS
� | Three months ended June 30, | � | � | ||||||||
� | 2020 | � | 2021 | � | � | ||||||
� | RMB | � | RMB | � | US$(1) | � | YoY % | ||||
� | (in millions, except percentages and per share amounts) | ||||||||||
� | � | � | � | � | |||||||
Revenue | 153,751 | � | 205,740 | � | 31,865 | 34 | % | ||||
� | � | � | � | � | |||||||
Income from operations | 34,705 | � | 30,847 | � | 4,778 | (11 | )%(3) | ||||
Operating margin | 23 | % | 15 | % | � | � | |||||
Adjusted EBITDA(2) | 51,039 | � | 48,628 | � | 7,532 | (5 | )%(3) | ||||
Adjusted EBITDA margin(2) | 33 | % | 24 | % | � | � | |||||
Adjusted EBITA(2) | 45,372 | � | 41,731 | � | 6,463 | (8 | )%(3) | ||||
Adjusted EBITA margin(2) | 30 | % | 20 | % | � | � | |||||
� | � | � | � | � | |||||||
Net income | 46,437 | � | 42,835 | � | 6,634 | (8 | )% | ||||
Net income attributable to ordinary shareholders | 47,591 | � | 45,141 | � | 6,991 | (5 | )% | ||||
Non-GAAP net income(2) | 39,474 | � | 43,441 | � | 6,728 | 10 | % | ||||
� | � | � | � | � | |||||||
Diluted earnings per share(4) | 2.17 | � | 2.05 | � | 0.32 | (6 | )% | ||||
Diluted earnings per ADS(4) | 17.36 | � | 16.38 | � | 2.54 | (6 | )% | ||||
Non-GAAP diluted earnings per share(2) (4) | 1.85 | � | 2.08 | � | 0.32 | 12 | % | ||||
Non-GAAP diluted earnings per ADS(2) (4) | 14.82 | � | 16.60 | � | 2.57 | 12 | % | ||||
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(1) | This results announcement contains translations of certain Renminbi (�RMB�) amounts into U.S. dollars (�US$�) and Hong Kong dollars (�HK$�) for the convenience of the reader. Unless otherwise stated, all translations of RMB into US$ were made at RMB6.4566 to US$1.00, the exchange rate on June 30, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board, and all translations of RMB into HK$ were made at RMB0.83208 to HK$1.00, the middle rate on June 30, 2021 as published by the People�s Bank of China. The percentages stated in this announcement are calculated based on the RMB amounts and there may be minor differences due to rounding. | |
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(2) | See the sections entitled �Information about Segments,� �Non-GAAP Financial Measures� and �Reconciliations of Non-GAAP Measures to the Nearest Comparable U.S. GAAP Measures� for more information about the non-GAAP measures referred to within this results announcement. | |
� | � | |
(3) | The year-over-year decreases were primarily due to our investments in strategic areas to capture incremental opportunities, such as Community Marketplaces, Taobao Deals, Local Consumer Services and Lazada, as well as our increased spending on growth initiatives within China retail marketplaces, such as Idle Fish and Taobao Live, and our support to merchants. | |
� | � | |
(4) | Each ADS represents eight ordinary shares. | |
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JUNE QUARTER INFORMATION BY SEGMENTS
The table below sets forth selected financial information of our operating segments for the periods indicated:
� | Three months ended June 30, 2021 | |||||||||||||||||||
� | � � Commerce(1) | � | � Cloud | � | Digital media | � | Innovation | � | � � Unallocated(3) | � | � � Consolidated | |||||||||
� | RMB | � | RMB | � | RMB | � | RMB | � | RMB | � | RMB | � | US$ | |||||||
� | (in millions, except percentages) | |||||||||||||||||||
Revenue | 180,241 | � | 16,051 | � | 8,073 | � | 1,375 | � | � | � | 205,740 | � | 31,865 | |||||||
Income (Loss) from operations | 39,022 | � | (1,643 | ) | (1,010 | ) | (2,939 | ) | (2,583 | ) | 30,847 | � | 4,778 | |||||||
Add: Share-based compensation expense | 3,780 | 1,979 | � | 383 | 777 | � | 892 | � | 7,811 | � | 1,209 | |||||||||
Add: Amortization of intangible assets | 2,789 | � | 4 | � | 208 | � | 14 | � | 58 | � | 3,073 | � | 476 | |||||||
Adjusted EBITA | 45,591 | (4) | 340 | � | (419 | ) | (2,148 | ) | (1,633 | ) | 41,731 | � | 6,463 | |||||||
Adjusted EBITA margin | 25 | % | 2 | % | (5 | )% | (156 | )% | 20 | % | � | |||||||||
� | Three months ended June 30, 2020 | |||||||||||||||||
� | � � Commerce(1) | � Cloud | Digital media | Innovation | � � Unallocated(3) | � � Consolidated | ||||||||||||
� | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||
� | (in millions, except percentages) | |||||||||||||||||
Revenue | 133,318 | � | 12,437 | � | 6,994 | � | 1,002 | � | � | � | 153,751 | � | ||||||
Income (Loss) from operations | 45,192 | � | (2,691 | ) | (2,018 | ) | (2,648 | ) | (3,130 | ) | 34,705 | � | ||||||
Add: Share-based compensation expense | 3,425 | 1,563 | � | 452 | � | 699 | 1,576 | 7,715 | ||||||||||
Add: Amortization of intangible assets | 2,620 | 7 | 245 | 23 | 57 | 2,952 | ||||||||||||
Adjusted EBITA | 51,237 | (4) | (1,121 | ) | (1,321 | ) | (1,926 | ) | (1,497 | ) | 45,372 | � | ||||||
Adjusted EBITA margin | 38 | % | (9 | )% | (19 | )% | (192 | )% | 30 | % | ||||||||
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(1) | �Commerce� segment was previously referred to as �Core Commerce� segment. | |
� | � | |
(2) | Beginning on April 1, 2021, we reclassified the results of our DingTalk business, which was previously reported under the innovation initiatives and others segment, to the cloud computing segment. This reclassification conforms to the way that we manage and monitor segment performance and reflects the integration of DingTalk with Alibaba Cloud to further facilitate the digital transformation of our enterprise customers. Comparative figures were reclassified to conform to this presentation. | |
� | � | |
(3) | Unallocated expenses primarily relate to corporate administrative costs and other miscellaneous items that are not allocated to individual segments. | |
� | � | |
(4) | Commerce adjusted EBITA before key strategic investments increased 6% year-over-year to RMB59,515 million (US$9,218 million). Starting from the quarter ended March 31, 2021, for purposes of presenting our commerce adjusted EBITA before key strategic investments, we expanded the list of key strategic investment areas that we break out in order to present the progress of these areas. Comparative figures are presented in the same manner accordingly. �Commerce adjusted EBITA before key strategic investments� was previously referred to as �Marketplace-based core commerce adjusted EBITA�. A reconciliation of adjusted EBITA for commerce to commerce adjusted EBITA before key strategic investments is included at the end of this results announcement. | |
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JUNE QUARTER OPERATIONAL AND FINANCIAL RESULTS
Revenue
Revenue for the quarter ended June 30, 2021 was RMB205,740 million (US$31,865 million), an increase of 34% compared to RMB153,751 million in the same quarter of 2020. The increase was mainly driven by the robust revenue growth of our China commerce retail business, which includes the consolidation of Sun Art starting in October 2020, and the revenue growth of our Cainiao logistics services and international commerce retail businesses. Excluding the consolidation of Sun Art, our revenue would have grown 22% year-over-year to RMB187,306 million (US$29,010 million).
The following table sets forth a breakdown of our revenue by segment for the periods indicated:
� | Three months ended June 30, | � | � | ||||||||||||
� | 2020 | � | 2021 | � | � | ||||||||||
� | RMB | � | % of | � | RMB | � | US$ | � | % of | � | YoY % | ||||
� | (in millions, except percentages) | ||||||||||||||
Commerce: | � | � | � | � | � | � | |||||||||
China commerce retail | � | � | � | � | � | � | |||||||||
- Customer management(1) | 71,215 | 46 | % | 81,002 | 12,546 | 39 | % | 14 | % | ||||||
- Others(2) | 30,106 | 20 | % | 54,804 | 8,488 | 27 | % | 82 | % | ||||||
� | 101,321 | 66 | % | 135,806 | 21,034 | 66 | % | 34 | % | ||||||
China commerce wholesale | 3,484 | 2 | % | 3,924 | 608 | 2 | % | 13 | % | ||||||
International commerce retail | 7,012 | 5 | % | 10,800 | 1,672 | 5 | % | 54 | % | ||||||
International commerce wholesale | 3,204 | 2 | % | 4,402 | 682 | 2 | % | 37 | % | ||||||
Cainiao logistics services | 7,713 | 5 | % | 11,601 | 1,797 | 6 | % | 50 | % | ||||||
Local Consumer Services | 7,101 | 5 | % | 8,757 | 1,356 | 4 | % | 23 | % | ||||||
Others | 3,483 | 2 | % | 4,951 | 767 | 2 | % | 42 | % | ||||||
Total commerce | 133,318 | 87 | % | 180,241 | 27,916 | 87 | % | 35 | % | ||||||
� | � | � | � | � | � | � | |||||||||
Cloud computing(3) | 12,437 | 8 | % | 16,051 | 2,486 | 8 | % | 29 | % | ||||||
Digital media and entertainment | 6,994 | 4 | % | 8,073 | 1,250 | 4 | % | 15 | % | ||||||
Innovation initiatives and others(3) | 1,002 | 1 | % | 1,375 | 213 | 1 | % | 37 | % | ||||||
Total | 153,751 | 100 | % | 205,740 | 31,865 | 100 | % | 34 | % | ||||||
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(1) | We presented our commission revenue as part of customer management revenue in order to better reflect our value proposition to merchants on our platforms. Comparative figures are presented in the same manner accordingly. | |
� | � | |
(2) | �Others� revenue under China commerce retail is primarily generated by our direct sales businesses, comprising mainly Sun Art, Tmall Supermarket, Freshippo, direct import and Intime, where revenue is recorded on a gross basis including the cost of inventory. | |
� | � | |
(3) | Beginning on April 1, 2021, we reclassified the results of our DingTalk business, which was previously reported under the innovation initiatives and others segment, to the cloud computing segment. This reclassification conforms to the way that we manage and monitor segment performance and reflects the integration of DingTalk with Alibaba Cloud to further facilitate the digital transformation of our enterprise customers. Comparative figures were reclassified to conform to this presentation. | |
Commerce
- China commerce retail business
Revenue from our China commerce retail business in the quarter ended June 30, 2021 was RMB135,806 million (US$21,034 million), an increase of 34% compared to RMB101,321 million in the same quarter of 2020. Customer management revenue grew 14% year-over-year, primarily due to the growth of online physical goods GMV on our China retail marketplaces. The growth also reflected the increase in revenue from new monetization formats, such as recommendation feeds and an increase in the average unit price per click in search monetization.
�Others� revenue under China commerce retail business was RMB54,804 million (US$8,488 million), achieving year-over-year growth of 82% compared to RMB30,106 million in the same quarter of 2020. The increase was primarily driven by the consolidation of Sun Art, as well as the contributions from our direct sales businesses, including Tmall Supermarket.
- China commerce wholesale business
Revenue from our China commerce wholesale business in the quarter ended June 30, 2021 was RMB3,924 million (US$608 million), an increase of 13% compared to RMB3,484 million in the same quarter of 2020. The increase was primarily due to increases in both average revenue from paying members and the number of paying members on 1688.com.
- International commerce retail business
Revenue from our international commerce retail business in the quarter ended June 30, 2021 was RMB10,800 million (US$1,672 million), an increase of 54% compared to RMB7,012 million in the same quarter of 2020. The increase was primarily due to the growth in revenue generated by Lazada and AliExpress.
- International commerce wholesale business
Revenue from our international commerce wholesale business in the quarter ended June 30, 2021 was RMB4,402 million (US$682 million), an increase of 37% compared to RMB3,204 million in the same quarter of 2020.
Contacts
Investor Relations Contact:
Rob Lin
[email protected]
Media Contacts:
Brion Tingler
[email protected]
Cathy Yan
[email protected]
