Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988,
“Alibaba” or “Alibaba Group”) today announced its financial results
for the quarter ended December 31, 2020.
“China was the only major economy to achieve positive GDP growth
last year. Thanks to the rapid recovery of China’s economy, Alibaba
had another very healthy quarter,” said Daniel Zhang, Chairman and
Chief Executive Officer of Alibaba Group. “We achieved another
successful 11.11 Global Shopping Festival by stimulating
consumption, satisfying consumer demands and supporting the
business recovery of merchants in response to the impact of the
pandemic. Our cloud computing business continues to expand market
leadership and show strong growth, reflecting the massive potential
of China’s nascent cloud computing market as well as our years of
investment in technology. Looking ahead, we are confident that we
will continue to create value for our customers, lead with
innovation and make our contributions to society.”
“We delivered another solid quarter, with revenue growth of 37%
year-over-year and adjusted EBITDA up 22% year-over-year, while our
strong free cash flow enabled us to further invest in strategic
areas,” said Maggie Wu, Chief Financial Officer of Alibaba Group.
“We are pleased that our Alibaba Cloud business achieved positive
adjusted EBITA during the quarter and Cainiao Network was operating
cash flow positive. These progresses reflect our long-term approach
to organically incubate and expand businesses from launch to
profitability.”
BUSINESS HIGHLIGHTS
In the quarter ended December 31,
2020:
- Revenue was RMB221,084 million (US$33,883 million), an
increase of 37% year-over-year.
- Annual active consumers on our China retail marketplaces
reached 779 million for the twelve months period ended December 31,
2020, an increase of 22 million from the twelve months period ended
September 30, 2020.
- Mobile MAUs on our China retail marketplaces reached 902
million in December 2020, an increase of 21 million over September
2020.
- Income from operations was RMB49,002 million (US$7,510
million), an increase of 24% year-over-year. Adjusted
EBITDA, a non-GAAP measurement, increased 22% year-over-year to
RMB68,380 million (US$10,480 million). Adjusted EBITA, a
non-GAAP measurement, increased 21% year-over-year to RMB61,253
million (US$9,387 million).
- Net income attributable to ordinary shareholders was
RMB79,427 million (US$12,173 million), and net income was
RMB77,977 million (US$11,950 million). Non-GAAP net income
was RMB59,207 million (US$9,074 million), an increase of 27%
year-over-year.
- Diluted earnings per ADS was RMB28.85 (US$4.42) and
non-GAAP diluted earnings per ADS was RMB22.03 (US$3.38), an
increase of 21% year-over-year. Diluted earnings per share
was RMB3.61 (US$0.55 or HK$4.29) and non-GAAP diluted earnings
per share was RMB2.75 (US$0.42 or HK$3.27), an increase of 21%
year-over-year.
- Net cash provided by operating activities was RMB103,208
million (US$15,817 million) and non-GAAP free cash flow was
RMB96,210 million (US$14,745 million).
Reconciliations of GAAP measures to non-GAAP measures presented
above are included at the end of this results announcement.
BUSINESS AND STRATEGIC UPDATES
Core commerce
China Retail Marketplaces – comprehensive product supply and
engaging user experience drive consumer growth and higher purchase
frequency
Consumers
In December 2020, our China retail marketplaces had 902 million
mobile MAUs. Annual active consumers on our China retail
marketplaces was 779 million for the twelve months ended December
31, 2020, representing a quarterly net increase of 22 million. We
continue to grow consumer mindshare and wallet share among our
users, as reflected in higher purchase frequency from all city
tiers.
We continued to increase penetration in less developed areas,
reflecting our success in broadening product offering to meet
diverse demand. One of the key drivers of our acquisition of new
users and consumers in less developed areas is Taobao Deals (特价版).
During the quarter, Taobao Deals achieved rapid user growth by
continuing to expand its value-for-money product supply and
focusing on user acquisition initiatives. Annual active consumers
of Taobao Deals reached over 100 million for the twelve months
period ended December 31, 2020 and mobile MAUs of Taobao Deals also
reached over 100 million in December 2020.
Product Supply
Tmall online physical goods GMV, excluding unpaid orders, grew
19% year-over-year during the December 2020 quarter, supported
primarily by rapid growth of the fast-moving consumer goods (FMCG)
and home furnishing categories, while growth of the consumer
electronics category accelerated year-over-year. The year-over-year
growth rate of Taobao online physical goods GMV, excluding unpaid
orders, was robust for the December 2020 quarter, primarily driven
by solid growth of the apparel and accessories, home furnishing and
consumer electronics categories.
We celebrated the twelfth annual 11.11 Global Shopping Festival
in the quarter, featuring a number of key changes in order to
better serve brands and enhance consumer experience. We extended
what originally was a one-day festival occurring on November 11 to
11 days, running from November 1 through November 11, 2020. This
change created greater opportunities for merchants and brands to
increase sales and build engagement and relationships with their
customers. The extended festival also enhanced the overall shopping
experience of consumers by reducing pressure on logistics demand
and ensuring timely order delivery. The new approach yielded strong
results, attracting a total of over 250,000 brands and 5 million
merchants and generating RMB498.2 billion (US$74.1 billion) in GMV,
excluding unpaid orders, during the 11-day campaign, an increase of
26% compared to the same timeframe in 2019. Over 470 brands
achieved more than RMB100 million in sales, showcasing the virtuous
cycle effects of digital transformation across our ecosystem. The
shopping festival was also an opportunity for brands to launch new
products and build brand awareness. During the festival this year,
there were approximately 30 million new product launches and GMV,
excluding unpaid orders, for new products grew strongly by 35%
year-over-year.
Tmall Global is the premier platform through which international
brands and merchants enter the China market online and build brand
awareness. The number of brands and merchants on the Tmall Global
platform as of December 31, 2020 grew over 60% year-over-year. In
order to better connect international brands with Chinese
consumers, Tmall Global continued to innovate in its cross-border
logistics solutions. Brands that do not have a physical presence in
China can now store inventory in our warehouses located in their
home markets, and Tmall Global facilitates export to China when
orders are placed. This service leverages the capabilities and
economies of scale of Alibaba’s logistics infrastructure to enable
brands to quickly enter the China market while reducing sales
uncertainty and controlling costs. Purchases of products warehoused
and shipped from overseas by Tmall Global grew rapidly, achieving
triple-digit year-over-year growth in GMV, excluding unpaid orders,
during the December quarter.
Engagement
During the December quarter, we introduced the Follow (订阅) and
Entertain (逛逛) features on the front-page of the Taobao app, which
further improved user engagement with brands, merchants, key
opinion leaders (KOLs), vloggers and content creators. On the
Follow landing page, consumers can view new products and promotions
offered by the stores they follow or in which they have
memberships. This feature is an effective method to enhance
consumer loyalty with quality merchants and brands. By browsing the
Entertain channel, consumers can learn about the latest consumption
and lifestyle trends as well as follow their favorite KOLs,
vloggers and content creators. During the quarter, page views
enabled through Taobao front page recommendations grew strongly by
over 90% year-over-year.
Taobao Live is an indispensable branding, marketing and
distribution tool that allows consumers to directly interact with
brands, merchants and KOLs through livestreaming sessions. Our own
businesses, such as Juhuasuan, Ele.me and Fliggy, are also
increasingly leveraging Taobao Live to attract and engage with
consumers. Taobao Live generated over RMB400 billion in GMV for the
twelve months ended December 31, 2020.
New Retail – gaining market share in the grocery category
using multi-banner and multi-format strategy
In October 2020, we completed our acquisition of a controlling
stake in Sun Art Retail Group Limited (“Sun Art”), a leading
hypermarket operator in China, and started consolidating Sun Art’s
results in our financial statements. The increased investment in
Sun Art will allow us to digitalize its offline traffic,
synchronize online and offline channel inventory, broaden supply
chain network and increase online purchases. In the quarter ended
December 31, 2020, online purchases, a majority of which was driven
by Alibaba’s digital technology, represented 24% of Sun Art’s sales
of goods.
Our self-operated grocery retail chain Freshippo (known as
“Hema” in Chinese) achieved healthy double-digit same-store sales
growth during the quarter as we continued to optimize its product
supply and improve customer experience. As of December 31, 2020, we
self-operated 246 Freshippo stores in China. Freshippo will
continue to adopt a multi-format and multi-banner expansion
strategy by developing new shopping formats and scenarios for
consumption of food and beverage and general merchandise. During
the quarter, Freshippo opened its first “X Membership” warehouse
store in Shanghai, which features high-quality products at
competitive prices that can be purchased only by store members.
Local Consumer Services – fast and high-quality growth of
merchants and consumers
Demand for digitalization in the restaurant and service industry
remains strong after the impact of the COVID-19 pandemic in China.
Ele.me has continued to capture this market opportunity, attracting
high-quality merchants by providing digital technology solutions
and other value-added services. The number of registered merchants
grew over 30% year-over-year as of December 31, 2020.
Ele.me’s average daily number of paying members in the December
quarter grew about 30% year-over-year given the successful upgrade
of our membership program and continued onboarding of high-quality
merchants. As part of our New Retail strategy, Ele.me continues to
expand its on-demand delivery services to cover a wider range of
products in categories such as fresh produce and grocery. As of
December 31, 2020, the number of non-restaurant registered
merchants enabled by Ele.me increased by over 80%
year-over-year.
Cainiao Network – improving efficiency across the Alibaba
ecosystem and the logistics industry in China and
internationally
In the December quarter, Cainiao Network revenue grew 51%
year-over-year to RMB11,360 million (US$1,741 million), primarily
due to the increase in volume of orders fulfilled from our fast
growing cross-border and international commerce retail businesses.
Cainiao had positive operating cash flow during the quarter.
Cainiao Network continued to expand both its domestic services
and global smart logistics infrastructure by deepening integration
with logistics partners as well as offering more products and
services. In China, Cainiao and its partners processed over 2.3
billion orders during the 11.11 Global Shopping Festival while
continuing to improve delivery time to enhance consumer experience.
Internationally, Cainiao and its partners continued to invest in
smart logistics infrastructure to serve our global merchants and to
help alleviate logistics capacity constraints caused by the
COVID-19 pandemic. In December 2020, Cainiao deployed more than 200
international chartered cargo flights for our AliExpress business,
which resulted in improved fulfilment efficiency for AliExpress
orders and a reduction of average delivery time by 3.5 days for
order deliveries from China to international markets.
International – consistent strong growth in Southeast Asia
and growth recovery of AliExpress
Lazada – Our Southeast Asian e-commerce platform Lazada
continued to achieve robust growth in both buyers and sellers,
benefiting from acceleration of digitalization across industries in
Southeast Asia. Lazada recorded another quarter of triple-digit
year-over-year order growth despite new waves of the COVID-19
pandemic in many markets where it operates.
AliExpress – Despite logistics disruptions caused by the
COVID-19 pandemic in many markets where it operates, AliExpress, in
partnership with Cainiao, continued to invest and upgrade its
global logistics infrastructure to enhance its cross-border
delivery capabilities and efficiency. These investments have
supported an ongoing growth recovery since the trough in the March
2020 quarter. Excluding the Russia joint venture business, growth
in GMV, excluding unpaid orders, has recovered to a pre-COVID
pandemic level in the December quarter.
Cloud Computing
Alibaba Cloud empowers the digital transformation of enterprises
by providing comprehensive technology solutions and services in the
cloud for a wide range of industries. In the December quarter,
cloud computing revenue grew 50% year-over-year to RMB16,115
million (US$2,470 million), primarily driven by robust growth in
revenue from customers in the Internet and retail industries and
the public sector. For the first time, Alibaba Cloud achieved
positive adjusted EBITA during the quarter due to the realization
of economies of scale.
During the 11.11 Global Shopping Festival, Alibaba Cloud
provided a highly scalable, reliable and secure public cloud
infrastructure, which at its peak processed 583,000 orders per
second. Since we migrated our e-commerce businesses onto the public
cloud a year ago, these businesses are now able to seamlessly
create, upgrade and deploy on a cloud native approach; and this
capability was especially important during the festival, helping us
to improve operating efficiency and ensure business continuity.
Alibaba Cloud continues to invest in research and development of
leading cloud technologies to help our customers undertake digital
transformation and enable the growth of their businesses. Our
proprietary technologies have consistently won recognition from
leading research and advisory organizations such as Gartner and
Forrester. For example, according to Gartner’s November 2020
report, among the large-scale global cloud providers, Alibaba Cloud
is the only Chinese company with the Leader ranking for database
management system under Gartner’s Magic Quadrant measurement.
Digital Media and
Entertainment
Youku maintained its strong focus on providing a superior user
experience and blockbuster content in a wide range of genres.
During the quarter, Youku’s average daily subscriber base increased
around 30% year-over-year, driven by the appeal of its original
content and continued contribution from the 88VIP membership
program.
Alibaba Pictures continued its solid track record in content
investment and distribution. For example, Alibaba Pictures invested
in and distributed the top three grossing films during the
three-day New Year holiday in China, which accounted for over 80%
of China box office sales during the period according to Beacon Box
Office data. Alibaba Pictures’ popular original dramas, such as
Professional Single, also contributed to Youku’s strong
subscription growth during the quarter. In addition, Alibaba
Pictures enhanced the production capabilities of popular original
dramas that are exclusively featured on Youku and increased IP
commercialization by content owners on our online marketplaces.
We continued to improve the operational efficiency of our
digital media and entertainment businesses through disciplined
investment in content and production capability. During the
quarter, adjusted EBITA loss for the digital media and
entertainment segment narrowed year-over-year.
Cash Flow from Operating Activities and
Free Cash Flow
In the December 2020 quarter, net cash provided by operating
activities was RMB103,208 million (US$15,817 million), an increase
of 7% compared to RMB96,505 million in the same quarter of 2019.
Free cash flow, a non-GAAP measurement of liquidity, increased by
23% to RMB96,210 million (US$14,745 million), from RMB78,279
million in the same quarter of 2019, mainly due to our robust
profit growth. A reconciliation of net cash provided by operating
activities to free cash flow is included at the end of this results
announcement.
Share Repurchase
On December 28, 2020, we announced that our board of directors
authorized an upsize of our share repurchase program from US$6
billion to US$10 billion, for a two-year period through the end of
2022. During the quarter ended December 31, 2020, we repurchased
approximately 540,000 of our ADSs (or approximately 4.3 million of
our ordinary shares) for approximately US$118 million under the
share repurchase program. As of December 31, 2020, we had
approximately 21.7 billion ordinary shares (equivalent to
approximately 2.71 billion ADSs) issued and outstanding.
Anti-monopoly
Investigation
On December 24, 2020, Alibaba Group received a notice of an
investigation from the State Administration for Market Regulation
(“SAMR”) that it had commenced an investigation pursuant to the PRC
Anti-monopoly Law. The investigation is ongoing and we are fully
cooperating with the SAMR. We have established a special taskforce
with leaders from our relevant business units to conduct internal
reviews. We will continue to actively communicate with the SAMR on
compliance with regulatory requirements. We will further update the
market when the investigation is concluded.
Update on Ant Group
On November 3, 2020, Ant Group announced the suspension of its
proposed dual listings and initial public offering on the Shanghai
Stock Exchange STAR board and the Hong Kong Stock Exchange. Due to
recent significant changes in the Fintech regulatory environment in
China, Ant Group is in the process of developing its rectification
plan, which will need to go through the relevant regulatory
procedures. Therefore, Ant Group’s business prospects and IPO plans
are subject to substantial uncertainties. Currently, we are unable
to make a complete and fair assessment of the impact that these
changes and uncertainties will have on Alibaba Group. We will
update the market once Ant Group has completed the relevant
regulatory procedures for its rectification plan.
KEY OPERATIONAL METRICS*
December 31,
September 30,
December 31,
Net adds
2019
2020
2020
YoY
QoQ
China Commerce Retail:
Annual active consumers(1) (in
millions)
711
757
779
68
22
Mobile monthly active users (MAUs)(2) (in
millions)
824
881
902
78
21
_____________________
*
For definitions of terms used but not
defined in this results announcement, please refer to our annual
report for the fiscal year ended March 31, 2020.
(1)
For the twelve months ended on the
respective dates.
(2)
For the month ended on the respective
dates.
DECEMBER QUARTER SUMMARY FINANCIAL
RESULTS
Three months ended December
31,
2019
2020
RMB
RMB
US$(1)
YoY % Change
(in millions, except
percentages and per share amounts)
Revenue
161,456
221,084
33,883
37
%
Income from operations
39,560
49,002
7,510
24
%
Operating margin
25
%
22
%
Adjusted EBITDA(2)
55,880
68,380
10,480
22
%
Adjusted EBITDA margin(2)
35
%
31
%
Adjusted EBITA(2)
50,662
61,253
9,387
21
%
Adjusted EBITA margin(2)
31
%
28
%
Net income
50,132
77,977
11,950
56
%(3)
Net income attributable to ordinary
shareholders
52,309
79,427
12,173
52
%(3)
Non-GAAP net income(2)
46,493
59,207
9,074
27
%
Diluted earnings per share(4)
2.44
3.61
0.55
48
%(3)
Diluted earnings per ADS(4)
19.55
28.85
4.42
48
%(3)
Non-GAAP Diluted earnings per share(2)
(4)
2.27
2.75
0.42
21
%
Non-GAAP Diluted earnings per ADS(2)
(4)
18.19
22.03
3.38
21
%
_____________________
(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 RMB6.5250 to US$1.00, the exchange rate on December
31, 2020 as set forth in the H.10 statistical release of the
Federal Reserve Board, and all translations of RMB into HK$ were
made at RMB0.84164 to HK$1.00, the middle rate on December 31, 2020
as published by the People’s Bank of China. The percentages stated
in this announcement are calculated based on the RMB amounts and
there may be minor differences due to rounding.
(2)
See the sections entitled “Information
about Segments,” “Non-GAAP Financial Measures” and “Reconciliations
of Non-GAAP Measures to the Nearest Comparable U.S. GAAP Measures”
for more information about the non-GAAP measures referred to within
this results announcement.
(3)
The year-over-year increase was mainly due
to an increase in the net gain arising from increases in the market
prices of our equity investments in publicly-traded companies in
the quarter ended December 31, 2020.
(4)
Each ADS represents eight ordinary
shares.
DECEMBER QUARTER INFORMATION BY SEGMENTS
The table below sets forth selected financial information of our
operating segments for the periods indicated:
Three months ended December
31, 2020
Core commerce
Cloud computing
Digital media and
entertainment(1)
Innovation initiatives and
others(1)
Unallocated(2)
Consolidated
RMB
RMB
RMB
RMB
RMB
RMB
US$
(in millions, except
percentages)
Revenue
195,541
16,115
8,079
1,349
—
221,084
33,883
Income (Loss) from operations
59,513
(2,044
)
(2,387
)
(3,454
)
(2,626
)
49,002
7,510
Add: Share-based compensation expense
4,269
2,063
770
1,439
538
9,079
1,391
Add: Amortization of intangible assets
2,855
5
228
23
61
3,172
486
Adjusted EBITA
66,637
(3)
24
(1,389
)
(1,992
)
(2,027
)
61,253
9,387
Adjusted EBITA margin
34
%
0
%
(17
)%
(148
)%
28
%
Three months ended December
31, 2019
Core commerce
Cloud computing
Digital media and
entertainment(1)
Innovation initiatives and
others(1)
Unallocated(2)
Consolidated
RMB
RMB
RMB
RMB
RMB
RMB
(in millions, except
percentages)
Revenue
141,475
10,721
8,028
1,232
—
161,456
Income (Loss) from operations
51,347
(1,822
)
(4,094
)
(2,722
)
(3,149
)
39,560
Add: Share-based compensation expense
3,863
1,460
364
931
1,212
7,830
Add: Amortization of intangible assets
2,865
6
330
23
48
3,272
Adjusted EBITA
58,075
(356
)
(3,400
)
(1,768
)
(1,889
)
50,662
Adjusted EBITA margin
41
%
(3
)%
(42
)%
(144
)%
31
%
_____________________
(1)
Beginning on April 1, 2020, we
reclassified the results of our self-developed online games
business, which was previously reported under the innovation
initiatives and others segment, to the digital media and
entertainment segment because it has moved beyond the incubation
stage. This reclassification conforms to the way that we manage and
monitor segment performance. Comparative figures were reclassified
to conform to this presentation.
(2)
Unallocated expenses primarily relate to
corporate administrative costs and other miscellaneous items that
are not allocated to individual segments.
(3)
Marketplace-based core commerce adjusted
EBITA for the quarter ended December 31, 2020 was RMB73,327 million
(US$11,238 million). A reconciliation of adjusted EBITA for core
commerce to marketplace-based core commerce adjusted EBITA is
included at the end of this results announcement.
DECEMBER QUARTER OPERATIONAL AND FINANCIAL RESULTS
Revenue
Revenue for the quarter ended December 31, 2020 was RMB221,084
million (US$33,883 million), an increase of 37% compared to
RMB161,456 million in the same quarter of 2019. The increase was
mainly driven by the robust revenue growth of our China commerce
retail business, which includes the consolidation of Sun Art
starting in October 2020, and the strong revenue growth of our
cloud computing business. Excluding the consolidation of Sun Art,
our revenue would have grown 27% year-over-year.
The following table sets forth a breakdown of our revenue by
segment for the periods indicated:
Three months ended December
31,
2019
2020
RMB
% of Revenue
RMB
US$
% of Revenue
YoY % Change
(in millions, except
percentages)
Core commerce:
China commerce retail
- Customer management(1)
84,644
52%
101,919
15,620
46%
20%
- Others(2)
25,814
16%
51,760
7,932
23%
101%
110,458
68%
153,679
23,552
69%
39%
China commerce wholesale
3,365
2%
3,831
587
2%
14%
International commerce retail
7,396
5%
10,158
1,557
5%
37%
International commerce wholesale
2,457
1%
3,762
577
2%
53%
Cainiao logistics services
7,518
5%
11,360
1,741
5%
51%
Local consumer services
7,584
5%
8,348
1,279
4%
10%
Others
2,697
2%
4,403
675
2%
63%
Total core commerce
141,475
88%
195,541
29,968
89%
38%
Cloud computing
10,721
7%
16,115
2,470
7%
50%
Digital media and entertainment(3)
8,028
5%
8,079
1,238
4%
1%
Innovation initiatives and others(3)
1,232
0%
1,349
207
0%
9%
Total
161,456
100%
221,084
33,883
100%
37%
_____________________
(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 were presented in the same manner accordingly.
(2)
“Others” revenue under China commerce
retail is primarily generated by our New Retail and direct sales
businesses, comprising mainly Sun Art, Tmall Supermarket,
Freshippo, direct import and Intime.
(3)
Beginning on April 1, 2020, we
reclassified revenue from our self-developed online games business,
which was previously reported under the innovation initiatives and
others segment, as revenue from digital media and entertainment
segment because it has moved beyond the incubation stage. This
reclassification conforms to the way that we manage and monitor
segment performance. Comparative figures were reclassified to
conform to this presentation.
Core commerce
- China commerce retail business Revenue from our China
commerce retail business in the quarter ended December 31, 2020 was
RMB153,679 million (US$23,552 million), an increase of 39% compared
to RMB110,458 million in the same quarter of 2019. Customer
management revenue grew 20% year-over-year, primarily due to robust
growth in revenue from new monetization formats, such as
recommendation feeds, an increase in the average unit price per
click in search monetization, as well as the 19% year-over-year
growth of Tmall online physical goods GMV, excluding unpaid orders.
“Others” revenue under China commerce retail business was RMB51,760
million (US$7,932 million), achieving year-over-year growth of 101%
compared to RMB25,814 million in the same quarter of 2019. The
increase was primarily driven by the consolidation of Sun Art, as
well as the contributions from our direct sales businesses,
including Tmall Supermarket and Freshippo. The proportion of
revenue from our direct sales businesses increased this quarter
after we began to consolidate Sun Art in October 2020. We expect
that the proportion of revenue of our direct sales businesses will
continue to increase as we further implement our New Retail
strategy.
- China commerce wholesale business Revenue from our China
commerce wholesale business in the quarter ended December 31, 2020
was RMB3,831 million (US$587 million), an increase of 14% compared
to RMB3,365 million in the same quarter of 2019. 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
December 31, 2020 was RMB10,158 million (US$1,557 million), an
increase of 37% compared to RMB7,396 million in the same quarter of
2019. The increase was primarily due to the growth in revenue
generated by Lazada and Trendyol.
- International commerce wholesale business Revenue from
our international commerce wholesale business in the quarter ended
December 31, 2020 was RMB3,762 million (US$577 million), an
increase of 53% compared to RMB2,457 million in the same quarter of
2019. The increase was primarily due to increases in both the
number of paying members and average revenue from paying members on
Alibaba.com, as well as an increase in revenue generated by
cross-border related value-added services.
- Cainiao logistics services Revenue from Cainiao
Network’s logistics services, which represents revenue from its
domestic and international one-stop-shop logistics services and
supply chain management solutions, after elimination of
inter-company transactions, was RMB11,360 million (US$1,741
million) in the quarter ended December 31, 2020, an increase of 51%
compared to RMB7,518 million in the same quarter of 2019, primarily
due to the increase in volume of orders fulfilled from our fast
growing cross-border and international commerce retail
businesses.
- Local consumer services Revenue from local consumer
services, which primarily represents platform commissions, fees
from provision of delivery services and other services provided by
our on-demand delivery and local services platform Ele.me, was
RMB8,348 million (US$1,279 million) in the quarter ended December
31, 2020, an increase of 10% compared to RMB7,584 million in the
same quarter of 2019, primarily due to an increase in GMV as well
as more efficient use of subsidies that is contra revenue.
Cloud computing
Revenue from our cloud computing business in the quarter ended
December 31, 2020 was RMB16,115 million (US$2,470 million), an
increase of 50% compared to RMB10,721 million in the same quarter
of 2019, primarily driven by robust growth in revenue from
customers in the Internet and retail industries and the public
sector.
Digital media and entertainment
Revenue from our digital media and entertainment segment in the
quarter ended December 31, 2020 was RMB8,079 million (US$1,238
million), an increase of 1% compared to RMB8,028 million in the
same quarter of 2019. The slight increase was primarily due to the
increase in revenue from online games business, largely offset by
the decrease in revenue from customer management.
Innovation initiatives and others
Revenue from innovation initiatives and others in the quarter
ended December 31, 2020 was RMB1,349 million (US$207 million), an
increase of 9% compared to RMB1,232 million in the same quarter of
2019.
Costs and Expenses
The following tables set forth a breakdown of our costs and
expenses, share-based compensation expense and costs and expenses
excluding share-based compensation expense by function for the
periods indicated.
Three months ended December
31,
% of Revenue YoY
change
2019
2020
RMB
% of Revenue
RMB
US$
% of Revenue
(in millions, except
percentages)
Costs and expenses:
Cost of revenue
84,332
52%
121,268
18,585
55%
3%
Product development expenses
11,077
7%
13,607
2,086
6%
(1)%
Sales and marketing expenses
15,800
9%
25,343
3,884
11%
2%
General and administrative expenses
7,415
5%
8,692
1,332
4%
(1)%
Amortization of intangible assets
3,272
2%
3,172
486
2%
0%
Total costs and expenses
121,896
75%
172,082
26,373
78%
3%
Share-based compensation
expense:
Cost of revenue
1,685
1%
2,143
329
1%
0%
Product development expenses
3,644
2%
4,022
616
2%
0%
Sales and marketing expenses
961
0%
1,085
166
0%
0%
General and administrative expenses
1,540
1%
1,829
280
1%
0%
Total share-based compensation expense
7,830
4%
9,079
1,391
4%
0%
Costs and expenses excluding
share-based compensation expense:
Cost of revenue
82,647
51%
119,125
18,256
54%
3%
Product development expenses
7,433
5%
9,585
1,470
4%
(1)%
Sales and marketing expenses
14,839
9%
24,258
3,718
11%
2%
General and administrative expenses
5,875
4%
6,863
1,052
3%
(1)%
Amortization of intangible assets
3,272
2%
3,172
486
2%
0%
Total costs and expenses excluding
share-based compensation expense
114,066
71%
163,003
24,982
74%
3%
Cost of revenue – Cost of revenue in the quarter ended
December 31, 2020 was RMB121,268 million (US$18,585 million), or
55% of revenue, compared to RMB84,332 million, or 52% of revenue,
in the same quarter of 2019. Without the effect of share-based
compensation expense, cost of revenue as a percentage of revenue
would have increased from 51% in the quarter ended December 31,
2019 to 54% in the quarter ended December 31, 2020. The increase
was primarily attributable to higher proportion of our direct sales
businesses from the consolidation of Sun Art as well as the growth
of our Tmall Supermarket and New Retail businesses, which resulted
in increased cost of inventory, partly offset by a decrease in
delivery costs per order of our local consumer services and a
decrease in content costs of our digital media and entertainment
segment.
Product development expenses – Product development
expenses in the quarter ended December 31, 2020 were RMB13,607
million (US$2,086 million), or 6% of revenue, compared to RMB11,077
million, or 7% of revenue, in the same quarter of 2019. Without the
effect of share-based compensation expense, product development
expenses as a percentage of revenue would have decreased from 5% in
the quarter ended December 31, 2019 to 4% in the quarter ended
December 31, 2020.
Sales and marketing expenses – Sales and marketing
expenses in the quarter ended December 31, 2020 were RMB25,343
million (US$3,884 million), or 11% of revenue, compared to
RMB15,800 million, or 9% of revenue, in the same quarter of 2019.
Without the effect of share-based compensation expense, sales and
marketing expenses as a percentage of revenue would have increased
from 9% in the quarter ended December 31, 2019 to 11% in the
quarter ended December 31, 2020. The increase was primarily due to
an increase in marketing and promotional spending for user
acquisition and retention on our China retail marketplaces.
General and administrative expenses – General and
administrative expenses in the quarter ended December 31, 2020 were
RMB8,692 million (US$1,332 million), or 4% of revenue, compared to
RMB7,415 million, or 5% of revenue, in the same quarter of 2019.
Without the effect of share-based compensation expense, general and
administrative expenses as a percentage of revenue would have
decreased from 4% in the quarter ended December 31, 2019 to 3% in
the quarter ended December 31, 2020.
Share-based compensation expense – Total share-based
compensation expense included in the cost and expense items above
in the quarter ended December 31, 2020 was RMB9,079 million
(US$1,391 million), an increase of 16% compared to RMB7,830 million
in the same quarter of 2019. Share-based compensation expense as a
percentage of revenue remained stable at 4% in the quarter ended
December 31, 2020, as compared to the same quarter last year.
The following table sets forth our analysis of share-based
compensation expense for the quarters indicated by type of
share-based awards:
Three months ended
December 31, 2019
September 30, 2020
December 31, 2020
% Change
RMB
% of Revenue
RMB
% of Revenue
RMB
US$
% of Revenue
YoY
QoQ
(in millions, except
percentages)
By type of awards:
Alibaba Group share-based awards(1)
6,587
4%
7,703
5%
7,694
1,179
4%
17
%
(0)
%
Ant Group share-based awards(2)
347
0%
16,056
10%
542
83
0%
56
%
(97)
%
Others(3)
896
0%
935
1%
843
129
0%
(6)
%
(10)
%
Total share-based compensation expense
7,830
4%
24,694
16%
9,079
1,391
4%
16
%
(63)
%
_____________________
(1)
This represents Alibaba Group share-based
awards granted to our employees.
(2)
This represents Ant Group share-based
awards granted to our employees, which is subject to mark-to-market
accounting treatment.
(3)
Others includes share-based awards of our
subsidiaries.
Share-based compensation expense related to Alibaba Group
share-based awards remained stable in this quarter compared to the
previous quarter.
Share-based compensation expense related to Ant Group
share-based awards decreased in this quarter compared to the
previous quarter, mainly due to the recognition of an increase in
the value of these awards in the previous quarter.
We expect that our share-based compensation expense will
continue to be affected by changes in the fair value of the
underlying awards and the quantity of awards we grant in the
future.
Amortization of intangible assets – Amortization of
intangible assets in the quarter ended December 31, 2020 was
RMB3,172 million (US$486 million), a decrease of 3% from RMB3,272
million in the same quarter of 2019.
Income from operations and operating
margin
Income from operations in the quarter ended December 31, 2020
was RMB49,002 million (US$7,510 million), or 22% of revenue, an
increase of 24% compared to RMB39,560 million, or 25% of revenue,
in the same quarter of 2019.
Adjusted EBITDA and Adjusted
EBITA
Adjusted EBITDA increased 22% year-over-year to RMB68,380
million (US$10,480 million) in the quarter ended December 31, 2020,
compared to RMB55,880 million in the same quarter of 2019.
Excluding the consolidation of Sun Art, our adjusted EBITDA would
have grown 21% year-over-year.
Adjusted EBITA increased 21% year-over-year to RMB61,253 million
(US$9,387 million) in the quarter ended December 31, 2020, compared
to RMB50,662 million in the same quarter of 2019. A reconciliation
of net income to adjusted EBITDA and adjusted EBITA is included at
the end of this results announcement.
Adjusted EBITA and adjusted EBITA
margin by segments
Adjusted EBITA and adjusted EBITA margin by segments are set
forth in the table below. See the section entitled “Information by
Segments” above for a reconciliation of income from operations to
adjusted EBITA.
Three months ended December
31,
2019
2020
RMB
% of Segment Revenue
RMB
US$
% of Segment Revenue
(in millions, except
percentages)
Core commerce
58,075
41
%
66,637
10,213
34
%
Cloud computing
(356
)
(3
)%
24
3
0
%
Digital media and entertainment(1)
(3,400
)
(42
)%
(1,389
)
(213
)
(17
)%
Innovation initiatives and others(1)
(1,768
)
(144
)%
(1,992
)
(305
)
(148
)%
_____________________
(1)
Beginning on April 1, 2020, we
reclassified the results of our self-developed online games
business, which was previously reported under the innovation
initiatives and others segment, to the digital media and
entertainment segment because it has moved beyond the incubation
stage. This reclassification conforms to the way that we manage and
monitor segment performance. Comparative figures were reclassified
to conform to this presentation.
Core commerce segment – Adjusted EBITA increased by 15%
to RMB66,637 million (US$10,213 million) in the quarter ended
December 31, 2020, compared to RMB58,075 million in the same
quarter of 2019, primarily due to an increase in marketplace-based
core commerce adjusted EBITA as well as reduced losses for local
consumer services business. Marketplace-based core commerce
adjusted EBITA increased 10% year-over-year to RMB73,327 million
(US$11,238 million). The growth rate of marketplace-based core
commerce adjusted EBITA has been decreasing because of our
increased strategic investments in certain new businesses within
China retail marketplaces. Our investments in new business
initiatives within China retail marketplaces, such as Taobao Deals,
Taobao Live, Taobao Short Video and Taobao Grocery, will expand our
addressable market in China by enhancing consumer experience and
loyalty and increasing penetration into less developed areas.
Adjusted EBITA margin decreased from 41% in the quarter ended
December 31, 2019 to 34% in the quarter ended December 31, 2020,
primarily due to the consolidation of Sun Art and the increased
revenue contribution from our self-operated New Retail and direct
sales businesses, in respect of which revenue is recorded on a
gross basis, including the cost of inventory.
A reconciliation of adjusted EBITA for core commerce to
marketplace-based core commerce adjusted EBITA is included at the
end of this results announcement.
We expect that our core commerce adjusted EBITA margin will
continue to be affected by the pace of our investment in new
businesses and the growth of our self-operated New Retail and
direct sales businesses.
Cloud computing segment – Adjusted EBITA of RMB24 million
(US$3 million) in the quarter ended December 31, 2020 was
profitable for the first time, compared to a loss of RMB356 million
in the same quarter of 2019, primarily attributable to the
realization of economies of scale.
Digital media and entertainment segment – Adjusted EBITA
in the quarter ended December 31, 2020 was a loss of RMB1,389
million (US$213 million), compared to a loss of RMB3,400 million in
the same quarter of 2019. Adjusted EBITA margin improved to
negative 17% in the quarter ended December 31, 2020 from negative
42% in the quarter ended December 31, 2019, primarily due to
reduced losses in Youku and increased contribution from our online
games business.
Innovation initiatives and others segment – Adjusted
EBITA in the quarter ended December 31, 2020 was a loss of RMB1,992
million (US$305 million), compared to a loss of RMB1,768 million in
the same quarter of 2019, mainly due to our investments in
technological research and innovation.
Interest and investment income,
net
Interest and investment income, net in the quarter ended
December 31, 2020 was RMB40,036 million (US$6,135 million), an
increase from RMB17,136 million in the same quarter of 2019. The
increase is primarily due to an increase in the net gain arising
from increases in the market prices of our equity investments in
publicly-traded companies in the quarter ended December 31, 2020.
In addition, we recognized a one-time gain of RMB6.4 billion
(US$981 million) arising from the revaluation of our previously
held equity interests in Sun Art upon our consolidation in the
quarter ended December 31, 2020, compared to a one-time gain of
RMB10.3 billion recognized in relation to our deconsolidation of
AliExpress Russia businesses in the same quarter of 2019.
The above-mentioned gains were excluded from our non-GAAP net
income.
Other income, net
Other income, net in the quarter ended December 31, 2020 was
RMB2,826 million (US$433 million), compared to RMB987 million in
the same quarter of 2019. The increase in other income, net was
primarily due to the increase in the amount of input VAT
super-credit that can be offset against our VAT payable.
Income tax expenses
Income tax expenses in the quarter ended December 31, 2020 were
RMB9,194 million (US$1,409 million), compared to RMB8,407 million
in the same quarter of 2019.
Our effective tax rate was 10% in the quarter ended December 31,
2020, compared to 15% in the same quarter of 2019. Excluding
share-based compensation expense, revaluation and disposal
gains/losses of investments, impairment of investments, as well as
deferred tax effects arising from our share of results of equity
method investees, our effective tax rate would have been 17% in the
quarter ended December 31, 2020.
Share of results of equity method
investees
Share of results of equity method investees in the quarter ended
December 31, 2020 was a loss of RMB3,601 million (US$552 million),
compared to a profit of RMB2,165 million in the same quarter of
2019. Share of results of equity method investees in the quarter
ended December 31, 2020 and the comparative periods consisted of
the following:
Three months ended
December 31, 2019
September 30, 2020
December 31, 2020
RMB
RMB
RMB
US$
(in millions)
Share of profit (loss) of equity method
investees
- Ant Group
215
4,681
4,796
735
- Others
2,229
987
(100
)
(15
)
Impairment loss
—
(5
)
(7,196
)
(1,103
)
Dilution gain (loss)
166
(3
)
(19
)
(3
)
Others(1)
(445
)
(1,416
)
(1,082
)
(166
)
Total
2,165
4,244
(3,601
)
(552
)
_____________________
(1)
Others mainly include amortization of
intangible assets of equity method investees and share-based
compensation expense related to share-based awards granted to
employees of our equity method investees.
We record our share of results of all equity method investees
one quarter in arrears. We recorded a share of loss of other equity
method investees in the quarter ended December 31, 2020, compared
to a share of profit of other equity method investees in the same
quarter of 2019, primarily because our share of profit of Suning in
the quarter ended December 31, 2019 included a significant one-time
gain arising from Suning’s deconsolidation of one of its
subsidiaries. In addition, we recorded an impairment loss of
RMB7,196 million (US$1,103 million) in this quarter with respect to
certain equity method investees as a result of their prolonged
decline in market values against our carrying values.
The COVID-19 pandemic has caused widespread disruption to the
economy, and the businesses of our equity method investees may
continue to be adversely affected, which could negatively impact
our share of results of equity method investees in future
periods.
Net income and Non-GAAP net
income
Our net income in the quarter ended December 31, 2020 was
RMB77,977 million (US$11,950 million), an increase of 56% compared
to RMB50,132 million in the same quarter of 2019. The
year-over-year increase was mainly due to an increase in the net
gain arising from increases in the market prices of our equity
investments in publicly-traded companies in the quarter ended
December 31, 2020.
Excluding share-based compensation expense, revaluation and
disposal gains/losses of investments, impairment of investments and
certain other items, non-GAAP net income in the quarter ended
December 31, 2020 was RMB59,207 million (US$9,074 million), an
increase of 27% compared to RMB46,493 million in the same quarter
of 2019. A reconciliation of net income to non-GAAP net income is
included at the end of this results announcement.
Net income attributable to ordinary
shareholders
Net income attributable to ordinary shareholders in the quarter
ended December 31, 2020 was RMB79,427 million (US$12,173 million),
an increase of 52% compared to RMB52,309 million in the same
quarter of 2019. The year-over-year increase was mainly due to an
increase in the net gain arising from increases in the market
prices of our equity investments in publicly-traded companies in
the quarter ended December 31, 2020.
Diluted earnings per ADS/share and
non-GAAP diluted earnings per ADS/share
Diluted earnings per ADS in the quarter ended December 31, 2020
was RMB28.85 (US$4.42) on a weighted average of 22,021 million
diluted shares outstanding during the quarter, an increase of 48%
compared to RMB19.55 on a weighted average of 21,393 million
diluted shares outstanding during the same quarter in 2019.
Excluding share-based compensation expense, revaluation and
disposal gains/losses of investments, impairment of investments and
certain other items, non-GAAP diluted earnings per ADS in the
quarter ended December 31, 2020 was RMB22.03 (US$3.38), an increase
of 21% compared to RMB18.19 in the same quarter of 2019.
Diluted earnings per share in the quarter ended December 31,
2020 was RMB3.61 (US$0.55 or HK$4.29), an increase of 48% compared
to RMB2.44 in the same quarter of 2019. Excluding share-based
compensation expense, revaluation and disposal gains/losses of
investments, impairment of investments and certain other items,
non-GAAP diluted earnings per share in the quarter ended December
31, 2020 was RMB2.75 (US$0.42 or HK$3.27), an increase of 21%,
compared to RMB2.27 in the same quarter of 2019.
A reconciliation of diluted earnings per ADS/share to non-GAAP
diluted earnings per ADS/share is included at the end of this
results announcement. Each ADS represents eight ordinary
shares.
Cash, cash equivalents and short-term
investments
As of December 31, 2020, cash, cash equivalents and short-term
investments were RMB456,314 million (US$69,933 million), compared
to RMB405,912 million as of September 30, 2020. The increase in
cash, cash equivalents and short-term investments during the
quarter ended December 31, 2020 was primarily due to free cash flow
generated from operations of RMB96,210 million (US$14,745 million),
partly offset by cash used in investment and acquisition activities
of RMB46,852 million (US$7,180 million).
Cash flow from operating activities and
free cash flow
Net cash provided by operating activities in the quarter ended
December 31, 2020 was RMB103,208 million (US$15,817 million), an
increase of 7% compared to RMB96,505 million in the same quarter of
2019. Free cash flow, a non-GAAP measurement of liquidity, in the
quarter ended December 31, 2020 increased by 23% to RMB96,210
million (US$14,745 million), from RMB78,279 million in the same
quarter of 2019, mainly due to our robust profit growth. A
reconciliation of net cash provided by operating activities to free
cash flow is included at the end of this results announcement.
Net cash used in investing
activities
During the quarter ended December 31, 2020, net cash used in
investing activities of RMB79,712 million (US$12,216 million)
primarily reflected (i) cash outflow of RMB46,852 million (US$7,180
million) for investment and acquisition activities, including the
acquisition of Sun Art, (ii) an increase in short-term investments
by RMB28,433 million (US$4,358 million), as well as (iii) capital
expenditures of RMB5,844 million (US$895 million), which included
cash outflow for acquisition of land use rights and construction in
progress relating to office campuses of RMB975 million (US$149
million).
We adopted ASU 2019-02, “Entertainment — Films — Other Assets —
Film Costs (Subtopic 926-20) and Entertainment — Broadcasters —
Intangibles — Goodwill and Other (Subtopic 920-350),” on April 1,
2020. As a result of our adoption of this new accounting update, we
are now reporting cash outflows for the acquisition of licensed
copyrights as operating activities in the consolidated statements
of cash flows prospectively beginning on April 1, 2020. Prior to
our adoption of ASU 2019-02, cash outflows for the acquisition of
licensed copyrights were previously classified as investing
activities in the consolidated statements of cash flows.
Employees
As of December 31, 2020, we had a total of 252,084 employees,
compared to 122,399 as of September 30, 2020. The increase was
primarily due to the consolidation of Sun Art.
WEBCAST AND CONFERENCE CALL INFORMATION
Alibaba Group’s management will hold a conference call to
discuss the financial results at 7:30 a.m. U.S. Eastern Time (8:30
p.m. Hong Kong Time) on February 2, 2021.
Details of the conference call are as follows: International:
+65 6713 5330 U.S.: +1 347 549 4094 U.K.: +44 203 713 5084 Hong
Kong: +852 3018 8307 China Landline: 800 820 2079 China Mobile: 400
820 6895 Conference ID: 4649348 (English) Conference ID: 1047169
(simultaneous interpretation in Chinese, listen only mode)
A live webcast of the earnings conference call can be accessed
at http://www.alibabagroup.com/en/ir/earnings. An archived webcast
will be available through the same link following the call. A
replay of the conference call will be available for one week
(dial-in number: +61 2 8199 0299; same conference ID as shown
above).
Our results announcement and accompanying slides are available
at Alibaba Group’s Investor Relations website at
http://www.alibabagroup.com/en/ir/home on February 2, 2021.
ABOUT ALIBABA GROUP
Alibaba Group’s mission is to make it easy to do business
anywhere. The company aims to build the future infrastructure of
commerce. It envisions that its customers will meet, work and live
at Alibaba, and that it will be a good company that lasts for 102
years.
SAFE HARBOR STATEMENTS
This announcement contains forward-looking statements. These
statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
“will,” “expects,” “anticipates,” “future,” “intends,” “plans,”
“believes,” “estimates,” “potential,” “continue,” “ongoing,”
“targets,” “guidance” and similar statements. In addition,
statements that are not historical facts, including statements
about Alibaba’s strategies and business plans, Alibaba’s beliefs,
expectations and guidance regarding the growth of its business and
its revenue, the business outlook and quotations from management in
this announcement, as well as Alibaba’s strategic and operational
plans, are or contain forward-looking statements. Alibaba may also
make forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission (the “SEC”), in announcements
made on the website of The Stock Exchange of Hong Kong Limited (the
“Hong Kong Stock Exchange”), in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: Alibaba’s ability to maintain the trusted status of its
ecosystem; risks associated with sustained investments in Alibaba’s
business and strategic acquisitions and investments; Alibaba’s
expected revenue growth and ability to maintain or grow its revenue
or business; Alibaba’s ability to continue to compete effectively
and maintain and improve the network effects of its ecosystem;
company culture; Alibaba’s ability to continue to innovate; risks
and challenges associated with operating a complex and large-scale
company; risks associated with expanding our international and
cross-border businesses and operations; fluctuations in general
economic and business conditions in China and globally; impacts of
the COVID-19 pandemic; uncertainties arising from competition among
countries and geopolitical tensions, including protectionist or
national security policies; changes in laws, regulations and
regulatory environment that affect Alibaba’s business operations;
risks associated with the performance of our business partners,
including but not limited to Ant Group; privacy and data protection
regulations and concerns; and security breaches, and assumptions
underlying or related to any of the foregoing. Further information
regarding these and other risks is included in Alibaba’s filings
with the SEC and announcements on the website of the Hong Kong
Stock Exchange. All information provided in this results
announcement is as of the date of this results announcement and are
based on assumptions that we believe to be reasonable as of this
date, and Alibaba does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, we use the
following non-GAAP financial measures: for our consolidated
results, adjusted EBITDA (including adjusted EBITDA margin),
adjusted EBITA (including adjusted EBITA margin), marketplace-based
core commerce adjusted EBITA, non-GAAP net income, non-GAAP diluted
earnings per share/ADS and free cash flow. For more information on
these non-GAAP financial measures, please refer to the section
entitled “Information about Segments” and the table captioned
“Reconciliations of Non-GAAP Measures to the Nearest Comparable
U.S. GAAP Measures” in this results announcement.
We believe that adjusted EBITDA, adjusted EBITA,
marketplace-based core commerce adjusted EBITA, non-GAAP net income
and non-GAAP diluted earnings per share/ADS help identify
underlying trends in our business that could otherwise be distorted
by the effect of certain income or expenses that we include in
income from operations, net income and diluted earnings per
share/ADS. We believe that these non-GAAP measures provide useful
information about our core operating results, enhance the overall
understanding of our past performance and future prospects and
allow for greater visibility with respect to key metrics used by
our management in its financial and operational decision-making. We
present three different income measures, namely adjusted EBITDA,
adjusted EBITA and non-GAAP net income, as well as one measure that
provides supplemental information on our core commerce segment,
namely marketplace-based core commerce adjusted EBITA, in order to
provide more information and greater transparency to investors
about our operating results.
We consider free cash flow to be a liquidity measure that
provides useful information to management and investors about the
amount of cash generated by our business that can be used for
strategic corporate transactions, including investing in our new
business initiatives, making strategic investments and acquisitions
and strengthening our balance sheet.
Adjusted EBITDA, adjusted EBITA, marketplace-based core commerce
adjusted EBITA, non-GAAP net income, non-GAAP diluted earnings per
share/ADS and free cash flow should not be considered in isolation
or construed as an alternative to income from operations, adjusted
EBITA for core commerce, net income, diluted earnings per
share/ADS, cash flows or any other measure of performance or as an
indicator of our operating performance. These non-GAAP financial
measures presented here do not have standardized meanings
prescribed by U.S. GAAP and may not be comparable to similarly
titled measures presented by other companies. Other companies may
calculate similarly titled measures differently, limiting their
usefulness as comparative measures to our data.
Adjusted EBITDA represents net income before (i) interest
and investment income, net, interest expense, other income, net,
income tax expenses and share of results of equity method
investees, (ii) certain non-cash expenses, consisting of
share-based compensation expense, amortization of intangible
assets, depreciation of property and equipment, operating lease
cost relating to land use rights and impairment of goodwill, which
we do not believe are reflective of our core operating performance
during the periods presented.
Adjusted EBITA represents net income before (i) interest
and investment income, net, interest expense, other income, net,
income tax expenses and share of results of equity method
investees, (ii) certain non-cash expenses, consisting of
share-based compensation expense, amortization of intangible assets
and impairment of goodwill, which we do not believe are reflective
of our core operating performance during the periods presented.
Marketplace-based core commerce adjusted EBITA represents
adjusted EBITA for core commerce excluding the effects of (i) local
consumer services, (ii) Lazada, (iii) New Retail and direct import
and (iv) Cainiao Network. Marketplace-based core commerce adjusted
EBITA reflects the performance of our most established businesses,
namely, those of our China retail marketplaces and wholesale
marketplaces which primarily adopt a marketplace-based approach. By
excluding certain businesses that are in the earlier stages of
their development and with business approaches that continue to
evolve, marketplace-based core commerce adjusted EBITA enables
investors to clearly evaluate the performance of our most
established businesses on a like-for-like basis.
Non-GAAP net income represents net income before
share-based compensation expense, amortization of intangible
assets, impairment of investments and goodwill, gain or loss on
deemed disposals/disposals/revaluation of investments, gain in
relation to the receipt of the 33% equity interest in Ant Group,
amortization of excess value receivable arising from the
restructuring of commercial arrangements with Ant Group and others,
as adjusted for the tax effects on non-GAAP adjustments.
Non-GAAP diluted earnings per share represents non-GAAP
net income attributable to ordinary shareholders divided by the
weighted average number of shares outstanding during the periods on
a diluted basis. Non-GAAP diluted earnings per ADS
represents non-GAAP diluted earnings per share after adjustment to
the ordinary share-to-ADS ratio.
Free cash flow represents net cash provided by operating
activities as presented in our consolidated cash flow statement
less purchases of property and equipment (excluding acquisition of
land use rights and construction in progress relating to office
campuses) and other intangible assets, as well as adjustments to
exclude from net cash provided by operating activities the consumer
protection fund deposits from merchants on our China retail
marketplaces. Prior to April 1, 2020, we also deducted acquisition
of licensed copyrights from cash flows from investing activities.
After our adoption of ASU 2019-02, “Entertainment — Films — Other
Assets — Film Costs (Subtopic 926-20) and Entertainment —
Broadcasters — Intangibles — Goodwill and Other (Subtopic
920-350),” on April 1, 2020, we changed the classification of cash
outflows for the acquisition of licensed copyrights from investing
activities to operating activities in the consolidated statements
of cash flows, prospectively beginning on April 1, 2020. We deduct
certain items of cash flows from investing activities in order to
provide greater transparency into cash flow from our
revenue-generating business operations. We exclude “acquisition of
land use rights and construction in progress relating to office
campuses” because the office campuses are used by us for corporate
and administrative purposes and are not directly related to our
revenue-generating business operations. We also exclude consumer
protection fund deposits from merchants on our China retail
marketplaces because these deposits are restricted for the purpose
of compensating consumers for claims against merchants.
The section entitled “Information about Segments” and the table
captioned “Reconciliations of Non-GAAP Measures to the Nearest
Comparable U.S. GAAP Measures” in this results announcement have
more details on the non-GAAP financial measures that are most
directly comparable to GAAP financial measures and the related
reconciliations between these financial measures.
ALIBABA GROUP HOLDING LIMITED UNAUDITED CONSOLIDATED
INCOME STATEMENTS
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions, except per share
data)
(in millions, except per share
data)
Revenue
161,456
221,084
33,883
395,397
529,894
81,210
Cost of revenue
(84,332
)
(121,268
)
(18,585
)
(209,865
)
(295,751
)
(45,326
)
Product development expenses
(11,077
)
(13,607
)
(2,086
)
(32,493
)
(43,934
)
(6,733
)
Sales and marketing expenses
(15,800
)
(25,343
)
(3,884
)
(38,494
)
(56,366
)
(8,639
)
General and administrative expenses
(7,415
)
(8,692
)
(1,332
)
(20,326
)
(27,490
)
(4,213
)
Amortization of intangible assets
(3,272
)
(3,172
)
(486
)
(9,344
)
(9,012
)
(1,381
)
Impairment of goodwill
—
—
—
(576
)
—
—
Income from operations
39,560
49,002
7,510
84,299
97,341
14,918
Interest and investment income, net
17,136
40,036
6,135
80,671
72,683
11,139
Interest expense
(1,309
)
(1,092
)
(167
)
(4,015
)
(3,316
)
(508
)
Other income, net
987
2,826
433
6,259
5,467
838
Income before income tax and share of
results of equity method investees
56,374
90,772
13,911
167,214
172,175
26,387
Income tax expenses
(8,407
)
(9,194
)
(1,409
)
(17,934
)
(22,229
)
(3,407
)
Share of results of equity method
investees
2,165
(3,601
)
(552
)
(9,278
)
992
152
Net income
50,132
77,977
11,950
140,002
150,938
23,132
Net loss attributable to noncontrolling
interests
2,042
1,558
239
6,211
5,006
767
Net income attributable to Alibaba Group
Holding Limited
52,174
79,535
12,189
146,213
155,944
23,899
Accretion of mezzanine equity
135
(108
)
(16
)
(112
)
(157
)
(24
)
Net income attributable to ordinary
shareholders
52,309
79,427
12,173
146,101
155,787
23,875
Earnings per share attributable to
ordinary shareholders(1)
Basic
2.48
3.67
0.56
7.00
7.21
1.10
Diluted
2.44
3.61
0.55
6.89
7.09
1.09
Earnings per ADS attributable to
ordinary shareholders(1)
Basic
19.87
29.36
4.50
55.98
57.68
8.84
Diluted
19.55
28.85
4.42
55.14
56.71
8.69
Weighted average number of shares used
in calculating earnings per ordinary share (million
shares)(1)
Basic
21,058
21,643
20,878
21,608
Diluted
21,393
22,021
21,187
21,969
_____________________
(1)
Each ADS represents eight ordinary
shares.
ALIBABA GROUP HOLDING LIMITED REVENUE
The following table sets forth our revenue by segments for the
periods indicated:
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Core commerce(1)
141,475
195,541
29,968
342,239
459,781
70,465
Cloud computing(2)
10,721
16,115
2,470
27,799
43,359
6,645
Digital media and entertainment(3)(5)
8,028
8,079
1,238
21,896
23,139
3,546
Innovation initiatives and
others(4)(5)
1,232
1,349
207
3,463
3,615
554
Total
161,456
221,084
33,883
395,397
529,894
81,210
_____________________
(1)
Revenue from core commerce is primarily
generated from our China retail marketplaces, Freshippo, Sun Art,
1688.com, Lazada, AliExpress, Alibaba.com, local consumer services
and Cainiao logistics services.
(2)
Revenue from cloud computing is primarily
generated from the provision of services, such as elastic
computing, database, storage, network virtualization services,
large scale computing, security, management and application
services, big data analytics, a machine learning platform and IoT
services.
(3)
Revenue from digital media and
entertainment is primarily generated from Youku, online games
business and UCWeb.
(4)
Revenue from innovation initiatives and
others is primarily generated from businesses such as Amap, Tmall
Genie and other innovation initiatives. Other revenue also includes
SME annual fee received from Ant Group and its affiliates.
(5)
Beginning on April 1, 2020, we
reclassified revenue from our self-developed online games business,
which was previously reported under the innovation initiatives and
others segment, as revenue from digital media and entertainment
segment because it has moved beyond the incubation stage. This
reclassification conforms to the way that we manage and monitor
segment performance. Comparative figures were reclassified to
conform to this presentation.
ALIBABA GROUP HOLDING LIMITED INFORMATION ABOUT
SEGMENTS
The following table sets forth our income (loss) from operations
by segments for the periods indicated:
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Core commerce
51,347
59,513
9,120
118,465
135,599
20,781
Cloud computing
(1,822
)
(2,044
)
(313
)
(5,259
)
(7,614
)
(1,167
)
Digital media and entertainment(1)
(4,094
)
(2,387
)
(366
)
(10,911
)
(6,756
)
(1,035
)
Innovation initiatives and others(1)
(2,722
)
(3,454
)
(529
)
(8,464
)
(11,301
)
(1,732
)
Unallocated
(3,149
)
(2,626
)
(402
)
(9,532
)
(12,587
)
(1,929
)
Total
39,560
49,002
7,510
84,299
97,341
14,918
_____________________
(1)
Beginning on April 1, 2020, we
reclassified the results of our self-developed online games
business, which was previously reported under the innovation
initiatives and others segment, to the digital media and
entertainment segment because it has moved beyond the incubation
stage. This reclassification conforms to the way that we manage and
monitor segment performance. Comparative figures were reclassified
to conform to this presentation.
The following table sets forth our adjusted EBITA by segments
for the periods indicated:
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Core commerce
58,075
66,637
10,213
137,674
163,832
25,108
Cloud computing
(356
)
24
3
(1,235
)
(474
)
(72
)
Digital media and entertainment(1)
(3,400
)
(1,389
)
(213
)
(8,111
)
(3,420
)
(524
)
Innovation initiatives and others(1)
(1,768
)
(1,992
)
(305
)
(5,379
)
(7,078
)
(1,085
)
Unallocated
(1,889
)
(2,027
)
(311
)
(5,640
)
(5,019
)
(769
)
Total
50,662
61,253
9,387
117,309
147,841
22,658
_____________________
(1)
Beginning on April 1, 2020, we
reclassified the results of our self-developed online games
business, which was previously reported under the innovation
initiatives and others segment, to the digital media and
entertainment segment because it has moved beyond the incubation
stage. This reclassification conforms to the way that we manage and
monitor segment performance. Comparative figures were reclassified
to conform to this presentation.
ALIBABA GROUP HOLDING LIMITED INFORMATION ABOUT
SEGMENTS
The table below sets forth selected financial information of our
operating segments for the nine months ended December 31, 2020:
Nine months ended December 31,
2020
Core commerce
Cloud computing
Digital media and
entertainment(1)
Innovation initiatives and
others(1)
Unallocated(2)
Consolidated
RMB
RMB
RMB
RMB
RMB
RMB
US$
(in millions, except
percentages)
Revenue
459,781
43,359
23,139
3,615
—
529,894
81,210
Income (Loss) from operations
135,599
(7,614
)
(6,756
)
(11,301
)
(12,587
)
97,341
14,918
Add: Share-based compensation expense
20,177
7,123
2,635
4,156
7,397
41,488
6,359
Add: Amortization of intangible assets
8,056
17
701
67
171
9,012
1,381
Adjusted EBITA
163,832
(3)
(474
)
(3,420
)
(7,078
)
(5,019
)
147,841
22,658
Adjusted EBITA margin
36
%
(1
)%
(15
)%
(196
)%
28
%
Nine months ended December 31,
2019
Core commerce
Cloud computing
Digital media and
entertainment(1)
Innovation initiatives and
others(1)
Unallocated(2)
Consolidated
RMB
RMB
RMB
RMB
RMB
RMB
(in millions, except
percentages)
Revenue
342,239
27,799
21,896
3,463
—
395,397
Income (Loss) from operations
118,465
(5,259
)
(10,911
)
(8,464
)
(9,532
)
84,299
Add: Share-based compensation expense
11,074
4,007
1,810
3,022
3,177
23,090
Add: Amortization of intangible assets
8,135
17
990
63
139
9,344
Add: Impairment of goodwill
—
—
—
—
576
576
Adjusted EBITA
137,674
(1,235
)
(8,111
)
(5,379
)
(5,640
)
117,309
Adjusted EBITA margin
40
%
(4
)%
(37
)%
(155
)%
30
%
_____________________
(1)
Beginning on April 1, 2020, we
reclassified the results of our self-developed online games
business, which was previously reported under the innovation
initiatives and others segment, to the digital media and
entertainment segment because it has moved beyond the incubation
stage. This reclassification conforms to the way that we manage and
monitor segment performance. Comparative figures were reclassified
to conform to this presentation.
(2)
Unallocated expenses primarily relate to
corporate administrative costs and other miscellaneous items that
are not allocated to individual segments.
(3)
Marketplace-based core commerce adjusted
EBITA for the nine months ended December 31, 2020 was RMB179,743
million (US$27,547 million). A reconciliation of adjusted EBITA for
core commerce to marketplace-based core commerce adjusted EBITA is
included at the end of this results announcement.
ALIBABA GROUP HOLDING LIMITED UNAUDITED CONSOLIDATED
BALANCE SHEETS
As of March 31,
As of December 31,
2020
2020
RMB
RMB
US$
(in millions)
Assets
Current assets:
Cash and cash equivalents
330,503
312,137
47,837
Short-term investments
28,478
144,177
22,096
Restricted cash and escrow receivables
15,479
16,431
2,518
Equity securities and other
investments
4,234
5,847
896
Prepayments, receivables and other
assets
84,229
119,134
18,259
Total current assets
462,923
597,726
91,606
Equity securities and other
investments
161,329
240,259
36,821
Prepayments, receivables and other
assets
57,985
97,357
14,921
Investment in equity method investees
189,632
185,509
28,430
Property and equipment, net
103,387
147,082
22,541
Intangible assets, net
60,947
73,940
11,332
Goodwill
276,782
293,393
44,964
Total assets
1,312,985
1,635,266
250,615
Liabilities, Mezzanine Equity and
Shareholders’ Equity
Current liabilities:
Current bank borrowings
5,154
5,272
808
Current unsecured senior notes
—
9,775
1,498
Income tax payable
20,190
28,414
4,354
Escrow money payable
3,014
298
46
Accrued expenses, accounts payable and
other liabilities
161,536
224,910
34,469
Merchant deposits
13,640
28,142
4,313
Deferred revenue and customer advances
38,338
61,349
9,402
Total current liabilities
241,872
358,160
54,890
ALIBABA GROUP HOLDING LIMITED UNAUDITED CONSOLIDATED
BALANCE SHEETS (CONTINUED)
As of March 31,
As of December 31,
2020
2020
RMB
RMB
US$
(in millions)
Deferred revenue
2,025
2,723
417
Deferred tax liabilities
43,898
59,031
9,047
Non-current bank borrowings
39,660
38,151
5,847
Non-current unsecured senior notes
80,616
64,501
9,885
Other liabilities
25,263
30,346
4,651
Total liabilities
433,334
552,912
84,737
Commitments and contingencies
—
—
—
Mezzanine equity
9,103
8,443
1,294
Shareholders’ equity:
Ordinary shares
1
1
—
Additional paid-in capital
343,707
388,755
59,579
Treasury shares at cost
—
(773
)
(118
)
Subscription receivables
(51
)
(47
)
(7
)
Statutory reserves
6,100
7,150
1,096
Accumulated other comprehensive loss
(643
)
(19,206
)
(2,944
)
Retained earnings
406,287
561,181
86,005
Total shareholders’ equity
755,401
937,061
143,611
Noncontrolling interests
115,147
136,850
20,973
Total equity
870,548
1,073,911
164,584
Total liabilities, mezzanine equity and
equity
1,312,985
1,635,266
250,615
ALIBABA GROUP HOLDING LIMITED UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Net cash provided by operating
activities(1)
96,505
103,208
15,817
178,443
207,603
31,817
Net cash used in investing
activities(1)
(32,588
)
(79,712
)
(12,216
)
(75,077
)
(216,493
)
(33,179
)
Net cash provided by (used in) financing
activities
61,287
(5,685
)
(871
)
67,886
(188
)
(29
)
Effect of exchange rate changes on cash
and cash equivalents, restricted cash and escrow receivables
(1,952
)
(4,132
)
(634
)
1,778
(8,336
)
(1,278
)
Increase (Decrease) in cash and cash
equivalents, restricted cash and escrow receivables
123,252
13,679
2,096
173,030
(17,414
)
(2,669
)
Cash and cash equivalents, restricted cash
and escrow receivables at beginning of period
248,272
314,889
48,259
198,494
345,982
53,024
Cash and cash equivalents, restricted cash
and escrow receivables at end of period
371,524
328,568
50,355
371,524
328,568
50,355
(1)
We adopted ASU 2019-02, “Entertainment —
Films — Other Assets — Film Costs (Subtopic 926-20) and
Entertainment — Broadcasters — Intangibles — Goodwill and Other
(Subtopic 920-350),” on April 1, 2020. As a result of our adoption
of this new accounting update, we are now reporting cash outflows
for the acquisition of licensed copyrights as operating activities
in the consolidated statements of cash flows prospectively
beginning on April 1, 2020. Prior to our adoption of ASU 2019-02,
cash outflows for the acquisition of licensed copyrights were
previously classified as investing activities in the consolidated
statements of cash flows.
ALIBABA GROUP HOLDING LIMITED RECONCILIATIONS OF
NON-GAAP MEASURES TO THE NEAREST COMPARABLE U.S. GAAP
MEASURES
The table below sets forth a
reconciliation of our net income to adjusted EBITA and adjusted
EBITDA for the periods indicated:
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Net income
50,132
77,977
11,950
140,002
150,938
23,132
Less: Interest and investment income,
net
(17,136
)
(40,036
)
(6,135
)
(80,671
)
(72,683
)
(11,139
)
Add: Interest expense
1,309
1,092
167
4,015
3,316
508
Less: Other income, net
(987
)
(2,826
)
(433
)
(6,259
)
(5,467
)
(838
)
Add: Income tax expenses
8,407
9,194
1,409
17,934
22,229
3,407
Add: Share of results of equity method
investees
(2,165
)
3,601
552
9,278
(992
)
(152
)
Income from operations
39,560
49,002
7,510
84,299
97,341
14,918
Add: Share-based compensation expense
7,830
9,079
1,391
23,090
41,488
6,359
Add: Amortization of intangible assets
3,272
3,172
486
9,344
9,012
1,381
Add: Impairment of goodwill
—
—
—
576
—
—
Adjusted EBITA
50,662
61,253
9,387
117,309
147,841
22,658
Add: Depreciation of property and
equipment, and operating lease cost relating to land use rights
5,218
7,127
1,093
14,910
19,103
2,927
Adjusted EBITDA
55,880
68,380
10,480
132,219
166,944
25,585
ALIBABA GROUP HOLDING LIMITED RECONCILIATIONS OF
NON-GAAP MEASURES TO THE NEAREST COMPARABLE U.S. GAAP MEASURES
(CONTINUED)
The table below sets forth a
reconciliation of adjusted EBITA for core commerce to
marketplace-based core commerce adjusted EBITA for the periods
indicated:
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Adjusted EBITA for core
commerce
58,075
66,637
10,213
137,674
163,832
25,108
Less: Effects of local consumer services,
Lazada, New Retail and direct import and Cainiao Network
8,296
6,690
1,025
21,107
15,911
2,439
Marketplace-based core commerce
adjusted EBITA
66,371
73,327
11,238
158,781
179,743
27,547
ALIBABA GROUP HOLDING LIMITED RECONCILIATIONS OF
NON-GAAP MEASURES TO THE NEAREST COMPARABLE U.S. GAAP MEASURES
(CONTINUED)
The table below sets forth a
reconciliation of our net income to non-GAAP net income for the
periods indicated:
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Net income
50,132
77,977
11,950
140,002
150,938
23,132
Add: Share-based compensation expense
7,830
9,079
1,391
23,090
41,488
6,359
Add: Amortization of intangible assets
3,272
3,172
486
9,344
9,012
1,381
Add: Impairment of investments and
goodwill
4,842
8,436
1,293
24,947
14,205
2,177
Less: Gain on deemed disposals/disposals/
revaluation of investments and others
(17,015
)
(37,639
)
(5,768
)
(15,098
)
(69,390
)
(10,635
)
Less: Gain in relation to the receipt of
the 33% equity interest in Ant Group
(2,336
)
—
—
(71,561
)
—
—
Add: Amortization of excess value
receivable arising from the restructuring of commercial
arrangements with Ant Group
—
—
—
97
—
—
Adjusted for tax effects on non-GAAP
adjustments(1)
(232
)
(1,818
)
(278
)
(629
)
(484
)
(74
)
Non-GAAP net income
46,493
59,207
9,074
110,192
145,769
22,340
_____________________
(1)
Tax effects on non-GAAP adjustments
primarily comprised of tax effects relating to certain gains and
losses from investments, share-based compensation expense and
amortization of intangible assets.
ALIBABA GROUP HOLDING LIMITED RECONCILIATIONS OF
NON-GAAP MEASURES TO THE NEAREST COMPARABLE U.S. GAAP MEASURES
(CONTINUED)
The table below sets forth a
reconciliation of our diluted earnings per share/ADS to non-GAAP
diluted earnings per share/ADS for the periods indicated:
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions, except per share
data)
(in millions, except per share
data)
Net income attributable to ordinary
shareholders – basic
52,309
79,427
12,173
146,101
155,787
23,875
Dilution effect on earnings arising from
option plans operated by equity method investees and
subsidiaries
(32
)
(27
)
(4
)
(47
)
(53
)
(8
)
Net income attributable to ordinary
shareholders – diluted
52,277
79,400
12,169
146,054
155,734
23,867
Add: Non-GAAP adjustments to net
income(1)
(3,639
)
(18,770
)
(2,876
)
(29,810
)
(5,169
)
(792
)
Non-GAAP net income attributable
to ordinary shareholders for computing non-GAAP diluted earnings
per share/ADS
48,638
60,630
9,293
116,244
150,565
23,075
Weighted average number of shares on a
diluted basis (million shares)(5)
21,393
22,021
21,187
21,969
Diluted earnings per
share(2)(5)
2.44
3.61
0.55
6.89
7.09
1.09
Add: Non-GAAP adjustments to net income
per share(3)(5)
(0.17
)
(0.86
)
(0.13
)
(1.40
)
(0.24
)
(0.04
)
Non-GAAP diluted earnings per
share(4)(5)
2.27
2.75
0.42
5.49
6.85
1.05
Diluted earnings per ADS(2)(5)
19.55
28.85
4.42
55.14
56.71
8.69
Add: Non-GAAP adjustments to net income
per ADS(3)(5)
(1.36
)
(6.82
)
(1.04
)
(11.26
)
(1.88
)
(0.29
)
Non-GAAP diluted earnings per
ADS(4)(5)
18.19
22.03
3.38
43.88
54.83
8.40
_____________________
(1)
See the table above for the reconciliation
of net income to non-GAAP net income for more information of these
non-GAAP adjustments.
(2)
Diluted earnings per share is derived from
net income attributable to ordinary shareholders for computing
diluted earnings per share divided by weighted average number of
shares on a diluted basis. Diluted earnings per ADS is derived from
the diluted earnings per share after adjustment to the ordinary
share-to-ADS ratio.
(3)
Non-GAAP adjustments to net income per
share is derived from non-GAAP adjustments to net income divided by
weighted average number of shares on a diluted basis. Non-GAAP
adjustments to net income per ADS is derived from the non-GAAP
adjustments to net income per share after adjustment to the
ordinary share-to-ADS ratio.
(4)
Non-GAAP diluted earnings per share is
derived from non-GAAP net income attributable to ordinary
shareholders for computing non-GAAP diluted earnings per share
divided by weighted average number of shares on a diluted basis.
Non-GAAP diluted earnings per ADS is derived from the non-GAAP
diluted earnings per share after adjustment to the ordinary
share-to-ADS ratio.
(5)
Each ADS represents eight ordinary
shares.
ALIBABA GROUP HOLDING LIMITED RECONCILIATIONS OF
NON-GAAP MEASURES TO THE NEAREST COMPARABLE U.S. GAAP MEASURES
(CONTINUED)
The table below sets forth a reconciliation of net cash provided
by operating activities to free cash flow for the periods
indicated:
Three months ended December
31,
Nine months ended December
31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Net cash provided by operating
activities(1)
96,505
103,208
15,817
178,443
207,603
31,817
Less: Purchase of property and equipment
(excluding land use rights and construction in progress relating to
office campuses)
(5,749
)
(4,869
)
(746
)
(20,781
)
(30,117
)
(4,616
)
Less: Acquisition of licensed
copyrights(1) and other intangible assets
(5,274
)
(15
)
(2
)
(10,120
)
(1,733
)
(266
)
Less: Changes in the consumer protection
fund deposits
(7,203
)
(2,114
)
(324
)
(12,414
)
(2,433
)
(373
)
Free cash flow
78,279
96,210
14,745
135,128
173,320
26,562
_____________________
(1)
We adopted ASU 2019-02, “Entertainment —
Films — Other Assets — Film Costs (Subtopic 926-20) and
Entertainment — Broadcasters — Intangibles — Goodwill and Other
(Subtopic 920-350),” on April 1, 2020. As a result of our adoption
of this new accounting update, we are now reporting cash outflows
for the acquisition of licensed copyrights as operating activities
in the consolidated statements of cash flows prospectively
beginning on April 1, 2020. Prior to our adoption of ASU 2019-02,
cash outflows for the acquisition of licensed copyrights were
previously classified as investing activities in the consolidated
statements of cash flows.
ALIBABA GROUP HOLDING LIMITED SELECTED OPERATING
DATA
Annual active consumers
The table below sets forth the number of active consumers on our
China retail marketplaces for the periods indicated:
Twelve months ended
Mar 31, 2019
Jun 30, 2019
Sep 30, 2019
Dec 31, 2019
Mar 31, 2020
Jun 30, 2020
Sep 30, 2020
Dec 31, 2020
(in millions)
Annual active consumers
654
674
693
711
726
742
757
779
Mobile MAUs
The table below sets forth the mobile MAUs on our various mobile
apps that access our China retail marketplaces for the periods
indicated:
The month ended
Mar 31, 2019
Jun 30, 2019
Sep 30, 2019
Dec 31, 2019
Mar 31, 2020
Jun 30, 2020
Sep 30, 2020
Dec 31, 2020
(in millions)
Mobile MAUs
721
755
785
824
846
874
881
902
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210202005625/en/
Investor Relations Contact: Rob Lin
investor@alibabagroup.com Media Contacts: Brion Tingler
brion.tingler@alibaba-inc.com Cathy Yan
cathy.yan@alibaba-inc.com
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