Alibaba Cloud Q2 revenue up 130 percent as it adds customers, pares losses

Alibaba, China's e-commerce giant, said its second quarter cloud revenue surged 130 percent from a year ago to $224 million as the company continues to add customers.

The company reported second quarter net income of $1 billion, or 45 cents a share, on revenue of $5.14 billion. Non-GAAP earnings were 79 cents a share. Wall Street was looking for adjusted earnings of 69 cents a share on revenue of $5 billion.

While 83 percent of Alibaba's revenue is commerce related, the cloud computing group has moved up to 4 percent of the sales pie from 3 percent a year ago. The operating loss in the second quarter for Alibaba Cloud was $60 million.

Alibaba is aiming to replicate in China what Amazon has done with Amazon Web Services. Alibaba said it had 651,000 paying customers for its cloud services, up from 577,000 in the first quarter. Alibaba Cloud, launched in September 2009, has expanded across companies and industries.

The company said it is "seeing increasing adoption of value-added products including complex data analysis and security." Alibaba provides hosting and security for more than 35 percent of the websites in China.

Meanwhile, Alibaba Cloud now has more than 40,000 developers on board and is focusing on artificial intelligence as a new growth area.

On the commerce front, Taobao, Tmall, and Alibaba's other businesses fared well.