Alibaba delivered mixed first quarter results as revenue missed expectations, earnings were well ahead, and the company grew its global customer base.
The e-commerce giant's results mirrored Amazon earnings, which showed a slowdown in e-commerce growth. However, Amazon's profits were fine due to Amazon Web Services. Alibaba earnings were also strong, and the company said it will increase its share buyback program from $10 billion to $15 billion.
Alibaba has been under fire from Chinese regulators. China's government has been reining in its tech giants and many of them have been whacked in the US market.
For the first quarter, Alibaba reported revenue of RMB205.74 billion ($31.86 billion), up 34% from a year ago. Net income was RMB45.14 billion ($6.99 billion) and non-GAAP earnings were $6.46 billion. On an adjusted basis, the company earned 16.60 yuan per share.
Wall Street was expecting revenue of 209.39 billion yuan with adjusted earnings of 14.43 yuan per share, according to IBES data from Refinitiv.
Daniel Zhang, CEO of Alibaba, said global June global active consumers across the company's ecosystem hit 1.18 billion, up 45 million from the previous quarter. Of that tally, 912 million active consumers are in China. Zhang said the company is focused on the long run and investing in its business.
Zhang also addressed the China regulatory landscape. He said:
I believe our investors will be even more focused on the recent regulatory change in the China Internet industry and expected impact on Alibaba. We are in the process of studying the regulatory requirements, evaluating the potential impact on our relevant businesses, and we will respond positively with actions. We believe all these new regulations aim to foster the healthy environment of the Internet industry over the long run. In the context of China's economic growth and livelihood improvements, this is consistent with Alibaba's strong term mission and vision to serve SMEs with digital technology to serve the underprivileged groups and to serve our consumers' demand for better life. We continue to stay optimistic about the long-term potential of China's economy and the long-term growth prospects of Alibaba. We will fulfill our responsibilities as a platform in accordance with the regulatory requirements and continue to carry out our commitment to be a good company that creates long-term value for the society in China and globally.
Alibaba said its cloud unit delivered first quarter revenue of $2.49 billion, up 29% from a year ago. That growth rate slowed due to the loss of a large customer. Alibaba said:
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.
Zhang said on a conference call that excluding that large customer "Alibaba Cloud revenue growth this quarter would be close to 40% year-over-year.
On the commerce front, Alibaba said it is broadening its offerings as it faces competition from smaller rivals. Growth areas included its secondhand marketplace in China called Idle Fish as well as Taobao Deals.