Alibaba reported strong second-quarter financial results on Friday, beating analyst expectations and revealing strong growth in the firm's cloud business.
In Q2 2019 (statement), Alibaba reported revenue growth of 40 percent year-over-year, reaching 119 billion yuan ($16.7 billion) and earnings per share of $3.85, or non-GAAP EPS of $1.83, an increase of 36 percent year-over-year.
Alibaba's cloud computing revenue grew by 64 percent year-over-year to 9,291 billion yuan ($1.3 billion) during Q2. The vendor says that demand has been primarily driven by an increase in average revenue per customer, and as of August this year, 59 percent of all registered companies in China are customers of Alibaba Cloud.
Alibaba says that the Chinese market, in both the public sector and traditional industries, is poised for the "transformation of business models and processes through digitization of customer insight, inventory, workflow, resource planning, and other aspects."
"As an Internet technology company that has pioneered digital transformation, we believe that we are uniquely positioned to maintain our leadership in providing cloud services that are not only cost-effective but also enable businesses to operate more intelligently," the company added.
When it comes to Alibaba's active marketplace users, 19 million new users appeared in the 12-month period ending June 30, 2019, bringing Alibaba's annual total up to 693 million. Mobile monthly active users reached 785 million.
"Our digital economy continues to thrive and prosper," said Alibaba CEO Daniel Zhang. "We aim to serve over one billion annual active consumers and help our merchants achieve over 10 trillion [yuan] in annual gross merchandise volume by end of fiscal 2024. We will continue to invest in the user experience and innovative technology to create new value for consumers, as well as the millions of enterprises undergoing digital transformation in the new digital economy."
In related news, last month Alibaba acquired NetEase's Kaola import e-commerce platform in a deal worth $2 billion. The acquisition has been made in light of the import e-commerce market in China, in which Zhang believes has "great growth potential."
Kaola will continue to operate under its own brand.
Another new partnership of note is an agreement inked with MongoDB to provide the database service with an entry point into the Chinese market. Alibaba Cloud will offer MongoDB to clients and will include management of current and past versions of the software, as well as security updates and customer support.