Alibaba Q3 2020: Revenue tops $33 billion as retail climbs, cloud business moves to profit

The firm's retail marketplace is continuing to attract millions of users on desktop and mobile.

Alibaba has reported strong third-quarter financial results as revenues in the e-commerce market and cloud sector continue to improve.

On Tuesday, February 2, Alibaba Group reported Q3 2020 results (statement) (.PDF), ending December 31, 2020, of $33.8 billion, up 37% year-over-year, with diluted earnings per share (EPS) (ADS) of $4.42, or non-GAAP diluted EPS of $3.38, an increase of 21% year-over-year.

In Q2 2020, Alibaba reported revenues of $22.84 billion with diluted EPS of $1.54, or non-GAAP diluted EPS of $2.65.  

Net income for the quarter was reported as $11.95 billion, or $12.1 billion attributable to standard shareholders. 

Alibaba, which operates under the ticker BABA, reported non-GAAP net income of $9.07 billion. In the previous quarter, the Chinese firm reported $3.9 billion in net income ($6.9 billion non-GAAP). 

Alibaba's China retail marketplace now accounts for 779 million active consumers, in comparison to 757 million in Q2 2020. There were 902 million mobile monthly active users recorded by the end of the quarter.

The Chinese technology giant's cloud business, Alibaba Cloud, reported revenues of $2.47 billion, an increase of 50% year-over-year. This is the first time Alibaba has reported positive adjusted EBITA -- an indicator of profitability -- and the firm cited "the realization of economies of scale" as the reason.

During the 11.11 Global Shopping Festival, Alibaba Cloud's public cloud infrastructure processed 583,000 orders per second at its peak.

"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, Alibaba Group CFO. "We are pleased that our Alibaba Cloud business achieved positive adjusted EBITA during the quarter and Cainiao Network was operating cash flow positive. [This progress] reflects our long-term approach to organically incubate and expand businesses from launch to profitability."

In related company news, Alibaba was hit with an antitrust probe by Chinese regulators who intend to investigate allegations of monopolistic behavior, including "forced exclusivity" demands imposed on merchants. On this matter, Alibaba says that a dedicated taskforce has now been established, and "we will further update the market when the investigation is concluded."

Several weeks ago, the founder of Alibaba, Jack Ma, resurfaced after showing dissent toward Beijing and going off the grid for three months. His return caused shares to jump. 

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