3 key takeaways from Alibaba Group’s Q4 earnings report

Alibaba Group Holding Ltd (NYSE: BABA) said on Thursday its revenue in the fiscal fourth quarter topped estimates, despite swinging to a loss due to a sizeable anti-monopoly fine.

1. Financial performance

Alibaba reported £610 million of net loss for Q4 that translates to 22 pence per ADS (American Depositary Share). In the same quarter last year, it had posted £350 million of net income, or 13 pence per share. The Chinese multinational attributed its quarterly loss to a recent £2.0 billion anti-monopoly fine.

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

Adjusted for expenses and excluding the fine, Alibaba earned £1.14 per share in the fourth quarter versus the year-ago figure of £1.01 per share. The technology giant generated £20.67 billion of revenue in Q4 – a significant increase from £12.61 billion last year.

According to FactSet, experts had forecast £19.88 billion of revenue for Alibaba in the recent quarter and £1.23 per share of adjusted per ADS earnings (excluding fine).

2. Other notable figures

Other prominent figures in Alibaba’s earnings report include a 72% annualised growth total core commerce revenue and a 37% increase in revenue from cloud computing. Its China retail marketplaces boasted 811 million annual active customers in Q4 that represents an increase of 32 million compared to the start of the year 2021.

Mobile monthly active users, the Hangzhou-headquartered firm added, were 925 million in March 2021, compared to 902 million in December 2020.

3. CFO Maggie Wu’s remarks

Commenting on the earnings report on Thursday, CFO Maggie Wu said:

“Given the market potential and our proven profit and cash-flow generation capabilities, we plan to use all of our incremental profits and additional capital in the fiscal year 2022 to support our merchants and invest into new businesses and key strategic areas that will help us increase consumer wallet share and penetrate into new addressable markets.”

In separate news, Samsung said it raised its non-memory chip investment to £107.47 billion as South Korea offered bigger tax breaks.

Impact on the share price

The NYSE-listed shares of Alibaba tanked roughly 3% in premarket trading on Thursday. Including the price action, the stock is now exchanging hands at £151.53 per share after sliding from a year-to-date high of £192.72 per share in mid-February. In comparison, it had started the year at £162.14 per share.

At the time of writing, Alibaba Group has a market cap of £411.27 billion and a price to earnings ratio of 23.79.