Alibaba Group Holding Limited (NYSE: BABA) has just released its fiscal fourth-quarter 2023 results, and the stock market has shown mixed reactions. Although revenue growth was higher than expected, the company had investment losses that were larger than the positive performance indicators.
Revenue Growth and Earnings
Alibaba’s Q4 revenue amounted to $30.73 billion, a 7% year-on-year growth, beyond the analyst consensus estimate. The adjusted earnings per ADS (American Depositary Share) were $1.40, slightly falling short of the consensus estimate of $1.41.
Net Income Plunge
Net income dropped by 86% year-on-year to $453 million because of huge losses from investments in publicly traded companies during the quarter. The adjusted net income dropped 11% annually to $3.38 billion.
Segment Performance
The revenue of Taobao and Tmall Group increased 4% from the previous year to $12.91 billion. The Alibaba International Digital Commerce Group revenue rose by 45% year over year to $3.80 billion. The Local Services Group revenue increased by 19% year over year to $2. Revenue rose 30% year over year to $3.40 billion, mostly because of the cross-border fulfillment services that support AliExpress.
Revenue rose by 3% year-on-year to $3.55 billion. Youku’s revenue has decreased by 1% year-on-year to $685 million, mostly because of the slight drop in Youku’s revenue. The figure dropped by 3% year-on-year to $7.13 billion.
The revenue of China’s commerce retail business grew by 3% year over year to $12.22 billion. The direct sales and other revenue decreased by 2% year over year to $3.42 billion. Chinese trade wholesale business revenue increased by 20% year-on-year to $686 million.
China Commerce Retail Business
The revenue from China’s commerce retail business increased by 3% year-on-year to $12.22 billion. The sales and other income dropped by 2% on a yearly basis to $3.42 billion. The revenue of China commerce wholesale business has increased by 20% year-on-year to $686 million.
International Commerce and Cloud
The Alibaba International Digital Commerce Group witnessed the strong growth, which was mainly due to the cross-border businesses. Cloud Intelligence Group has registered double-digit year-on-year revenue growth. Cainiao Smart Logistics Network enlarged its premium delivery services to more countries.
Youku’s Revenue Decline
The Digital Media and Entertainment Group tumbled slightly because of the slight decrease in Youku’s revenue.
Conclusion
In the fourth quarter of 2023, Alibaba Group Holding Limited (NYSE: BABA) encountered a great investment loss that affected its financial performance. Alibaba is in a tricky situation as it tries to deal with investment risks at the same time as it keeps on growing its revenues.
The investors are always watching the company’s strategic moves, and the effect of the investment decisions is still a major issue in determining the future of Alibaba.
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