Alibaba Group Holding Limited (NYSE:BABA) has reported non-GAAP earnings of $2.14 per ADS (RMB 15.63) for the second quarter of fiscal 2024, exceeding the Consensus Estimate by 1.4%. This figure represents a 21% increase from the year-ago fiscal quarter’s reported figure in RMB terms.

Revenues of RMB 224.8 billion ($30.8 billion) rose by 9% from the year-ago fiscal quarter’s level. However, the top line fell slightly short of the Consensus Estimate of $31.01 billion.

The revenue growth was propelled by strong momentum in the international commerce retail business, with robust contributions from the local services and Cainiao logistics services segments.

Revenues by Segments:

Taobao and Tmall Group (43.4% of total revenues): Alibaba generated RMB 97.65 billion ($13.4 billion) in revenues from this segment, growing 4% from the year-ago fiscal quarter.

China Commerce Retail (41.2% of total revenues): Revenues reached RMB 92.6 billion ($12.7 billion), reflecting a 3% rise from the year-ago fiscal quarter. The growth was attributed to the strength in customer management revenues and strong sales in the consumer electronics category.

China Commerce Wholesale (2.3% of total revenues): The business generated revenues of RMB 5.1 billion ($698 million), growing by 18% on a year-over-year basis.

Alibaba International Digital Commerce Group (10.9% of total revenues): Alibaba generated RMB 24.5 billion ($3.4 billion) in revenues from this segment, marking a 53% growth from the year-ago fiscal quarter.

International Commerce Retail (8.4% of total revenues): Revenues reached RMB 18.98 billion ($2.6 billion), up 73% from the year-ago fiscal quarter.

International Commerce Wholesale (2.5% of total revenues): The business generated revenues of RMB 5.5 billion ($758 million), increasing by 9% year-over-year.

Local Services Group (6.9% of total revenues): Revenues grossed RMB 15.6 billion ($2.13 billion), up 16% from the year-ago fiscal quarter.

Cainiao Smart Logistics Network (10.1% of total revenues): Revenues summed up to RMB 22.8 billion ($3.1 billion), up 25% from the year-ago fiscal quarter.

Cloud Intelligence Group (12.3% of total revenues): The segment generated revenues of RMB 27.6 billion ($3.8 billion), up 2% from the year-ago fiscal quarter.

Digital Media and Entertainment Group (2.6% of total revenues): Revenues logged RMB 5.8 billion ($792 million), increasing 11% from the year-ago fiscal quarter.

All Others (19.4% of total revenues): Revenues were RMB 48.05 billion ($6.6 billion), down 0.2% from the year-ago fiscal quarter.

Despite a decline in revenues from Sun Art due to a decrease in ticket size, strength across Alibaba Health, Fliggy, Freshippo, and Intelligent Information Platform contributed positively.

Operating Details:

In the fiscal second quarter, sales and marketing expenses were RMB 25.5 billion ($3.5 billion), up 13.9% from the year-ago fiscal quarter’s reported figure, remaining flat at 11% of total revenues.

General and administrative expenses were RMB 9.4 billion ($1.3 billion), down 11.2% from the year-ago fiscal quarter’s level, contracting by 100 basis points (bps) as a percentage of total revenues.

Product development expenses were RMB 14.2 billion ($1.95 billion), down 6.1% from the year-ago fiscal quarter’s reported figure, contracting by 100 bps as a percentage of total revenues.

The operating income was RMB 33.6 billion ($5.9 billion) in the reported quarter, up 34% year over year, with an operating margin of 15%, expanding by 300 bps from the year-ago quarter.

Adjusted EBITDA increased by 14% from the year-ago fiscal quarter’s reported figure to RMB 49.2 billion ($6.7 billion).

Balance Sheet & Cash Flow:

As of Sep 30, 2023, cash and cash equivalents were $33.4 billion (RMB 243.7 billion), up from $31.2 billion (RMB 226.4 billion) as of June 30, 2023.

Short-term investments totaled $40.7 billion (RMB 296.8 billion) at the end of the second quarter of fiscal 2024, up from $39.16 billion (RMB 283.95 billion) at the end of the first quarter of fiscal 2024.

Alibaba generated $6.7 billion (RMB 49.2 billion) in cash from operations in the reported quarter, up from $6.2 billion (RMB 45.3 billion) in the previous fiscal quarter.

BABA’s free cash flow was $6.2 billion (RMB 45.2 billion).

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