Alibaba Group Reports Q2 2025 Results: Strong AI and E-commerce Growth Amid Strategic Investments

Alibaba Group Holding Limited reported its financial results for the quarter ended June 30, 2025, highlighting strong performance in its core e-commerce and cloud computing businesses, driven by strategic investments in quick commerce and AI. The company’s CEO, Eddie Wu, emphasized the success of its “user first” strategy, noting significant growth in user engagement and operational synergies across its consumer platforms. Revenue for the quarter reached RMB247.65 billion (US$34.57 billion), a 2% increase year-over-year. Customer management revenue rose 10% to RMB89.25 billion, fueled by improved take rates and expanded use of Quanzhantui services. Alibaba China E-commerce Group saw a 25% year-over-year increase in monthly active consumers on the Taobao app following the launch of “Taobao Instant Commerce,” a new on-demand delivery service. Cloud Intelligence Group delivered robust growth, with revenue up 26% to RMB33.40 billion. AI-related product revenue achieved triple-digit year-over-year growth for the eighth consecutive quarter, underscoring strong demand for AI infrastructure. Alibaba Cloud was recognized in Omdia’s “Market Radar: GenAI Cloud Titans in Asia & Oceania 2025” report for its full-stack GenAI solutions and developer-friendly AI platforms. Despite strong revenue growth, adjusted EBITA declined 14% to RMB38.84 billion due to heavy investments in quick commerce, user acquisition, and technology enhancements. Income from operations fell 3% to RMB34.99 billion, primarily due to these strategic outlays, partially offset by reduced amortization and share-based compensation expenses. Net income attributable to ordinary shareholders surged 78% to RMB43.12 billion, driven by mark-to-market gains on equity investments and a one-time gain from the disposal of Trendyol’s local consumer service business. However, non-GAAP net income declined 18% to RMB33.51 billion, reflecting the impact of increased spending. Cash and cash equivalents, short-term investments, and other treasury investments totaled RMB585.66 billion as of June 30, 2025. Net cash provided by operating activities dropped 39% to RMB20.67 billion, while free cash flow turned negative at RMB18.82 billion, mainly due to higher cloud infrastructure spending and quick commerce investments. Alibaba also repurchased 56 million ordinary shares (7 million ADSs) for US$815 million during the quarter. The company’s remaining share repurchase authorization stands at US$19.3 billion, valid through March 2027. In a strategic reorganization, Alibaba combined Taobao, Tmall, Ele.me, and Fliggy into a new Alibaba China E-commerce Group. Cainiao, Amap, and Digital Media and Entertainment were reclassified into “All others.” The new segment reporting structure will now include Alibaba China E-commerce Group, Alibaba International Digital Commerce Group, Cloud Intelligence Group, and All others. Alibaba International Digital Commerce Group reported 19% revenue growth, driven by cross-border performance. AIDC’s losses narrowed significantly, with improved unit economics in AliExpress’ Choice and Trendyol’s international operations. The company reaffirmed its commitment to investing in AI and consumer-focused initiatives, positioning itself to capture long-term growth opportunities. Alibaba’s management will host a conference call on August 29, 2025, to discuss the results in detail.