Alibaba Reports Strong Q4 and FY 2025 Results, Driven by AI and Cloud Growth

Alibaba Group has announced its financial results for the quarter and fiscal year ended March 31, 2025, showcasing robust growth and strategic advancements in key areas, particularly AI and cloud computing. Quarterly Highlights In the March quarter, Alibaba’s revenue grew by 7% year-over-year (YoY) to RMB236.454 billion (US$32.584 billion). The company reported a significant increase in income from operations, which rose by 93% to RMB28.465 billion (US$3.923 billion). This surge is attributed to a 36% YoY increase in adjusted EBITA to RMB32.616 billion (US$4.495 billion) and a substantial decrease in share-based compensation expenses. However, free cash flow experienced a 76% drop to RMB3.743 billion (US$516 million) due to increased cloud infrastructure expenditure. Segment Analysis Taobao and Tmall Group Taobao and Tmall’s customer management revenue increased by 12% YoY to RMB71.077 billion (US$9.794 billion), driven by higher take rates and the use of marketing tools like Quanzhantui. Despite a slight decrease in direct sales revenue, total revenue for China commerce retail grew by 8% to RMB95.581 billion (US$13.171 billion). The company continues to invest in user growth, price-competitive products, and AI applications to enhance user experience, leading to a 10% increase in 88VIP members, surpassing 50 million. Alibaba International Digital Commerce Group (AIDC) AIDC revenues grew by 22% to RMB33.579 billion (US$4.627 billion), with strong performances in cross-border businesses and narrowed losses. The unit economics of AliExpress' Choice business improved sequentially. AIDC focuses on key regions such as Europe and the Gulf, enriching product offerings and engaging local merchants and partners to diversify its business model. Cloud Intelligence Group Revenue for the Cloud Intelligence Group increased by 18% to RMB30.127 billion (US$4.152 billion), with public cloud revenue driving much of this growth. AI-related product revenue maintained triple-digit growth for the seventh consecutive quarter. Alibaba’s AI products, including Lingma, an AI coding assistant, saw robust adoption and revenue growth. The company’s Qwen3 series, a new generation of hybrid reasoning models, covers a full range of model sizes and has been open-sourced to drive innovation and adoption. Cainiao Smart Logistics Network Limited (Cainiao) Cainiao’s revenue decreased by 12% to RMB21.573 billion (US$2.973 billion) due to the increasing integration of logistics services into Alibaba’s e-commerce businesses. The group’s adjusted EBITA narrowed to a loss of RMB606 million (US$83 million), down from a loss of RMB1.342 billion (US$184 million) in the previous year. Local Services Group Revenue for the Local Services Group grew by 10% to RMB16.134 billion (US$2.223 billion), driven by the order growth of Amap and Ele.me and revenue from marketing services. Adjusted EBITA losses narrowed to RMB2.316 billion (US$319 million), a 28% improvement from the previous year. Digital Media and Entertainment Group Revenue increased by 12% to RMB5.554 billion (US$765 million), primarily due to the strong performance of Alibaba Pictures and Youku’s advertising revenue. For the first time, the segment reported a positive adjusted EBITA of RMB36 million (US$5 million). Full Fiscal Year 2025 Alibaba’s fiscal year revenue grew by 6% YoY to RMB996.347 billion (US$137.300 billion). The company’s income from operations increased by 24% to RMB140.905 billion (US$19.417 billion), with a 6% YoY increase in adjusted EBITDA to RMB202.325 billion (US$27.881 billion) and a 5% YoY increase in adjusted EBITA to RMB173.065 billion (US$23.849 billion). Taobao and Tmall Group For the full fiscal year, customer management revenue grew by 6% to RMB322.346 billion (US$44.420 billion). Direct sales revenue decreased by 7% to RMB103.180 billion (US$14.219 billion) due to the planned reduction of certain direct sales businesses, but the overall China commerce retail revenue increased by 3% to RMB425.526 billion (US$58.639 billion). AIDC AIDC revenues surged by 29% to RMB132.300 billion (US$18.231 billion). While the segment’s adjusted EBITA losses widened to RMB15.137 billion (US$2.086 billion), this was partly offset by Lazada’s improved operating efficiencies and profitability. Cloud Intelligence Group Revenue increased by 11% to RMB118.028 billion (US$16.265 billion). Adjusted EBITA grew by 72% to RMB10.556 billion (US$1.455 billion), driven by public cloud revenue growth and operational efficiencies. Cainiao Revenue rose by 2% to RMB101.272 billion (US$13.956 billion). The group’s adjusted EBITA decreased by 78% to RMB302 million (US$41 million) due to decreased profits from cross-border fulfillment solutions. Local Services Group Revenue increased by 12% to RMB67.076 billion (US$9.243 billion). Adjusted EBITA losses narrowed by 62% to RMB3.689 billion (US$508 million). Digital Media and Entertainment Group Revenue grew by 5% to RMB22.267 billion (US$3.068 billion), and the adjusted EBITA turned positive primarily due to Youku's profitability. Financial Measures Net income for the fiscal year increased by 77% to RMB125.976 billion (US$17.360 billion). Non-GAAP net income remained stable at RMB158.122 billion (US$21.790 billion). Share repurchases for the fiscal year amounted to US$11.9 billion, resulting in a 5.1% net reduction in outstanding shares. The board approved a total dividend of US$4.6 billion, comprising a regular annual dividend and a one-time special dividend. Strategy and Outlook CEO Eddie Wu emphasized that the company’s “user first, AI-driven” strategy is paying off, with core business growth accelerating and a strong focus on AI and cloud computing. CFO Toby Xu highlighted the company’s commitment to shareholder returns, noting the significant repurchase of shares and approval of dividends. The company will continue to invest in its core businesses and strengthen its competitive position. Industry Evaluation Alibaba’s financial results and strategic initiatives received positive feedback from industry analysts, who praised the company’s focus on AI and cloud technologies as a catalyst for future growth. The launch of the Qwen3 series and the company’s open-source approach to AI are seen as crucial steps in maintaining market leadership and fostering innovation. Analysts also noted the importance of Alibaba’s international expansion through AIDC and the potential synergies created by integrating logistics into its e-commerce ecosystem. Company Profile: Alibaba Group is a leading Chinese multinational technology company with a diverse portfolio of businesses in e-commerce, technology, media, and entertainment. Founded in 1999, Alibaba has become a dominant player in the digital economy, known for its innovative use of AI and cloud services. This summary captures the essential financial and strategic highlights of Alibaba’s Q4 and FY2025 results, emphasizing the company's focus on AI and cloud computing, and its continued investment in user experience and growth across various segments. The positive industry evaluations reflect confidence in Alibaba’s long-term prospects and strategic direction.