BABA-W (09988) released its second quarter financial performance with a net profit of 43.547 billion yuan, a 63% year-on-year increase. The peak number of daily active users on Gaode exceeded 300 million, creating a new historical high.

BABA-W (09988) announces its performance for the quarter ending September 30, 2024. The group generated revenue of 236.503 billion RMB (Chinese Yuan), a 5% increase year-on-year; net profit attributable to ordinary shareholders was 43.874 billion RMB, a 58% increase year-on-year; net profit was 43.547 billion RMB, a 63% increase year-on-year; diluted earnings per American Depository Share (ADS) were $18.17 (2.59 USD) and diluted earnings per share were 2.27 RMB. The announcement stated that the increase in net profit was mainly due to changes in the valuation of equity investments held by the group, a decrease in investment impairments, and an increase in operating profit. Taotian Group During this quarter, online GMV growth was driven by double-digit growth in order volume year-on-year, with the growth in orders primarily driven by an increase in purchase frequency, partially offset by a decrease in average order amount. In October and November of this year, the group successfully held the Double 11 Carnival Season, during which GMV of Taobao and Tmall achieved strong growth, reaching a record high number of buyers. 88VIP members are the highest-spending consumer group of the group, with their number continuing to grow in double digits year-on-year, reaching 46 million this quarter. The group's high-end consumers are loyal customers who can increase purchase frequency and drive GMV growth. Therefore, the group is committed to enhancing the benefits and services for members and continuously increasing the number of 88VIP members. Cloud Intelligence Group For the quarter ending September 30, 2024, the Cloud Intelligence Group generated revenue of 29.610 billion RMB (4.219 billion USD), a 7% increase year-on-year. During this quarter, overall revenue (excluding revenue from Alibaba's consolidated businesses) grew by over 7% year-on-year, driven by double-digit growth in public cloud businesses, including an increase in adoption of AI-related products. AI-related product revenue has achieved triple-digit year-on-year growth for five consecutive quarters. The group will continue to invest in customer growth and technology, especially in AI infrastructure, in order to capture the growing trend of AI adoption and maintain its market-leading position. Alibaba Cloud has been recognized as the preferred provider for public cloud and AI training and applications in China. According to "The Forrester Wave: Public Cloud Platforms in China 2024" report, Alibaba Cloud is positioned in the "Leaders quadrant", scoring the highest in 23 out of 32 evaluation criteria, in both product offerings and strategy. This quarter, Alibaba Cloud was also recognized as a "Leaders quadrant" in the "Omdia Universe: Chinese Commercial Foundation Model 2024" report, scoring the highest in strategic execution and technical capabilities. These achievements affirm Alibaba Cloud's position as a leading public cloud and AI platform in China. In September of this year, the group hosted the 16th annual Cloud Computing Developer Conference and Expo "Yunqi Conference 2024." At the conference, the Cloud Intelligence Group announced new technologies, including: - Upgrades to the Tanyi Q&A large model family: The group made significant upgrades to the Tanyi Q&A large model family, including the release of the Tanyi Q&A Open Source Model 2.5 series, which has become one of the leading models in the global open source ecosystem. The flagship version Tanyi Q&A Open Source Model 2.5-72B has shown strong performance in multiple benchmark tests, surpassing industry competitors. Since its first open source release in 2023 until the quarter ending September 30, 2024, over 70,000 derivative models based on the Tanyi family have been developed on Hugging Face, making Tanyi Q&A one of the most widely adopted open source models globally. - Cost-effectiveness and AI inclusivity: Alibaba Cloud is committed to providing customers with the most cost-effective AI capabilities. This quarter, the group significantly improved the cost-effectiveness of Tanyi Q&A model customers by reducing API call rates. This makes advanced AI technology more economically accessible and easier to obtain. - Comprehensive upgrade of AI infrastructure: In order to better seize the opportunities of AI applications, the group strengthened its AI infrastructure to improve scalability and performance. Recently, the group launched GPU container service, and upgraded AI servers and high-performance network products. These improvements have significantly enhanced the efficiency of model training and inference in various industries. For the quarter ending September 30, 2024, Alibaba International Digital Commerce Group (AIDC) reported a 29% year-on-year revenue growth to 31.672 billion RMB (4.513 billion USD). The strong performance continued to be driven by growth in cross-border businesses, particularly in the AliExpress Choice business. AliExpress and Trendyol platforms continued to invest in specific markets in Europe and the Gulf region to enhance consumer awareness. At the same time, the group improved operational and investment efficiency. As a result, the unit economics of the Choice business improved compared to the previous quarter. For the quarter ending September 30, 2024, Cainiao Group (Cainiao) reported an 8% year-on-year revenue increase to 24.647 billion RMB (3.512 billion USD), mainly driven by growth in revenue from cross-border logistics fulfillment solutions. For the quarter ending September 30, 2024, the Local Services Group reported a 14% year-on-year revenue increase to 17.725 billion RMB (2.526 billion USD), driven by growth in orders from Amap and Ele.me, as well as an increase in revenue from marketing services. This quarter, due to operational efficiency improvements and business scale expansion, the Local Services Group significantly narrowed its losses year-on-year. During the National Day holiday in October this year, the peak number of daily active users of Amap exceeded 300 million, reaching a record high. For the quarter ending September 30, 2024, the Digital Entertainment Group reported revenue of 5.694 billion RMB (0.811 billion USD), a 1% year-on-year decrease. The losses of the Digital Entertainment Group narrowed year-on-year, benefiting from increased advertising revenue and improved efficiency in content investment, resulting in gradually reduced operating losses for Youku this quarter. Alibaba Group CEO Wu Yongming said, "This quarter, the Taotian business continued to invest in user experience, enrich product offerings, and better serve consumers. We have established long-term cooperation with technology partners to expand payment and logistics services on the Taobao and Tmall platforms, expecting to significantly benefit the platform as a whole."Incremental effect. The growth of cloud business accelerated in the past several quarters, with double-digit growth in public cloud product revenue and triple-digit growth in AI-related product revenue. We are more confident in the outlook for our core business than in the past and will continue to invest to support long-term growth. The operating efficiency of other businesses continues to improve, with most businesses continuing to improve profitability or reduce losses.Xu Hong, Chief Financial Officer of Alibaba Group, said: "The growth in revenue this quarter was driven by the gradual increase in monetization of Taotian Group, including service fees based on GMV and full-site promotion of merchants using our marketing tools. Consistent with our strategy, we continue to invest in our core business and improve operational efficiency. This quarter, we repurchased $4.1 billion in shares, further reducing the outstanding shares by 2.1% compared to the end of June, to achieve better returns for shareholders."