Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988,
“Alibaba” or “Alibaba Group”) today announced its financial results
for the quarter and fiscal year ended March 31, 2022.
“Alibaba delivered on the goal of serving one billion annual
active consumers in China this past quarter and achieved a record
RMB 8,317 billion in global GMV for the fiscal year. Despite macro
challenges that impacted supply chains and consumer sentiment, we
continued to focus on customer value proposition and building the
capabilities to deliver value. We saw tangible progress across our
businesses, especially in operational improvements in key strategic
areas,” said Daniel Zhang, Chairman and Chief Executive Officer of
Alibaba Group. “Looking ahead, we will continue to execute on our
multi-engine growth strategy by strengthening our digital
infrastructure and focusing on quality growth to create long-term
value for our customers, shareholders and other stakeholders across
our ecosystem.”
“We delivered healthy results this quarter with revenue growth
of 9% year-over-year. Total revenue for the fiscal year grew 19%
year-over-year, despite a challenging macro environment. Our
continued investments in strategic initiatives have generated
promising growth momentum and improved operating efficiency,” said
Toby Xu, Chief Financial Officer of Alibaba Group. “Looking ahead
to fiscal year 2023, we will firmly focus on generating
sustainable, high-quality revenue growth and optimizing our
operating cost structure to enhance overall return amidst these
uncertain times.”
BUSINESS HIGHLIGHTS
In the quarter ended March 31,
2022:
- Revenue was RMB204,052 million (US$32,188 million), an
increase of 9% year-over-year that was primarily driven by the
revenue growth of the China commerce segment by 8% year-over-year
to RMB140,330 million (US$22,137 million), Local consumer services
segment by 29% year-over-year to RMB10,445 million (US$1,647
million) and Cloud segment by 12% year-over-year to RMB18,971
million (US$2,993 million).
- Annual active consumers of Alibaba Group across the
world reached approximately 1.31 billion for the twelve months
ended March 31, 2022, an increase of 28.3 million from the twelve
months ended December 31, 2021. This included over 1 billion
consumers in China, a historic milestone, and 305 million consumers
overseas, representing quarterly net increases of approximately
24.6 million and 3.7 million, respectively, and annual net
increases of 113 million and 64 million, respectively.
- Income from operations was RMB16,717 million (US$2,637
million), compared to a loss from operations of RMB7,663 million in
the same quarter of 2021. Excluding one-off and certain other items
as identified in “March Quarter Operational and Financial Results”
below, income from operations would have decreased by RMB6,894
million year-over-year primarily due to our increased investments
in Taocaicai and Taobao Deals, the continued impact of COVID-19 as
well as asset impairment and special provisions made by Sun Art.
Adjusted EBITA, a non-GAAP measurement, decreased 30% or
RMB6,801 million year-over-year to RMB15,811 million (US$2,494
million).
- Net loss attributable to ordinary shareholders was
RMB16,241 million (US$2,562 million) and net loss was
RMB18,357 million (US$2,896 million), primarily due to decreases in
the market prices of our equity investments in publicly-traded
companies, which we excluded from our non-GAAP measures, partly
offset by income from operations. Non-GAAP net income was
RMB19,799 million (US$3,123 million), a decrease of 24%
year-over-year.
- Diluted loss per ADS was RMB6.07 (US$0.96) and
diluted loss per share was RMB0.76 (US$0.12 or HK$0.94).
Non-GAAP diluted earnings per ADS was RMB7.95
(US$1.25), a decrease of 23% year-over-year and non-GAAP diluted
earnings per share was RMB0.99 (US$0.16 or HK$1.22), a decrease
of 23% year-over-year.
- Net cash used in operating activities was RMB7,040
million (US$1,111 million). Free cash flow, a non-GAAP
measurement of liquidity, was an outflow of RMB15,070 million
(US$2,377 million), compared to an outflow of RMB658 million in the
same quarter of 2021, mainly due to the payment of the final
installment of RMB9,114 million (US$1,438 million) of the RMB18,228
million fine levied by China’s State Administration for Market
Regulation pursuant to China’s Anti-monopoly Law (the
“Anti-monopoly Fine”), and a decrease in profit.
In the fiscal year ended March 31,
2022:
- Revenue was RMB853,062 million (US$134,567 million), an
increase of 19% year-over-year that was primarily driven by the
revenue growth of the China commerce segment by 18% year-over-year
to RMB592,705 million (US$93,497 million), Cloud segment by 23%
year-over-year to RMB74,568 million (US$11,763 million) and
International commerce segment by 25% year-over-year to RMB61,078
million (US$9,635 million). Excluding the consolidation of Sun Art,
our revenue would have grown 14% year-over-year to RMB770,734
million (US$121,580 million).
- Income from operations was RMB69,638 million (US$10,985
million), a decrease of 22% year-over-year. Excluding one-off and
certain other items as identified in “Full Fiscal Year Operational
and Financial Results” below, income from operations would have
decreased by RMB41,683 million year-over-year, primarily due to our
increased investments in Taobao Deals and Taocaicai, our increased
spending for user growth, as well as our support to merchants.
Adjusted EBITA, a non-GAAP measurement, decreased 23% or
RMB40,056 million year-over-year to RMB130,397 million (US$20,570
million).
- Net income attributable to ordinary shareholders was
RMB61,959 million (US$9,774 million) and net income was
RMB47,079 million (US$7,427 million), showing year-over-year
decreases of 59% and 67%, respectively, primarily due to the net
losses arising from decreases in the market prices of our equity investments in
publicly-traded companies, compared to net gains from these
investments in last year, which we excluded from our non-GAAP
measures. Non-GAAP net income was RMB136,388 million
(US$21,515 million), a decrease of 21% year-over-year.
- Diluted earnings per ADS was RMB22.74 (US$3.59) and
diluted earnings per share was RMB2.84 (US$0.45 or HK$3.50).
Non-GAAP diluted earnings per ADS was RMB52.69
(US$8.31), a decrease of 19% year-over-year and non-GAAP diluted
earnings per share was RMB6.59 (US$1.04 or HK$8.13), a decrease
of 19% year-over-year.
- Net cash provided by operating activities was RMB142,759
million (US$22,520 million), a decrease of 38% compared to
RMB231,786 million in fiscal year 2021. Free cash flow, a
non-GAAP measurement, was RMB98,874 million (US$15,597 million), a
decrease of 43% year-over-year from RMB172,662 million in fiscal
year 2021, mainly due to a decrease in profit and the full payment
in the amount of RMB18,228 million of the Anti-monopoly Fine.
Reconciliations of GAAP measures to non-GAAP measures presented
above are included at the end of this results announcement.
BUSINESS AND STRATEGIC UPDATES
Alibaba Group
For the twelve months ended March 31, 2022, our global
consumer-facing businesses served approximately 1.31 billion annual
active consumers and generated RMB8,317 billion (US$1,312 billion)
in GMV. Our China consumer-facing businesses, including those in
China commerce, Local consumer services and Digital media and
entertainment segments, generated GMV of approximately RMB7,976
billion (US$1,258 billion). The combined annual active consumers,
after de-duplication, of our consumer-facing businesses in China
reached a historic milestone of over 1 billion, up approximately
113 million year-over-year and slightly exceeded our target for
fiscal year 2022. Our International commerce retail business, which
mainly include Lazada, AliExpress, Trendyol and Daraz, generated
GMV of approximately US$54 billion (RMB341 billion) and served 305
million annual active consumers in the twelve months ended March
31, 2022.
Our digital infrastructure, such as smart logistics and cloud
computing, which enables and underpins our major commerce, local
services and entertainment businesses, equips us with unique
technology-driven capabilities to meet changing consumer demand and
help our enterprise customers and partners achieve digital
transformation in China and internationally. We are committed to
investing and developing these digital infrastructure businesses,
which we believe will support sustainable growth and yield
attractive returns on investment over the long term.
China Commerce
For the twelve months ended March 31, 2022, our China commerce
segment had a combined 903 million annual active consumers,
representing annual and quarterly net increases of 89 million and
21 million, respectively. The solid consumer growth for the segment
reflected the successful execution of our multi-app strategy to
create personalized, immersive and engaging experiences for
different consumption scenarios and formats, which help attract and
retain users of different demographics and shopping behaviors to
our commerce ecosystem. The percentage of new annual active
consumers from less developed areas continued to be over 70% in
fiscal year 2022 and was higher compared to fiscal year 2021.
Taobao and Tmall are an important part of Chinese consumers’
everyday lives and continue to achieve high consumer retention. In
fiscal year 2022, more than 124 million annual active consumers
each spent over RMB10,000 on Taobao and Tmall. Approximately 98% of
annual active consumers who spent over RMB10,000 on Taobao and
Tmall in fiscal year 2021 continued to be active in fiscal year
2022. During the year ended March 31, 2022, online physical goods
GMV of Taobao and Tmall, excluding unpaid orders, recorded
year-over-year low single-digit growth. In the March quarter, the
combined GMV growth of January and February was flat, and the
overall GMV of the quarter had a low single-digit decline, mainly
due to disruptions in supply chain and logistics, as well as demand
softening, as a result of the impact of COVID-19 in March.
Taobao Deals (淘特), our value-for-money platform, helped us drive
more first-time shoppers into our e-commerce ecosystem. For the
twelve months ended March 31, 2022, annual active consumers on
Taobao Deals reached a milestone of over 300 million, a quarterly
net increase of over 20 million. More than 20% of these annual
active consumers using Taobao Deals had not shopped on Taobao or
Tmall in fiscal year 2022. Importantly, Taobao Deals has
successfully launched and executed several initiatives to optimize
logistics costs and improve delivery experience for consumers.
During the fiscal year and quarter ended March 31, 2022, the number
of paid orders on Taobao Deals grew rapidly at over 100% and 35%
year-over-year, respectively. The meaningful slowdown in order
growth in the March 2022 quarter was due to the impact of
COVID-19.
In March 2021, we launched Taocaicai offering consumers next day
pick-up service for grocery and daily necessity products at
neighborhood pick-up points. In fiscal year 2022, we successfully
completed the development of our core regional distribution centers
and warehouse network for the Taocaicai business in targeted
regions and cities throughout China. For the twelve months ended
March 31, 2022, Taocaicai had over 90 million annual active
consumers, of which more than 50% were first-time fresh produce
buyers on our various platforms. At the same time, Taocaicai’s unit
economics continued to improve quarter-over-quarter during the
fiscal year, benefitting from higher order density and improving
gross margin from enhanced supply chain capabilities. In the March
quarter, Taocaicai GMV continued to grow quarter-over-quarter,
primarily driven by improving average order value.
In fiscal year 2022, our direct sales and others revenue grew
43% year-over-year to RMB260,955 million (US$41,165 million),
primarily driven by Sun Art and robust growth of our Tmall
Supermarket and Freshippo businesses. Excluding the consolidation
of Sun Art, direct sales and others revenue would have grown 28%
year-over-year in fiscal year 2022. These direct sales businesses
enhance our product supply and improve our service capabilities in
various verticals, including fast-moving consumer goods (FMCG),
fresh produce and electronics and home appliances.
By leveraging our multiple direct sales businesses, we have
developed diversified fulfillment networks and are able to offer
time-guaranteed delivery, same-day delivery, and next-day delivery
in China. We have significantly invested in same-city logistics and
developed on-demand instant delivery capabilities for food, grocery
and other general merchandise. In fiscal year 2022, we added a
next-day pick-up option for customers who purchase grocery and FMCG
products through our Taocaicai business. These logistics and
fulfilment models meeting various consumer needs form a
comprehensive network that serves our self-operated businesses and
external merchants in multiple verticals. By leveraging our
on-demand instant delivery capability, the online portion of Sun
Art’s revenue increased by five percentage points to 29%, while
Freshippo’s online GMV contribution remained at over 60% in fiscal
year 2022. We believe that continued investment in these
fulfillment and logistics capabilities will better serve our
e-commerce platforms and our customers.
International Commerce
For the twelve months ended March 31, 2022, our International
commerce segment had a combined 305 million annual active
consumers, representing annual net increases of 64 million and
quarterly net increase of 4 million, respectively.
International Retail
Our International commerce retail businesses, mainly including
the Lazada, AliExpress, Trendyol and Daraz platforms, empower
brands and merchants with localized market insights and serve local
consumers through wide product selection and improving delivery
experience. In fiscal year 2022, the combined order growth of these
businesses was around 34% year-over-year. This reflected robust
order growth of Lazada of 60% and Trendyol of 68%, which was
partially offset by flat order growth of AliExpress due to the
European Union’s removal of the value-added tax (“VAT”) exemption
for cross-border parcels below €22, which took effect in July 2021,
as well as supply chain and logistics disruptions due to the
Russia-Ukraine conflict. Lazada continues to execute its
localization strategy by increasing the assortment of local and
global product supply as well as offering value-added services,
such as free shipping, which has resulted in strong order growth as
well as improved consumer mindshare.
During the March quarter, the combined order growth of these
businesses was around 7% year-over-year, driven by solid growth in
Lazada of 32% and Trendyol of 48%, which was partially offset by
order decline of AliExpress due to the ongoing impact from the
change in the European Union’s VAT rules as well as supply chain
and logistics disruptions due to the Russia-Ukraine conflict.
International Wholesale
In fiscal year 2022, our International commerce wholesale
business exhibited robust growth of 46% year-over-year in value of
transactions completed on Alibaba.com, driven by solid export
growth of goods from China as well as increasing adoption of
value-added services, such as global logistics and trade assurance,
by global buyers and sellers. The robust transaction value growth
resulted in strong revenue growth of 28% year-over-year, with
value-added service revenue growing even faster at 38%
year-over-year. During the March quarter, transaction value growth
on Alibaba.com slowed to 22% year-over-year primarily due to
slowing export growth in China as well as supply chain disruptions
as a result of the impact of COVID-19.
Local Consumer Services
For the twelve months ended March 31, 2022, Local consumer
services segment had approximately 376 million annual active
consumers, representing a yearly net increase of 64 million and a
quarterly net increase of 4 million. For the fiscal year and
quarter ended March 31, 2022, Local consumer services segment
generated year-over-year order volume growth of over 25% and
approximately 9%, respectively. The slower order volume growth for
the March quarter was due to the impact of COVID-19 that started in
March 2022.
To Home
In the first half of fiscal year 2022, Ele.me continued its
investments in growing paying members and enhancing consumer
experience, which resulted in strong growth in annual active
consumers and orders. Building on this progress, starting from
December quarter 2021, Ele.me has focused on improving user
retention and operating efficiency in strategic cities, which
resulted in improving average order value during the second half of
fiscal year 2022. As part of our strategic initiative to diversify
the category mix, non-restaurant orders of Ele.me, such as grocery
and pharmacy orders, grew strongly during fiscal year 2022 through
situational marketing during various festivals and holidays. For
the quarter ended March 31, 2022, Ele.me enjoyed resilient GMV
growth driven by higher average order value, partially offset by
declining orders in March due to the impact of COVID-19. During the
quarter, Ele.me’s unit economics continued to improve
year-over-year, driven by optimized user acquisition spending and
reduction in delivery cost per order.
To Destination
In fiscal year 2022, order volume of “To Destination”
businesses, which include Amap and Fliggy, grew rapidly, primarily
driven by the increasing number of transacting Amap users and
increased usage frequency. In fiscal year 2022, Amap continued to
be successful in developing content and services that resulted in
higher user engagement and loyalty from consumers that sought to
discover, connect with and visit local merchants using the Amap
app. For the quarter ended March 31, 2022, year-over-year order
growth decelerated for Amap and declined for Fliggy due to the
impact of COVID-19.
Cainiao
In fiscal year 2022, revenue from Cainiao, before inter-segment
elimination, grew 27% year-over-year to RMB66,808 million
(US$10,539 million), primarily driven by the increase in revenue
from third-party merchants of our cross-border e-commerce retail
businesses as well as the growth of fulfillment solutions and
value-added services provided to our China commerce retail
businesses. During the fiscal year, 69% of Cainiao’s total revenue
was generated from external customers. Revenue from Cainiao, after
inter-segment elimination, grew 24% year-over-year to RMB46,107
million (US$7,273 million).
Cainiao continues to expand its international logistics network
by strengthening its end-to-end logistics capabilities, including
eHubs, line-haul, sorting centers and last-mile network. For the
fiscal year ended March 31, 2022, Cainiao’s daily average
cross-border and international package volume exceeded 4.5 million.
During the quarter ended March 31, 2022, Cainiao commenced
operation of two new international sorting centers, making a total
of nine overseas sorting centers in operation. International eHubs
in Kuala Lumpur and Liege, which function as the customs clearance,
warehousing and fulfilment centers for their respective regions,
officially commenced operation in November 2021 and were already
running at near full capacity in March 2022.
In China, Cainiao continues to scale its consumer logistics
business by expanding its Cainiao Post network to improve consumer
experience and delivery efficiency, and penetrate into less
developed areas, which complements our China commerce businesses.
For example, during the fiscal year, in partnership with Taobao and
Tmall businesses, Cainiao Post introduced additional value-added
services (such as home delivery options for consumers) which have
gained rapid adoption throughout China. Additionally, Cainiao
continued to improve its end-to-end smart supply chain solutions
for different industry verticals. For example, in March 2022
quarter, the adoption of Cainiao’s end-to-end smart supply chain
solutions for the FMCG category in China continued to gain traction
with revenue growth from external merchants accelerating to over
30% year-over-year.
Cainiao also collaborates with DAMO Academy to research and
develop advanced technologies to be deployed in products and
services to digitalize and enhance the efficiency of the logistics
industry. For example, Cainiao has been driving the adoption of our
proprietary L4 self-driving vehicle Xiaomanlv (小蛮驴) for unmanned
delivery of parcels within gated communities and campuses. From
inception through March 31, 2022, Xiaomanlv had delivered over 10
million parcels, leading the industry of unmanned neighborhood
delivery.
Cloud
Our Cloud segment is comprised of Alibaba Cloud and DingTalk.
For the twelve months ended March 31, 2022, total revenue from our
Cloud segment before inter-segment elimination, which includes
revenue from services provided to other Alibaba businesses, was
RMB100,180 million (US$15,803 million), an increase of 21%
year-over-year. Revenue after inter-segment elimination was
approximately RMB74,568 million (US$11,763 million) for fiscal year
2022, an increase of 23% year-over-year. Year-over-year revenue
growth moderated in fiscal year 2022 primarily because a top
customer in the Internet industry gradually phased out using our
cloud services for its international business due to non-product
related reasons as well as slowing demand from customers in China’s
Internet industry. Excluding revenue generated from this top
customer, our Cloud segment revenue after inter-segment elimination
would have grown strongly at 29% year-over-year during the twelve
months ended March 31, 2022.
In the quarter ended March 31, 2022, revenue from our Cloud
segment, after inter-segment elimination, was RMB18,971 million
(US$2,993 million), an increase of 12% year-over-year.
Year-over-year revenue growth of our Cloud segment was slower in
March quarter compared to prior quarters, reflecting slowing
economic activities, softening demand from customers in China’s
Internet industry and delays in delivery of hybrid cloud projects
due to the impact of COVID-19.
Importantly, our Cloud segment revenue is becoming more
diversified with revenue contribution from non-Internet industries
steadily increasing. For fiscal year and quarter ended March 31,
2022, contribution of Cloud revenue after inter-segment elimination
from non-Internet industries was 50% and 52% , respectively.
Alibaba Cloud
Alibaba Cloud offers a comprehensive suite of cloud services to
customers worldwide, including proprietary servers, chips, elastic
computing, storage, network, security, database and big data. We
leverage these capabilities and technologies to support businesses
within Alibaba Group and provide our customers across various
verticals with industry-specific solutions, including those for
financial services, telecommunications, retail, and industrial
applications. Alibaba Cloud continues to expand internationally
with strong customer growth. As of March 31, 2022, Alibaba Cloud
offers computing services in 27 regions globally, adding new
Internet data centers in Indonesia, Philippines, South Korea,
Thailand and Germany in fiscal year 2022.
Alibaba Cloud’s advantages are its proprietary technology and
Alibaba Group’s continued commitment to investing in research and
development in new product offerings and industry-specific
solutions for our customers and partners. Highlights of our
proprietary technologies in fiscal year 2022 include:
Data Centers and Hardware:
- Proprietary server technology: Alibaba Cloud possesses
full-stack cloud infrastructure design capabilities, covering data
centers, network technologies and proprietary hardware. In fiscal
year 2022, we unveiled our proprietary server series Panjiu (磐久),
including high-performance computing series, large-scale storage
series, and high-performance storage series. Our server series
adopts a flexible modular design that allows separation of compute
and storage, which provides our customers the flexibility to meet
varying demands of different business scenarios. Our Panjiu server
series integrates software and hardware to achieve outstanding
performance in computing, storage, and security to help our
customers succeed in the cloud-native era.
Infrastructure as a Service (IaaS)
- IaaS leadership: According to the 2021 Gartner Solution
Scorecard for integrated IaaS+PaaS published in November 2021,
Alibaba Cloud was recognized as the third highest scored solution
among all the global vendors evaluated. In a Gartner report
published in April 2022, Alibaba Cloud was ranked the biggest IaaS
player in Asia Pacific and the third largest globally as measured
by revenue market share in 2021. Over the last four years, Alibaba
Cloud has retained its leadership position in Asia Pacific.
Platform as a Service (PaaS) and Solutions:
- Database: In fiscal year 2022, our Cloud business
upgraded PolarDB to next-generation cloud native technology, which
meets our customers’ increasing demands and requirements for
on-demand storage, transaction processing and computation,
elasticity and scalability.
DingTalk
DingTalk, our digital collaboration workplace and application
development platform that offers new ways of working, sharing and
collaboration for modern enterprises and organizations, announced
its strategy to help our customers accelerate organization and
business digitalization in fiscal year 2022.
As of March 31, 2022, DingTalk powered users from over 21
million organizations to stay connected and work remotely. DingTalk
is also committed to accelerating the digital transformation of
enterprises by serving as a platform to third parties to offer more
digital products, solutions and services. As of March 31, 2022,
over 3.5 million DingTalk applications had been developed and
adopted by businesses and users.
Digital Media and
Entertainment
In the March quarter, Youku’s daily average paying subscriber
base increased 14% year-over-year, primarily driven by quality
content and continued contribution from our 88VIP membership
program. Youku continues to improve operational efficiency through
disciplined investment in content and production capability, which
resulted in narrowing of losses year-over-year during the
quarter.
ESG Updates
Collaboration in green technologies
We believe in an open and collaborative model that empowers the
adoption of green technology and fosters cooperative innovation
among technology companies. We joined the Low Carbon Patent Pledge,
an initiative launched by a consortium of global technology
companies that encourages the sharing of low carbon technology
patents, and have made nine key patents of green data center
technology freely available to external parties, including a unique
“soaking server” cooling system that could lead to energy savings
of over 70% compared to traditional mechanical cooling.
Responding to the COVID-19 pandemic
Supporting the provisions of essential supplies to local
communities
In the past quarter, as COVID-19 resurged in many cities in
China, including Shanghai, we leveraged our supply and logistics
capabilities to help those in need.
- Increased manpower to support Shanghai: In April
2022, Sun Art, Freshippo and other business units launched
initiatives to support the supply and delivery of essential goods
to residents in Shanghai and dispatched thousands of couriers and
frontline workers to Shanghai from nearby cities.
- Ele.me: Ele.me launched the “group purchase + designated
point delivery” service to meet communities’ demand for daily
necessities. Ele.me also offered special emergency delivery
services to vulnerable groups such as the elderly living alone,
families with infants and young children, the disabled and patients
with acute illnesses. In Beijing, Ele.me strived to ensure 24-hour
delivery capability of key supermarkets.
- Freshippo: In Shanghai, Freshippo offered an emergency
channel for group-purchase and self-pickup orders and built large
temporary warehouses to support local supply operations. With each
group order, Freshippo provided free supplies to the elderly in
need or living alone.
- Sun Art: One RT-Mart store in Shanghai was temporarily
converted into a fresh produce warehouse, serving as a hub for
other RT-Mart stores in the city. Sun Art also launched late
shopping services from 10:00 p.m. to 12:00 a.m. in Beijing.
- Cainiao: Cainiao built a logistics system that
encompassed disaster preparedness management, emergency
transportation, and transit and distribution to deal with
emergencies. Cainiao also launched designated channels to
facilitate delivery of daily necessities to senior care centers and
the elderly in Shanghai.
- Amap: Amap launched the “Map of PCR Test Sites” (核酸地图)
function at the end of April, 2022. With this function, users can
easily search for the locations and operating hours of nearby test
sites.
- Taobao and Tmall: Many small and medium enterprises have
faced challenges during the COVID-19 resurgence. Taobao and Tmall
launched a series of targeted relief measures to help merchants in
Shanghai ease cash flow pressure, reduce operating costs and speed
up resumption of work and production.
Safeguarding employees and frontline workers
- Employees: The health and safety of our employees have
always been our top priorities. We provided care packages with food
and daily necessities to employees and their families in Shanghai,
and set up online channels to offer physical and psychological
health counselling.
- Frontline workers: Since March 2022, we have provided
COVID-19 care packages, medical coverage, quarantine allowances as
well as 24/7 support to Ele.me delivery couriers and many other
frontline workers.
- Voluntary services: During the pandemic in Shanghai,
approximately 4,500 of our employees volunteered to participate in
community services.
Share Repurchases
During the quarter ended March 31, 2022, we repurchased
approximately 17.8 million of our ADSs (the equivalent of
approximately 142.8 million of our ordinary shares) for
approximately US$2.0 billion under our share repurchase program. In
fiscal year 2022, we repurchased approximately 60.0 million of our
ADSs (the equivalent of approximately 480.3 million of our ordinary
shares) for approximately US$9.6 billion under our share repurchase
program. In March 2022, we expanded our current share repurchase
program from US$15billion to US$25 billion, which is effective
through March 2024. As of March 31, 2022, we had approximately 21.4
billion ordinary shares (the equivalent of approximately 2.7
billion ADSs) outstanding.
Guidance
Since mid-March 2022, our domestic businesses have been
significantly affected by the COVID-19 resurgence in China,
particularly in Shanghai. Considering the risks and uncertainties
arising from COVID-19, which we are not able to control and are
difficult for us to predict, we believe it is prudent at this time
not to give financial guidance as we typically do at the start of
the fiscal year. However, we believe our Company will continue to
generate strong operating cash flow to maintain strategic
flexibility as we calibrate our operations against changing
economic and competitive circumstances. In fiscal year 2023, our
operating principles include focusing on sustainable, high-quality
revenue growth and optimizing our cost structure to enhance overall
return.
MARCH QUARTER SUMMARY FINANCIAL RESULTS
Three months ended March
31,
2021
2022
RMB
RMB
US$
YoY % Change(7)
(in millions, except
percentages and per share amounts)
Revenue
187,395
204,052
32,188
9%
(Loss) Income from operations
(7,663) (2)
16,717(2)
2,637
N/A
Operating margin
(4)%
8%
Adjusted EBITDA(1)
29,898
23,373
3,687
(22)%(3)
Adjusted EBITDA margin(1)
16%
11%
Adjusted EBITA(1)
22,612
15,811
2,494
(30)%(3)
Adjusted EBITA margin(1)
12%
8%
Net loss
(7,654)
(18,357)
(2,896)
(140)% (4)
Net loss attributable to ordinary
shareholders
(5,479)
(16,241)
(2,562)
(196)%(4)
Non-GAAP net income(1)
26,216
19,799
3,123
(24)%(3)
Diluted loss per share(5)
(0.25)
(0.76)
(0.12)
(205)%(4) (6)
Diluted loss per ADS(5)
(1.99)
(6.07)
(0.96)
(205)%(4) (6)
Non-GAAP diluted earnings per share(1)
(5)
1.29
0.99
0.16
(23)% (3) (6)
Non-GAAP diluted earnings per ADS(1)
(5)
10.32
7.95
1.25
(23)% (3) (6)
(1)
See the sections entitled “Information
about Segments,” “Non-GAAP Financial Measures” and “Reconciliations
of Non-GAAP Measures to the Nearest Comparable U.S. GAAP Measures”
for more information about the non-GAAP measures referred to within
this results announcement.
(2)
Excluding one-off and certain other items,
our income from operations would have decreased by RMB6,894 million
year-over-year, primarily due to our increased investments in
Taocaicai and Taobao Deals, the continued impact of COVID-19 as
well as asset impairment and special provisions made by Sun Art.
Please refer to “March Quarter Operational and Financial Results”
section below for details.
(3)
The year-over-year decreases were
primarily due to our increased investments in Taocaicai and Taobao
Deals, the continued impact of COVID-19 as well as asset impairment
and special provisions made by Sun Art.
(4)
The year-over-year increases in net loss
were primarily attributable to the increase in net losses arising
from the decrease in market value of our equity investments in
publicly-traded companies, partly offset by the increase in income
from operations.
(5)
Each ADS represents eight ordinary
shares.
(6)
The year-over-year percentages as stated
are calculated based on the exact amount and there may be minor
differences from the year-over-year percentages calculated based on
the RMB amounts after rounding.
(7)
For a more intuitive presentation,
widening of loss in YoY% is shown in terms of negative growth rate,
and narrowing of loss in YoY% is shown in terms of positive growth
rate.
MARCH QUARTER INFORMATION BY SEGMENTS
The table below sets forth selected financial information of our
operating segments for the periods indicated:
Three months ended March 31,
2022
China
commerce
International
commerce
Local
consumer
services
Cainiao
Cloud
Digital
media and
entertainment
Innovation
initiatives
and others
Unallocated(1)
Consolidated
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
US$
(in millions, except
percentages)
Revenue
140,330
14,335
10,445
11,582
18,971
8,005
384
—
204,052
32,188
YoY% change
8
%
7
%
29
%
16
%
12
%
(1
)%
(35
)%
—
9
%
Income (Loss) from operations
32,471
(1,918
)
(6,503
)
(1,081
)
598
(2,170
)
(2,727
)
(1,953
)
16,717
2,637
Add: Share-based compensation expense
(902
)
(664
)
(479
)
(85
)
(326
)
5
64
(1,350
)
(3,737
)
(590
)
Add: Amortization of intangible assets
580
19
1,499
254
4
199
211
65
2,831
447
Adjusted EBITA
32,149
(2,563
)
(5,483
)
(912
)
276
(1,966
)
(2,452
)
(3,238
)
15,811
2,494
Adjusted EBITA YoY% change(2)
(19
)%
(3
)%
17
%
(56
)%
N/A
27
%
(49
)%
(30
)%
(30
)%
Adjusted EBITA margin
23
%
(18
)%
(52
)%
(8
)%
1
%
(25
)%
(639
)%
—
8
%
Three months ended March 31,
2021
China
commerce
International
commerce
Local
consumer
services
Cainiao
Cloud
Digital
media and
entertainment
Innovation
initiatives
and others
Unallocated(1)
Consolidated
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
(in millions, except
percentages)
Revenue
130,391
13,416
8,123
9,959
16,865
8,047
594
—
187,395
Income (Loss) from operations
36,165
(3,416
)
(9,443
)
(1,089
)
(2,337
)
(3,565
)
(2,135
)
(21,843
)
(7,663
)
Add: Share-based compensation expense
2,500
884
850
229
1,989
646
471
1,063
8,632
Add: Amortization of intangible assets
835
49
1,960
275
6
221
16
53
3,415
Add: Fine imposed pursuant to China’s
Anti-monopoly Law
—
—
—
—
—
—
—
18,228
18,228
Adjusted EBITA
39,500
(2,483
)
(6,633
)
(585
)
(342
)
(2,698
)
(1,648
)
(2,499
)
22,612
Adjusted EBITA margin
30
%
(19
)%
(82
)%
(6
)%
(2
)%
(34
)%
(277
)%
—
12
%
Starting from the quarter ended December 31, 2021, our chief
operating decision maker (“CODM”) started to review information
under a new reporting structure, and segment reporting has been
updated to conform to this change, which also provides greater
transparency in our business progress and financial performance.
Our updated segments comprise:
- China commerce, which mainly includes retail businesses such as
Taobao, Tmall, Taobao Deals, Taocaicai, Tmall Supermarket, Tmall
Global, Freshippo, Alibaba Health, and Sun Art, as well as
wholesale business including 1688.com;
- International commerce, which mainly includes our international
retail and wholesale businesses such as Lazada, AliExpress,
Trendyol, Daraz and Alibaba.com;
- Local consumer services, which mainly includes location-based
services, such as Ele.me, Amap (previously reported under the
Innovation initiatives and others segment), Fliggy and
Taoxianda;
- Cainiao, which mainly includes our domestic and international
one-stop-shop logistics services and supply chain management
solutions;
- Cloud, which comprises Alibaba Cloud and DingTalk;
- Digital media and entertainment, which comprises Youku and
Alibaba Pictures, as well as other content platforms and online
games business; and
- Innovation initiatives and others, which includes businesses
such as Tmall Genie and DAMO Academy.
Comparative figures were reclassified to conform to this
presentation.
(1)
Unallocated expenses primarily relate to
corporate administrative costs and other miscellaneous items that
are not allocated to individual segments.
(2)
For a more intuitive presentation,
widening of adjusted EBITA loss in YoY% is shown in terms of
negative growth rate, and narrowing of adjusted EBITA loss in YoY%
is shown in terms of positive growth rate.
MARCH QUARTER OPERATIONAL AND FINANCIAL RESULTS
Revenue
Revenue for the quarter ended March 31, 2022 was RMB204,052
million (US$32,188 million), an increase of 9% compared to
RMB187,395 million in the same quarter of 2021. The increase was
mainly driven by the revenue growth of China commerce, Local
consumer services and Cloud segments.
The following table sets forth a breakdown of our revenue by
segment for the periods indicated:
Three months ended March
31,
2021
2022
RMB
% of Revenue
RMB
US$
% of Revenue
YoY % Change
(in millions, except
percentages)
China commerce:
China commerce retail
- Customer management
63,224
34
%
63,421
10,004
31
%
0
%
- Direct sales and others(1)
63,797
34
%
72,526
11,441
36
%
14
%
127,021
68
%
135,947
21,445
67
%
7
%
China commerce wholesale
3,370
2
%
4,383
692
2
%
30
%
Total China commerce
130,391
70
%
140,330
22,137
69
%
8
%
International commerce:
International commerce retail
9,496
5
%
9,887
1,560
5
%
4
%
International commerce wholesale
3,920
2
%
4,448
701
2
%
13
%
Total International commerce
13,416
7
%
14,335
2,261
7
%
7
%
Local consumer services
8,123
4
%
10,445
1,647
5
%
29
%
Cainiao
9,959
5
%
11,582
1,827
6
%
16
%
Cloud
16,865
9
%
18,971
2,993
9
%
12
%
Digital media and entertainment
8,047
4
%
8,005
1,263
4
%
(1
)%
Innovation initiatives and others
594
1
%
384
60
0
%
(35
)%
Total
187,395
100
%
204,052
32,188
100
%
9
%
Starting from the quarter ended December 31, 2021, our CODM
started to review information under a new reporting structure, and
segment reporting has been updated to conform to this change, which
also provides greater transparency in our business progress and
financial performance (see “March Quarter Information by Segments”
above). Comparative figures were reclassified to conform to this
presentation.
(1)
“Direct sales and others” revenue under
China commerce retail primarily represents our direct sales
businesses, comprising mainly Sun Art, Tmall Supermarket and
Freshippo, where revenue and the cost of inventory are recorded on
a gross basis.
China Commerce
- China Commerce Retail Business
Revenue from our China commerce retail business in the quarter
ended March 31, 2022 was RMB135,947 million (US$21,445 million), an
increase of 7% compared to RMB127,021 million in the same quarter
of 2021. Customer management revenue remained stable
year-over-year, primarily due to a low single-digit decline
year-over-year in online physical goods GMV of Taobao and Tmall,
excluding unpaid orders. For the March quarter, the combined GMV
growth of January and February was flat and GMV declined in March
due to the impact of COVID-19.
“Direct sales and others” revenue under China commerce retail
business in the quarter ended March 31, 2022 was RMB72,526 million
(US$11,441 million), an increase of 14% compared to RMB63,797
million in the same quarter of 2021, primarily due to the revenue
contributed by our direct sales businesses, such as Freshippo and
Tmall Supermarket.
- China Commerce Wholesale Business
Revenue from our China commerce wholesale business in the
quarter ended March 31, 2022 was RMB4,383 million (US$692 million),
an increase of 30% compared to RMB3,370 million in the same quarter
of 2021, primarily due to an increase in revenue from value-added
services to wholesale buyers and paying members.
International Commerce
- International Commerce Retail Business
Revenue from our International commerce retail business in the
quarter ended March 31, 2022 was RMB9,887 million (US$1,560
million), an increase of 4% compared to RMB9,496 million in the
same quarter of 2021. The increase was primarily due to the growth
in revenue generated by Lazada. The slower year-over-year growth
rate as compared to prior quarters was mainly due to a decrease in
revenue of Trendyol that was negatively impacted by the
depreciation of Turkish lira against Renminbi, and a decline in
orders of AliExpress which was due to the ongoing impact from the
change in the European Union’s VAT rules as well as supply chain
and logistics disruptions due to the Russia-Ukraine conflict .
- International Commerce Wholesale Business
Revenue from our International commerce wholesale business in
the quarter ended March 31, 2022 was RMB4,448 million (US$701
million), an increase of 13% compared to RMB3,920 million in the
same quarter of 2021. The increase was primarily due to an increase
in revenue generated by cross-border related value-added services,
as well as an increase in the number of paying members on
Alibaba.com. The slower year-over-year growth rate as compared to
prior quarters was primarily due to slowing export growth in China
as well as supply chain disruptions as a result of the impact of
COVID-19.
Local Consumer Services
Revenue from Local consumer services, which mainly includes
location-based services, such as Ele.me, Amap, Fliggy and
Taoxianda, was RMB10,445 million (US$1,647 million) in the quarter
ended March 31, 2022, an increase of 29% compared to RMB8,123
million in the same quarter of 2021, primarily due to more
efficient use of subsidies that were contra revenue as well as
resilient GMV growth. The resilient GMV growth was driven by higher
average order value but was partially offset by declining orders in
March due to the impact of COVID-19.
Cainiao
Revenue from Cainiao, which represents revenue from its domestic
and international one-stop-shop logistics services and supply chain
management solutions, after inter-segment elimination, was
RMB11,582 million (US$1,827 million) in the quarter ended March 31,
2022, an increase of 16% compared to RMB9,959 million in the same
quarter of 2021, primarily contributed by the increase in revenue
from consumer logistics services as a result of service upgrade to
enhance consumer experience, partly offset by the decrease in
international orders that was mainly impacted by the supply chain
and logistics disruptions due to the Russia-Ukraine conflict. Total
revenue generated by Cainiao, before inter-segment elimination,
which includes revenue from services provided to other Alibaba
businesses, was RMB16,451 million (US$2,595 million), an increase
of 19% compared to RMB13,866 million in the same quarter of 2021.
The year-over-year increase, in addition to the growth from
external revenue, also reflected the growth of fulfillment
solutions and value-added services provided to our China commerce
retail businesses, such as Tmall, Taobao and Taobao Deals.
Cloud
Revenue from our Cloud segment, after inter-segment elimination,
was RMB18,971 million (US$2,993 million) in the quarter ended March
31, 2022, an increase of 12% compared to RMB16,865 million in the
same quarter of 2021. Year-over-year revenue growth, which
moderated during the quarter, was primarily driven by strong growth
in telecommunications, financial services, and retail industries
that was partially offset by declining revenue in certain other
industries, such as select Internet verticals including online
education and entertainment. Excluding revenue generated from a top
customer in the Internet industry that has gradually stopped using
our overseas cloud services for its international business due to
non-product related requirements, our Cloud segment revenue, after
inter-segment elimination, would have grown 15% year-over-year
during the quarter ended March 31, 2022. Year-over-year revenue
growth was slower compared to prior quarters, reflecting slowing
economic activities, softening demand from customers in China’s
Internet industry and delays in completing hybrid cloud projects
due to the impact of COVID-19. Total revenue from our Cloud
business before inter-segment elimination, which includes revenue
from services provided to other Alibaba businesses, was RMB25,230
million (US$3,980 million), an increase of 12% compared to
RMB22,624 million in the same quarter of 2021.
Digital Media and Entertainment
Revenue from our Digital media and entertainment segment in the
quarter ended March 31, 2022 was RMB8,005 million (US$1,263
million), a decrease of 1%, compared to RMB8,047 million in the
same quarter of 2021.
Innovation Initiatives and Others
Revenue from Innovation initiatives and others was RMB384
million (US$60 million) in the quarter ended March 31, 2022, a
decrease of 35% compared to RMB594 million in the same quarter of
2021.
Costs and Expenses
The following tables set forth a breakdown of our costs and
expenses, share-based compensation expense and costs and expenses
excluding share-based compensation expense by function for the
periods indicated.
Three months ended March
31,
% of Revenue YoY
change
2021
2022
RMB
% of Revenue
RMB
US$
% of Revenue
(in millions, except
percentages)
Costs and expenses:
Cost of revenue
125,454
67
%
138,945
21,918
68
%
1
%
Product development expenses
13,302
7
%
10,944
1,726
5
%
(2
)%
Sales and marketing expenses
25,153
14
%
27,200
4,291
13
%
(1
)%
General and administrative expenses
27,734
14
%
7,415
1,169
4
%
(10
)%
Amortization of intangible assets
3,415
2
%
2,831
447
2
%
0
%
Total costs and expenses
195,058
104
%
187,335
29,551
92
%
(12
)%
Share-based compensation
expense:
Cost of revenue
1,750
1
%
(692
)
(109
)
0
%
(1
)%
Product development expenses
3,785
2
%
(1,407
)
(222
)
(1
)%
(3
)%
Sales and marketing expenses
1,001
1
%
(199
)
(32
)
0
%
(1
)%
General and administrative expenses
2,096
1
%
(1,439
)
(227
)
(1
)%
(2
)%
Total share-based compensation expense
8,632
5
%
(3,737
)
(590
)
(2
)%
(7
)%
Costs and expenses excluding
share-based compensation expense:
Cost of revenue
123,704
66
%
139,637
22,027
68
%
2
%
Product development expenses
9,517
5
%
12,351
1,948
6
%
1
%
Sales and marketing expenses
24,152
13
%
27,399
4,323
13
%
0
%
General and administrative expenses
25,638
13
%
8,854
1,396
5
%
(8
)%
Amortization of intangible assets
3,415
2
%
2,831
447
2
%
0
%
Total costs and expenses excluding
share-based compensation expense
186,426
99
%
191,072
30,141
94
%
(5
)%
Cost of revenue – Cost of revenue in the quarter ended
March 31, 2022 was RMB138,945 million (US$21,918 million), or 68%
of revenue, compared to RMB125,454 million, or 67% of revenue, in
the same quarter of 2021. Without the effect of share-based
compensation expense, cost of revenue as a percentage of revenue
would have increased from 66% in the quarter ended March 31, 2021
to 68% in the quarter ended March 31, 2022. The increase was
primarily attributable to (i) the higher proportion of our direct
sales businesses, such as Freshippo and Tmall Supermarket, that
resulted in increased cost of inventory as a percentage of revenue,
and (ii) the growth of Taocaicai and Cainiao businesses that led to
an increase in logistics costs as a percentage of revenue, which is
partly offset by the reduction in delivery cost per order of Local
consumer services.
Product development expenses – Product development
expenses in the quarter ended March 31, 2022 were RMB10,944 million
(US$1,726 million), or 5% of revenue, compared to RMB13,302
million, or 7% of revenue, in the same quarter of 2021. Without the
effect of share-based compensation expense, product development
expenses as a percentage of revenue would have increased from 5% in
the quarter ended March 31, 2021 to 6% in the quarter ended March
31, 2022.
Sales and marketing expenses – Sales and marketing
expenses in the quarter ended March 31, 2022 were RMB27,200 million
(US$4,291 million), or 13% of revenue, compared to RMB25,153
million, or 14% of revenue, in the same quarter of 2021. Without
the effect of share-based compensation expense, sales and marketing
expenses as a percentage of revenue would have remained stable at
13% in the quarter ended March 31, 2022 compared to the same
quarter of 2021.
General and administrative expenses – General and
administrative expenses in the quarter ended March 31, 2022 were
RMB7,415 million (US$1,169 million), or 4% of revenue, compared to
RMB27,734 million, or 14% of revenue, in the same quarter of 2021,
primarily due to the Anti-monopoly Fine in the amount of RMB18,228
million in the quarter ended March 31, 2021. Without the effect of
this fine and share-based compensation expense, general and
administrative expenses as a percentage of revenue would have
increased from 4% in the quarter ended March 31, 2021 to 5% in the
quarter ended March 31, 2022.
Share-based compensation expense – Total share-based
compensation expense included in the cost and expense items above
in the quarter ended March 31, 2022 was a net reversal of RMB3,737
million (US$590 million), compared to an expense of RMB8,632
million in the same quarter of 2021.
The following table sets forth our analysis of share-based
compensation expense for the quarters indicated by type of
share-based awards:
Three months ended March
31,
2021
2022
% Change
RMB
% of Revenue
RMB
US$
% of Revenue
YoY
(in millions, except
percentages)
By type of awards:
Alibaba Group share-based awards(1)
7,162
4
%
7,597
1,198
4
%
6
%
Ant Group share-based awards(2)
444
0
%
(12,683
)
(2,001
)
(6
)%
N/A
Others(3)
1,026
1
%
1,349
213
0
%
31
%
Total share-based compensation expense
8,632
5
%
(3,737
)
(590
)
(2
)%
N/A
(1)
This represents Alibaba Group share-based
awards granted to our employees.
(2)
This represents Ant Group share-based
awards granted to our employees, which is subject to mark-to-market
accounting treatment.
(3)
This represents share-based awards of our
subsidiaries
Share-based compensation expense related to Alibaba Group
share-based awards remained stable in the quarter ended March 31,
2022 compared to the same quarter of 2021.
Share-based compensation expense related to Ant Group
share-based awards was a net reversal for the quarter ended March
31, 2022 compared to the same quarter of 2021, as a result of our
on-going evaluation of Ant Group. During the quarter, we recognized
a decrease in the value of the awards after considering existing
circumstances.
We expect that our share-based compensation expense will
continue to be affected by changes in the fair value of the
underlying awards and the quantity of awards we grant in the
future.
Amortization of intangible assets – Amortization of
intangible assets in the quarter ended March 31, 2022 was RMB2,831
million (US$447 million), a decrease of 17% from RMB3,415 million
in the same quarter of 2021.
Income (loss) from operations and
operating margin
Income from operations in the quarter ended March 31, 2022 was
RMB16,717 million (US$2,637 million), or 8% of revenue, compared to
loss from operations of RMB7,663 million, or negative 4% of
revenue, in the same quarter of 2021. During the quarter ended
March 31, 2022, we recognized a reversal of share-based
compensation expense of RMB13,046 million (US$2,058 million)
related to the mark-to-market adjustment of Ant Group share-based
awards granted to our employees. During the quarter ended March 31,
2021, we recorded a RMB18,228 million Anti-monopoly Fine. Both
these impacts were excluded from our non-GAAP measures of
profitability. Excluding these impacts, our income from operations
would have decreased by RMB6,894 million year-over-year, from
RMB10,565 million in the quarter ended March 31, 2021 to RMB3,671
million (US$579 million) in the quarter ended March 31, 2022,
primarily due to our increased investments in Taocaicai and Taobao
Deals, the continued impact of COVID-19, as well as asset
impairment and special provisions made by Sun Art.
Adjusted EBITDA and Adjusted
EBITA
Adjusted EBITDA decreased 22% year-over-year to RMB23,373
million (US$3,687 million) in the quarter ended March 31, 2022,
compared to RMB29,898 million in the same quarter of 2021. Adjusted
EBITA decreased 30% or RMB6,801 million year-over-year to RMB15,811
million (US$2,494 million) in the quarter ended March 31, 2022,
compared to RMB22,612 million in the same quarter of 2021. The
year-over-year decreases were primarily due to our increased
investments in Taocaicai and Taobao Deals, the continued impact of
COVID-19, as well as asset impairment and special provisions made
by Sun Art. A reconciliation of net income to adjusted EBITDA and
adjusted EBITA is included at the end of this results
announcement.
Adjusted EBITA and adjusted EBITA
margin by segments
Adjusted EBITA and adjusted EBITA margin by segments are set
forth in the table below. See the section entitled “March Quarter
Information by Segments” above for a reconciliation of income
(loss) from operations to adjusted EBITA.
Three months ended March
31,
2021
2022
RMB
% of Segment
Revenue
RMB
US$
% of Segment Revenue
(in millions, except
percentages)
China commerce
39,500
30
%
32,149
5,071
23
%
International commerce
(2,483
)
(19
)%
(2,563
)
(404
)
(18
)%
Local consumer services
(6,633
)
(82
)%
(5,483
)
(865
)
(52
)%
Cainiao
(585
)
(6
)%
(912
)
(144
)
(8
)%
Cloud
(342
)
(2
)%
276
44
1
%
Digital media and entertainment
(2,698
)
(34
)%
(1,966
)
(310
)
(25
)%
Innovation initiatives and others
(1,648
)
(277
)%
(2,452
)
(387
)
(639
)%
Unallocated(1)
(2,499
)
—
(3,238
)
(511
)
—
Total
22,612
12
%
15,811
2,494
8
%
Starting from the quarter ended December 31, 2021, our CODM
started to review information under a new reporting structure, and
segment reporting has been updated to conform to this change, which
also provides greater transparency in our business progress and
financial performance (see “March Quarter Information by Segments”
above). Comparative figures were reclassified to conform to this
presentation.
(1)
Unallocated expenses primarily
relate to corporate administrative costs and other miscellaneous
items that are not allocated to individual segments.
China commerce segment – Adjusted EBITA decreased by 19%
to RMB32,149 million (US$5,071 million) in the quarter ended March
31, 2022, compared to RMB39,500 million in the same quarter of
2021. The decrease was primarily due to our increased investments
in Taocaicai and Taobao Deals, the continued impact of COVID-19 as
well as asset impairment and special provisions made by Sun Art.
These factors also led to a decrease in adjusted EBITA margin from
30% in the quarter ended March 31, 2021 to 23% in the quarter ended
March 31, 2022.
We expect that our China commerce adjusted EBITA margin will
continue to be affected by the growth of our direct sales
businesses.
International commerce segment – Adjusted EBITA was a
loss of RMB2,563 million (US$404 million) in the quarter ended
March 31, 2022, compared to a loss of RMB2,483 million in the same
quarter of 2021. The slight increase in loss year-over-year was
primarily due to increase in loss of Trendyol resulted from its
investments in new businesses, such as international business and
local consumer services in Turkey, offset by the increase in profit
contributed by our International wholesale businesses.
Local consumer services segment –Adjusted EBITA was a
loss of RMB5,483 million (US$865 million) in the quarter ended
March 31, 2022, compared to a loss of RMB6,633 million in the same
quarter of 2021, primarily due to the narrowed losses of our “To
Home” businesses, driven by optimized user acquisition spending and
reduction in delivery cost per order.
Cainiao segment – Adjusted EBITA was a loss of RMB912
million (US$144 million) in the quarter ended March 31, 2022,
compared to a loss of RMB585 million in the same quarter of 2021.
The year-over-year increase in loss was primarily due to increase
in operating cost as a result of our investment in expanding the
global smart logistics infrastructure, as well as the impact from
COVID-19 and the Russia-Ukraine conflict.
Cloud segment– Adjusted EBITA of Cloud segment, which
comprises Alibaba Cloud and DingTalk, was a profit of RMB276
million (US$44 million) in the quarter ended March 31, 2022,
compared to a loss of RMB342 million in the same quarter of 2021,
primarily attributable to the realization of economies of scale,
partly offset by our increased investments in DingTalk.
Digital media and entertainment segment – Adjusted EBITA
in the quarter ended March 31, 2022 was a loss of RMB1,966 million
(US$310 million), compared to a loss of RMB2,698 million in the
same quarter of 2021, primarily due to our disciplined investment
in content and production capability, which resulted in narrowing
of losses of Youku year-over-year.
Innovation initiatives and others segment – Adjusted
EBITA in the quarter ended March 31, 2022 was a loss of RMB2,452
million (US$387 million), compared to a loss of RMB1,648 million in
the same quarter of 2021, primarily due to our investments in
technology and innovation.
Interest and investment income,
net
Interest and investment income, net in the quarter ended March
31, 2022 was a loss of RMB36,708 million (US$5,791 million),
compared to a gain of RMB111 million in the quarter ended March 31,
2021, primarily due to the increase in net losses arising from the
decreases in market prices of our equity investments in
publicly-traded companies.
The above-mentioned losses were excluded from our non-GAAP net
income.
Other income, net
Other income, net in the quarter ended March 31, 2022 was
RMB1,620 million (US$256 million), compared to RMB2,115 million in
the same quarter of 2021.
Income tax expenses
Income tax expenses in the quarter ended March 31, 2022 were
RMB2,079 million (US$328 million), compared to RMB7,049 million in
the same quarter of 2021.
Excluding share-based compensation expense, revaluation and
disposal gains/losses of investments, impairment of investments, as
well as the deferred tax effects on basis differences arising from
our equity method investees, our effective tax rate would have been
23% in the quarter ended March 31, 2022.
Share of results of equity method
investees
Share of results of equity method investees in the quarter ended
March 31, 2022 was RMB3,282 million (US$518 million), compared to
RMB5,992 million in the same quarter of 2021. Share of results of
equity method investees in the quarter ended March 31, 2022 and the
same quarter in the prior year consisted of the following:
Three months ended March
31,
2021
2022
RMB
RMB
US$
(in millions)
Share of profit (loss) of equity method
investees
- Ant Group
7,182
7,275
1,148
- Others
(432
)
(973
)
(153
)
Impairment loss
(55
)
(2,624
)
(414
)
Others(1)
(703
)
(396
)
(63
)
Total
5,992
3,282
518
(1)
“Others” mainly include amortization of
intangible assets of equity method investees, share-based
compensation expense related to share-based awards granted to
employees of our equity method investees, as well as gain or loss
arising from the dilution of our investments in equity method
investees.
We record our share of results of all equity method investees
one quarter in arrears. Our share of profit of Ant Group was
essentially flat year-over-year whereby an increase in Ant Group’s
recognition during the three months ended December 31, 2021 of net
gains attributable to increases in the fair values of certain
overseas investments that Ant Group previously made was offset by a
decrease in its operating profit.
Net loss and Non-GAAP net
income
Our net loss in the quarter ended March 31, 2022 was RMB18,357
million (US$2,896 million), compared to RMB7,654 million in the
same quarter of 2021. The year-over-year increase in net loss was
primarily attributable to the increase in net losses arising from
the decreases in market prices of our equity investments in
publicly-traded companies, partly offset by the increase in income
from operations.
Excluding the Anti-monopoly Fine, share-based compensation
expense, revaluation and disposal gains/losses of investments,
impairment of investments and certain other items, non-GAAP net
income in the quarter ended March 31, 2022 was RMB19,799 million
(US$3,123 million), a decrease of 24% compared to RMB26,216 million
in the same quarter of 2021. A reconciliation of net income to
non-GAAP net income is included at the end of this results
announcement.
Net loss attributable to ordinary
shareholders
Net loss attributable to ordinary shareholders in the quarter
ended March 31, 2022 was RMB16,241 million (US$2,562 million),
compared to RMB5,479 million in the same quarter of 2021. The
year-over-year increase was primarily attributable to the increase
in net losses arising from the decrease in market prices of our
equity investments in publicly-traded companies, partly offset by
the increase in income from operations.
Diluted loss per ADS/share and non-GAAP
diluted earnings per ADS/share
Diluted loss per ADS in the quarter ended March 31, 2022 was
RMB6.07 (US$0.96), compared to diluted loss per ADS of RMB1.99 in
the same quarter in 2021. Excluding the Anti-monopoly Fine,
share-based compensation expense, revaluation and disposal
gains/losses of investments, impairment of investments and certain
other items, non-GAAP diluted earnings per ADS in the quarter ended
March 31, 2022 was RMB7.95 (US$1.25), a decrease of 23% compared to
RMB10.32 in the same quarter of 2021.
Diluted loss per share in the quarter ended March 31, 2022 was
RMB0.76 (US$0.12 or HK$0.94), compared to diluted loss per share of
RMB0.25 in the same quarter of 2021. Excluding the Anti-monopoly
Fine, share-based compensation expense, revaluation and disposal
gains/losses of investments, impairment of investments and certain
other items, non-GAAP diluted earnings per share in the quarter
ended March 31, 2022 was RMB0.99 (US$0.16 or HK$1.22), a decrease
of 23% compared to RMB1.29 in the same quarter of 2021.
A reconciliation of diluted loss per ADS/share to non-GAAP
diluted earnings per ADS/share is included at the end of this
results announcement. Each ADS represents eight ordinary
shares.
Net cash from operating activities and
free cash flow
Net cash from operating activities in the quarter ended March
31, 2022 was an outflow of RMB7,040 million (US$1,111 million),
compared to an inflow of RMB24,183 million in the same quarter of
2021, which includes a net cash inflow of RMB18,796 million in
connection with the consumer protection fund deposits received
primarily from Tmall merchants during the quarter ended March 31,
2021. Excluding these deposits and certain other items, free cash
flow, a non-GAAP measurement of liquidity, was an outflow of
RMB15,070 million (US$2,377 million), compared to an outflow of
RMB658 million in the same quarter of 2021, mainly due to the
payment of the final installment in the amount of RMB9,114 million
(US$1,438 million) of the RMB18,228 million Anti-monopoly Fine and
a decrease in profit. A reconciliation of net cash provided by
operating activities to free cash flow is included at the end of
this results announcement.
Net cash used in investing
activities
During the quarter ended March 31, 2022, net cash used in
investing activities of RMB87,254 million (US$13,764 million)
primarily reflected (i) an increase in short-term investments by
RMB71,670 million (US$11,306 million), (ii) capital expenditures of
RMB11,502 million (US$1,814 million), which included cash outflow
for acquisition of land use rights and construction in progress
relating to office campuses of RMB2,301 million (US$363 million),
as well as (iii) cash outflow of RMB6,291 million (US$992 million)
for investment and acquisition activities.
Net cash used in financing
activities
During the quarter ended March 31, 2022, net cash used in
financing activities of RMB10,614 million (US$1,675 million)
primarily reflected cash used in repurchase of ordinary shares of
RMB12,132 million (US$1,914 million), partially offset by net
proceeds from bank borrowings of RMB2,189 million (US$345
million).
Employees
As of March 31, 2022, we had a total of 254,941 employees,
compared to 259,316 as of December 31, 2021.
FULL FISCAL YEAR SUMMARY FINANCIAL RESULTS
Year ended March 31,
2021
2022
RMB
RMB
US$
YoY % Change(8)
(in millions, except
percentages and per share amounts)
Revenue
717,289
853,062
134,567
19
%
Income from operations
89,678
69,638
10,985
(22)% (2
)
Operating margin
13
%
8
%
Adjusted EBITDA(1)
196,842
158,205
24,956
(20)%(3
)
Adjusted EBITDA margin(1)
27
%
19
%
Adjusted EBITA(1)
170,453
130,397
20,570
(23)%(3
)
Adjusted EBITA margin(1)
24
%
15
%
Net income
143,284
47,079
7,427
(67)% (4
)
Net income attributable to ordinary
shareholders(5)
150,308
61,959
9,774
(59)%(4
)
Non-GAAP net income(1)
171,985
136,388
21,515
(21)%(3
)
Diluted earnings per share(5) (6)
6.84
2.84
0.45
(58)%(4) (7
)
Diluted earnings per ADS(5) (6)
54.70
22.74
3.59
(58)%(4) (7
)
Non-GAAP diluted earnings per share(1)
(6)
8.14
6.59
1.04
(19)% (3) (7
)
Non-GAAP diluted earnings per ADS(1)
(6)
65.15
52.69
8.31
(19)% (3) (7
)
(1)
See the sections entitled “Information
about Segments,” “Non-GAAP Financial Measures” and “Reconciliations
of Non-GAAP Measures to the Nearest Comparable U.S. GAAP Measures”
for more information about the non-GAAP measures referred to within
this results announcement.
(2)
Excluding one-off and certain other items,
our income from operations would have decreased by RMB41,683
million year-over-year, primarily due to our increased investments
in Taobao Deals and Taocaicai, our increased spending for user
growth, as well as our support to merchants. Please refer to “Full
Fiscal Year Operational and Financial Results” section below for
details.
(3)
The year-over-year decreases were
primarily due to our increased investments in Taobao Deals and
Taocaicai, our increased spending for user growth, as well as our
support to merchants.
(4)
The year-over-year decreases were
primarily due to the net losses arising from decreases in the
market value of our equity investments in publicly-traded
companies, compared to net gains from these investments in last
year.
(5)
In the consolidated financial information
for the three months and nine months ended December 31, 2021, which
we announced on February 24, 2022, net income attributable to
ordinary shareholders was understated by RMB7,263 million, and
earnings per share/ADS was understated correspondingly. This
understatement was caused by a non-cash goodwill impairment charge
that should have been partially attributed to noncontrolling
interests but was fully recorded in net income attributable to
ordinary shareholders. The attribution did not affect any of our
reported non-GAAP measures, including adjusted EBITA, adjusted
EBITDA, non-GAAP net income and non-GAAP earnings per share/ ADS.
It had no impact on our reported revenue, income from operations or
total net income for the three months and nine months ended
December 31, 2021. This attribution resulted in understatement of
(1) net income attributable to ordinary shareholders and (2)
earnings per share/ADS attributable to ordinary shareholders. If
this impairment charge was properly attributed to noncontrolling
interests, net income attributable to ordinary shareholders for the
three months and nine months ended December 31, 2021 would increase
by the same amount to RMB27,692 million and RMB78,200 million,
respectively; for the three months ended December 31, 2021, the
basic earnings per share/ADS attributable to ordinary shareholders
would increase to RMB1.29/share and RMB10.29/ADS respectively, and
the diluted earnings per share/ADS attributable to ordinary
shareholders would increase to RMB1.27/share and RMB10.19/ADS
respectively; for the nine months ended December 31, 2021, the
basic earnings per share/ADS attributable to ordinary shareholders
would increase to RMB3.62/share and RMB28.95/ADS respectively, and
the diluted earnings per share/ADS attributable to ordinary
shareholders would increase to RMB3.58/share and RMB28.62/ADS
respectively. We have performed quantitative and qualitative
assessments and concluded that the effect of the attribution was
not material to the consolidated financial information for the
three months and nine months ended December 31, 2021. When we
announce our financial results for the three months and nine months
ending December 31, 2022, we will present revised consolidated
financial information for the three months and nine months ended
December 31, 2021 that reflects the above attribution. The above
attribution has no impact on the consolidated financial information
for the three months ended March 31, 2022 contained in this
announcement. The consolidated financial information for the year
ended March 31, 2022 contained in this announcement reflects the
correct attribution of the aforementioned impairment charge to
noncontrolling interests.
(6)
Each ADS represents eight ordinary
shares.
(7)
The year-over-year percentages as stated
are calculated based on the exact amount and there may be minor
differences from the year-over-year percentages calculated based on
the RMB amounts after rounding.
(8)
For a more intuitive presentation,
widening of loss in YoY% is shown in terms of negative growth rate,
and narrowing of loss in YoY% is shown in terms of positive growth
rate.
FULL FISCAL YEAR INFORMATION BY SEGMENTS
The table below sets forth selected financial information of our
operating segments for the fiscal year 2022:
Year ended March 31,
2022
China
commerce
International
commerce
Local
consumer
services
Cainiao
Cloud
Digital
media and
entertainment
Innovation
initiatives
and others
Unallocated(1)
Consolidated
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
US$
(in millions, except
percentages)
Revenue
592,705
61,078
43,491
46,107
74,568
32,272
2,841
—
853,062
134,567
YoY% change
18
%
25
%
23
%
24
%
23
%
3
%
23
%
—
19
%
Income (Loss) from operations
172,219
(10,655
)
(30,485
)
(3,920
)
(5,167
)
(7,019
)
(9,424
)
(35,911
)
69,638
10,985
Add: Share-based compensation expense
7,078
1,569
2,556
1,396
6,297
1,520
1,839
1,716
23,971
3,782
Add: Amortization of intangible assets
2,817
95
6,154
1,059
16
809
456
241
11,647
1,837
Add: Impairment of goodwill
—
—
—
—
—
—
—
25,141
25,141
3,966
Adjusted EBITA
182,114
(8,991
)
(21,775
)
(1,465
)
1,146
(4,690
)
(7,129
)
(8,813
)
130,397
20,570
Adjusted EBITA YoY% change(2)
(15
)%
(82
)%
(34
)%
(80
)%
N/A
23
%
(37
)%
(17
)%
(23
)%
Adjusted EBITA margin
31
%
(15
)%
(50
)%
(3
)%
2
%
(15
)%
(251
)%
—
15
%
Year ended March 31,
2021
China
commerce
International
commerce
Local
consumer
services
Cainiao
Cloud
Digital
media and
entertainment
Innovation
initiatives
and others
Unallocated(1)
Consolidated
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
(in millions, except
percentages)
Revenue
501,683
48,851
35,442
37,258
60,558
31,186
2,311
—
717,289
Income (Loss) from operations
197,135
(9,361
)
(29,100
)
(3,964
)
(12,479
)
(10,321
)
(7,802
)
(34,430
)
89,678
Add: Share-based compensation expense
14,505
4,223
4,972
1,956
10,205
3,281
2,518
8,460
50,120
Add: Amortization of intangible assets
1,922
206
7,852
1,195
23
922
83
224
12,427
Add: Fine imposed pursuant to China’s
Anti-monopoly Law
—
—
—
—
—
—
—
18,228
18,228
Adjusted EBITA
213,562
(4,932
)
(16,276
)
(813
)
(2,251
)
(6,118
)
(5,201
)
(7,518
)
170,453
Adjusted EBITA margin
43
%
(10
)%
(46
)%
(2
)%
(4
)%
(20
)%
(225
)%
—
24
%
Starting from the quarter ended December 31, 2021, our CODM
started to review information under a new reporting structure, and
segment reporting has been updated to conform to this change, which
also provides greater transparency in our business progress and
financial performance. Our updated segments comprise:
- China commerce, which mainly includes retail businesses such as
Taobao, Tmall, Taobao Deals, Taocaicai, Tmall Supermarket, Tmall
Global, Freshippo, Alibaba Health, and Sun Art, as well as
wholesale business including 1688.com;
- International commerce, which mainly includes our international
retail and wholesale businesses such as Lazada, AliExpress,
Trendyol, Daraz and Alibaba.com;
- Local consumer services, which mainly includes location-based
services, such as Ele.me, Amap (previously reported under the
Innovation initiatives and others segment), Fliggy and
Taoxianda;
- Cainiao, which mainly includes our domestic and international
one-stop-shop logistics services and supply chain management
solutions;
- Cloud, which comprises Alibaba Cloud and DingTalk;
- Digital media and entertainment, which comprises Youku and
Alibaba Pictures, as well as other content platforms and online
games business; and
- Innovation initiatives and others, which includes businesses
such as Tmall Genie and DAMO Academy.
Comparative figures were reclassified to conform to this
presentation.
(1)
Unallocated expenses primarily relate to
corporate administrative costs and other miscellaneous items that
are not allocated to individual segments. The goodwill impairment
is presented as an unallocated item in the segment information
because our management does not consider this as part of the
segment operating performance measure.
(2)
For a more intuitive presentation,
widening of adjusted EBITA loss in YoY% is shown in terms of
negative growth rate, and narrowing of adjusted EBITA loss in YoY%
is shown in terms of positive growth rate.
FULL FISCAL YEAR OPERATIONAL AND FINANCIAL RESULTS
Revenue
Revenue in fiscal year 2022 was RMB853,062 million (US$134,567
million), an increase of 19% compared to RMB717,289 million in
fiscal year 2021. The increase was mainly driven by the segment
revenue growth of China commerce, Cloud and International commerce.
Excluding the consolidation of Sun Art, our revenue would have
grown 14% year-over-year to RMB770,734 million (US$121,580
million).
The following table sets forth a breakdown of our revenue by
segment for the periods indicated:
Year ended March 31,
2021
2022
RMB
% of Revenue
RMB
US$
% of Revenue
YoY % Change
(in millions, except
percentages)
China commerce:
China commerce retail
- Customer management
304,543
43
%
315,038
49,696
37
%
3
%
- Direct sales and others(1)
182,818
25
%
260,955
41,165
30
%
43
%
487,361
68
%
575,993
90,861
67
%
18
%
China commerce wholesale
14,322
2
%
16,712
2,636
2
%
17
%
Total China commerce
501,683
70
%
592,705
93,497
69
%
18%
International commerce:
International commerce retail
34,455
5
%
42,668
6,731
5
%
24
%
International commerce wholesale
14,396
2
%
18,410
2,904
2
%
28
%
Total International commerce
48,851
7
%
61,078
9,635
7
%
25
%
Local consumer services
35,442
5
%
43,491
6,861
5
%
23
%
Cainiao
37,258
5
%
46,107
7,273
5
%
24
%
Cloud
60,558
8
%
74,568
11,763
9
%
23
%
Digital media and entertainment
31,186
4
%
32,272
5,091
4
%
3
%
Innovation initiatives and others
2,311
1
%
2,841
447
1
%
23
%
Total
717,289
100
%
853,062
134,567
100
%
19
%
Starting from the quarter ended December 31, 2021, our CODM
started to review information under a new reporting structure, and
segment reporting is updated to conform to this change, which also
provides greater transparency in our business progress and
financial performance (see “Full Fiscal Year Information by
Segments” above). Comparative figures were reclassified to conform
to this presentation.
(1)
“Direct sales and others” revenue
under China commerce retail primarily represents our direct sales
businesses, comprising mainly Sun Art, Tmall Supermarket and
Freshippo, where revenue and the cost of inventory are recorded on
a gross basis.
China Commerce
- China Commerce Retail Business
Revenue from our China commerce retail business in fiscal year
2022 was RMB575,993 million (US$90,861 million), an increase of 18%
compared to RMB487,361 million in fiscal year 2021. Customer
management revenue increased by 3% year-over-year, primarily due to
single-digit year-over-year growth in online physical goods GMV of
Taobao and Tmall, excluding unpaid orders, that resulted from
slowing market conditions and increased competition, as well as our
support to merchants.
“Direct sales and others” revenue under China commerce retail
business in fiscal year 2022 was RMB260,955 million (US$41,165
million), an increase of 43% compared to RMB182,818 million in
fiscal year 2021, primarily due to the revenue contributed by our
direct sales businesses, such as Sun Art (which we started to
consolidate in October 2020), Tmall Supermarket and Freshippo.
- China Commerce Wholesale Business
Revenue from our China commerce wholesale business in fiscal
year 2022 was RMB16,712 million (US$2,636 million), an increase of
17% compared to RMB14,322 million in fiscal year 2021. The increase
was primarily due to the increase in revenue from value-added
services to paying members and wholesale buyers.
International Commerce
- International Commerce Retail Business
Revenue from our International commerce retail business in
fiscal year 2022 was RMB42,668 million (US$6,731 million), an
increase of 24% compared to RMB34,455 million in fiscal year 2021.
The increase was mainly attributable to the growth in revenue
generated by Lazada. Revenue growth of Trendyol and AliExpress were
slower than the overall International commerce retail revenue
growth, primarily due to the negative impact by the depreciation of
Turkish lira against Renminbi on Trendyol, and weakening order
growth of AliExpress that was affected by the change in the
European Union’s VAT rules as well as supply chain and logistics
disruptions due to the Russia-Ukraine conflict.
- International Commerce Wholesale Business
Revenue from our International commerce wholesale business in
fiscal year 2022 was RMB18,410 million (US$2,904 million), an
increase of 28% compared to RMB14,396 million in fiscal year 2021.
The increase was primarily due to increases in both the average
revenue from paying members and the number of paying members on
Alibaba.com, as well as an increase in revenue generated by
cross-border related value-added services.
Local Consumer Services
Revenue from Local consumer services, which mainly includes
location-based services, such as Ele.me, Amap, Fliggy and
Taoxianda, was RMB43,491 million (US$6,861 million) in fiscal year
2022, an increase of 23% compared to RMB35,442 million in fiscal
year 2021, primarily driven by the growth in GMV.
Cainiao
Revenue from Cainiao, which represents revenue from its domestic
and international one-stop-shop logistics services and supply chain
management solutions, after inter-segment elimination, was
RMB46,107 million (US$7,273 million) in fiscal year 2022, an
increase of 24% compared to RMB37,258 million in fiscal year 2021,
primarily due to the increases in both volume of orders fulfilled
and penetration of cross-border and International commerce retail
businesses, the increase in revenue from value-added services
provided to external merchants, as well as increase in revenue from
consumer logistics services as a result of service upgrade to
enhance consumer experience. Total revenue generated by Cainiao,
before inter-segment elimination, which includes revenue from
services provided to other Alibaba businesses, was RMB66,808
million (US$10,539 million), an increase of 27% compared to
RMB52,735 million in fiscal year 2021. The year-over-year increase,
in addition to the growth from external revenue, also reflected the
growth of fulfillment solutions and value-added services provided
to our China commerce retail businesses, such as Tmall, Taobao and
Taobao Deals.
Cloud
Revenue from our Cloud segment (comprised of Alibaba Cloud and
DingTalk), after inter-segment elimination, was RMB74,568 million
(US$11,763 million) in fiscal year 2022, an increase of 23%
year-over-year compared to RMB60,558 million in fiscal year 2021.
Year-over-year revenue growth moderated in fiscal year 2022
primarily because of revenue decline from a top cloud customer in
the Internet industry that has gradually stopped using our overseas
cloud services for its international business due to non-product
related requirements as well as slowing demand from customers in
China’s Internet industry. Excluding the revenue generated from
this top customer, our Cloud segment revenue, after inter-segment
elimination, would have grown strongly at 29% year-over-year during
the twelve months ended March 31, 2022. Total revenue from our
Cloud business, before inter-segment elimination, which includes
revenue from services provided to other Alibaba businesses, was
RMB100,180 million (US$15,803 million), an increase of 21% compared
to RMB82,971 million in the fiscal year 2021.
Digital Media and Entertainment
Revenue from our Digital media and entertainment segment in
fiscal year 2022 was RMB32,272 million (US$5,091 million), an
increase of 3%, compared to RMB31,186 million in fiscal year
2021.
Innovation Initiatives and Others
Revenue from Innovation initiatives and others was RMB2,841
million (US$447 million) in fiscal year 2022, an increase of 23%
compared to RMB2,311 million in fiscal year 2021.
Costs and Expenses
The following tables set forth a breakdown of our costs and
expenses, share-based compensation expense and costs and expenses
excluding share-based compensation expense by function for the
periods indicated.
Year ended March 31,
% of Revenue
YoY change
2021
2022
RMB
% of Revenue
RMB
US$
% of Revenue
(in millions, except
percentages)
Costs and expenses:
Cost of revenue
421,205
59
%
539,450
85,096
63
%
4
%
Product development expenses
57,236
8
%
55,465
8,749
7
%
(1
)%
Sales and marketing expenses
81,519
11
%
119,799
18,898
14
%
3
%
General and administrative expenses
55,224
8
%
31,922
5,036
4
%
(4
)%
Amortization of intangible assets
12,427
1
%
11,647
1,837
1
%
0
%
Impairment of goodwill
—
—
25,141
3,966
3
%
3
%
Total costs and expenses
627,611
87
%
783,424
123,582
92
%
5
%
Share-based compensation
expense:
Cost of revenue
11,224
2
%
5,725
903
1
%
(1
)%
Product development expenses
21,474
3
%
11,035
1,741
1
%
(2
)%
Sales and marketing expenses
5,323
0
%
3,050
481
0
%
0
%
General and administrative expenses
12,099
2
%
4,161
657
1
%
(1
)%
Total share-based compensation expense
50,120
7
%
23,971
3,782
3
%
(4
)%
Costs and expenses excluding
share-based compensation expense:
Cost of revenue
409,981
57
%
533,725
84,193
62
%
5
%
Product development expenses
35,762
5
%
44,430
7,008
6
%
1
%
Sales and marketing expenses
76,196
11
%
116,749
18,417
14
%
3
%
General and administrative expenses
43,125
6
%
27,761
4,379
3
%
(3
)%
Amortization of intangible assets
12,427
1
%
11,647
1,837
1
%
0
%
Impairment of goodwill
—
—
25,141
3,966
3
%
3
%
Total costs and expenses excluding
share-based compensation expense
577,491
80
%
759,453
119,800
89
%
9
%
Cost of revenue – Cost of revenue in fiscal year 2022 was
RMB539,450 million (US$85,096 million), or 63% of revenue, compared
to RMB421,205 million, or 59% of revenue, in fiscal year 2021.
Without the effect of share-based compensation expense, cost of
revenue as a percentage of revenue would have increased from 57% in
fiscal year 2021 to 62% in fiscal year 2022. The increase was
primarily attributable to (i) the higher proportion of our direct
sales businesses, such as Sun Art, which we started to consolidate
in October 2020, that resulted in increased cost of inventory as a
percentage of revenue, and (ii) the growth of Taocaicai businesses
that led to an increase in logistics costs as a percentage of
revenue.
Product development expenses – Product development
expenses in fiscal year 2022 were RMB55,465 million (US$8,749
million), or 7% of revenue, compared to RMB57,236 million, or 8% of
revenue, in fiscal year 2021. Without the effect of share-based
compensation expense, product development expenses as a percentage
of revenue would have increased from 5% in fiscal year 2021 to 6%
in fiscal year 2022.
Sales and marketing expenses – Sales and marketing
expenses in fiscal year 2022 were RMB119,799 million (US$18,898
million), or 14% of revenue, compared to RMB81,519 million, or 11%
of revenue, in fiscal year 2021. Without the effect of share-based
compensation expense, sales and marketing expenses as a percentage
of revenue would have increased from 11% in fiscal year 2021 to 14%
in fiscal year 2022. The increase was primarily due to an increase
in marketing and promotional spending for user acquisition and
engagement for our mobile commerce apps, such as Taobao Deals,
Taobao, Lazada and Ele.me.
General and administrative expenses – General and
administrative expenses in fiscal year 2022 were RMB31,922 million
(US$5,036 million), or 4% of revenue, compared to RMB55,224
million, or 8% of revenue, in fiscal year 2021, primarily due to
the Anti-monopoly Fine in the amount of RMB18,228 million recorded
in fiscal year 2021. Without the effect of this fine and
share-based compensation expense, general and administrative
expenses as a percentage of revenue would have remained stable at
3% in fiscal year 2022 compared to fiscal year 2021.
Share-based compensation expense – Total share-based
compensation expense included in the cost and expense items above
in fiscal year 2022 was RMB23,971 million (US$3,782 million), a
decrease of 52% compared to RMB50,120 million in fiscal year 2021.
Share-based compensation expense as a percentage of revenue
decreased to 3% in fiscal year 2022, as compared to 7% in fiscal
year 2021.
The following table sets forth our analysis of share-based
compensation expense for the periods indicated by type of
share-based awards:
Year ended March 31,
2021
2022
% Change
RMB
% of Revenue
RMB
US$
% of Revenue
YoY
(in millions, except
percentages)
By type of awards:
Alibaba Group share-based awards(1)
29,317
4
%
30,576
4,823
4
%
4
%
Ant Group share-based awards(2)
17,315
2
%
(11,585
)
(1,827
)
(1
)%
N/A
Others(3)
3,488
1
%
4,980
786
0
%
43
%
Total share-based compensation expense
50,120
7
%
23,971
3,782
3
%
(52
)%
(1)
This represents Alibaba Group share-based
awards granted to our employees.
(2)
This represents Ant Group share-based
awards granted to our employees, which is subject to mark-to-market
accounting treatment.
(3)
This represents share-based awards of our
subsidiaries
Share-based compensation expense related to Alibaba Group
share-based awards remained stable in fiscal year 2022 compared to
fiscal year 2021.
Share-based compensation expense related to Ant Group
share-based awards was a net reversal in fiscal year 2022 compared
to fiscal year 2021, as a result of our on-going evaluation of Ant
Group. During fiscal year 2022, we recognized a decrease in the
value of the awards after considering existing circumstances.
We expect that our share-based compensation expense will
continue to be affected by changes in the fair value of the
underlying awards and the quantity of awards we grant in the
future.
Amortization of intangible assets – Amortization of
intangible assets in fiscal year 2022 was RMB11,647 million
(US$1,837 million), a decrease of 6% from RMB12,427 million in
fiscal year 2021.
Impairment of goodwill - Impairment of goodwill of
RMB25,141 million (US$3,966 million) was recorded in fiscal year
2022, representing the amount by which the carrying value of
certain reporting units within the Digital media and entertainment
segment exceeds their fair value, based on an annual goodwill
impairment assessment.
Income from operations and operating
margin
Income from operations in fiscal year ended March 31, 2022 was
RMB69,638 million (US$10,985 million), or 8% of revenue, a decrease
of 22% compared to RMB89,678 million, or 13% of revenue, in fiscal
year 2021. During fiscal year 2022, we recorded a RMB25,141 million
(US$3,966 million) impairment of goodwill in relation to the
Digital media and entertainment segment and a reversal of
share-based compensation expense of RMB13,046 million (US$2,058
million) related to the mark-to-market adjustment of Ant Group
share-based awards granted to our employees. During fiscal year
2021, we recorded a RMB18,228 million Anti-monopoly Fine and a
RMB15,510 million share-based compensation expense related to the
mark-to-market adjustment of Ant Group share-based awards granted
to our employees. All of these impacts were excluded from our
non-GAAP measures of profitability. Excluding these impacts, income
from operations would have decreased by RMB41,683 million
year-over-year, from RMB123,416 million in fiscal year 2021 to
RMB81,733 million (US$12,893 million) in fiscal year 2022,
primarily due to our increased investments in Taobao Deals and
Taocaicai, our increased spending for user growth, as well as our
support to merchants.
Adjusted EBITDA and Adjusted
EBITA
Adjusted EBITDA decreased 20% year-over-year to RMB158,205
million (US$24,956 million) in fiscal year 2022, compared to
RMB196,842 million in fiscal year 2021. Adjusted EBITA decreased
23% or RMB40,056 million year-over-year to RMB130,397 million
(US$20,570 million) in fiscal year 2022, compared to RMB170,453
million in fiscal year 2021. The year-over-year decreases were
primarily due to our increased investments in Taobao Deals and
Taocaicai, our increased spending for user growth, as well as our
support to merchants. A reconciliation of net income to adjusted
EBITDA and adjusted EBITA is included at the end of this results
announcement.
Adjusted EBITA and adjusted EBITA
margin by segments
Adjusted EBITA and adjusted EBITA margin by segments are set
forth in the table below. See the section entitled “Full Fiscal
Year Information by Segments” above for a reconciliation of income
(loss) from operations to adjusted EBITA.
Year ended March 31,
2021
2022
RMB
% of Segment
Revenue
RMB
US$
% of
Segment Revenue
(in millions, except
percentages)
China commerce
213,562
43
%
182,114
28,728
31
%
International commerce
(4,932
)
(10
)%
(8,991
)
(1,418
)
(15
)%
Local consumer services
(16,276
)
(46
)%
(21,775
)
(3,435
)
(50
)%
Cainiao
(813
)
(2
)%
(1,465
)
(231
)
(3
)%
Cloud
(2,251
)
(4
)%
1,146
181
2
%
Digital media and entertainment
(6,118
)
(20
)%
(4,690
)
(740
)
(15
)%
Innovation initiatives and others
(5,201
)
(225
)%
(7,129
)
(1,125
)
(251
)%
Unallocated(1)
(7,518
)
—
(8,813
)
(1,390
)
—
Total
170,453
24
%
130,397
20,570
15
%
Starting from the quarter ended December 31, 2021, our CODM
started to review information under a new reporting structure, and
segment reporting is updated to conform to this change, which also
provides greater transparency in our business progress and
financial performance (see “Full Fiscal Year Information by
Segments” above). Comparative figures were reclassified to conform
to this presentation.
(1)
Unallocated expenses primarily relate to
corporate administrative costs and other miscellaneous items that
are not allocated to individual segments.
China commerce segment – Adjusted EBITA decreased by 15%
to RMB182,114 million (US$28,728 million) in fiscal year 2022,
compared to RMB213,562 million in fiscal year 2021. The decrease
was primarily due to our increased investments in Taobao Deals and
Taocaicai within our China commerce retail businesses and our
increased spending for user growth, as well as our support to
merchants. Adjusted EBITA margin decreased from 43% in fiscal year
2021 to 31% in fiscal year 2022, primarily due to the
above-mentioned factors, as well as the consolidation of Sun Art in
October 2020 where its revenue and the cost of inventory are mainly
recorded on a gross basis.
We expect that our China commerce adjusted EBITA margin will
continue to be affected by the growth of our direct sales
businesses.
International commerce segment – Adjusted EBITA was a
loss of RMB8,991 million (US$1,418 million) in fiscal year 2022,
compared to a loss of RMB4,932 million in fiscal year 2021. The
year-over year increase in adjusted EBITA loss was primarily
attributable to the increase in Lazada’s marketing and promotional
spending for user acquisition and engagement, as well as increase
in loss of Trendyol resulted from its investments in new
businesses, such as international business and local consumer
services in Turkey, partly offset by the increase in profit
contributed by our International wholesale businesses.
Local consumer services segment – Adjusted EBITA was a
loss of RMB21,775 million (US$3,435 million) in fiscal year 2022,
compared to a loss of RMB16,276 million in fiscal year 2021,
primarily due to the increased losses of our “To Home” businesses,
which reflected of our investments in growing paying members and
consumer experience enhancement of Ele.me.
Cainiao segment – Adjusted EBITA was a loss of RMB1,465
million (US$231 million) in fiscal year 2022, compared to a loss of
RMB813 million in fiscal year 2021. The year-over-year increase in
loss was primarily due to increase in operating cost as a result of
our investment in expanding the global smart logistics
infrastructure, as well as the impact from COVID-19 and the
Russia-Ukraine conflict.
Cloud segment (comprised of Alibaba Cloud and DingTalk)
– Adjusted EBITA of Cloud segment, which comprised of
Alibaba Cloud and DingTalk, was a profit of RMB1,146 million
(US$181 million) in fiscal year 2022, compared to a loss of
RMB2,251 million in fiscal year 2021, primarily attributable to the
realization of economies of scale, partly offset by our increased
investments in DingTalk.
Digital media and entertainment segment – Adjusted EBITA
in fiscal year 2022 was a loss of RMB4,690 million (US$740
million), compared to a loss of RMB6,118 million in fiscal year
2021, primarily due to our disciplined investment in content and
production capability, which resulted in narrowing of losses of
Youku year-over-year.
Innovation initiatives and others segment – Adjusted
EBITA in fiscal year 2022 was a loss of RMB7,129 million (US$1,125
million), compared to a loss of RMB5,201 million in fiscal year
2021, primarily due to our investments in technology and
innovation.
Interest and investment income,
net
Interest and investment income, net in fiscal year 2022 was a
loss of RMB15,702 million (US$2,477 million), compared to a gain of
RMB72,794 million in fiscal year 2021, primarily due to the net
losses arising from decrease in market prices of our listed equity
investments in publicly-traded companies, compared to net gains
from these investments in fiscal year 2021.
The above-mentioned gains and losses were excluded from our
non-GAAP net income.
Other income, net
Other income, net in fiscal year 2022 was RMB10,523 million
(US$1,660 million), compared to RMB7,582 million in fiscal year
2021, primarily due to the increase in net exchange gain.
Income tax expenses
Income tax expenses in fiscal year 2022 were RMB26,815 million
(US$4,230 million), compared to RMB29,278 million in fiscal year
2021.
Excluding share-based compensation expense, revaluation and
disposal gains/losses of investments, impairment of goodwill and
investments, as well as the deferred tax effects on basis
differences arising from equity method investees, our effective tax
rate would have been 21% in fiscal year 2022.
Share of results of equity method
investees
Share of results of equity method investees in fiscal year 2022
was RMB14,344 million (US$2,263 million), compared to RMB6,984
million in fiscal year 2021. Share of results of equity method
investees in fiscal year 2022 and prior year consisted of the
following:
Year ended March 31,
2021
2022
RMB
RMB
US$
(in millions)
Share of profit (loss) of equity method
investees
- Ant Group
19,693
24,084
3,799
- Others
(1,016
)
(89
)
(14
)
Impairment loss
(7,256
)
(6,201
)
(978
)
Others(1)
(4,437
)
(3,450
)
(544
)
Total
6,984
14,344
2,263
(1)
Others” mainly include amortization of
intangible assets of equity method investees, share-based
compensation expense related to share-based awards granted to
employees of our equity method investees, as well as gain or loss
arising from the dilution of our investment in equity method
investees.
We record our share of results of all equity method investees
one quarter in arrears. In connection with our share of profit of
Ant Group, although Ant Group’s operating profit decreased
year-over-year, our share of profit of Ant Group was still an
increase year-over-year, mainly due to Ant Group’s recognition
during the twelve months ended December 31, 2021 of net gains
attributable to the increases in fair values of certain overseas
investments it previously made. The increase in share of results of
other equity method investees was mainly due to the overall
improvement in financial performance of our equity method
investees.
Net income and Non-GAAP net
income
Our net income in fiscal year 2022 was RMB47,079 million
(US$7,427 million), compared to RMB143,284 million in fiscal year
2021. The year-over-year decrease was primarily due to the net
losses arising from decreases in the market prices of our equity
investments in publicly-traded companies, compared to net gains
from these investments in last year.
Excluding the Anti-monopoly Fine, share-based compensation
expense, revaluation and disposal gains/losses of investments,
impairment of goodwill and investments and certain other items,
non-GAAP net income in fiscal year 2022 was RMB136,388 million
(US$21,515 million), a decrease of 21% compared to RMB171,985
million in fiscal year 2021. A reconciliation of net income to
non-GAAP net income is included at the end of this results
announcement.
Net income attributable to ordinary
shareholders
Net income attributable to ordinary shareholders in fiscal year
2022 was RMB61,959 million (US$9,774 million), compared to
RMB150,308 million in fiscal year 2021. The year-over-year decrease
was primarily due to the net losses arising from decreases in the
market prices of our equity investments in publicly-traded
companies, compared to net gains from these investments in last
year.
Diluted earnings per ADS/share and
non-GAAP diluted earnings per ADS/share
Diluted earnings per ADS in fiscal year 2022 was RMB22.74
(US$3.59), a decrease of 58% compared to RMB54.70 in fiscal year
2021. Excluding the Anti-monopoly Fine, share-based compensation
expense, revaluation and disposal gains/losses of investments,
impairment of goodwill and investments and certain other items,
non-GAAP diluted earnings per ADS in fiscal year 2022 was RMB52.69
(US$8.31), a decrease of 19% compared to RMB65.15 in fiscal year
2021.
Diluted earnings per share in fiscal year 2022 was RMB2.84
(US$0.45 or HK$3.50), a decrease of 58% compared to RMB6.84 in
fiscal year 2021. Excluding the Anti-monopoly Fine, share-based
compensation expense, revaluation and disposal gains/losses of
investments, impairment of goodwill and investments and certain
other items, non-GAAP diluted earnings per share in fiscal year
2022 was RMB6.59 (US$1.04 or HK$8.13), a decrease of 19%, compared
to RMB8.14 in the fiscal year 2021.
A reconciliation of diluted earnings per ADS/share to non-GAAP
diluted earnings per ADS/share is included at the end of this
results announcement. Each ADS represents eight ordinary
shares.
Cash, cash equivalents and short-term
investments
As of March 31, 2022, cash, cash equivalents and short-term
investments were RMB446,412 million (US$70,420 million), compared
to RMB473,638 million as of March 31, 2021. The decrease in cash,
cash equivalents and short-term investments during the year ended
March 31, 2022 was primarily due to cash used in repurchase of
ordinary shares of RMB61,225 million (US$9,658 million), cash used
in investment and acquisition activities of RMB52,848 million
(US$8,337 million) and repayment of unsecured senior notes of
US$1,500 million, partly offset by the free cash flow generated
from operations of RMB98,874 million (US$15,597 million).
Net cash from operating activities and
free cash flow
Net cash provided by operating activities in fiscal year 2022
was RMB142,759 million (US$22,520 million), a decrease of 38%
compared to RMB231,786 million in the fiscal year 2021. Free cash
flow decreased by 43% in fiscal year 2022 to RMB98,874 million
(US$15,597 million), from RMB172,662 million in fiscal year 2021,
mainly due to a decrease in profit and the full payment in the
amount of RMB18,228 million of the Anti-monopoly Fine. A
reconciliation of net cash provided by operating activities to free
cash flow is included at the end of this results announcement.
Net cash used in investing
activities
During fiscal year 2022, net cash used in investing activities
of RMB198,592 million (US$31,327 million) primarily reflected (i)
an increase in short-term investments by RMB106,984 million
(US$16,876 million), (ii) capital expenditures of RMB53,309 million
(US$8,409 million), which included cash outflow for acquisition of
land use rights and construction in progress relating to office
campuses of RMB11,281 million (US$1,780 million), as well as (iii)
cash outflow of RMB52,848 million (US$8,337 million) for investment
and acquisition activities. These cash outflows were partially
offset by cash inflow of RMB15,468 million (US$2,440 million) from
disposal of investments.
Net cash used in financing
activities
During fiscal year 2022, net cash used in financing activities
of RMB64,449 million (US$10,167 million) primarily reflected cash
used in repurchase of ordinary shares of RMB61,225 million
(US$9,658 million) and repayment of unsecured senior notes of
US$1,500 million, partially offset by the net cash inflow from
transactions with noncontrolling interests of RMB3,953 million
(US$624 million).
WEBCAST AND CONFERENCE CALL INFORMATION
Alibaba Group’s management will hold a conference call to
discuss the financial results at 7:30 a.m. U.S. Eastern Time (7:30
p.m. Hong Kong Time) on May 26, 2022.
Details of the conference call are as follows:
International: +65 6780 1201 U.S.: +1 332 208 9458 U.K.: +44 20
3692 8123 Hong Kong SAR: +852 3018 8307 China Landline: 800 820
2079 China Mobile: 400 820 6895 Conference ID: 1388446 (English)
Conference ID: 5973677 (simultaneous interpretation in Chinese,
listen only mode)
A live webcast of the earnings conference call can be accessed
at https://www.alibabagroup.com/en/ir/earnings. An archived webcast
will be available through the same link following the call. A
replay of the conference call will be available for one week
(dial-in number: +61 2 8199 0299; same conference ID as shown
above).
Please visit Alibaba Group’s Investor Relations website at
https://www.alibabagroup.com/en/ir/home on May 26, 2022 to view the
earnings release and accompanying slides prior to the conference
call.
About Alibaba Group
Alibaba Group’s mission is to make it easy to do business
anywhere. The company aims to build the future infrastructure of
commerce. It envisions that its customers will meet, work and live
at Alibaba, and that it will be a good company that lasts for 102
years.
EXCHANGE RATE INFORMATION
This results announcement contains translations of certain
Renminbi (“RMB”) amounts into U.S. dollars (“US$”) and Hong Kong
dollars (“HK$”) for the convenience of the reader. Unless otherwise
stated, all translations of RMB into US$ were made at RMB6.3393 to
US$1.00, the exchange rate on March 31, 2022 as set forth in the
H.10 statistical release of the Federal Reserve Board, and all
translations of RMB into HK$ were made at RMB0.81101 to HK$1.00,
the middle rate on March 31, 2022 as published by the People’s Bank
of China. The percentages stated in this announcement are
calculated based on the RMB amounts and there may be minor
differences due to rounding.
SAFE HARBOR STATEMENTS
This announcement contains forward-looking statements. These
statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
“may,” “will,” “expect,” “anticipate,” “future,” “aim,” “estimate,”
“intend,” “seek, ” “plan,” “believe,” “potential,” “continue,”
“ongoing,” “target,” “guidance,” “is/are likely to” and similar
statements. In addition, statements that are not historical facts,
including statements about Alibaba’s strategies and business plans,
Alibaba’s beliefs, expectations and guidance regarding the growth
of its business and its revenue, the business outlook and
quotations from management in this announcement, as well as
Alibaba’s strategic and operational plans, are or contain
forward-looking statements. Alibaba may also make forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission (the “SEC”), in announcements made on the
website of The Stock Exchange of Hong Kong Limited (the “Hong Kong
Stock Exchange”), in press releases and other written materials and
in oral statements made by its officers, directors or employees to
third parties. Forward-looking statements involve inherent risks
and uncertainties. A number of factors could cause actual results
to differ materially from those contained in any forward-looking
statement, including but not limited to the following: Alibaba’s
ability to maintain the trusted status of its ecosystem; risks
associated with sustained investments in Alibaba’s business,
strategic acquisitions and investments; Alibaba’s ability to
maintain or grow its revenue or business; Alibaba’s ability to
continue to compete effectively and maintain and improve the
network effects of its ecosystem; company culture; Alibaba’s
ability to continue to innovate; risks and challenges associated
with operating a complex and large-scale company; risks associated
with our acquisitions, investments and alliances; risks associated
with expanding our international and cross-border businesses and
operations; uncertainties arising from competition among countries
and geopolitical tensions, including protectionist or national
security policies; changes in laws, regulations and regulatory
environment that affect Alibaba’s business operations (including in
the areas of anti-monopoly and unfair competition); risks
associated with the performance and regulatory environment of our
business partners, including but not limited to Ant Group; privacy
and data protection regulations and concerns; security breaches;
fluctuations in general economic and business conditions in China
and globally; impacts of the COVID-19 pandemic and assumptions
underlying or related to any of the foregoing. Further information
regarding these and other risks is included in Alibaba’s filings
with the SEC and announcements on the website of the Hong Kong
Stock Exchange. All information provided in this results
announcement is as of the date of this results announcement and are
based on assumptions that we believe to be reasonable as of this
date, and Alibaba does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
NON-GAAP FINANCIAL MEASURES
To supplement our consolidated financial statements, which are
prepared and presented in accordance with GAAP, we use the
following non-GAAP financial measures: for our consolidated
results, adjusted EBITDA (including adjusted EBITDA margin),
adjusted EBITA (including adjusted EBITA margin), non-GAAP net
income, non-GAAP diluted earnings per share/ADS and free cash flow.
For more information on these non-GAAP financial measures, please
refer to the section entitled “Information about Segments” and the
table captioned “Reconciliations of Non-GAAP Measures to the
Nearest Comparable U.S. GAAP Measures” in this results
announcement.
We believe that adjusted EBITDA, adjusted EBITA, non-GAAP net
income and non-GAAP diluted earnings per share/ADS help identify
underlying trends in our business that could otherwise be distorted
by the effect of certain income or expenses that we include in
income from operations, net income and diluted earnings per
share/ADS. We believe that these non-GAAP measures provide useful
information about our core operating results, enhance the overall
understanding of our past performance and future prospects and
allow for greater visibility with respect to key metrics used by
our management in its financial and operational decision-making. We
present three different income measures, namely adjusted EBITDA,
adjusted EBITA and non-GAAP net income in order to provide more
information and greater transparency to investors about our
operating results.
We consider free cash flow to be a liquidity measure that
provides useful information to management and investors about the
amount of cash generated by our business that can be used for
strategic corporate transactions, including investing in our new
business initiatives, making strategic investments and acquisitions
and strengthening our balance sheet.
Adjusted EBITDA, adjusted EBITA, non-GAAP net income, non-GAAP
diluted earnings per share/ADS and free cash flow should not be
considered in isolation or construed as an alternative to income
from operations, net income, diluted earnings per share/ADS, cash
flows or any other measure of performance or as an indicator of our
operating performance. These non-GAAP financial measures presented
here do not have standardized meanings prescribed by U.S. GAAP and
may not be comparable to similarly titled measures presented by
other companies. Other companies may calculate similarly titled
measures differently, limiting their usefulness as comparative
measures to our data.
Adjusted EBITDA represents net income before (i) interest
and investment income, net, interest expense, other income, net,
income tax expenses and share of results of equity method
investees, (ii) certain non-cash expenses, consisting of
share-based compensation expense, amortization of intangible
assets, depreciation and impairment of property and equipment,
operating lease cost relating to land use rights and impairment of
goodwill, and iii) a fine imposed pursuant to China’s Anti-monopoly
Law, which we do not believe are reflective of our core operating
performance during the periods presented.
Adjusted EBITA represents net income before (i) interest
and investment income, net, interest expense, other income, net,
income tax expenses and share of results of equity method
investees, (ii) certain non-cash expenses, consisting of
share-based compensation expense, amortization of intangible assets
and impairment of goodwill, and iii) a fine imposed pursuant to
China’s Anti-monopoly Law, which we do not believe are reflective
of our core operating performance during the periods presented.
Non-GAAP net income represents net income before
share-based compensation expense, amortization of intangible
assets, impairment of goodwill and investments, a fine imposed
pursuant to China’s Anti-monopoly Law, gain or loss on deemed
disposals/disposals/revaluation of investments and others, as
adjusted for the tax effects.
Non-GAAP diluted earnings per share represents non-GAAP
net income attributable to ordinary shareholders divided by the
weighted average number of shares outstanding during the periods on
a diluted basis for computing non-GAAP diluted earnings per share.
Non-GAAP diluted earnings per ADS represents non-GAAP
diluted earnings per share after adjustment to the ordinary
share-to-ADS ratio.
Free cash flow represents net cash provided by operating
activities as presented in our consolidated cash flow statement
less purchases of property and equipment (excluding acquisition of
land use rights and construction in progress relating to office
campuses) and intangible assets, as well as adjustments to exclude
from net cash provided by operating activities the consumer
protection fund deposits from merchants on our marketplaces. We
deduct certain items of cash flows from investing activities in
order to provide greater transparency into cash flow from our
revenue-generating business operations. We exclude “acquisition of
land use rights and construction in progress relating to office
campuses” because the office campuses are used by us for corporate
and administrative purposes and are not directly related to our
revenue-generating business operations. We also exclude consumer
protection fund deposits from merchants on our marketplaces because
these deposits are restricted for the purpose of compensating
consumers for claims against merchants.
The section entitled “Information about Segments” and the table
captioned “Reconciliations of Non-GAAP Measures to the Nearest
Comparable U.S. GAAP Measures” in this results announcement have
more details on the non-GAAP financial measures that are most
directly comparable to GAAP financial measures and the related
reconciliations between these financial measures.
ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONSOLIDATED INCOME
STATEMENTS
Three months ended March
31,
Year ended March 31,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
(in millions, except per share
data)
(in millions, except per share
data)
Revenue
187,395
204,052
32,188
717,289
853,062
134,567
Cost of revenue
(125,454
)
(138,945
)
(21,918
)
(421,205
)
(539,450
)
(85,096
)
Product development expenses
(13,302
)
(10,944
)
(1,726
)
(57,236
)
(55,465
)
(8,749
)
Sales and marketing expenses
(25,153
)
(27,200
)
(4,291
)
(81,519
)
(119,799
)
(18,898
)
General and administrative expenses
(27,734
)
(7,415
)
(1,169
)
(55,224
)
(31,922
)
(5,036
)
Amortization of intangible assets
(3,415
)
(2,831
)
(447
)
(12,427
)
(11,647
)
(1,837
)
Impairment of goodwill
—
—
—
—
(25,141
)
(3,966
)
(Loss) Income from operations
(7,663
)
16,717
2,637
89,678
69,638
10,985
Interest and investment income, net
111
(36,708
)
(5,791
)
72,794
(15,702
)
(2,477
)
Interest expense
(1,160
)
(1,189
)
(188
)
(4,476
)
(4,909
)
(774
)
Other income, net
2,115
1,620
256
7,582
10,523
1,660
(Loss) Income before income tax and
share of results of equity method investees
(6,597
)
(19,560
)
(3,086
)
165,578
59,550
9,394
Income tax expenses
(7,049
)
(2,079
)
(328
)
(29,278
)
(26,815
)
(4,230
)
Share of results of equity method
investees
5,992
3,282
518
6,984
14,344
2,263
Net (loss) income
(7,654
)
(18,357
)
(2,896
)
143,284
47,079
7,427
Net loss attributable to noncontrolling
interests(1)
2,288
2,241
354
7,294
15,170
2,393
Net (loss) income attributable to Alibaba
Group Holding Limited(1)
(5,366
)
(16,116
)
(2,542
)
150,578
62,249
9,820
Accretion of mezzanine equity
(113
)
(125
)
(20
)
(270
)
(290
)
(46
)
Net (loss) income attributable to
ordinary shareholders(1)
(5,479
)
(16,241
)
(2,562
)
150,308
61,959
9,774
(Loss) Earnings per share attributable
to ordinary shareholders(1) (2)
Basic
(0.25
)
(0.76
)
(0.12
)
6.95
2.87
0.45
Diluted
(0.25
)
(0.76
)
(0.12
)
6.84
2.84
0.45
(Loss) Earnings per ADS attributable to
ordinary shareholders(1) (2)
Basic
(2.02
)
(6.07
)
(0.96
)
55.63
22.99
3.63
Diluted
(1.99
)
(6.07
)
(0.96
)
54.70
22.74
3.59
Weighted average number of shares used
in calculating earnings per ordinary share (million
shares)(2)
Basic
21,652
21,401
21,619
21,558
Diluted
22,024
21,401
21,982
21,787
(1)
See "Full Fiscal Year Summary
Financial Results" within this results announcement for more
information about the attribution of a goodwill impairment charge
to noncontrolling interests.
(2)
Each ADS represents eight
ordinary shares.
ALIBABA GROUP HOLDING LIMITED
REVENUE
The following table sets forth our revenue
by segments for the periods indicated:
Three months ended March
31,
Year ended March 31,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
China commerce(1)
130,391
140,330
22,137
501,683
592,705
93,497
International commerce(2)
13,416
14,335
2,261
48,851
61,078
9,635
Local consumer services(3)
8,123
10,445
1,647
35,442
43,491
6,861
Cainiao(4)
9,959
11,582
1,827
37,258
46,107
7,273
Cloud(5)
16,865
18,971
2,993
60,558
74,568
11,763
Digital media and entertainment(6)
8,047
8,005
1,263
31,186
32,272
5,091
Innovation initiatives and others(7)
594
384
60
2,311
2,841
447
Total
187,395
204,052
32,188
717,289
853,062
134,567
Starting from the quarter ended December 31, 2021, our CODM
started to review information under a new reporting structure, and
segment reporting is updated to conform to this change, which also
provides greater transparency in our business progress and
financial performance (see “March Quarter Information by Segments”
and “Full Fiscal Year Information by Segments” above). Comparative
figures were reclassified to conform to this presentation.
(1)
Revenue from China commerce is primarily
generated from our China commerce retail business, including
Taobao, Tmall, Sun Art, Tmall Supermarket and Freshippo, as well as
China commerce wholesale business including 1688.com.
(2)
Revenue from International commerce is
primarily generated from our international commerce retail
business, including Lazada and AliExpress, as well as our
international commerce wholesale business including
Alibaba.com.
(3)
Revenue from Local consumer services is
primarily generated from Ele.me.
(4)
Revenue from Cainiao is primarily
generated from our domestic and international one-stop-shop
logistics services and supply chain management solutions.
(5)
Revenue from Cloud is primarily generated
from the provision of services, such as elastic computing,
database, storage, network virtualization services, large scale
computing, security, management and application services, big data
analytics, a machine learning platform and IoT services.
(6)
Revenue from Digital media and
entertainment is primarily generated from Youku and other content
platforms, as well as online games business.
(7)
Revenue from Innovation initiatives and
others is primarily generated from businesses such as Tmall Genie
and other innovation initiatives. Other revenue also includes SME
annual fee received from Ant Group and its affiliates.
ALIBABA GROUP HOLDING LIMITED
INFORMATION ABOUT SEGMENTS
The following table sets forth our income
(loss) from operations by segments for the periods indicated:
Three months ended March
31,
Year ended March 31,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
China commerce
36,165
32,471
5,123
197,135
172,219
27,167
International commerce
(3,416
)
(1,918
)
(303
)
(9,361
)
(10,655
)
(1,681
)
Local consumer services
(9,443
)
(6,503
)
(1,026
)
(29,100
)
(30,485
)
(4,809
)
Cainiao
(1,089
)
(1,081
)
(171
)
(3,964
)
(3,920
)
(618
)
Cloud
(2,337
)
598
94
(12,479
)
(5,167
)
(815
)
Digital media and entertainment
(3,565
)
(2,170
)
(342
)
(10,321
)
(7,019
)
(1,107
)
Innovation initiatives and others
(2,135
)
(2,727
)
(430
)
(7,802
)
(9,424
)
(1,487
)
Unallocated
(21,843
)
(1,953
)
(308
)
(34,430
)
(35,911
)
(5,665
)
Total
(7,663
)
16,717
2,637
89,678
69,638
10,985
Starting from the quarter ended December 31, 2021, our CODM
started to review information under a new reporting structure, and
segment reporting is updated to conform to this change, which also
provides greater transparency in our business progress and
financial performance (see “March Quarter Information by Segments”
and “Full Fiscal Year Information by Segments” above). Comparative
figures were reclassified to conform to this presentation.
The following table sets forth our adjusted EBITA by segments
for the periods indicated:
Three months ended March
31,
Year ended March 31,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
China commerce
39,500
32,149
5,071
213,562
182,114
28,728
International commerce
(2,483
)
(2,563
)
(404
)
(4,932
)
(8,991
)
(1,418
)
Local consumer services
(6,633
)
(5,483
)
(865
)
(16,276
)
(21,775
)
(3,435
)
Cainiao
(585
)
(912
)
(144
)
(813
)
(1,465
)
(231
)
Cloud
(342
)
276
44
(2,251
)
1,146
181
Digital media and entertainment
(2,698
)
(1,966
)
(310
)
(6,118
)
(4,690
)
(740
)
Innovation initiatives and others
(1,648
)
(2,452
)
(387
)
(5,201
)
(7,129
)
(1,125
)
Unallocated
(2,499
)
(3,238
)
(511
)
(7,518
)
(8,813
)
(1,390
)
Total
22,612
15,811
2,494
170,453
130,397
20,570
Starting from the quarter ended December 31, 2021, our CODM
started to review information under a new reporting structure, and
segment reporting is updated to conform to this change, which also
provides greater transparency in our business progress and
financial performance, (see “March Quarter Information by Segments”
and “Full Fiscal Year Information by Segments” above). Comparative
figures were reclassified to conform to this presentation.
ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONSOLIDATED BALANCE
SHEETS
As of March 31,
As of March 31,
2021
2022
RMB
RMB
US$
(in millions)
Assets
Current assets:
Cash and cash equivalents
321,262
189,898
29,956
Short-term investments
152,376
256,514
40,464
Restricted cash and escrow receivables
35,207
37,455
5,908
Equity securities and other
investments
9,807
8,673
1,368
Prepayments, receivables and other
assets(1)
124,708
145,995
23,030
Total current assets
643,360
638,535
100,726
Equity securities and other
investments
237,221
223,611
35,274
Prepayments, receivables and other
assets
98,432
113,147
17,849
Investment in equity method investees
200,189
219,642
34,648
Property and equipment, net
147,412
171,806
27,102
Intangible assets, net
70,833
59,231
9,343
Goodwill
292,771
269,581
42,525
Total assets
1,690,218
1,695,553
267,467
Liabilities, Mezzanine Equity and
Shareholders’ Equity
Current liabilities:
Current bank borrowings
3,606
8,841
1,395
Current unsecured senior notes
9,831
—
—
Income tax payable
25,275
21,753
3,431
Accrued expenses, accounts payable and
other liabilities
261,140
271,460
42,822
Merchant deposits
15,017
14,747
2,326
Deferred revenue and customer advances
62,489
66,983
10,566
Total current liabilities
377,358
383,784
60,540
ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
As of March 31,
As of March 31,
2021
2022
RMB
RMB
US$
(in millions)
Deferred revenue
3,158
3,490
551
Deferred tax liabilities
59,598
61,706
9,734
Non-current bank borrowings
38,335
38,244
6,033
Non-current unsecured senior notes
97,381
94,259
14,869
Other liabilities
30,754
31,877
5,028
Total liabilities
606,584
613,360
96,755
Commitments and contingencies
—
—
—
Mezzanine equity
8,673
9,655
1,523
Shareholders’ equity:
Ordinary shares
1
1
—
Additional paid-in capital
394,308
410,506
64,755
Treasury shares at cost
—
(2,221
)
(350
)
Subscription receivables
(47
)
(46
)
(7
)
Statutory reserves
7,347
9,839
1,552
Accumulated other comprehensive loss
(19,063
)
(33,157
)
(5,230
)
Retained earnings
554,924
563,557
88,899
Total shareholders’ equity
937,470
948,479
149,619
Noncontrolling interests
137,491
124,059
19,570
Total equity
1,074,961
1,072,538
169,189
Total liabilities, mezzanine equity and
equity
1,690,218
1,695,553
267,467
(1)
Includes a dividend receivable from Ant
Group in the amount of RMB3,945 million (US$622 million). Ant Group
declared a dividend to its shareholders in March 2022 following
shareholder approval.
ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three months ended March
31,
Year ended March 31,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Net cash provided by (used in) operating
activities
24,183
(7,040
)
(1,111
)
231,786
142,759
22,520
Net cash used in investing activities
(27,701
)
(87,254
)
(13,764
)
(244,194
)
(198,592
)
(31,327
)
Net cash provided by (used in) financing
activities
30,270
(10,614
)
(1,675
)
30,082
(64,449
)
(10,167
)
Effect of exchange rate changes on cash
and cash equivalents, restricted cash and escrow receivables
1,149
(913
)
(143
)
(7,187
)
(8,834
)
(1,394
)
Increase (decrease) in cash and cash
equivalents, restricted cash and escrow receivables
27,901
(105,821
)
(16,693
)
10,487
(129,116
)
(20,368
)
Cash and cash equivalents, restricted cash
and escrow receivables at beginning of period
328,568
333,174
52,557
345,982
356,469
56,232
Cash and cash equivalents, restricted cash
and escrow receivables at end of period
356,469
227,353
35,864
356,469
227,353
35,864
ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO
THE NEAREST COMPARABLE U.S. GAAP MEASURES
The table below sets forth a
reconciliation of our net income to adjusted EBITA and adjusted
EBITDA for the periods indicated:
Three months ended March
31,
Year ended March 31,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Net (loss) income
(7,654
)
(18,357
)
(2,896
)
143,284
47,079
7,427
Adjustments to reconcile net (loss) income
to adjusted EBITA and adjusted EBITDA:
Interest and investment income, net
(111
)
36,708
5,791
(72,794
)
15,702
2,477
Interest expense
1,160
1,189
188
4,476
4,909
774
Other income, net
(2,115
)
(1,620
)
(256
)
(7,582
)
(10,523
)
(1,660
)
Income tax expenses
7,049
2,079
328
29,278
26,815
4,230
Share of results of equity method
investees
(5,992
)
(3,282
)
(518
)
(6,984
)
(14,344
)
(2,263
)
(Loss) Income from operations
(7,663
)
16,717
2,637
89,678
69,638
10,985
Share-based compensation expense
8,632
(3,737
)
(590
)
50,120
23,971
3,782
Amortization of intangible assets
3,415
2,831
447
12,427
11,647
1,837
Fine imposed pursuant to China’s
Anti-monopoly Law
18,228
—
—
18,228
—
—
Impairment of goodwill
—
—
—
—
25,141
3,966
Adjusted EBITA
22,612
15,811
2,494
170,453
130,397
20,570
Depreciation and impairment of property
and equipment, and operating lease cost relating to land use
rights
7,286
7,562
1,193
26,389
27,808
4,386
Adjusted EBITDA
29,898
23,373
3,687
196,842
158,205
24,956
ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO
THE NEAREST COMPARABLE U.S. GAAP MEASURES (CONTINUED)
The table below sets forth a
reconciliation of our net (loss) income to non-GAAP net income for
the periods indicated:
Three months ended March
31,
Year ended March 31,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Net (loss) income
(7,654
)
(18,357
)
(2,896
)
143,284
47,079
7,427
Adjustments to reconcile net (loss) income
to non-GAAP net income:
Share-based compensation expense
8,632
(3,737
)
(590
)
50,120
23,971
3,782
Amortization of intangible assets
3,415
2,831
447
12,427
11,647
1,837
Impairment of goodwill and investments
532
5,303
837
14,737
40,264
6,351
Loss (Gain) on deemed disposals/disposals/
revaluation of investments and others
3,085
37,845
5,970
(66,305
)
21,671
3,419
Fine imposed pursuant to China’s
Anti-monopoly Law
18,228
—
—
18,228
—
—
Tax effects (1)
(22
)
(4,086
)
(645
)
(506
)
(8,244
)
(1,301
)
Non-GAAP net income
26,216
19,799
3,123
171,985
136,388
21,515
(1)
Tax effects primarily comprises tax
effects relating to share-based compensation expense, amortization
of intangible assets and certain gains and losses from investments,
and others.
ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO
THE NEAREST COMPARABLE U.S. GAAP MEASURES (CONTINUED)
The table below sets forth a
reconciliation of our diluted (loss) earnings per share/ADS to
non-GAAP diluted earnings per share/ADS for the periods
indicated:
Three months ended March
31,
Year ended March 31,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
(in millions, except per share
data)
(in millions, except per share
data)
Net (loss) income attributable to
ordinary shareholders – basic
(5,479
)
(16,241
)
(2,562
)
150,308
61,959
9,774
Dilution effect on earnings arising from
option plans operated by equity method investees and
subsidiaries
(2
)
(8
)
(1
)
(55
)
(37
)
(6
)
Net (loss) income attributable to ordinary
shareholders – diluted
(5,481
)
(16,249
)
(2,563
)
150,253
61,922
9,768
Non-GAAP adjustments to net income
attributable to ordinary shareholders(1)
33,870
37,703
5,948
28,701
81,593
12,871
Non-GAAP net income attributable
to ordinary shareholders for computing non-GAAP diluted earnings
per share/ADS
28,389
21,454
3,385
178,954
143,515
22,639
Weighted average number of shares on a
diluted basis for computing non-GAAP diluted earnings per share/ADS
(million shares)(4)
22,024
21,599
21,982
21,787
Diluted (loss) earnings per
share(2)(4)
(0.25
)
(0.76
)
(0.12
)
6.84
2.84
0.45
Non-GAAP diluted earnings per
share(3)(4)
1.29
0.99
0.16
8.14
6.59
1.04
Diluted (loss) earnings per
ADS(2)(4)
(1.99
)
(6.07
)
(0.96
)
54.70
22.74
3.59
Non-GAAP diluted earnings per
ADS(3)(4)
10.32
7.95
1.25
65.15
52.69
8.31
(1)
See the table above for the reconciliation
of net (loss) income to non-GAAP net income for more information of
these non-GAAP adjustments.
(2)
Diluted (loss) earnings per share is
derived from net (loss) income attributable to ordinary
shareholders for computing diluted (loss) earnings per share
divided by weighted average number of shares on a diluted basis.
Diluted (loss) earnings per ADS is derived from the diluted (loss)
earnings per share after adjustment to the ordinary share-to-ADS
ratio.
(3)
Non-GAAP diluted earnings per share is
derived from non-GAAP net income attributable to ordinary
shareholders for computing non-GAAP diluted earnings per share
divided by weighted average number of shares on a diluted basis for
computing non-GAAP diluted earnings per share. Non-GAAP diluted
earnings per ADS is derived from the non-GAAP diluted earnings per
share after adjustment to the ordinary share-to-ADS ratio.
(4)
Each ADS represents eight ordinary
shares.
ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO
THE NEAREST COMPARABLE U.S. GAAP MEASURES (CONTINUED)
The table below sets forth a
reconciliation of net cash provided by operating activities to free
cash flow for the periods indicated:
Three months ended March
31,
Year ended March 31,
2021
2022
2021
2022
RMB
RMB
US$
RMB
RMB
US$
(in millions)
(in millions)
Net cash provided by (used in)
operating activities
24,183
(7,040
)
(1,111
)
231,786
142,759
22,520
Less: Purchase of property and equipment
(excluding land use rights and construction in progress relating to
office campuses)
(6,043
)
(9,201
)
(1,451
)
(36,160
)
(42,028
)
(6,630
)
Less: Acquisition of intangible assets
(2
)
—
—
(1,735
)
(15
)
(2
)
Less: Changes in the consumer protection
fund deposits
(18,796
)
1,171
185
(21,229
)
(1,842
)
(291
)
Free cash flow
(658
)
(15,070
)
(2,377
)
172,662
98,874
15,597
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220525006070/en/
Investor Relations Contact Rob Lin Investor Relations
Alibaba Group Holding Limited investor@alibaba-inc.com
Media Contacts: Cathy Yan cathy.yan@alibaba-inc.com
Ivy Ke ivy.ke@alibaba-inc.com
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