[January 24, 2017] |
|
Alibaba Group Announces December Quarter 2016 Results
Alibaba Group Holding Limited (NYSE:BABA) today announced its financial
results for the quarter ended December 31, 2016.
"Our robust December quarter demonstrates the strength of the Chinese
consumer and Alibaba's ability to create value across our vast
ecosystem," said Daniel Zhang, Chief Executive Officer of Alibaba Group.
"The 11.11 Shopping Festival featured Alibaba at its best, integrating
commerce, entertainment and social engagement, all happening globally at
record scale. We are driving the age of 'New Retail,' which leverages
big data and innovation to provide a seamless online and offline
experience for nearly half a billion mobile monthly active users. This
retail transformation will make it even easier and more efficient for
brands and retailers to engage with these consumers anywhere, anytime."
"We reported another excellent quarter, with robust revenue growth of
54%. With three quarters of the year coming in ahead of expectations, we
are adjusting up our 2017 fiscal year revenue guidance from 48% to 53%
year-over-year growth," said Maggie Wu, Chief Financial Officer of
Alibaba Group. "This quarter we generated US$4.9 billion in free cash
flow on a non-GAAP basis1, enabling us to continue investing
in growth areas globally, including cloud computing, digital media and
entertainment and innovation initiatives, as well as core commerce."
BUSINESS HIGHLIGHTS
In the quarter ended December 31, 2016:
-
Revenue was RMB53,248 million (US$7,669 million), an increase of 54%
year-over-year.
-
Revenue from core commerce increased 45% year-over-year to
RMB46,576 million (US$6,708 million).
-
Revenue from cloud computing increased 115% year-over-year to
RMB1,764 million (US$254 million).
-
Revenue from digital media and entertainment increased 273%
year-over-year to RMB4,063 million (US$585 million).
-
Revenue from innovation initiatives and others increased 61%
year-over-year to RMB845 million (US$122 million).
-
Mobile MAUs on our China retail marketplaces reached 493 million in
December, an increase of 43 million over September, while annual
active buyers on our China retail marketplaces reached 443 million, an
increase of 4 million from the 12-month period ended in September.
-
The number of paying customers of our cloud computing business grew to
765,000 from 651,000 in the previous quarter. Operating loss from
cloud computing was RMB339 million (US$49 million) and adjusted EBITA
loss was RMB92 million (US$13 million).
-
Net income was RMB17,157 million (US$2,471 million), income from
operations was RMB20,664 million (US$2,976 million) and adjusted
EBITDA was RMB27,021 million (US$3,892 million). Operating margin was
39%, adjusted EBITDA margin was 51% and adjusted EBITA margin for core
commerce was 64%.
-
Diluted EPS was RMB6.94 (US$1.00) and non-GAAP diluted EPS was RMB9.02
(US$1.30).
-
Net cash provided by operating activities was RMB37,416 million
(US$5,389 million) and non-GAAP free cash flow was RMB34,122 million
(US$4,915 million).
1
|
For the quarter ended December 31, 2016, net cash provided by
operating activities was RMB37,416 million (US$5,389 million) and
non-GAAP free cash flow was RMB34,122 million (US$4,915 million).
|
|
|
BUSINESS AND STRATEGIC UPDATES
Core Commerce
Taobao - personalized data powering higher consumer engagement.
Taobao App's highly relevant and engaging content continues to drive
mobile user growth, with our China retail marketplaces adding 43 million
MAUs from September to 493 million MAUs in December. Consumers are
engaging with our Taobao platform to experience social commerce and
obtain consumer information, reflecting user behavior beyond conducting
transactions and demonstrating the substantial marketing value of the
platform to brands and merchants. By leveraging data to deliver a
personalized experience, we continue to drive increasing traffic, strong
user engagement and higher consumer mind share.
Tmall - another record breaking 11.11. The 2016 11.11 Global
Shopping Festival was another record breaking event. The success of the
festival demonstrated the scale, capabilities and strength of the
infrastructure we have been building for future commerce. We recorded
RMB120.7 billion (US$17.4 billion) in GMV settled through Alipay on our
marketplaces, of which 82% was generated from mobile. Our
technology infrastructure processed around 175,000 peak orders per
second. Cainiao Network helped merchants and third-party logistics
companies process over 657 million delivery orders with a higher level
of consumer satisfaction than prior years.
International expansion - laying the foundation for long-term growth. Our
cross-border and international consumer businesses saw robust growth
during the quarter. These businesses comprise Tmall Global for
cross-border imports, AliExpress for cross-border exports, and Lazada
for the Southeast Asia market. We continue to see opportunities in
overseas markets where we bring a unique value proposition to merchants
and consumers. For instance, Tmall Global provides global brands,
retailers, small businesses and farmers from economies around the world
access to over 440 million Chinese consumers on our platform. Further,
we continue to invest in the commerce infrastructure in emerging
markets, such as Southeast Asia, to expand merchant and consumer
opportunities and capture the long-term growth potential of cross-border
and local trade.
Achievements in anti-counterfeiting. More than 100,000 brands do
business on Alibaba's marketplaces - a clear demonstration of the trust
that they place in us. Over the past year, our anti-counterfeiting
initiatives have produced effective results and more brands have decided
to proactively work with us in joint anti-counterfeiting initiatives.
Recently we formed a coalition with about twenty major brands to
leverage our big data capabilities to crack down on counterfeiting.
These brands include Louis Vuitton, Samsung, Swarovski, Mars, Inc. and
Ford Motor Company.
Cloud Computing
Paying customers for cloud computing grew to 765,000, an increase of
about 114,000 from last quarter, driving revenue to RMB1,764 million
(US$254 million) during the quarter, reflecting a 115% year-over-year
growth. Alibaba Cloud's top priority remains expanding market
leadership. We will continue to invest in customers through more cost
effective solutions for standard products as well as developing and
deploying more sophisticated value-added products and services.
Alibaba Cloud expanded its global footprint with new data center
launches in Japan, Germany, the Middle East and Australia during the
quarter. Its international expansion will provide customers worldwide
with greater access to its diverse offerings, including elastic
computing, data storage and cloud security services.
Digital Media and Entertainment
In November, we consolidated the Digital Media and Entertainment
businesses under a single management team to realize greater synergies
within the segment and with other Alibaba businesses. For instance,
Youku Tudou participated in the 11.11 Global Shopping Festival for the
first time and showcased live streaming of the Countdown Gala
Celebration to millions of users on the Youku Tudou App.
We maintained our competitive position in digital entertainment in China
through a combination of licensed premium content as well as
self-produced and joint-produced programming, achieving synergies across
our entertainment platforms on both mobile and living room screens.
New Retail Strategy and Investments
"New Retail" leverages our substantial consumer reach and our
capabilities in big data technology to transform traditional retail by
addressing the increasingly sophisticated needs of consumers and
improving efficiency across the entire value chain of brands and
retailers. Our New Retail strategy will enable us to tap into the entire
US$4.8 trillion retail sector in China by eliminating the distinction
between online and offline commerce, as Chinese consumers today engage
in commerce anywhere, any time with the help of mobile phones. To this
end, we are partnering with brick-and-mortar retailers in different
verticals through equity investments and deeper operational integration,
which will allow us to deploy our proprietary omni-channel solutions to
create a seamless shopping experience for consumers.
Sanjiang Shopping Club - In November 2016, we agreed to invest
RMB2.1 billion (US$302 million) for a 35% equity stake (including shares
and convertible bonds) in Sanjiang Shopping Club, one of the leading
neighborhood grocery chains in Zhejiang Province. Enabled by Alibaba's
technology solutions, Sanjiang plans to pilot a new shopping format at
its local grocery stores to enhance the shopping experience for fresh
and perishable products.
Intime Retail Group - On January 10, 2017, we announced an offer
to acquire a controlling stake in Intime Retail Group, a leading
department store operator in China with 29 department stores and 17
shopping malls. We expect that the maximum amount of cash required for
the transaction will be approximately HK$19.8 billion (US$2.6 billion).
Olympic Partnership
On January 19, 2017, we and the International Olympic Committee launched
a historic long-term partnership through 2028. Joining The Olympic
Partner (TOP) worldwide sponsorship program, Alibaba has become the
official "Cloud Services" and "E-Commerce Platform Services" Partner.
Updates on Equity Investees and Others
Cainiao Network - data enabled logistics. Cainiao Network's
data-driven approach enables it to power its delivery network with
improving scale and efficiency. During the December quarter, Cainiao
Network's platform enabled the delivery of an average of 57 million
packages per day.
Koubei - Local Services. Koubei, our local services joint venture
with Ant Financial, generated RMB73.1 billion (US$10.5 billion) in
payment volume transacted through Alipay during the December quarter,
representing a 52% increase over the prior quarter. In January 2017,
Koubei completed a US$1.1 billion equity financing led by Silver Lake,
CDH Investments, Yunfeng Capital and Primavera Capital. This transaction
provides Koubei with a strong capital base to execute on its aggressive
growth strategy.
Positive Social Impact. Through volunteer work by Alibaba
employees, we recently created the "Reunion" platform to help locate
missing children across China. The Reunion platform is an ecosystem of
connected Alibaba and partner mobile apps that provides the
infrastructure for law enforcement authorities to receive crowd-sourced
information from the public in order to more effectively conduct
searches for missing children. Participating mobile apps include our
Taobao App and AutoNavi map app as well as Weibo. From the
implementation of the platform in mid-2016 to the end of the year, law
enforcement authorities have successfully located 611 missing children
based on issued 648 alerts broadcasted to the ecosystem of mobile users
(a 94% success rate).
Cash Flow from Operating Activities and Free
Cash Flow
In the December quarter, net cash provided by operating activities was
RMB37,416 million (US$5,389 million). We generated RMB34,122 million
(US$4,915 million) in non-GAAP free cash flow, representing 44%
year-over-year growth. A reconciliation of net cash provided by
operating activities to free cash flow is included at the end of this
results announcement.
KEY OPERATIONAL METRICS:*
|
|
December 31, 2015
|
|
September 30, 2016
|
|
December 31, 2016
|
|
% Change
|
|
|
|
|
YoY
|
|
QoQ
|
|
|
|
|
|
|
|
|
|
|
|
China Commerce Retail:
|
|
|
|
|
|
|
|
|
|
|
Annual active buyers(1) (in millions)
|
|
407
|
|
439
|
|
443
|
|
9%
|
|
1%
|
Mobile monthly active users (MAUs)(2) (in millions)
|
|
393
|
|
450
|
|
493
|
|
25%
|
|
10%
|
Cloud Computing:
|
|
|
|
|
|
|
|
|
|
|
Paying customers(3) (in thousands)
|
|
383
|
|
651
|
|
765
|
|
100%
|
|
18%
|
_________________
|
*
|
For definitions of terms used but not defined in this results
announcement, please refer to our annual report on Form 20-F for the
fiscal year ended March 31, 2016.
|
(1)
|
For the twelve months ended on the respective dates.
|
(2)
|
For the month ended on the respective dates.
|
(3)
|
As of the respective dates.
|
|
|
SUMMARY FINANCIAL RESULTS:
|
|
Three months ended December 31,
|
|
|
|
|
2015
|
|
2016
|
|
|
|
|
RMB
|
|
RMB
|
|
US$(1)
|
|
YoY % Change
|
|
|
(in millions, except percentages and per share amounts)
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
34,543
|
|
|
53,248
|
|
|
7,669
|
|
54
|
%
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
12,434
|
|
|
20,664
|
|
|
2,976
|
|
66
|
%
|
Operating margin
|
|
36
|
%
|
|
39
|
%
|
|
|
|
|
Adjusted EBITDA(2)
|
|
19,111
|
|
|
27,021
|
|
|
3,892
|
|
41
|
%
|
Adjusted EBITDA margin(2)
|
|
55
|
%
|
|
51
|
%
|
|
|
|
|
Adjusted EBITA(2)
|
|
18,072
|
|
|
25,669
|
|
|
3,697
|
|
42
|
%
|
Adjusted EBITA margin(2)
|
|
52
|
%
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
12,456
|
|
|
17,157
|
|
|
2,471
|
|
38
|
%
|
Non-GAAP net income(2)
|
|
16,575
|
|
|
22,491
|
|
|
3,239
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share/ADS (EPS)
|
|
4.90
|
|
|
6.94
|
|
|
1.00
|
|
42
|
%
|
Non-GAAP diluted EPS(2)
|
|
6.52
|
|
|
9.02
|
|
|
1.30
|
|
38
|
%
|
|
|
|
|
|
|
|
Nine months ended December 31,
|
|
|
|
|
2015
|
|
2016
|
|
|
|
|
RMB
|
|
RMB
|
|
US$(1)
|
|
YoY % Change
|
|
|
(in millions, except percentages and per share amounts)
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
76,959
|
|
|
119,694
|
|
|
17,240
|
|
56
|
%
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
23,990
|
|
|
38,523
|
|
|
5,548
|
|
61
|
%
|
Operating margin
|
|
31
|
%
|
|
32
|
%
|
|
|
|
|
Adjusted EBITDA(2)
|
|
40,842
|
|
|
57,859
|
|
|
8,333
|
|
42
|
%
|
Adjusted EBITDA margin(2)
|
|
53
|
%
|
|
48
|
%
|
|
|
|
|
Adjusted EBITA(2)
|
|
38,162
|
|
|
54,021
|
|
|
7,781
|
|
42
|
%
|
Adjusted EBITA margin(2)
|
|
50
|
%
|
|
45
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
65,975
|
|
|
31,374
|
|
|
4,519
|
|
(52
|
)%
|
Non-GAAP net income(2)
|
|
35,235
|
|
|
47,431
|
|
|
6,831
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share/ADS (EPS)
|
|
25.75
|
|
|
12.85
|
|
|
1.85
|
|
(50
|
)%
|
Non-GAAP diluted EPS(2)
|
|
13.77
|
|
|
19.10
|
|
|
2.75
|
|
39
|
%
|
_______________
|
(1)
|
This results announcement contains translations of certain Renminbi
("RMB") amounts into U.S. dollars ("US$") for the convenience of the
reader. Unless otherwise stated, all translations of RMB into US$
were made at RMB6.9430 to US$1.00, the exchange rate on December 31,
2016 as set forth in the H.10 statistical release of the Federal
Reserve Board. The percentages stated in this announcement are
calculated based on the RMB amounts.
|
(2)
|
See the sections entitled "Information about Segments", "Non-GAAP
Financial Measures" and "Reconciliations of Non-GAAP Measures to the
Nearest Comparable GAAP Measures" for more information about the
non-GAAP measures referred to within this results announcement.
|
|
|
INFORMATION ABOUT SEGMENTS
The table below sets forth selected financial information of our
operating segments for the periods indicated:
|
|
Three months ended December 31, 2016
|
|
|
Core commerce
|
|
Cloud computing
|
|
Digital media and entertainment
|
|
Innovation initiatives and others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions, except percentages)
|
Revenue
|
|
46,576
|
|
|
1,764
|
|
|
4,063
|
|
|
845
|
|
|
-
|
|
|
53,248
|
|
|
7,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
27,439
|
|
|
(339
|
)
|
|
(3,196
|
)
|
|
(1,450
|
)
|
|
(1,790
|
)
|
|
20,664
|
|
|
2,976
|
|
Add: Share-based compensation expense
|
|
1,590
|
|
|
246
|
|
|
344
|
|
|
502
|
|
|
1,062
|
|
|
3,744
|
|
|
539
|
|
Add: Amortization of intangible assets
|
|
601
|
|
|
1
|
|
|
421
|
|
|
163
|
|
|
75
|
|
|
1,261
|
|
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITA
|
|
29,630
|
|
|
(92
|
)
|
|
(2,431
|
)
|
|
(785
|
)
|
|
(653
|
)
|
|
25,669
|
|
|
3,697
|
|
Adjusted EBITA margin
|
|
64
|
%
|
|
(5
|
)%
|
|
(60
|
)%
|
|
(93
|
)%
|
|
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2015
|
|
|
Core commerce
|
|
Cloud computing
|
|
Digital media and entertainment
|
|
Innovation initiatives and others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
|
(in millions, except percentages)
|
Revenue
|
|
32,111
|
|
|
819
|
|
|
1,088
|
|
|
525
|
|
|
-
|
|
|
34,543
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
18,928
|
|
|
(712
|
)
|
|
(1,019
|
)
|
|
(2,363
|
)
|
|
(2,400
|
)
|
|
12,434
|
|
Add: Share-based compensation expense
|
|
1,625
|
|
|
379
|
|
|
222
|
|
|
1,237
|
|
|
907
|
|
|
4,370
|
|
Add: Amortization of intangible assets
|
|
191
|
|
|
1
|
|
|
382
|
|
|
165
|
|
|
74
|
|
|
813
|
|
Add: Impairment of goodwill
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
455
|
|
|
455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITA
|
|
20,744
|
|
|
(332
|
)
|
|
(415
|
)
|
|
(961
|
)
|
|
(964
|
)
|
|
18,072
|
|
Adjusted EBITA margin
|
|
65
|
%
|
|
(41
|
)%
|
|
(38
|
)%
|
|
(183
|
)%
|
|
|
|
52
|
%
|
____________________
|
*
|
Unallocated expenses are primarily related to corporate
administrative costs and other miscellaneous items that are not
allocated to individual segments.
|
**
|
Please see the end of this results announcement for information
about segments for the nine months ended December 31, 2016.
|
|
|
DECEMBER QUARTER OPERATIONAL AND FINANCIAL RESULTS
Revenue
Revenue for the quarter ended December 31, 2016 was RMB53,248 million
(US$7,669 million), an increase of 54% compared to RMB34,543 million in
the same quarter of 2015. The increase was mainly driven by the robust
revenue growth of our China commerce retail business, Alibaba Cloud as
well as the consolidation of newly acquired businesses (mainly Youku
Tudou and Lazada). The strong revenue growth of China commerce retail
business reflects our continuing efforts to enhance our social commerce
platform by providing better user experience enabled by data technology.
The following table sets forth a breakdown of our revenue by segment for
the periods indicated:
|
|
Three months ended December 31,
|
|
|
|
|
2015
|
|
2016
|
|
|
|
|
RMB
|
|
% of Revenue
|
|
RMB
|
|
US$
|
|
% of Revenue
|
|
YoY % Change
|
|
|
(in millions, except percentages)
|
Core commerce:
|
|
|
|
|
|
|
|
|
|
|
|
|
China commerce retail
|
|
28,714
|
|
83%
|
|
40,802
|
|
5,877
|
|
77%
|
|
42%
|
China commerce wholesale
|
|
1,162
|
|
3%
|
|
1,514
|
|
218
|
|
3%
|
|
30%
|
International commerce retail
|
|
632
|
|
2%
|
|
2,452
|
|
353
|
|
4%
|
|
288%
|
International commerce wholesale
|
|
1,430
|
|
4%
|
|
1,554
|
|
224
|
|
3%
|
|
9%
|
Others
|
|
173
|
|
1%
|
|
254
|
|
36
|
|
0%
|
|
47%
|
Total core commerce
|
|
32,111
|
|
93%
|
|
46,576
|
|
6,708
|
|
87%
|
|
45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cloud computing
|
|
819
|
|
2%
|
|
1,764
|
|
254
|
|
3%
|
|
115%
|
Digital media and entertainment
|
|
1,088
|
|
3%
|
|
4,063
|
|
585
|
|
8%
|
|
273%
|
Innovation initiatives and others
|
|
525
|
|
2%
|
|
845
|
|
122
|
|
2%
|
|
61%
|
Total
|
|
34,543
|
|
100%
|
|
53,248
|
|
7,669
|
|
100%
|
|
54%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core commerce segment
-
China commerce retail business
Revenue -
Revenue from our China commerce retail business in the quarter ended
December 31, 2016 was RMB40,802 million (US$5,877 million), or 77% of
total revenue, an increase of 42% compared to RMB28,714 million in the
same quarter of 2015. The increased revenue was due to robust growth
of online marketing service revenue, as well as growth in commission
revenue. Online marketing service revenue grew by 47% year-over-year,
which was driven primarily by increases in the volume of clicks,
reflecting our ability to deliver more relevant content to consumers
through our improved data technology. This growth resulted in higher
average spending on our online marketing services by an increasing
number of brands and merchants. Commission revenue, representing 30%
of China commerce retail revenue in the quarter ended December 31,
2016, grew by 32% year-over-year, reflecting robust GMV growth.
Mobile
revenue from the China commerce retail business in the quarter ended
December 31, 2016 was RMB32,451 million (US$4,674 million), or 80% of
our China commerce retail revenue, an increase of 73% compared to
RMB18,746 million, or 65% of the China commerce retail revenue, in the
same quarter of 2015.
As a result of the foregoing, our
annual China commerce retail revenue per annual active buyer increased
from RMB184 for the quarter ended December 31, 2015 to RMB241 (US$35)
for the quarter ended December 31, 2016, and mobile revenue per mobile
MAU grew from RMB108 for the quarter ended December 31, 2015 to RMB166
(US$24) for the quarter ended December 31, 2016, as illustrated in
these charts
and the table at the end of this announcement.
Mobile
MAUs - Mobile MAUs on our China retail marketplaces grew to 493
million in the month ended December 31, 2016, compared to 450 million
in the month ended September 30, 2016, representing a net addition of
43 million MAUs in the quarter and a 25% increase from 393 million in
the month ended December 31, 2015. The growth in mobile MAUs in this
quarter was primarily due to the continuing success of our efforts to
provide highly relevant and engaging content to increase user
engagement on our mobile platforms.
Annual active
buyers - Our China retail marketplaces had 443 million
annual active buyers in the 12 months ended December 31, 2016,
compared to 439 million in the 12 months ended September 30, 2016,
representing a net addition of 4 million annual active buyers from the
prior quarter, and compared to 407 million in the 12 months ended
December 31, 2015, representing an increase of 9% year-over-year.
Average annual spend per active buyer for the 12 months ended December
31, 2016 continued to increase from prior quarters.
-
China commerce wholesale business - Revenue from
our China commerce wholesale business in the quarter ended December
31, 2016 was RMB1,514 million (US$218 million), an increase of 30%
compared to RMB1,162 million in the same quarter of 2015. The increase
was primarily due to an increase in the average revenue from paying
members and also to an increase in the number of paying members on our
1688.com platform.
-
International commerce retail business - Revenue from
our international commerce retail business in the quarter ended
December 31, 2016 was RMB2,452 million (US$353 million), an increase
of 288% compared to RMB632 million in the same quarter of 2015. The
increase was primarily due to the consolidation of Lazada starting
from mid-April 2016 and also due to the growth in revenue generated
from AliExpress.
-
International commerce wholesale business -
Revenue from our international commerce wholesale business in the
quarter ended December 31, 2016 was RMB1,554 million (US$224 million),
an increase of 9% compared to RMB1,430 million in the same quarter of
2015. The increase was due to growth in revenue generated by the
import/export related value-added services.
Cloud computing
Revenue from our cloud computing business in the quarter ended December
31, 2016 was RMB1,764 million (US$254 million), an increase of 115%
compared to RMB819 million in the same quarter of 2015, primarily driven
by an increase in the number of paying customers to 765,000,
representing a year-over-year increase of 100%, and also by an
increase in their usage of our cloud computing services including more
complex offerings, such as our content delivery network and database
services.
Digital media and entertainment
Revenue from our digital media and entertainment business in the quarter
ended December 31, 2016 was RMB4,063 million (US$585 million), an
increase of 273% compared to RMB1,088 million in the same quarter of
2015. The increase was primarily due to the consolidation of Youku
Tudou, and also to an increase in revenue from mobile value-added
services provided by UCWeb, such as mobile search, news feeds and game
publishing.
Innovation initiatives and others
Revenue from innovation initiatives and others in the quarter ended
December 31, 2016 was RMB845 million (US$122 million), an increase of
61% compared to RMB525 million in the same quarter of 2015, primarily
due to an increase in revenue from YunOS and other new initiatives.
Costs and Expenses
The following tables set forth a breakdown of our costs and expenses,
share-based compensation expense and costs and expenses excluding
share-based compensation expense by function for the periods indicated.
|
|
Three months ended December 31,
|
|
% of Revenue YoY change
|
|
|
2015
|
|
|
2016
|
|
|
|
|
RMB
|
|
% of Revenue
|
|
RMB
|
|
US$
|
|
% of Revenue
|
|
|
|
(in millions, except percentages)
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
10,951
|
|
32
|
%
|
|
19,126
|
|
2,755
|
|
36
|
%
|
|
4
|
%
|
Product development expenses
|
|
3,749
|
|
11
|
%
|
|
4,420
|
|
636
|
|
8
|
%
|
|
(3
|
)%
|
Sales and marketing expenses
|
|
3,641
|
|
11
|
%
|
|
4,490
|
|
647
|
|
9
|
%
|
|
(2
|
)%
|
General and administrative expenses
|
|
2,500
|
|
7
|
%
|
|
3,287
|
|
473
|
|
6
|
%
|
|
(1
|
)%
|
Amortization of intangible assets
|
|
813
|
|
2
|
%
|
|
1,261
|
|
182
|
|
2
|
%
|
|
0
|
%
|
Impairment of goodwill
|
|
455
|
|
1
|
%
|
|
-
|
|
-
|
|
-
|
|
|
(1
|
)%
|
Total costs and expenses
|
|
22,109
|
|
64
|
%
|
|
32,584
|
|
4,693
|
|
61
|
%
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense by function:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
1,467
|
|
4
|
%
|
|
590
|
|
85
|
|
1
|
%
|
|
(3
|
)%
|
Product development expenses
|
|
1,561
|
|
5
|
%
|
|
1,591
|
|
229
|
|
3
|
%
|
|
(2
|
)%
|
Sales and marketing expenses
|
|
492
|
|
2
|
%
|
|
386
|
|
55
|
|
1
|
%
|
|
(1
|
)%
|
General and administrative expenses
|
|
850
|
|
2
|
%
|
|
1,177
|
|
170
|
|
2
|
%
|
|
0
|
%
|
Total share-based compensation expense
|
|
4,370
|
|
13
|
%
|
|
3,744
|
|
539
|
|
7
|
%
|
|
(6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses excluding share-based compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
9,484
|
|
28
|
%
|
|
18,536
|
|
2,670
|
|
35
|
%
|
|
7
|
%
|
Product development expenses
|
|
2,188
|
|
6
|
%
|
|
2,829
|
|
407
|
|
5
|
%
|
|
(1
|
)%
|
Sales and marketing expenses
|
|
3,149
|
|
9
|
%
|
|
4,104
|
|
592
|
|
8
|
%
|
|
(1
|
)%
|
General and administrative expenses
|
|
1,650
|
|
5
|
%
|
|
2,110
|
|
303
|
|
4
|
%
|
|
(1
|
)%
|
Amortization of intangible assets
|
|
813
|
|
2
|
%
|
|
1,261
|
|
182
|
|
2
|
%
|
|
0
|
%
|
Impairment of goodwill
|
|
455
|
|
1
|
%
|
|
-
|
|
-
|
|
-
|
|
|
(1
|
)%
|
Total costs and expenses excluding share-based compensation expenses
|
|
17,739
|
|
51
|
%
|
|
28,840
|
|
4,154
|
|
54
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue - Cost of revenue in the quarter ended December
31, 2016 was RMB19,126 million (US$2,755 million), compared to RMB10,951
million in the same quarter of 2015. Without the effect of share-based
compensation expense, cost of revenue as a percentage of revenue would
have increased from 28% in the quarter ended December 31, 2015 to 35% in
the quarter ended December 31, 2016. The increase was primarily due to
an increase in content acquisition costs of Youku Tudou, costs of
inventory of Lazada and logistics costs associated with Tmall
Supermarket.
Product development expenses - Product development expenses in
the quarter ended December 31, 2016 were RMB4,420 million (US$636
million), compared to RMB3,749 million in the same quarter of 2015.
Without the effect of share-based compensation expense, product
development expenses as a percentage of revenue would have decreased
from 6% in the quarter ended December 31, 2015 to 5% in the quarter
ended December 31, 2016, reflecting operating leverage.
Sales and marketing expenses - Sales and marketing expenses in
the quarter ended December 31, 2016 were RMB4,490 million (US$647
million), compared to RMB3,641 million in the same quarter of 2015.
Without the effect of share-based compensation expense, sales and
marketing expenses as a percentage of revenue would have decreased from
9% in the quarter ended December 31, 2015 to 8% in the quarter ended
December 31, 2016, reflecting operating leverage.
General and administrative expenses - General and administrative
expenses in the quarter ended December 31, 2016 were RMB3,287 million
(US$473 million), compared to RMB2,500 million in the same quarter of
2015. Without the effect of share-based compensation expense, general
and administrative expenses as a percentage of revenue would have
decreased from 5% in the quarter ended December 31, 2015 to 4% in the
quarter ended December 31, 2016, reflecting operating leverage.
Share-based compensation expense - Share-based compensation
expense as percentage of revenue decreased to 7% in the quarter ended
December 31, 2016 from 13% in same quarter of 2015. Total share-based
compensation expense included in cost and expense items above in the
quarter ended December 31, 2016 was RMB3,744 million (US$539 million), a
decrease of 14% compared to RMB4,370 million in the same quarter of
2015. The following table sets forth our analysis of share-based
compensation expense for the quarters indicated by type of share-based
awards:
|
|
Three months ended
|
|
|
|
|
|
|
December 31, 2015
|
|
September 30, 2016
|
|
December 31, 2016
|
|
% Change
|
|
|
RMB
|
|
% of Revenue
|
|
RMB
|
|
% of Revenue
|
|
RMB
|
|
US$
|
|
% of Revenue
|
|
YoY
|
|
QoQ
|
|
|
(in millions, except percentages)
|
By type of awards:
|
|
|
Alibaba Group share-based awards granted to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Our employees
|
|
2,614
|
|
8
|
%
|
|
2,910
|
|
8
|
%
|
|
3,263
|
|
|
470
|
|
|
6
|
%
|
|
25
|
%
|
|
12
|
%
|
- Ant Financial employees and other consultants(1)
|
|
671
|
|
2
|
%
|
|
598
|
|
2
|
%
|
|
(134
|
)
|
|
(19
|
)
|
|
0
|
%
|
|
N/A
|
|
|
N/A
|
|
Ant Financial share-based awards granted to our employees(1)
|
|
1,071
|
|
3
|
%
|
|
543
|
|
1
|
%
|
|
433
|
|
|
62
|
|
|
1
|
%
|
|
(60
|
)%
|
|
(20
|
)%
|
Others
|
|
14
|
|
0
|
%
|
|
200
|
|
1
|
%
|
|
182
|
|
|
26
|
|
|
0
|
%
|
|
1,200
|
%
|
|
(9
|
)%
|
Total share-based compensation expense
|
|
4,370
|
|
13
|
%
|
|
4,251
|
|
12
|
%
|
|
3,744
|
|
|
539
|
|
|
7
|
%
|
|
(14
|
)%
|
|
(12
|
)%
|
___________________
(1) Awards subject to mark-to-market accounting treatment and the
related expenses were principally recorded under the "Innovation
Initiatives and Others" segment.
|
|
Share-based compensation expense related to Alibaba Group share-based
awards granted to our employees increased in this quarter compared to
the previous quarter. The increase reflected the effect of the expense
arising from new awards granted in this quarter. In addition, the
reversal in share-based compensation expense reflected the mark-down of
the fair value of Alibaba Group share-based awards granted to Ant
Financial employees and other consultants, which are subject to
mark-to-market accounting treatment.
We expect that our share-based compensation expense will continue to be
affected by changes in the fair value of our shares and Ant Financial
shares, as well as the quantity of awards we grant to our employees and
consultants in the future. Due to the accounting treatment of Ant
Financial share-based awards granted to our employees, if the fair value
of Ant Financial equity continues to increase in the future, our
share-based compensation expense will likely increase, although any such
increase will be non-cash and will not result in any economic cost or
equity dilution to our shareholders.
Amortization of intangible assets - Amortization of intangible
assets in the quarter ended December 31, 2016 was RMB1,261 million
(US$182 million), an increase of 55% from RMB813 million in the same
quarter of 2015. The increase was due to an increase in intangible
assets recognized arising from our strategic acquisitions and
investments, including Lazada and Youku Tudou.
Income from operations and operating margin
Income from operations in the quarter ended December 31, 2016 was
RMB20,664 million (US$2,976 million), or 39% of revenue, an increase of
66% compared to RMB12,434 million, or 36% of revenue, in the same
quarter of 2015.
Adjusted EBITDA and Adjusted EBITDA margin
Adjusted EBITDA increased by 41% to RMB27,021 million (US$3,892 million)
in the quarter ended December 31, 2016, compared to RMB19,111 million in
the same quarter of 2015. Adjusted EBITDA margin decreased to 51% in the
quarter ended December 31, 2016 from 55% in the same quarter of 2015,
mainly due to the consolidation of Youku Tudou and Lazada, partially
offset by operating leverage achieved. A reconciliation of net income to
adjusted EBITDA is included at the end of this results announcement.
As many of our newly developed and acquired businesses have different
cost structures and lower margins, we expect that our margin will be
negatively impacted by these new businesses.
Adjusted EBITA and adjusted EBITA margin by
segments
Adjusted EBITA and adjusted EBITA margin by segments are set forth in
the table below. See the section entitled "Information about Segments"
above for a reconciliation of income from operations to adjusted EBITA.
|
|
Three months ended December 31,
|
|
|
2015
|
|
2016
|
|
|
RMB
|
|
% of Revenue
|
|
RMB
|
|
US$
|
|
% of Revenue
|
|
|
(in millions, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
Core commerce
|
|
20,744
|
|
|
65
|
%
|
|
29,630
|
|
|
4,268
|
|
|
64
|
%
|
Cloud computing
|
|
(332
|
)
|
|
(41
|
)%
|
|
(92
|
)
|
|
(13
|
)
|
|
(5
|
)%
|
Digital media and entertainment
|
|
(415
|
)
|
|
(38
|
)%
|
|
(2,431
|
)
|
|
(350
|
)
|
|
(60
|
)%
|
Innovation initiatives and others
|
|
(961
|
)
|
|
(183
|
)%
|
|
(785
|
)
|
|
(114
|
)
|
|
(93
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core commerce segment - Adjusted EBITA increased by 43% to
RMB29,630 million (US$4,268 million) in the quarter ended December 31,
2016, compared to RMB20,744 million in the same quarter of 2015.
Adjusted EBITA margin decreased to 64% in the quarter ended December 31,
2016 from 65% in the same quarter of 2015, primarily due to the
consolidation of Lazada and investment in Tmall Supermarket, partially
offset by operating leverage.
Cloud computing segment - Adjusted EBITA in the quarter ended
December 31, 2016 was a loss of RMB92 million (US$13 million), compared
to a loss of RMB332 million in the same quarter of 2015. Adjusted EBITA
margin improved to negative 5% in the quarter ended December 31, 2016
from negative 41% in the quarter ended December 31, 2015, primarily due
to robust growth in revenue and economies of scale.
Digital media and entertainment segment - Adjusted EBITA in the
quarter ended December 31, 2016 was a loss of RMB2,431 million (US$350
million), compared to a loss of RMB415 million in the same quarter of
2015. Adjusted EBITA margin was negative 60% in the quarter ended
December 31, 2016, as compared to negative 38% in the quarter ended
December 31, 2015, primarily due to the consolidation of Youku Tudou,
partially offset by improved margins at UCWeb driven by the increase in
revenue from mobile value-added services.
Innovation initiatives and others segment - Adjusted EBITA in the
quarter ended December 31, 2016 was a loss of RMB785 million (US$114
million), compared to a loss of RMB961 million in the same quarter of
2015. Adjusted EBITA margin improved to negative 93% in the quarter
ended December 31, 2016, compared to negative 183% in the quarter ended
December 31, 2015, primarily due to increase in revenue from new
business initiatives.
Interest and investment income, net
Interest and investment income, net in the quarter ended December 31,
2016 was RMB837 million (US$121 million), a significant decrease from
RMB2,944 million in the same quarter of 2015. Interest and investment
income, net in the quarter ended December 31, 2015 included a gain
arising from the sale of our movie-related businesses to Alibaba
Pictures, as well as gains from disposals of certain investments.
Other income, net
Other income, net in the quarter ended December 31, 2016 was RMB3,015
million (US$434 million), compared to RMB1,607 million in the same
quarter of 2015. The increase was primarily due to an increase in
foreign exchange gains. Other income, net included royalty fees and
software technology service fees received from Ant Financial of RMB512
million (US$74 million) in the quarter ended December 31, 2016, compared
to RMB502 million in the same quarter of 2015.
Income tax expenses
Income tax expenses in the quarter ended December 31, 2016 were RMB5,110
million (US$736 million), an increase of 44% compared to RMB3,559
million in the same quarter of 2015. Our effective tax rate was 21% in
the quarter ended December 31, 2016, compared to 22% in the same quarter
of 2015. Excluding share-based compensation expense, impairment of
investments and other unrealized investment gain/loss, our effective tax
rate would have been 18% in the quarter ended December 31, 2016,
compared to 16% in the same quarter of 2015. The increase in our
effective tax rate was primarily due to the consolidation of Youku and
Lazada, which incurred significant losses before income tax.
Share of results of equity investees
Share of losses of equity investees in the quarter ended December 31,
2016 was RMB1,548 million (US$223 million), an increase of 213% compared
to RMB495 million in the same quarter of 2015. We record our share of
results of equity investees one quarter in arrears. Share of results of
equity investees in the quarter ended December 31, 2016 consisted of the
following:
|
|
Three months ended
|
|
|
December 31, 2015
|
|
September 30, 2016
|
|
December 31, 2016
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions)
|
Share of profits (loss) of equity investees:
|
|
|
|
|
|
|
|
|
- Koubei
|
|
(105
|
)
|
|
(3
|
)
|
|
(237
|
)
|
|
(34
|
)
|
- Youku Tudou**
|
|
(81
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
- Cainiao Network
|
|
(86
|
)
|
|
(220
|
)
|
|
(234
|
)
|
|
(34
|
)
|
- Other equity investees
|
|
87
|
|
|
(160
|
)
|
|
(373
|
)
|
|
(54
|
)
|
Impairment loss
|
|
-
|
|
|
-
|
|
|
(245
|
)
|
|
(35
|
)
|
Others*
|
|
(310
|
)
|
|
(184
|
)
|
|
(459
|
)
|
|
(66
|
)
|
Total
|
|
(495
|
)
|
|
(567
|
)
|
|
(1,548
|
)
|
|
(223
|
)
|
________________
|
*
|
Others mainly include amortization of intangible assets of equity
investees and share-based compensation expenses.
|
**
|
We began to consolidate the results of Youku Tudou starting in the
quarter ended June 30, 2016, and consequently, ceased to account for
our investment in Youku Tudou as an equity method investee.
|
|
|
The increase in share of results of equity investees during the quarter
ended December 31, 2016 compared to the previous quarter was primarily
due to an impairment loss on an equity investee, an increase in
amortization of intangible assets of equity investees and an increase in
share of losses of certain equity investees, including Koubei, in the
quarter ended December 31, 2016. Koubei recognized a non-recurring
income of RMB523 million in the quarter ended September 30, 2016,
without recording this non-recurring income, our share of Koubei's loss
would have been RMB262 million in the previous quarter.
Net income and Non-GAAP net income
Our net income in the quarter ended December 31, 2016 was RMB17,157
million (US$2,471 million), an increase of 38% compared to RMB12,456
million in the same quarter of 2015. Excluding the non-cash revaluation
gain, share-based compensation and certain other items, non-GAAP net
income in the quarter ended December 31, 2016 was RMB22,491 million
(US$3,239 million), an increase of 36% compared to RMB16,575 million in
the same quarter of 2015. 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 the quarter ended
December 31, 2016 was RMB17,855 million (US$2,572 million), an increase
of 43% compared to RMB12,498 million in the same quarter of 2015.
Diluted EPS and non-GAAP diluted EPS
Diluted EPS in the quarter ended December 31, 2016 was RMB6.94 (US$1.00)
on a weighted average of 2,571 million diluted shares outstanding during
the quarter, an increase of 42% compared to RMB4.90 on a weighted
average of 2,550 million diluted shares outstanding during the same
quarter of 2015. Excluding the non-cash revaluation gain, share-based
compensation and certain other items, non-GAAP diluted EPS in the
quarter ended December 31, 2016 was RMB9.02 (US$1.30), an increase of
38% compared to RMB6.52 in the same quarter of 2015. A reconciliation of
diluted EPS to non-GAAP diluted EPS is included at the end of this
results announcement.
Cash, cash equivalents and short-term
investments
As of December 31, 2016, cash, cash equivalents and short-term
investments were RMB138,488 million (US$19,946 million), compared to
RMB107,554 million as of September 30, 2016. The increase in cash, cash
equivalents and short-term investments during the quarter ended December
31, 2016 was due to free cash flow generated from operations of
RMB34,122 million (US$4,915 million).
Cash flow from operating activities and free
cash flow
Net cash provided by operating activities in the quarter ended December
31, 2016 was RMB37,416 million (US$5,389 million), an increase of 43%
compared to RMB26,230 million in the same quarter of 2015. Free cash
flow, a non-GAAP measurement of liquidity, in the quarter ended December
31, 2016 was RMB34,122 million (US$4,915 million), compared to RMB23,719
million in the same quarter of 2015. 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 December 31, 2016, net cash used in investing
activities of RMB8,146 million (US$1,173 million) reflected cash outflow
of RMB1,961 million (US$282 million) for investments, as well as capital
expenditures of RMB7,301 million (US$1,052 million), which included cash
outflow for acquisition of land use rights and construction in progress
of RMB4,055 million (US$584 million).
Employees
As of December 31, 2016, we had a total of 46,819 employees, compared to
46,689 as of September 30, 2016 and 36,465 as of December 31, 2015.
OUTLOOK
For fiscal year 2017, we expect revenue to increase 53% year-over-year.
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 (8:30 p.m. Hong Kong
Time) on January 24, 2017.
Details of the conference call are as follows:
|
International: +65 6713 5090
|
U.S.: +1 845 675 0437
|
U.K.: +44 203 621 4779
|
Hong Kong: +852 3018 6771
|
Conference ID: 48066090
|
A live webcast of the earnings conference call can be accessed at http://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; conference ID: 48066090).
Our results announcement and accompanying slides are available at
Alibaba Group's Investor Relations website at http://www.alibabagroup.com/en/ir/home
on January 24, 2017.
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 company that lasts at least 102 years.
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 "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates,"
"potential," "continue," "ongoing," "targets," "guidance" and similar
statements. Among other things, statements that are not historical
facts, including statements about Alibaba's strategies and business
plans, Alibaba's beliefs and expectations regarding the growth of its
businesses and its revenue for the full fiscal year, 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 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 goals and
strategies; Alibaba's future business development; Alibaba's ability to
maintain the trusted status of its ecosystem, reputation and brand;
risks associated with increased investments in Alibaba's business and
new business initiatives; risks associated with strategic acquisitions
and investments; Alibaba's ability to retain or increase engagement of
consumers, merchants and other participants in its ecosystem and enable
new offerings; Alibaba's ability to maintain or grow its revenue or
business; risks associated with limitation or restriction of services
provided by Alipay; changes in laws, regulations and regulatory
environment that affect Alibaba's business operations; privacy and
regulatory concerns; competition; security breaches; the continued
growth of the e-commerce market in China and globally; risks associated
with the performance of our business partners, including but not limited
to Ant Financial; and fluctuations in general economic and business
conditions in China and globally 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. 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 EPS and free cash
flow; and for our segment results, adjusted EBITA (including adjusted
EBITA margin). 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 GAAP Measures" in this results announcement.
We believe that adjusted EBITDA, adjusted EBITA, segmental adjusted
EBITA, non-GAAP net income and non-GAAP diluted EPS 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 EPS. We believe that adjusted EBITDA,
adjusted EBITA, segmental adjusted EBITA, non-GAAP net income and
non-GAAP diluted EPS 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 our financial and operational
decision-making. 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,
segmental adjusted EBITA, non-GAAP net income, non-GAAP diluted EPS and
free cash flow should not be considered in isolation or construed as an
alternative to income from operations, net income, diluted EPS, cash
flows or any other measure of performance or as an indicator of our
operating performance. These non-GAAP financial measures presented here
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, other income, net, interest expenses, income tax
expenses and share of results of equity investees, and (ii) certain
non-cash expenses, consisting of share-based compensation expense,
amortization, depreciation and impairment of goodwill, 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, other income, net, interest expenses, income tax
expenses and share of results of equity investees, and (ii) certain
non-cash expenses, consisting of share-based compensation expenses,
amortization and impairment of goodwill, 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, impairment of goodwill and
investments, gain on deemed disposals/disposals/revaluation of
investments and amortization of excess value receivable arising from the
restructuring of commercial arrangements with Ant Financial, as adjusted
for the tax effects on non-GAAP adjustments.
Non-GAAP diluted EPS 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, including
accounting for the effects of the assumed conversion of convertible
preference shares.
Free cash flow represents net cash provided by operating
activities as presented in our consolidated cash flow statement less
purchases of property and equipment and intangible assets (excluding
acquisition of land use rights and construction in progress) and
adjusted for changes in loan receivables relating to micro loans of the
SME loan business (which we transferred to Ant Financial in February
2015) and others. We present the adjustment for changes in loan
receivables because such receivables are reflected under cash flow from
operating activities, whereas the secured borrowings and other bank
borrowings used to finance them are reflected under cash flows from
financing activities, and accordingly, the adjustment is made to show
cash flows from operating activities net of the effect of changes in
loan receivables.
The section entitled "Information about Segments" and the table
captioned "Reconciliations of Non-GAAP Measures to the Nearest
Comparable 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 December 31,
|
|
Nine months ended December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions, except per share data)
|
|
(in millions, except per share data)
|
Revenue
|
|
34,543
|
|
|
53,248
|
|
|
7,669
|
|
|
76,959
|
|
|
119,694
|
|
|
17,240
|
|
Cost of revenue
|
|
(10,951
|
)
|
|
(19,126
|
)
|
|
(2,755
|
)
|
|
(24,793
|
)
|
|
(43,993
|
)
|
|
(6,336
|
)
|
Product development expenses
|
|
(3,749
|
)
|
|
(4,420
|
)
|
|
(636
|
)
|
|
(10,215
|
)
|
|
(12,542
|
)
|
|
(1,806
|
)
|
Sales and marketing expenses
|
|
(3,641
|
)
|
|
(4,490
|
)
|
|
(647
|
)
|
|
(8,446
|
)
|
|
(11,982
|
)
|
|
(1,726
|
)
|
General and administrative expenses
|
|
(2,500
|
)
|
|
(3,287
|
)
|
|
(473
|
)
|
|
(6,872
|
)
|
|
(8,845
|
)
|
|
(1,274
|
)
|
Amortization of intangible assets
|
|
(813
|
)
|
|
(1,261
|
)
|
|
(182
|
)
|
|
(2,188
|
)
|
|
(3,809
|
)
|
|
(550
|
)
|
Impairment of goodwill
|
|
(455
|
)
|
|
-
|
|
|
-
|
|
|
(455
|
)
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
12,434
|
|
|
20,664
|
|
|
2,976
|
|
|
23,990
|
|
|
38,523
|
|
|
5,548
|
|
Interest and investment income, net
|
|
2,944
|
|
|
837
|
|
|
121
|
|
|
48,476
|
|
|
2,006
|
|
|
289
|
|
Interest expense
|
|
(475
|
)
|
|
(701
|
)
|
|
(101
|
)
|
|
(1,436
|
)
|
|
(1,995
|
)
|
|
(287
|
)
|
Other income, net
|
|
1,607
|
|
|
3,015
|
|
|
434
|
|
|
2,587
|
|
|
5,646
|
|
|
813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax and share of results of equity investees
|
|
16,510
|
|
|
23,815
|
|
|
3,430
|
|
|
73,617
|
|
|
44,180
|
|
|
6,363
|
|
Income tax expenses
|
|
(3,559
|
)
|
|
(5,110
|
)
|
|
(736
|
)
|
|
(6,624
|
)
|
|
(9,223
|
)
|
|
(1,328
|
)
|
Share of results of equity investees
|
|
(495
|
)
|
|
(1,548
|
)
|
|
(223
|
)
|
|
(1,018
|
)
|
|
(3,583
|
)
|
|
(516
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
12,456
|
|
|
17,157
|
|
|
2,471
|
|
|
65,975
|
|
|
31,374
|
|
|
4,519
|
|
Net loss attributable to noncontrolling interests
|
|
42
|
|
|
698
|
|
|
101
|
|
|
120
|
|
|
1,654
|
|
|
238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to ordinary shareholders
|
|
12,498
|
|
|
17,855
|
|
|
2,572
|
|
|
66,095
|
|
|
33,028
|
|
|
4,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
5.11
|
|
|
7.19
|
|
|
1.04
|
|
|
26.86
|
|
|
13.32
|
|
|
1.92
|
|
Diluted
|
|
4.90
|
|
|
6.94
|
|
|
1.00
|
|
|
25.75
|
|
|
12.85
|
|
|
1.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of share used in calculating net income
per ordinary share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
2,446
|
|
|
2,485
|
|
|
|
|
2,461
|
|
|
2,479
|
|
|
|
Diluted
|
|
2,550
|
|
|
2,571
|
|
|
|
|
2,567
|
|
|
2,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALIBABA GROUP HOLDING LIMITED
REVENUE
The following table sets forth our revenue by segments for the
periods indicated:
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions)
|
|
(in millions)
|
Core commerce(i)
|
|
32,111
|
|
46,576
|
|
6,708
|
|
70,880
|
|
102,310
|
|
14,736
|
Cloud computing(ii)
|
|
819
|
|
1,764
|
|
254
|
|
1,953
|
|
4,500
|
|
648
|
Digital media and entertainment(iii)
|
|
1,088
|
|
4,063
|
|
585
|
|
2,798
|
|
10,806
|
|
1,556
|
Innovation initiatives and others(iv)
|
|
525
|
|
845
|
|
122
|
|
1,328
|
|
2,078
|
|
300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
34,543
|
|
53,248
|
|
7,669
|
|
76,959
|
|
119,694
|
|
17,240
|
(i)
|
Revenue from core commerce is primarily generated from our China
retail marketplaces, 1688.com, AliExpress, Alibaba.com and
Lazada.com.
|
(ii)
|
Revenue from cloud computing is primarily generated from the
provision of services, such as data storage, elastic computing,
database and large scale computing services, as well as web hosting
and domain name registration.
|
(iii)
|
Revenue from digital media and entertainment mainly represents
advertising and subscription revenue generated from our digital
entertainment business provided by Youku Tudou and mobile Internet
services revenue from UCWeb businesses.
|
(iv)
|
Revenue from innovation initiatives and others mainly represents
revenue generated by AutoNavi and YunOS, as well as fees from Ant
Financial related to the SME loan business.
|
|
|
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 December 31,
|
|
Nine months ended December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions)
|
|
(in millions)
|
Core commerce
|
|
18,928
|
|
|
27,439
|
|
|
3,952
|
|
|
40,420
|
|
|
57,680
|
|
|
8,308
|
|
Cloud computing
|
|
(712
|
)
|
|
(339
|
)
|
|
(49
|
)
|
|
(1,998
|
)
|
|
(1,176
|
)
|
|
(169
|
)
|
Digital media and entertainment
|
|
(1,019
|
)
|
|
(3,196
|
)
|
|
(460
|
)
|
|
(3,274
|
)
|
|
(7,296
|
)
|
|
(1,051
|
)
|
Innovation initiatives and others
|
|
(2,363
|
)
|
|
(1,450
|
)
|
|
(209
|
)
|
|
(5,245
|
)
|
|
(4,910
|
)
|
|
(708
|
)
|
Unallocated
|
|
(2,400
|
)
|
|
(1,790
|
)
|
|
(258
|
)
|
|
(5,913
|
)
|
|
(5,775
|
)
|
|
(832
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
12,434
|
|
|
20,664
|
|
|
2,976
|
|
|
23,990
|
|
|
38,523
|
|
|
5,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth our adjusted EBITA by segments for
the periods indicated:
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions)
|
|
(in millions)
|
Core commerce
|
|
20,744
|
|
|
29,630
|
|
|
4,268
|
|
|
45,343
|
|
|
63,853
|
|
|
9,197
|
|
Cloud computing
|
|
(332
|
)
|
|
(92
|
)
|
|
(13
|
)
|
|
(1,086
|
)
|
|
(307
|
)
|
|
(44
|
)
|
Digital media and entertainment
|
|
(415
|
)
|
|
(2,431
|
)
|
|
(350
|
)
|
|
(1,609
|
)
|
|
(4,831
|
)
|
|
(696
|
)
|
Innovation initiatives and others
|
|
(961
|
)
|
|
(785
|
)
|
|
(114
|
)
|
|
(2,442
|
)
|
|
(2,443
|
)
|
|
(352
|
)
|
Unallocated
|
|
(964
|
)
|
|
(653
|
)
|
|
(94
|
)
|
|
(2,044
|
)
|
|
(2,251
|
)
|
|
(324
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
18,072
|
|
|
25,669
|
|
|
3,697
|
|
|
38,162
|
|
|
54,021
|
|
|
7,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below sets forth selected financial information of our
operating segments for the nine months ended December 31, 2016:
|
|
Nine months ended December 31, 2016
|
|
|
Core commerce
|
|
Cloud computing
|
|
Digital media and entertainment
|
|
Innovation initiatives and others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions, except percentages)
|
Revenue
|
|
102,310
|
|
|
4,500
|
|
|
10,806
|
|
|
2,078
|
|
|
-
|
|
|
119,694
|
|
|
17,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
57,680
|
|
|
(1,176
|
)
|
|
(7,296
|
)
|
|
(4,910
|
)
|
|
(5,775
|
)
|
|
38,523
|
|
|
5,548
|
|
Add: Share-based compensation expense
|
|
4,517
|
|
|
866
|
|
|
1,036
|
|
|
1,974
|
|
|
3,296
|
|
|
11,689
|
|
|
1,683
|
|
Add: Amortization of intangible assets
|
|
1,656
|
|
|
3
|
|
|
1,429
|
|
|
493
|
|
|
228
|
|
|
3,809
|
|
|
550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITA
|
|
63,853
|
|
|
(307
|
)
|
|
(4,831
|
)
|
|
(2,443
|
)
|
|
(2,251
|
)
|
|
54,021
|
|
|
7,781
|
|
Adjusted EBITA margin
|
|
62
|
%
|
|
(7
|
)%
|
|
(45
|
)%
|
|
(118
|
)%
|
|
|
|
45
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended December 31, 2015
|
|
|
Core commerce
|
|
Cloud computing
|
|
Digital media and entertainment
|
|
Innovation initiatives and others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
|
(in millions, except percentages)
|
Revenue
|
|
70,880
|
|
|
1,953
|
|
|
2,798
|
|
|
1,328
|
|
|
-
|
|
|
76,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
40,420
|
|
|
(1,998
|
)
|
|
(3,274
|
)
|
|
(5,245
|
)
|
|
(5,913
|
)
|
|
23,990
|
|
Add: Share-based compensation expense
|
|
4,454
|
|
|
909
|
|
|
654
|
|
|
2,311
|
|
|
3,201
|
|
|
11,529
|
|
Add: Amortization of intangible assets
|
|
469
|
|
|
3
|
|
|
1,011
|
|
|
492
|
|
|
213
|
|
|
2,188
|
|
Add: Impairment of goodwill
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
455
|
|
|
455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITA
|
|
45,343
|
|
|
(1,086
|
)
|
|
(1,609
|
)
|
|
(2,442
|
)
|
|
(2,044
|
)
|
|
38,162
|
|
Adjusted EBITA margin
|
|
64
|
%
|
|
(56
|
)%
|
|
(58
|
)%
|
|
(184
|
)%
|
|
|
|
50
|
%
|
____________________
|
*
|
Unallocated expenses are primarily related to corporate
administrative costs and other miscellaneous items that are not
allocated to individual segments.
|
|
|
ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
As of March 31,
|
|
As of December 31,
|
|
|
2016
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(note)
|
|
|
|
|
|
|
(in millions)
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
106,818
|
|
133,989
|
|
19,298
|
Short-term investments
|
|
4,700
|
|
4,499
|
|
648
|
Restricted cash and escrow receivables
|
|
1,346
|
|
1,004
|
|
145
|
Investment securities
|
|
4,178
|
|
3,308
|
|
476
|
Prepayments, receivables and other assets(i)
|
|
16,993
|
|
25,728
|
|
3,706
|
Total current assets
|
|
134,035
|
|
168,528
|
|
24,273
|
|
Investment securities
|
|
29,392
|
|
34,331
|
|
4,945
|
Prepayments, receivables and other assets(i)
|
|
5,837
|
|
7,864
|
|
1,132
|
Investment in equity investees
|
|
91,461
|
|
120,065
|
|
17,293
|
Property and equipment, net
|
|
13,629
|
|
19,899
|
|
2,866
|
Land use rights
|
|
2,876
|
|
4,718
|
|
680
|
Intangible assets
|
|
5,370
|
|
12,921
|
|
1,861
|
Goodwill
|
|
81,645
|
|
122,540
|
|
17,649
|
Total assets
|
|
364,245
|
|
490,866
|
|
70,699
|
|
|
|
|
|
|
|
Liabilities, Mezzanine Equity and Shareholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Current bank borrowings
|
|
4,304
|
|
4,655
|
|
670
|
Current portion of unsecured notes
|
|
-
|
|
9,024
|
|
1,300
|
Income tax payable
|
|
2,790
|
|
5,736
|
|
826
|
Escrow money payable
|
|
-
|
|
802
|
|
116
|
Accrued expenses, accounts payable and other liabilities
|
|
27,334
|
|
44,236
|
|
6,371
|
Merchant deposits
|
|
7,314
|
|
13,649
|
|
1,966
|
Deferred revenue and customer advances
|
|
10,297
|
|
14,494
|
|
2,088
|
Total current liabilities
|
|
52,039
|
|
92,596
|
|
13,337
|
|
|
Deferred revenue
|
|
418
|
|
518
|
|
74
|
Deferred tax liabilities
|
|
6,471
|
|
9,734
|
|
1,402
|
Non-current bank borrowings
|
|
1,871
|
|
30,884
|
|
4,448
|
Unsecured senior notes(i)
|
|
51,391
|
|
46,262
|
|
6,663
|
Other liabilities
|
|
2,166
|
|
1,313
|
|
189
|
Total liabilities
|
|
114,356
|
|
181,307
|
|
26,113
|
_____________________________
|
(i)
|
Certain reclassifications in prepayments, receivables and other
assets and unsecured senior notes as of March 31, 2016 were
retrospectively adjusted as a result of the adoption of a new
accounting standard effective in the first quarter of fiscal 2017.
|
|
|
ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS (CONTINUED)
|
|
|
|
|
|
|
|
As of March 31,
|
|
As of December 31,
|
|
|
2016
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions)
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
-
|
|
|
-
|
|
|
-
|
|
Mezzanine equity
|
|
350
|
|
|
3,547
|
|
|
511
|
|
Alibaba Group Holding Limited shareholders' equity:
|
|
|
|
|
|
|
Ordinary shares
|
|
1
|
|
|
1
|
|
|
-
|
|
Additional paid-in capital
|
|
132,206
|
|
|
158,596
|
|
|
22,843
|
|
Treasury shares at cost
|
|
-
|
|
|
(2,823
|
)
|
|
(407
|
)
|
Restructuring reserve
|
|
(888
|
)
|
|
(689
|
)
|
|
(99
|
)
|
Subscription receivables
|
|
(172
|
)
|
|
(301
|
)
|
|
(43
|
)
|
Statutory reserves
|
|
3,244
|
|
|
4,022
|
|
|
579
|
|
Accumulated other comprehensive income
|
|
3,844
|
|
|
6,910
|
|
|
996
|
|
Retained earnings
|
|
78,752
|
|
|
97,969
|
|
|
14,110
|
|
|
|
|
|
|
|
|
Total Alibaba Group Holding Limited shareholders' equity
|
|
216,987
|
|
|
263,685
|
|
|
37,979
|
|
Noncontrolling interests
|
|
32,552
|
|
|
42,327
|
|
|
6,096
|
|
|
|
|
|
|
|
|
Total equity
|
|
249,539
|
|
|
306,012
|
|
|
44,075
|
|
|
|
|
|
|
|
|
Total liabilities, mezzanine equity and equity
|
|
364,245
|
|
|
490,866
|
|
|
70,699
|
|
|
|
|
|
|
|
|
|
|
|
ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions)
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
26,230
|
|
|
37,416
|
|
|
5,389
|
|
|
51,754
|
|
|
69,580
|
|
|
10,022
|
|
Net cash used in investing activities
|
|
(14,271
|
)
|
|
(8,146
|
)
|
|
(1,173
|
)
|
|
(35,438
|
)
|
|
(75,329
|
)
|
|
(10,850
|
)
|
Net cash provided by (used in) financing activities
|
|
1,268
|
|
|
(710
|
)
|
|
(103
|
)
|
|
(14,856
|
)
|
|
30,432
|
|
|
4,383
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
327
|
|
|
1,745
|
|
|
251
|
|
|
648
|
|
|
2,488
|
|
|
358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in cash and cash equivalents
|
|
13,554
|
|
|
30,305
|
|
|
4,364
|
|
|
2,108
|
|
|
27,171
|
|
|
3,913
|
|
Cash and cash equivalents at beginning of period
|
|
96,747
|
|
|
103,684
|
|
|
14,934
|
|
|
108,193
|
|
|
106,818
|
|
|
15,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
110,301
|
|
|
133,989
|
|
|
19,298
|
|
|
110,301
|
|
|
133,989
|
|
|
19,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE
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 December 31,
|
|
Nine months ended December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions)
|
|
(in millions)
|
Net income
|
|
12,456
|
|
|
17,157
|
|
|
2,471
|
|
|
65,975
|
|
|
31,374
|
|
|
4,519
|
|
Less: Interest and investment income, net
|
|
(2,944
|
)
|
|
(837
|
)
|
|
(121
|
)
|
|
(48,476
|
)
|
|
(2,006
|
)
|
|
(289
|
)
|
Add: Interest expense
|
|
475
|
|
|
701
|
|
|
101
|
|
|
1,436
|
|
|
1,995
|
|
|
287
|
|
Less: Other income, net
|
|
(1,607
|
)
|
|
(3,015
|
)
|
|
(434
|
)
|
|
(2,587
|
)
|
|
(5,646
|
)
|
|
(813
|
)
|
Add: Income tax expenses
|
|
3,559
|
|
|
5,110
|
|
|
736
|
|
|
6,624
|
|
|
9,223
|
|
|
1,328
|
|
Add: Share of results of equity investees
|
|
495
|
|
|
1,548
|
|
|
223
|
|
|
1,018
|
|
|
3,583
|
|
|
516
|
|
Income from operations
|
|
12,434
|
|
|
20,664
|
|
|
2,976
|
|
|
23,990
|
|
|
38,523
|
|
|
5,548
|
|
Add: Share-based compensation expense
|
|
4,370
|
|
|
3,744
|
|
|
539
|
|
|
11,529
|
|
|
11,689
|
|
|
1,683
|
|
Add: Amortization of intangible assets
|
|
813
|
|
|
1,261
|
|
|
182
|
|
|
2,188
|
|
|
3,809
|
|
|
550
|
|
Add: Impairment of goodwill
|
|
455
|
|
|
-
|
|
|
-
|
|
|
455
|
|
|
-
|
|
|
-
|
|
Adjusted EBITA
|
|
18,072
|
|
|
25,669
|
|
|
3,697
|
|
|
38,162
|
|
|
54,021
|
|
|
7,781
|
|
Add: Depreciation and amortization of property and equipment and
land use rights
|
|
1,039
|
|
|
1,352
|
|
|
195
|
|
|
2,680
|
|
|
3,838
|
|
|
552
|
|
Adjusted EBITDA
|
|
19,111
|
|
|
27,021
|
|
|
3,892
|
|
|
40,842
|
|
|
57,859
|
|
|
8,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE
GAAP MEASURES (CONTINUED)
|
|
The table below sets forth a reconciliation of our net income to
non-GAAP net income for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions)
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
12,456
|
|
|
17,157
|
|
|
2,471
|
|
|
65,975
|
|
|
31,374
|
|
|
4,519
|
|
Add: Share-based compensation expense
|
|
4,370
|
|
|
3,744
|
|
|
539
|
|
|
11,529
|
|
|
11,689
|
|
|
1,683
|
|
Add: Amortization of intangible assets
|
|
813
|
|
|
1,261
|
|
|
182
|
|
|
2,188
|
|
|
3,809
|
|
|
550
|
|
Add: Impairment of goodwill and investments
|
|
1,611
|
|
|
1,476
|
|
|
213
|
|
|
2,316
|
|
|
2,409
|
|
|
347
|
|
Less: Gain on deemed disposals/disposals/revaluation of investments
and others
|
|
(2,959
|
)
|
|
(1,161
|
)
|
|
(168
|
)
|
|
(47,101
|
)
|
|
(1,743
|
)
|
|
(251
|
)
|
Add: Amortization of excess value receivable arising from the
restructuring of commercial arrangements with Ant Financial
|
|
67
|
|
|
67
|
|
|
10
|
|
|
199
|
|
|
199
|
|
|
28
|
|
Adjusted for tax effects on non-GAAP adjustments*
|
|
217
|
|
|
(53
|
)
|
|
(8
|
)
|
|
129
|
|
|
(306
|
)
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
16,575
|
|
|
22,491
|
|
|
3,239
|
|
|
35,235
|
|
|
47,431
|
|
|
6,831
|
|
_____________________________
|
*
|
Tax effects on non-GAAP adjustments comprise of tax provisions on
the amortization of intangible assets and certain gains on disposal
of investments, as well as tax benefits from share-based awards.
Comparative figures were updated to conform with the current period
presentation.
|
|
|
ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE
GAAP MEASURES (CONTINUED)
|
|
The table below sets forth a reconciliation of our diluted EPS to
non-GAAP diluted EPS for the periods indicated:
|
|
|
Three months ended December 31,
|
|
Nine months ended December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions, except per share data)
|
|
(in millions, except per share data)
|
Net income attributable to ordinary shareholders - basic
|
|
12,498
|
|
17,855
|
|
|
2,572
|
|
66,095
|
|
|
33,028
|
|
|
4,757
|
|
Dilution effect on earnings arising from option plans operated by a
subsidiary and an equity investee
|
|
-
|
|
(3
|
)
|
|
-
|
|
-
|
|
|
(6
|
)
|
|
(1
|
)
|
Net income attributable to ordinary shareholders - diluted
|
|
12,498
|
|
17,852
|
|
|
2,572
|
|
66,095
|
|
|
33,022
|
|
|
4,756
|
|
Add: Non-GAAP adjustments to net income(a)
|
|
4,119
|
|
5,334
|
|
|
768
|
|
(30,740
|
)
|
|
16,057
|
|
|
2,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to ordinary shareholders
for computing non-GAAP diluted EPS
|
|
16,617
|
|
23,186
|
|
|
3,340
|
|
35,355
|
|
|
49,079
|
|
|
7,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares on a diluted basis
|
|
2,550
|
|
2,571
|
|
|
|
|
2,567
|
|
|
2,569
|
|
|
|
Diluted EPS(b)
|
|
4.90
|
|
6.94
|
|
|
1.00
|
|
25.75
|
|
|
12.85
|
|
|
1.85
|
|
Add: Non-GAAP adjustments to net income per share(c)
|
|
1.62
|
|
2.08
|
|
|
0.30
|
|
(11.98
|
)
|
|
6.25
|
|
|
0.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted EPS(d)
|
|
6.52
|
|
9.02
|
|
|
1.30
|
|
13.77
|
|
|
19.10
|
|
|
2.75
|
|
________________________
|
(a)
|
See the table above about the reconciliation of net income to
non-GAAP net income for more information of these non-GAAP
adjustments.
|
(b)
|
Diluted EPS is derived from net income attributable to ordinary
shareholders for computing diluted EPS divided by weighted average
number of shares on a diluted basis.
|
(c)
|
Non-GAAP adjustments to net income per share is derived from
non-GAAP adjustments to net income divided by weighted average
number of shares on a diluted basis.
|
(d)
|
Non-GAAP diluted EPS is derived from non-GAAP net income
attributable to ordinary shareholders for computing non-GAAP
diluted EPS divided by weighted average number of shares on a
diluted basis.
|
|
|
ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE
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 December 31,
|
|
Nine months ended December 31,
|
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions)
|
|
(in millions)
|
Net cash provided by operating activities
|
|
26,230
|
|
|
37,416
|
|
|
5,389
|
|
|
51,754
|
|
|
69,580
|
|
|
10,022
|
|
Less: Purchase of property and equipment and intangible assets
(excluding land use rights and construction in progress)
|
|
(2,365
|
)
|
|
(3,246
|
)
|
|
(468
|
)
|
|
(4,755
|
)
|
|
(9,388
|
)
|
|
(1,352
|
)
|
Add: Changes in loan receivables, net and others
|
|
(146
|
)
|
|
(48
|
)
|
|
(6
|
)
|
|
(108
|
)
|
|
618
|
|
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
23,719
|
|
|
34,122
|
|
|
4,915
|
|
|
46,891
|
|
|
60,810
|
|
|
8,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALIBABA GROUP HOLDING LIMITED
|
SELECTED OPERATING DATA
|
Annual active buyers
The table below sets forth the number of active buyers on our China
retail marketplaces for the periods indicated:
|
|
|
|
|
|
Twelve months ended
|
|
|
Mar 31, 2015
|
|
Jun 30, 2015
|
|
Sep 30, 2015
|
|
Dec 31, 2015
|
|
Mar 31, 2016
|
|
Jun 30, 2016
|
|
Sep 30, 2016
|
|
Dec 31, 2016
|
|
|
(in millions)
|
Annual active buyers
|
|
350
|
|
367
|
|
386
|
|
407
|
|
423
|
|
434
|
|
439
|
|
443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile
The table below sets forth the mobile MAUs on our China retail
marketplaces for the periods indicated:
|
|
|
|
The month ended
|
|
|
Mar 31, 2015
|
|
Jun 30, 2015
|
|
Sep 30, 2015
|
|
Dec 31, 2015
|
|
Mar 31, 2016
|
|
Jun 30, 2016
|
|
Sep 30, 2016
|
|
Dec 31, 2016
|
|
|
(in millions)
|
Mobile MAUs
|
|
289
|
|
307
|
|
346
|
|
393
|
|
410
|
|
427
|
|
450
|
|
493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per active buyer / mobile revenue per mobile MAU
The table below sets forth information with respect to annual China
commerce retail revenue per annual active buyer and annualized mobile
revenue per mobile MAU from China commerce retail for the periods
presented:
|
|
Mar 31, 2015
|
|
Jun 30, 2015
|
|
Sep 30, 2015
|
|
Dec 31, 2015
|
|
Mar 31, 2016
|
|
Jun 30, 2016
|
|
Sep 30, 2016
|
|
Dec 31, 2016
|
|
|
(in RMB)
|
Annual China commerce retail revenue per annual active buyer(1)
|
|
171
|
|
171
|
|
174
|
|
184
|
|
189
|
|
202
|
|
215
|
|
241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobile revenue per mobile MAU from China commerce retail - Annualized(2)
|
|
62
|
|
76
|
|
87
|
|
108
|
|
123
|
|
140
|
|
151
|
|
166
|
_____________________
|
(1)
|
China commerce retail revenue per active buyer for each of the
above periods is calculated by dividing the China commerce retail
revenue for the last 12-month period by the annual active buyers
for the same 12-month period.
|
(2)
|
Mobile revenue per mobile MAU from China commerce retail,
annualized is calculated by dividing mobile revenue from China
commerce retail for the last 12-month period by the mobile MAUs at
the end of the same period.
|
|
|
ALIBABA GROUP HOLDING LIMITED
|
SELECTED OPERATING DATA
|
Cloud computing paying customers
The table below sets forth the number of payment customers on Cloud
computing for the periods indicated:
|
|
|
|
|
|
Twelve months ended
|
|
|
Mar 31, 2015
|
|
Jun 30, 2015
|
|
Sep 30, 2015
|
|
Dec 31, 2015
|
|
Mar 31, 2016
|
|
Jun 30, 2016
|
|
Sep 30, 2016
|
|
Dec 31, 2016
|
|
|
(in thousands)
|
Paying customers
|
|
254
|
|
263
|
|
313
|
|
383
|
|
513
|
|
577
|
|
651
|
|
765
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170124005719/en/
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