Alibaba may have defied the skeptics who have pushed its stock down by 7% this year by reporting fast-growing sales in the latest quarter.
Sales rose in the most recent quarter by 39% year-over-year to $3.75 billion, the company said today, the fastest in four quarters and beating analysts’ expectations compiled by S&P Capital IQ. The closely watched gross merchandise value (GMV) on its platforms (the total value of all purchases), meanwhile, increased 24% year-over-year to $115 billion.
About 73% of the total GMV was bought on mobile devices and at the end of March, the company said it had 410 million monthly active users.
Maggie Wu, the chief financial officer, called it “a very strong quarter.”
Earnings were another story. Net income missed analysts’ estimates slightly, at $824 million, even though that was an 85% rise. Its non-GAAP earnings, which smooths out some of the fluctuations on investment gains year to year, barely budged from a year ago, falling 1% to $1.2 billion.
In March Alibaba announced the big news that goods passing on its platforms hit 3 trillion yuan ($461 billion) annually.
But the fact remains that the torrid sales growth that excited investors right before Alibaba’s 2014 IPO has slowed way down. The trend of quarterly revenue growth is down by about one third since then.
The company is expanding across southeast Asia and into other services to try to replace some lost growth.
One part of Alibaba’s growing sprawl that doesn’t attract much attention has been its online computing services called AliCloud.
Alibaba said today quarterly revenues in the business increased 175% year-over-year to $165 million.
Built out of the company’s own need for computing power to support its e-commerce operations, Alibaba offered its service to commercial paying customers in the same way Amazon has. Deutsche Bank estimates AliCloud’s market share tips 65% in China and expects cloud revenue to pass $2.5 billion by the end of fiscal 2018 from roughly $185 million last year. For comparison, Amazon Web Services’ revenue hit $2.57 billion in the first quarter, a 60% rise in year-on-year terms.