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Alibaba Group reports 5% revenue growth in Q4 2023 amid strategic investments

Alibaba Group announces a 5% year-over-year revenue increase for Q4 2023, with strategic focus on e-commerce and cloud computing, alongside a $25 billion boost in share repurchase program, despite a net income drop.

Alibaba Group announced its financial results for the quarter ended December 31, 2023 with revenue growth of 5% year-over-year.

We delivered a solid quarter as we are executing our focused strategies across the organization. Our top priority is to reignite the growth of our core businesses, e-commerce and cloud computing. We will step up investment to improve users’ core experiences to drive growth in Taobao and Tmall Group and strengthen market leadership in the coming year. We will also focus our resources on developing public cloud products and sustaining the strong growth momentum in international commerce business,” said Eddie Wu, Chief Executive Officer of Alibaba Group.

“Alibaba Group delivered a healthy quarter with revenue growth of 5% year-over-year. We increased our investment in strategic priorities and improved shareholder return by leveraging our strong balance sheet and cash flow. Our board of directors approved an increase of US$25 billion to our share repurchase program, demonstrating our confidence in the outlook of our business and cash flow. Our consistent share repurchase has also reduced outstanding share count while achieving EPS and cash flow per share accretion,” said Toby Xu, Chief Financial Officer of Alibaba Group.

In the quarter ended December 31, 2023:

• Revenue was RMB260,348 million (US$36,669 million), an increase of 5% year-over-year.

• Income from operations was RMB22,511 million (US$3,171 million), a decrease of 36% year-over-year. The year-over-year decrease was primarily attributable to the impairment of the intangible assets of Sun Art and the impairment of the goodwill of Youku. Adjusted EBITA, a non-GAAP measurement (excluding share-based compensation expense, impairment of intangible assets and goodwill and certain other items), increased 2% year-over-year to RMB52,843 million (US$7,443 million).

• Net income attributable to ordinary shareholders was RMB14,433 million (US$2,033 million). Net income was RMB10,717 million (US$1,509 million), a decrease of 77% or RMB35,029 million year-over-year, primarily attributable to mark-to-market changes from our equity investments and the decrease in income from operations due to the impairment as mentioned above. Excluding share-based compensation expense, gains/losses of investments, impairment of intangible assets and goodwill, and certain other items, non-GAAP net income in the quarter ended December 31, 2023 was RMB47,951 million (US$6,754 million), a decrease of 4% compared to RMB49,932 million in the same quarter of 2022.

• Diluted earnings per ADS was RMB5.65 (US$0.80) and diluted earnings per share was RMB0.71 (US$0.10 or HK$0.78). Non-GAAP diluted earnings per ADS was RMB18.97 (US$2.67), a decrease of 2% year-over-year and non-GAAP diluted earnings per share was RMB2.37 (US$0.33 or HK$2.62), a decrease of 2% year-over-year.

• Net cash provided by operating activities was RMB64,716 million (US$9,115 million), a decrease of 26% compared to RMB87,370 million in the same quarter of 2022. Free cash flow, a non-GAAP measurement of liquidity, was RMB56,540 million (US$7,963 million), a decrease of 31% compared to RMB81,514 million in the same quarter of 2022. The decrease in free cash flow was attributed to increased capex and several one-time factors including timing of income tax payments and working capital changes related to several of our businesses.

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