Alibaba had a strong quarter in Q2 2019, with revenue growing 42% and adjusted EBITDA growing 34% year-over-year, according to its official financial results. Alibaba user base grew to 674 million annual active consumers.
Alibaba Group revenue was RMB 114,924 million (US$16,741 million) in Q2 2019, an increase of 42% year-over-year.
Annual active consumers on its China retail marketplaces reached 674 million, an increase of 20 million from the 12-month period ended March 31, 2019. See Alibaba’s e-commerce performance here.
Income from operations was RMB24,375 million (US$3,551 million), an increase of 204% year-over-year. The increase would have been 27% excluding share-based compensation expense resulting from Ant Financial’s awards to its employees. This expense was significantly higher in the quarter ended June 30, 2018, as Ant Financial completed an equity financing at a higher valuation, which required Alibaba to recognize the increase in the value of these awards.
Adjusted EBITDA increased 34% year-over-year to RMB39,238 million (US$5,716 million). Adjusted EBITA for core commerce was RMB41,025 million (US$5,976 million), an increase of 25% year-over-year. Its marketplace-based core commerce adjusted EBITA, a non-GAAP measurement, increased 27% year-over-year to RMB46,800 million (US$6,817 million).
Net income attributable to ordinary shareholders was RMB21,252 million (US$3,096 million), and net income was RMB19,122 million (US$2,785 million). Non-GAAP net income was RMB30,949 million (US$4,508 million), an increase of 54% year-over-year.
Diluted earnings per ADS was RMB8.06 (US$1.17) and non-GAAP diluted earnings per ADS was RMB12.55 (US$1.83), an increase of 56% year-over-year. Net cash provided by operating activities was RMB34,612 million (US$5,042 million) and nonGAAP free cash flow was RMB26,361 million (US$3,840 million).
Alibaba Cloud Computing
Cloud computing revenue grew 66% year-over-year to RMB7,787 million (US$1,134 million) during the June 2019 quarter, primarily driven by an increase in average revenue per customer. During the June 2019 quarter, Alibaba Cloud launched over 300 new products and features, including those related to core cloud offerings, security, data intelligence, and AI applications.
Alibaba is focusing on delivering high value-added services while rationalizing Alibaba’s offerings of commodity products and services. Alibaba will continue to execute a strategy of expanding Alibaba’s market leadership, increasing investments in talent and technology infrastructure and developing new value-added products and features.
Alibaba is focusing on expanding SaaS offerings by working with SaaS partners to build an ecosystem to better serve Alibaba’s enterprise customers.
During the June 2019 quarter, Alibaba announced the Alibaba Cloud SaaS Accelerator, a solution that helps SaaS partners to build, launch and commercialize their offerings at scale within the Alibaba Cloud SaaS marketplace. Alibaba Cloud offers these partners proprietary technologies such as AI applications, data analytics, and software and development operations tools in order for them to deploy solutions for enterprise customers in various industries.
The SaaS Accelerator enables seamless integration of SaaS offerings of different vendors on the Alibaba Cloud platform.
Alibaba Digital Media and Entertainment
Digital media and entertainment segment revenue for the June quarter grew 6% year-over-year as the industry undergoes rationalization and tighter regulatory scrutiny on content. Youku continued to focus on delivering superior user experience and driving increased paying subscribers.
During the quarter, Youku’s average daily subscribers increased by 40% year-over-year. While Alibaba continues to invest in original content production capabilities, which gives Alibaba better control over content quality, format, and scheduling.
Alibaba is also taking systematic analytical measures to ensure content cost efficiencies and return on investment. These measures have been reflected in reduced losses year-over-year during the quarter.