BEIJING • Alibaba Group Holding's quarterly revenue and profit beat analysts' estimates as cloud computing services surged and its core e-commerce business held up despite a slowing Chinese economy.
Revenue at China's biggest e-commerce company rose 59 per cent year on year to 32.15 billion yuan (S$6.5 billion) in the first quarter ended June 30, the company said yesterday.
Alibaba shares gained 5.4 per cent when Wall Street opened.
Investments in computing and media are starting to bear fruit, reducing the group's dependence on e-commerce as economic growth at home exhibits signs of further deterioration.
As with Amazon.com, Alibaba is positioning cloud computing as one of its faster-growing businesses, eyeing top share in Japan in two years and beefing up its presence in the Middle East and the United States.
Its other standout division was media and entertainment, which saw revenue almost quadruple as services like Youku Tudou drew more users.
"This quarter's performance lifts investors doubt about its ability to maintain growth in its core e-commerce business," said Hong Kong-based analyst at Arete Research Services Li Muzhi. "The business diversification in digital entertainment and cloud is the icing on the cake."
Alibaba, which reached a three trillion yuan milestone of goods sold for the year ended in March, is also venturing abroad.
It made its largest overseas acquisition with a US$1 billion (S$1.34 billion) deal for control of Lazada Group, gaining access to six South-east Asian markets. Alibaba incorporated Lazada for the first time.
Net income was 7.1 billion yuan, also beating estimates. The company's annual active buyers increased 18 per cent to 434 million. Adjusted earnings per share were 4.90 yuan, beating estimates of 4.20 yuan.
The core commerce business posted revenue of 27.2 billion yuan, a jump of 47 per cent on the year earlier. The division posted adjusted earnings before interest, tax and amortisation of 16.6 billion yuan.
Apart from media and entertainment, which Alibaba reported individually for the first time, the cloud unit also turned in a strong performance. Its paying customers grew to 577,000, driving a 156 per cent leap in revenue.