Alibaba’s fiscal Q1 revenue rose to 268.95 billion yuan, beating estimates, but net income plunged amid higher AI and cloud spending.
Alibaba posted a 9% year-over-year increase in fiscal first-quarter revenue to 268.95 billion yuan ($40 billion), surpassing the 268.88 billion yuan analyst forecast. The growth was led by a 45% rise in Alibaba Cloud’s external revenue and AI-related product sales of 12.38 billion yuan ($1.82 billion).
Net income, however, fell 75% to 10.44 billion yuan ($1.6 billion) as capital expenditure surged 75% to 67.7 billion yuan ($10 billion), resulting in a $6.6 billion free cash flow outflow. The company’s U.S.-listed shares declined as much as 5% before trimming losses to around 3.5%.
The cloud division’s performance marked its 12th consecutive quarter of triple-digit AI revenue growth, reflecting strong demand for Alibaba’s full-stack AI solutions. CEO Eddie Wu cited improved commercialization of AI products as a key driver of the quarter’s results.