BABA posts $35.28B revenue but adjusted earnings plunge to $12M on heavy AI and e-commerce investments.
Alibaba Group reported fiscal fourth-quarter revenue of $35.28 billion, a 3% year-over-year increase and slightly above the $35.23 billion estimate. Excluding divested businesses, revenue rose 11% on a like-for-like basis. However, adjusted earnings per ADS fell to 9 cents, missing the $1.12 expectation, as adjusted net income dropped to $12 million from $740 million in adjusted EBITA due to higher spending on AI and user experience improvements.
China Commerce revenue grew 6% to $17.72 billion, driven by AI-powered shopping tools and quick-commerce profitability. The company integrated Taobao and Tmall services into its Qwen app and launched an AI shopping assistant. Despite gains from equity investments boosting net income by 96%, the earnings miss overshadowed revenue growth.
Shares declined following the report, reflecting investor concerns over rising costs and the impact of AI investments on profitability.