Source: Company reports
4Q18 Results
Alibaba reported 4Q18 revenues of ¥61.9 billion ($9.9 billion), up 61% year over year. The strong growth was mainly driven by robust revenue growth from its core commerce segment, as well as the Alibaba cloud business. However, the operating margin was squeezed significantly to 15% in 4Q18, compared to 25% in 4Q17. Non-GAAP diluted EPS was ¥5.73 ($0.91), up 32% year over year.
Source: Company reports
Core commerce: Core commerce revenues reached ¥51.3 billion ($8.2 billion), up 62% year over year.
- China retail revenues: Alibaba reported China retail revenues of ¥40.2 billion, up 56% year over year. Annual active consumersreached552 million, for an increase of22% year over year. The pickup in active consumers was due to better new customer acquisition in lower-tier cities and the successful Chinese New Year promotional campaign.
- China wholesale revenues: Revenues for China wholesale were up 28% year over year to reach ¥1.8 billion.
- International retail revenues: International retail revenues increased by63% year over year to reach ¥4.0 billion ($632 million), primarily driven by robust GMV growth on the two marketplaces, Lazada and AliExpress.
Cloud computing: Revenues from the cloud computing business in 4Q18 were ¥4.4 billion (US$699 million), up 103% year over year. The strong increase was primarily driven by an increase in the number of paying customers and in customers’ usage of cloud services, which included more complex offerings, such as content delivery network and database services.
Digital media and entertainment: This segment reported revenues of ¥5.3 billion ($840 million), up34% year over year.The growth was primarily driven by an increase in subscription revenues from Youku Tudou and an increase in revenues from mobile value-added services provided by UCWeb, such as news feeds and mobile search.
Outlook
Alibaba guides for revenue growth for 2019 to be over 60% year over year. Excluding the consolidation of Ele.me and Cainiao Network,revenue growth will be over 50% year over year. The company plans to continue to invest its free cash flow into its various segments to sustain long-term growth, which will put pressure on its margin.
