Alibaba Group reports 96% plummet in net income with BABA earnings

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on May 14, 2024
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  • Alibaba Group announced their Q1 2024 financial results today.
  • Some of the results shocked the markets, including the precipitous drop in net income for the online retailer.
  • EPS also disappointed marginally, at $1.40 per share.

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Alibaba Group Holdings reported some truly concerning Q4 2024 financial results today before US markets opened.

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After a difficult quarter for the Chinese economy, as well as intensifying competition from online shopping rivals such as Temu, investors weren’t sure what to expect from the earnings – except that they would improve upon the previous quarter’s dismal results, which had included net income declining more than 70%.

Read our Alibaba earnings forecast: should you buy or sell the BABA dip?

Unfortunately, it only grew worse from there.

Today’s results

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Alibaba reported an even worse net income of $127 million for the quarter, a staggering drop of 96% (RMB21,077 million) year-on-year.

Income from operations showed a decrease of 3% year-on-year (YoY) to $2.04 billion (s RMB14,765 million).

Revenue was $30.7 billion (RMB221,874 million), an increase of 7% year-over-year.

Meanwhile, earnings per share (EPS) were down 5% YoY to $1.40 (RMB10.14) per share, or non-GAAP diluted EPS of $0.18 per share.

Net cash provided by operating activities was $3.23 billion (RMB23,340 million), a decrease of 26% compared to RMB31,401 million in the same quarter of 2023.

Forward-looking guidance

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In its press statement detailing the results today, Alibaba said that:

Our strategy of price-competitiveness and focus on user experience is yielding results. During the quarter, we achieved double-digit online GMV and order growth year-over-year, driven by strong increase in the number of purchasers and purchase frequency. For the quarter ended March 31, 2024, revenue from Taobao and Tmall Group grew 4% year-over-year to RMB93,216 million (US$12,910 million).”

Earnings expectations

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These grim results were largely in line with expectations and did little to shock markets.

Ahead of the announcement, analysts forecast that the company would announce revenues of around $30.42 billion, below the previous quarter’s amount of $36.6 billion but slightly above the $29.1 billion reported the previous year.

Earnings per share (EPS) were anticipated to come in at around $1.42, lower than the $1.50 declared a year prior in the same quarter. Today’s EPS disappointed marginally, with $0.02 less than expected on the EPS.

Previous results

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Today’s results represented little improvement upon Q3’s results for FY 2024, which were released in February.

In its previous quarter, Alibaba announced subdued results, including a 36% drop in year-over-year income from operations, which stood at $3.1 billion (RMB22 511 million).

Net income also fell a staggering 77% to just $2.03 billion

Revenues for the quarter were $36.6 billion (RMB 260 348 million), which represented a 5% increase year-on-year (YoY).

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