In its quarterly earnings report on Thursday, China’s Alibaba announced to have beaten the experts’ estimates for earnings and revenue. The company attributed its success to the cloud computing business and massive demand on its Singles’ Day shopping blitz that saw record sales.
Single’s Day is an annual event for Alibaba that occurs in November and has a reputation of fueling the highest revenue for the Chinese multinational conglomerate holding company in the third quarter of a year. In 2019, the 24-hour event recorded an all-time high of $38.4 billion in sales.
Advertising And Promotions Is The Primary Source Of Revenue For Alibaba
The primary source of revenue for Alibaba is its advertising and promotions services that it offers to third-party merchants that use its e-commerce platforms like Tmall and Taobao to list their products.
Alibaba also accentuated that it’s contributing to China’s fight against the recent outbreak of Coronavirus and is committed to the relief measures directed at its merchants and the provision of daily necessities to the consumers.
Ant Financial’s MYBank recently announced that it plans to offer loans to businesses in China to return to normal operations that were severely hurt due to the health emergency. The loans are valued at 20 billion yuan, as per the announcement. Ant Financial is an affiliate of Alibaba Group.
At 141.48 billion yuan, Alibaba’s sales from its primary commerce segment posted a 38% increase in the third quarter. Revenue generated from the cloud computing unit, on the other hand, was recorded at 10.72 billion yuan that marked a massive 68% growth as compared to the same quarter last year.
Alibaba’s Quarterly Revenue Notes A 38% Growth In The Third Quarter
On the net income’s front, the company registered 52.31 billion yuan in 2019’s third quarter versus 33.05 billion yuan previously. The company also announced to have made 18.19 yuan per ADS (American Depository Shares). According to Refinitiv, analysts had anticipated its EPS (earnings per share) at a lower 15.75 yuan per ADS (excluding items).
In terms of revenue, experts had forecast 159.28 billion yuan in Q3 versus 161.45 billion yuan that the company revealed in its report on Thursday. Alibaba’s quarterly revenue noted a 38% growth.
In premarket trading on Thursday, Alibaba’s shares listed in the U.S were recorded to have gained around 1%. At the time of writing, the stock is exchanging hands at $226.30.