Alibaba (BABA) Q3 2023 earnings report for December quarter

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Alibaba is operating in Suqian City, Jiangsu Province, China, on December 29, 2023.

Costfoto | Nurphoto | Getty Images

Alibaba missed market expectations for revenue in the December quarter, but announced it is increasing the size of its share buyback program by $25 billion, sending shares to whipsaw after earnings were released.

U.S.-listed shares in the Chinese e-commerce giant were are one point more than 5% higher in pre-market trade, but turned slightly negative after.

Alibaba said the $25 billion increase is added to its share repurchase program through the end of March 2027, bringing the total available under the scheme to $35.3 billion.

The announcement comes as Alibaba released financial results for its December quarter.

Here’s how Alibaba did in its fiscal third quarter, compared to LSEG estimates:

  • Revenue: 260.35 billion Chinese yuan ($36.6 billion) versus 262.07 billion yuan expected.

Revenue missed expectations, growing just 5% year-over-year, logging a slowdown from the previous quarters as growth in the company’s China e-commerce business and cloud computing division remained slow.

China e-commerce, cloud business slow

Alibaba has been grappling with a difficult macroeconomic environment in China, where the consumer has remained weak, even after Beijing removed its Covid-era restrictions. Amid economic uncertainties, local shoppers have flocked to discounting platforms such as Alibaba rival Pinduoduo.

The Taobao and Tmall business, Alibaba’s China e-commerce platforms, brought in revenue of 129.1 billion Chinese yuan in the December quarter, up just 2% year-on-year.

Alibaba’s cloud computing business, which investors have seen as critical to the tech giant’s future growth, brought in sales of 28.1 billion yuan, a 3% year-on-year rise.

In a statement, recently-appointed Alibaba CEO Eddie Wu said the company’s focus is on growth in e-commerce and cloud.

“Our top priority is to reignite the growth of our core businesses, e-commerce and cloud computing. We will step up investment to improve users’ core experiences to drive growth in Taobao and Tmall Group and strengthen market leadership in the coming year.”

Alibaba had a tumultuous year in 2023, when it carried out its largest-ever corporate structure overhaul. It also separately implemented several high-profile management changes, with company veteran Eddie Wu taking over the reins as chief executive in September.

Daniel Zhang, the previous CEO of Alibaba Group who became acting head of the cloud business in December 2022, was supposed to stay on to lead the business unit, but unexpectedly quit in September last year.

On top of its structural changes, Alibaba also scrapped the hotly-anticipated spinoff of its cloud computing business last year.

More recently, two of Alibaba’s co-founders, Jack Ma and Joe Tsai, in January bought shares worth around $200 million in the Chinese e-commerce giant.

CNBC’s Evelyn Cheng contributed to this report.


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