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

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

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

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

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

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

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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