E-commerce and cloud-computing sales fueled higher revenue for Alibaba Group Holding Ltd. in the latest quarter, as the company posted a profit after a regulatory fine dented its bottom line in the previous quarter.
Revenue for the Chinese tech giant rose to 205.74 Chinese yuan, or about $31.9 billion. A year efffarlier, Alibaba's revenue in 2020s June-ending quarter was 153.75 billion yuan.
Chinese e-commerce sales grew 34% year over year, Alibaba said, as the company added about 14 million monthly active mobile users. Cloud-computing revenue was up by 29% amid greater demand from the technology, financial services and retail industries.
Alibaba's profit attributable to shareholders was about $6.99 billion, or about $2.57 per American depositary share.
Citing confidence in the company's prospects for growth, Chief Financial Officer Maggie Wu said that the company is increasing the size of its program to buy back shares from investors. Alibaba will now repurchase up to $15 billion of shares through the end of next year, a rise from the company's previous $10 billion buyback plan.
Alibaba's U.S.-traded shares declined about 0.8% in premarket trading Tuesday morning. Year to date, shares have fallen by about 14% amid concerns about the Chinese business climate in which it operates.
Alibaba is facing increased competition in its core e-commerce business from new players such as $Pinduoduo(PDD.US)$ Inc., Bytedance Ltd.'s short-video platform Douyin and $Tencent(00700.HK)$'s social media app WeChat, which have pursued new interactive ways to reach consumers. In May, Alibaba announced that any incremental profits from this year would be invested in areas such as improving user growth and supporting merchants on its platforms.
Alibaba's cloud business, which investors have banked on to drive growth, has also faced challenges. The division was having trouble winning new contracts and securing some meetings as regulators were scrutinizing its e-commerce business and sister company Ant Group Co. The company has attributed the slowdown in growth in its cloud business last year to the loss of a major customer, which people familiar with the matter identified as Bytedance.
(END) Dow Jones Newswires
August 03, 2021 08:14 ET (12:14 GMT)
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