Alibaba results and Cainiao to pursue IPO

Alibaba Group Holding Limited has announced its financial results for the quarter and fiscal year ended March 31, 2023.

“In an increasingly complex world, we have proactively transformed our organization to strengthen the competitiveness of our businesses through greater independence to address the evolving needs of different customers and capture new opportunities,” said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. “We are taking concrete steps towards unlocking value from our businesses and are pleased to announce that our board has approved a full spin-off of the Cloud Intelligence Group via a stock dividend distribution to shareholders, with intention for it to become an independent publicly listed company.”

“We have established a capital management committee at the Alibaba board level to undertake a comprehensive capital management plan to enhance shareholder value. Alibaba is committed to improving shareholders’ return through the implementation of a robust capital allocation framework,” said Toby Xu, Chief Financial Officer of Alibaba Group. “We are delighted to share that our board has approved the process to start external financing for Alibaba International Digital Commerce Business Group; exploration of IPO for Cainiao Smart Logistics Group; and execution of IPO for Freshippo.”

BUSINESS HIGHLIGHTS
In the quarter ended March 31, 2023:

 Revenue was RMB208,200 million (US$30,316 million), an increase of 2% year-over-year.

 Income from operations was RMB15,240 million (US$2,219 million), a decrease of 9% year-overyear. Excluding the impact of an item discussed in “March Quarter Other Financial Results —Income from operations and operating margin” below, income from operations would have increased by RMB11,569 million year-over-year. Adjusted EBITA, a non-GAAP measurement, increased by 60% or RMB9,469 million year-over-year to RMB25,280 million (US$3,681 million), primarily due to an increase in China commerce adjusted EBITA, as well as narrowed adjusted EBITA losses of Local consumer services and Digital media and entertainment.

 Net income attributable to ordinary shareholders was RMB23,516 million (US$3,424 million).Net income was RMB21,996 million (US$3,203 million), compared to net loss of RMB18,357
million in the same quarter last year, primarily due to net gains arising from the increases in the market prices of our equity investments in publicly-traded companies, compared to net losses from these investments in the same quarter last year, partly offset by the decrease in share of profit of equity method investees, the increase in impairment of investments and the decrease in income from operations as mentioned above. Except for the share of profit of equity method investees, we excluded these investment related net gains or losses from our non-GAAP measures. Non-GAAP net income was RMB27,375 million (US$3,986 million), an increase of 38% year-over-year.

 Diluted earnings per ADS was RMB9.00 (US$1.31) and diluted earnings per share was RMB1.12 (US$0.16 or HK$1.28). Non-GAAP diluted earnings per ADS was RMB10.71 (US$1.56), an increase of 35% year-over-year and non-GAAP diluted earnings per share was RMB1.34 (US$0.20 or HK$1.53), an increase of 35% year-over-year.

 Net cash provided by operating activities was RMB31,401 million (US$4,572 million). Free cash
flow, a non-GAAP measurement of liquidity, was RMB32,267 million (US$4,698 million).

In the fiscal year ended March 31, 2023:
 Revenue was RMB868,687 million (US$126,491 million), an increase of 2% year-over-year.

 Income from operations was RMB100,351 million (US$14,612 million), an increase of 44% yearover-year. Excluding the impact of certain items discussed in “Full Fiscal Year Other Financial
Results — Income from operations and operating margin” below, income from operations would have increased by RMB24,143 million year-over-year. Adjusted EBITA, a non-GAAP measurement, increased 13% or RMB17,514 million year-over-year to RMB147,911 million (US$21,538 million), primarily due to narrowed adjusted EBITA losses of Local consumer services,
International commerce and Digital media and entertainment, as well as an increase in China commerce adjusted EBITA.

 Net income attributable to ordinary shareholders was RMB72,509 million (US$10,558 million) and net income was RMB65,573 million (US$9,548 million), showing year-over-year increases of
17% and 39%, respectively, primarily due to the increase in income from operations and the decrease in net losses arising from changes in the fair values of our equity investments, partly offset by the decrease in share of profit of equity method investees and the increase in impairment of investments.

We excluded net gains or losses arising from the changes in fair value and impairment of our investments from our non-GAAP measures. Non-GAAP net income was RMB141,379 million
(US$20,586 million), an increase of 4% year-over-year.

 Diluted earnings per ADS was RMB27.46 (US$4.00) and diluted earnings per share was RMB3.43 (US$0.50 or HK$3.92). Non-GAAP diluted earnings per ADS was RMB54.56 (US$7.94), an increase of 4% year-over-year and non-GAAP diluted earnings per share was RMB6.82 (US$0.99 or HK$7.79), an increase of 4% year-over-year.

 Net cash provided by operating activities was RMB199,752 million (US$29,086 million). Free cash flow, a non-GAAP measurement of liquidity, was RMB171,663 million (US$24,996 million).