Alibaba Group Holding Limited Q1 FY2026 earnings call

• Solid growth: Excluding revenue from Sun Art and Intime, total revenue on a like-for-like basis grew 10% year-over-year. Core businesses showed strong growth, with customer management revenue from China e-commerce up 10% and Cloud Intelligence Group revenue growth accelerating to 26%.
• AI advancements: AI-related revenue accounted for over 20% of revenue from external customers. Alibaba released upgraded Qwen3 models, entered a strategic partnership with SAP, and AI native applications like Amap 2025 and DingTalk upgrades were noted.
• Organizational and investment changes: Undertook a strategic combination of Taobao and Tmall Group, Ele.me and Fliggy into Alibaba China E-commerce Group. Invested RMB 380 billion over 3 years in cloud and AI infrastructure and RMB 50 billion in consumption. Quick commerce achieved key milestones with monthly active consumers approaching 300 million.

Alibaba China E-commerce Group: Revenue was RMB 140.1 billion, up 10% year-over-year. Customer management revenue from e-commerce grew 10%, quick commerce revenue rose 12%, and adjusted EBITDA decreased by 21%. AIDC: Revenue grew 19% year-over-year, and adjusted EBITDA loss narrowed significantly. Cloud Intelligence Group: Revenue grew 26% year-over-year, with AI-related revenue maintaining triple-digit growth for the eighth consecutive quarter, and adjusted EBITA margin remained relatively stable at 8.8%. All Others: Revenue decreased by 28% primarily due to the disposal of Sun Art and Intime, and adjusted EBITDA was a loss of RMB 1.4 billion.

• Committed to investing RMB 380 billion over 3 years in cloud and AI infrastructure and RMB 50 billion in consumption.
• Expect quick commerce to add RMB 1 trillion in annualized incremental GMV to the platform within the next 3 years.
• Cloud revenue growth to continue driven by robust AI-driven demand, with plans to invest in customer growth and technological innovation including AI products and services.

• Uncertainties in AI adoption and market competition could impact business growth.
• Fluctuations in supply chain and policy changes related to AI chips may affect CapEx plans and investment outcomes.

Q: Question about quick commerce growth opportunity in China, investment plan, and synergies with e-commerce A: Yongming Wu responded on quick commerce progress, synergies with e-commerce driving traffic and CMR growth, plans to improve operating efficiency and unit economics, and expectations of RMB 1T incremental GMV in 3 years Q: Question about Alibaba Cloud's growth acceleration, margin outlook, and CapEx outlook A: Yongming Wu discussed strong AI demand driving cloud growth, focus on user growth and new use cases over short-term margin, and commitment to RMB 380B cloud and AI investment plan with quarter-to-quarter CapEx flexibility Q: Question about ramping up in-store part of local service beyond food delivery A: Yongming Wu mentioned synergy with quick commerce scale and ongoing testing in selected cities for in-store services Q: Question about investment pace in commerce and CMR growth impact A: Hong Xu stated investments in consumption are incremental, pacing with market circumstances, and CMR growth driven by take rate increase from software service fee and QZT penetration, with quick commerce driving user growth and frequency boosting CMR Q: Question about capabilities and investments in agent-centered AI era A: Hong Xu talked about agent-driven AI needs for larger context windows, tool utilization, and Alibaba's support with products like AgentBay, and synergies with Alibaba ecosystem products Q: Question about differences in quick commerce strategy this time vs. past attempts A: Yongming Wu emphasized progress in Ele.me's infrastructure and capabilities, integration with Taobao app providing user, merchant, and logistics foundation, and different investment logic focusing on incremental benefit to overall e-commerce Q: Question about return on invested capital in quick commerce vs. AI A: Hong Xu highlighted focus on grasping both AI and consumption opportunities, balancing short-term and long-term returns, and seeing quick commerce driving traffic and advertising growth contributing to returns