Yahoo! Inc. (NASDAQ:YHOO) increase 7.63% to $35.24 in pre-market trading up after Alibaba released earnings this morning.
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“While uneven consumer sentiment appears to have affected Taobao, it had a negligible impact across the rest of the platform, with mobile monetization, (gross merchandise volume) growth, and cloud computing trends reinforcing the strength of Alibaba’s core business”, said Morningstar financial analyst R.J. Hottovy.
Smarter Analyst reported that analysts predict Alibaba to post a quarterly revenue of $3.36 billion and $3.43 per share earnings, which would be a 185 percent year-over-year increase. Given a mobile GMV of US$69 billion, the company’s 346 million mobile users spent an average of almost US$199.50 each.
Revenues from total China commerce business were RMB18.31 billion. See my October 26 blog “Alibaba Gains From MSCI China Inclusion: $1.6 Billion Passive Buying Seen”. They have rallied about 33% since then.
With more than 82 per cent of its revenue coming from China, Alibaba is highly sensitive to the country’s economy, which is headed for its slowest pace of growth in a quarter-century. That growth gave revenue a sizable boost, as mobile sales accounted for 60% of GMV.
For example, it’s mobile that is driving this increase in profitability, and mobile is also where much of BABA’s growth is being created. GMV does not directly contribute to revenue, since Alibaba does not itself sell goods through its shopping services including TMall.com and Taobao Marketplace. The division grew 128% year-on-year this quarter to $102 million and is the fastest growing segment in the company.
The company said it had 386 million annual active buyers on its China retail marketplaces at the end of September, up 19 million from the end of June.
Mobile GMV – Mobile GMV was RMB440.0 billion (US$69.0 billion), a 121% year-over-year surge. “This year-on-year increase in mobile revenue in both absolute dollars and as a percentage of total revenue from the China commerce retail business was due to increase in mobile GMV and better monetization of mobile usage”, Alibaba chief financial office Maggie Wu said in an analyst conference call.
Even so, Alibaba founder Jack Massachusetts told shareholders in a letter earlier this month that high savings rates and lower prices online would continue to drive e-commerce spending regardless of the economic environment.
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Pro-forma gross margin was 67.8%, up basis points (bps) sequentially and 109 bps year over year. Analysts had estimated sales of 21.3 billion yuan. The stock has soared 49% in the previous 12 months.
