- Alibaba annual active consumers in China beat analysts' predictions by about 20 million.
- Annual buyer growth suggests that Alibaba may continue to post strong advertising revenue.
- The company's earnings were heavily affected by a $2.8 billion fine imposed by China's State Administration for Market Regulation pursuant to China's Anti-Monopoly Law.
|Alibaba Earnings Results|
|Metric||Beat/Miss/Match||Reported Value||Analysts' Prediction|
|Adjusted Earnings Per Share (RMB)||Miss||10.32 (about $1.60)||11.66|
|Revenue (RMB, billions)||Beat||187.4||179.9|
|Annual Active Consumers in China (millions)||Beat||811.0||791.4|
Source: Predictions based on analysts’ consensus from Visible Alpha
BABA Financial Results: Analysis
Alibaba Group Holding Limited (BABA), the Chinese e-commerce and internet services giant, reported mixed financial results for its Q4 FY 2021, ended March 31. Adjusted earnings per share were RMB10.32 (about $1.60), well short of analysts' predicted RMB11.66. Note that Alibaba shares referred to throughout this story represent Nasdaq-listed American depositary shares (ADS) with the ticker BABA. Alibaba revenue, however, surpassed consensus estimates. The company reported revenue of about RMB187.4 billion, ahead of the predicted RMB179.9 billion, for year-over-year (YOY) growth of roughly 64%.
Alibaba's Annual Active Consumers in China
Alibaba reported 811 million annual active consumers, or "active buyers," in China for the 12 months ended March 31, 2021. This figure also beat analyst predictions and constituted growth of around 32 million active buyers on a sequential basis. This represents YOY growth of around 11.7% for this key metric, the strongest quarterly performance in more than a year.
The key metric of active buyers represents the total number of user accounts that placed at least one confirmed order through Alibaba's China retail marketplaces in the past 12 months. This metric is important because retaining and attracting active consumers supports Alibaba's business model, including selling marketing services to merchants that sell products on the company's platforms. The greater the number of Alibaba active consumers, the more advertising revenue the company can generate. This also means more potential customers for the company's cloud and entertainment businesses as well.
Alibaba's Outlook and Stock Performance
In its letter to shareholders, Alibaba predicted significant growth in annual revenue for FY 2022. The company expects to generate more than RMB930 billion for the year, far ahead of FY 2021's figure of RMB717.2 billion.
Alibaba shares fell by close to 4% in the period immediately following the company's earnings release. In the past year, the company's stock has significantly underperformed the broader market, providing one-year trailing total returns of 9.8% as compared with 41.6% for the S&P 500.
Next Earnings Report:
Alibaba's next earnings report is estimated to be released on Aug. 19, 2021.
Alibaba Group Holding Ltd. "Alibaba Group Announces March Quarter and Full Fiscal Year 2021 Results," Page 9. Accessed May 13, 2021.
Alibaba Group Holding Ltd. "Alibaba Group Announces March Quarter and Full Fiscal Year 2021 Results," Page 1. Accessed May 13, 2021.
Visible Alpha. "Financial Data." Accessed May 13, 2021.
Alibaba Group Holding Ltd. "Alibaba Group Announces March Quarter and Full Fiscal Year 2021 Results," Pages 1-2. Accessed May 13, 2021.
TradingView. "TradingView." Accessed May 13, 2021.
MarketScreener. "ALIBABA GROUP HOLDING LIMITED (BABA)." Accessed May 13, 2021.