Alibaba Group Announces Full Fiscal Year 2020 Results

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Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988, “Alibaba” or “Alibaba Group”) today announced its financial results for the fiscal year ended March 31, 2020.

“Alibaba achieved the historic milestone of US$1 trillion in GMV across our digital economy this fiscal year,” said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. “Our overall business continued to experience strong growth, with a total annual active consumer base of 960 million globally, despite concluding the fiscal year with a quarter impacted by the economic effects of the COVID-19 pandemic. The pandemic has fundamentally altered consumer behavior and enterprise operations, making digital adoption and transformation a necessity. We are well positioned and prepared to help large and small businesses across a wide spectrum of industries achieve the digital transformation they need to survive this difficult period and eventually prevail in the new normal. By focusing on the long term and investing in value creation for our consumers and business customers, we believe we will emerge from this crisis stronger and be ready to capture more growth in the future.”

“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual Alibaba revenue guidance of over RMB500 billion. Revenue growth of 35% year-over-year was driven by solid performance of our domestic retail businesses as well as robust cloud computing revenue growth,” said Maggie Wu, Chief Financial Officer of Alibaba Group.  “Our adjusted EBITDA grew 29% year-over-year, reflecting our discipline in allocating resources to key strategic growth areas while optimizing costs and improving efficiency. Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March. Based on our current view of Chinese domestic consumption and enterprise digitization, we expect to generate over RMB650 billion in revenue in fiscal year 2021.”

BUSINESS HIGHLIGHTS

In the fiscal year ended March 31, 2020:

  • Revenue was RMB509,711 million (US$71,985 million), an increase of 35% year-over-year.
  • Annual active consumers for the Alibaba Digital Economy reached 960 million globally, including 780 million consumers in China and 180 million consumers outside China. Annual active consumers on our China retail marketplaces reached 726 million, an increase of 72 million from the 12-month period ended March 31, 2019.
  • Mobile MAUs on our China retail marketplaces reached 846 million in March 2020, an increase of 125 million over March 2019.
  • GMV transacted in the Alibaba Digital Economy was RMB7,053 billion (US$1 trillion) for fiscal year 2020, which mainly included China retail marketplaces GMV of RMB6,589 billion (US$945 billion), as well as international retail marketplaces and local consumer services GMV.
  • Income from operations was RMB91,430 million (US$12,912 million), an increase of 60% year-over-year. Adjusted EBITDA, a non-GAAP measurement, increased 29% year-over-year to RMB157,659 million (US$22,266 million). Adjusted EBITA, a non-GAAP measurement, increased 28% year-over-year to RMB137,136 million (US$19,367 million).
  • Adjusted EBITA for core commerce was RMB165,800 million (US$23,415 million), an increase of 22% year-over-year. Our marketplace-based core commerce adjusted EBITA, a non-GAAP measurement, increased 19% year-over-year to RMB192,771 million (US$27,224 million).
  • Net income attributable to ordinary shareholders was RMB149,263 million (US$21,080 million), and net income was RMB140,350 million (US$19,821 million). Non-GAAP net income was RMB132,479 million (US$18,710 million), an increase of 42% year-over-year.
  • Diluted earnings per ADS was RMB55.93 (US$7.90) and non-GAAP diluted earnings per ADS was RMB52.98 (US$7.48), an increase of 38% year-over-year. Diluted earnings per share was RMB6.99 (US$0.99 or HK$7.65) and non-GAAP diluted earnings per share was RMB6.62 (US$0.93 or HK$7.25), an increase of 38% year-over-year
  • Net cash provided by operating activities was RMB180,607 million (US$25,507 million) and non-GAAP free cash flow was RMB130,914 million (US$18,489 million).

BUSINESS AND STRATEGIC UPDATES

Alibaba Digital Economy

The consumer commerce businesses of the Alibaba Digital Economy, mainly comprised of our China retail marketplaces, international retail marketplaces and local consumer services, reached RMB7,053 billion (US$1 trillion) of GMV in the twelve months ended March 31, 2020.  In September 2019, on the occasion of Alibaba’s 20th anniversary, we set our strategic goals for the next five years, consistent with our mission “to make it easy to do business anywhere,” to:

  • Continue to expand our globalization efforts;
  • Serve more than 1 billion Chinese consumers; and
  • Facilitate more than RMB10 trillion of consumption on our platforms.

These five-year goals are guide posts that will help us achieve our vision for 2036 to:

  • Serve 2 billion global consumers;
  • Enable 10 million businesses to be profitable; and
  • Create 100 million jobs.

We manage our consumer-facing businesses as one integrated platform serving one user base with access to our various offerings. For the twelve months ended March 31, 2020, 780 million consumers in China purchased goods or services on our China retail, local consumer services and digital media and entertainment platforms. These consumers account for around 85% and 40% of the Chinese population in developed and less developed areas, respectively.  We have also expanded into international markets, with over 180 million annual active consumers on our international retail marketplaces.  Our digital infrastructure, such as smart logistics and cloud computing, which cuts across platforms to serve our major commerce, local services and entertainment businesses, gives us unparalleled and unique insights to meet changing consumer demands. Through the Alibaba Business Operating System (ABOS), we offer our data technologies and analytics to help our enterprise customers and partners achieve digital transformation.

COVID-19 Pandemic

Business Customer Support Programs

Starting in late January 2020, the COVID-19 pandemic triggered a series of lockdowns, social distancing requirements and travel restrictions that drastically reduced economic activities in China.  In the initial phase of the crisis in China, the most pressing concern of all enterprises was business continuity – solving for issues like minimizing supply chain disruptions, cutting costs, identifying new revenue opportunities, improving cash flow and managing a remote workforce.  We helped our merchant customers to overcome these challenges and took proactive measures to fulfill our mission.

Social Responsibility

We leveraged our platform technology and other resources across our ecosystem to support those impacted by the COVID-19 pandemic within China and around the world.

  • Donations of PPE and equipment – Through their combined efforts, the Alibaba Foundation, the Jack Ma Foundation and the Joe and Clara Tsai Foundation donated over 200 million units of personal protective equipment, testing kits and ventilators to over 150 countries and regions. Tmall Global, Tmall Supermarket, Alibaba.com and Lazada sourced, verified and procured many of these scarce supplies.
  • Delivery of medical supplies – Our logistics subsidiary Cainiao delivered medical supplies to destinations around the world through its extensive global logistics network of airport hubs, customs clearance operations, trucking companies and local delivery personnel.
  • Knowledge sharing – The Alibaba Foundation and Jack Ma Foundation jointly established an online exchange called the Global MediXchange for Combating COVID-19 (GMCC) to facilitate sharing of best practices and knowledge for fighting the pandemic among medical professionals around the world in real-time in 11 languages. Close to 10,000 healthcare workers from 120 countries and regions have joined the GMCC.
  • Fund for medical and related supplies – Within China, we established a new RMB1 billion special fund to procure medical and related supplies for parts of the country affected by the COVID-19 pandemic.
  • AI technology – We made available AI technology to over 550 hospitals in China to help improve the speed and efficiency of their COVID-19 diagnosis using CT scans.
  • Jobs – Freshippo, Ele.me and Koubei launched employee-sharing initiatives to temporarily hire furloughed employees of businesses in negatively impacted service sectors, including restaurants, hotels, movie theaters and department stores.

Business Opportunities

The COVID-19 pandemic created opportunities for consumer adoption of a broader digital lifestyle and the shift to online purchase of daily necessities.  More businesses are adopting new digital tools and solutions to grow and manage their operations.  Over the years, Alibaba has pioneered and developed businesses that allow us to capture the long-term benefits of these trends.

  • Accelerated merchant on-boarding – We have seen a growing range of offline merchants going online. Daily active merchants using livestreaming on Taobao Live grew 88% year-over-year for the three months ended March 31, 2020.
  • New Retail (grocery category) – Freshippo’s revenue showed strong growth in February and March driven by an increased number of online customers, higher purchase frequency and larger order size.
  • DingTalk – In the month of March, DingTalk’s average daily active users on workdays reached 155 million. DingTalk also made significant penetration in the education sector as schools adopted the platform for their teachers and students. In March, DingTalk conducted on average over one million active classroom sessions each workday.
  • Cainiao Post – In March, as social distancing measures remained in place, we saw robust adoption of Cainiao Post by consumers who needed convenient and contactless pick-up and delivery options in their neighborhoods.