Chinese e-commerce giant tops estimates but shelves spinoff of cloud unit amid trade uncertainty.
Alibaba reported better-than-expected 9% revenue growth in its latest quarter to $30.8 billion, though it canceled previously planned IPOs for its cloud computing and grocery units due to market uncertainty, but, the company continues adapting with its international commerce business surging 53% amidst macro headwinds.
Solid Revenue Growth Amidst Market Turbulence
Hangzhou, China – Chinese e-commerce leader Alibaba posted a 9% year-over-year rise in revenue to $30.8 billion for its fiscal second quarter ended September 30. The result topped analyst estimates.
Operating profit surged 34% to $4.6 billion, though it declined 22% versus the prior quarter. Adjusted EBITDA grew 18% to $5.9 billion.
Alibaba also canceled previously announced plans to spin off its cloud computing division, Alibaba Cloud, citing uncertainty around achieving shareholder value enhancement.
Continued Growth and Adaptability
U.S. trade restrictions may limit Alibaba Cloud’s ability to provide services under existing contracts, potentially impacting results. Revenue for the cloud unit rose just 2% to $3.79 billion in Q2.
However, Alibaba’s international commerce segment, including Lazada and AliExpress, saw a 53% revenue jump to $3.36 billion. The group is gearing up to raise external capital.
Adapting Cloud Unit Approach
An IPO for Alibaba’s Freshippo grocery chain has also been shelved.
Despite macro headwinds, Alibaba delivered steady growth and profitability in Q2. However, the cloud unit spinoff reversal signals challenges in unlocking value across the sprawling conglomerate.
