Alibaba Group Holding Limited (BABA) 16 Nov 232024 Q2 Earnings call transcript

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Alibaba Group's September Quarter 2023 Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Rob Lin, Head of Investor Relations of Alibaba Group. Please go ahead.

welcome Group's and Results Quarter everyone, Call. Conference day, to September Alibaba XXXX Good Joe Eddie CEO Tsai, Officer; are Commerce. the us With Chairman; International Alibaba Chief Group, Jiang Digital Officer; CEO Tmall of Toby Wu, Financial Trudy Taobao Dai, of and Fan, Xu, Executive Chief

This later the section be call our call available webcast today. website. corporate on IR also the being website will A is our on of replay of

statements, plans forward-looking without Now governance and Today's investments. as prospects quickly discussion future of business about let new limitation our such our cover harbor. our growth on contain me our statements safe structure, the may strategies as belief including revenue organization and business, return as about and expectations business well and

and may to that involve Forward-looking cause current risks statements materially differ inherent results expectations. our from actual uncertainties

and detailed of documents and please uncertainties, refer these to with XX-F announced filed the of the or For latest Form Stock other Exchange. report Hong SEC Kong on discussion on risks annual our the U.S. website

applicable that today, we of are on except call based make these any required this to on as statements, as under statements not update we assumptions obligation do and forward-looking undertake law. Any

non-GAAP on some and free EBITDA, cash call, financial [indiscernible] adjusted per or ADS we net earnings basis. share a use measure EBITDA income, that flow as non-GAAP Please expressed adjusted margin, margin, such this adjusted EBITA EBITA, adjusted non-GAAP on diluted are

and earnings results reconciliation to measures our press GAAP Our in GAAP be non-GAAP can of release. found

last to will growth versus during [ year. ] quarter mentioned year-over-year call rates this refer all of Unless same I Joe. to now With that, growth city otherwise stated, turn the metrics

call ladies September joining our Rob. for and for you gentlemen. Thank Hello, the you, quarter. Thank earnings

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subject approvals, transaction unit. of an While conditions confident of the business fundamentals and we're is IPO relevant the success of market to our logistics

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Now to for remarks. Eddie I turn his

today's Alibaba for for me It's exciting Thanks you speak joining the this as call for everybody. to Group time. welcome on first earnings with CEO call. friends, earnings Investors, to quarter's of

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ratio revenue, of and administrative during ratio X% ratio remained percentage look X quarter. cost this a expense remained Sales to percentage X stable as point this quarter. of at X% Cost let's during in percentage expenses at XX% decreased marketing XX% excluding in Now stable quarter. the ratio and development decreased revenue at to expenses point Product quarter. this trends General SBC.

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by billion. in certain to increase in adjusted offset well due partly and from increase user primarily was narrowing increase and acquisition investment the increase The retention in to increased Group RMB services, as customer management X% losses and EBITDA in Tmall in and in the as by Taobao businesses XX.X profit investment content.

of was Commerce increase combined RMB order all XX The revenue performance retail Alibaba in revenue AliExpress's international growth billion, improvement commerce by billion. AIDC's XX% Group and driven XX%. International businesses RMB of retail strong Digital primarily from monetization. Revenue the platforms, retail major from Choice to increased the business contribution an in was to of by due XX.X increase revenue solid

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delivery During this countries in its X premium service quarter, Cainiao rolled consumers for and X-day out regions.

fulfillment in million primarily from results improved solutions, logistics a of domestic AliExpress operating services. The year. of enhanced last Choice's Importantly, same and XXX increase for compared order Choice million well EBITDA the volume cross-border quarter. ramped shopping XXX the RMB Cainiao RMB quarter the was was during service as services technology because overall experience and to profit adjusted rapidly as up other

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Hi, everyone.

management any For welcome in the only. the in today's are discrepancy, In provide of session. that ask Please will language note original English. prevail. for questions or to call, you Chinese will for [indiscernible] purpose statement consecutive translation interpretation the is the translator case Q&A our convenience

please this will Please line week hear Thank after when conference speaker you be start [Foreign and now. of Chinese ready. the session the Language] Operator, website bilingual you. call are SI to connect translation, on Q&A If available unable transcript within meeting. the the X

first Your question comes Keung Instructions] Goldman [Operator from Sachs. with Ronald

team, Thank management congratulations and [indiscernible]. you,

extra cloud, hoping for initially longer I with think distribution. return start some distribution I'll [ ] investors as of the an cloud were kind the proceeding on for from

[indiscernible]. billion the And the how do we months into here about to you our shareholder prices should should [indiscernible] -- a think on net buyback the about you kind few we or How dividend? besides we upsizing even you that of role, a how any that newly-announced USD given keep like regular further basis? have So ongoing consider X of priorities do cash. special we next return both think see it's and our next for from think XX year reorganization dividend as [ And And considering ] and the your ahead.

for very much very question. It's question. Thanks This is a [Interpreted] good the Joe Tsai.

spin-off. cloud of strategic from share So explained are for provide multiple approaches have the And if already to rationale doing business And we've the to of repurchase. and not to multitude announced the full shareholders. there value previously -- the a ways thinking we spin-off

Now there growth. we or Tmall very that And to now, to get phase is excited ways should and to provide from for returns about right cloud our Group are shareholders. alternative multiple we're that enhanced of investing thinking businesses a into Taobao

Eddie a our clear and investments. has strategy multiple out priorities laid And very for

how some rather these So of highlight gives the that sustainable model our full businesses. of direction cash a as kind pretty the uses growth I about you well thinking spin-offs, think of our we a good can investing and creating in as of value businesses than

where to that So there that should and to ability over investors you all and the the show up, tools years we a and our continue about fundamentals to think we going I a built we we sure. optimistic value confident and the have capabilities invest built is forward, think about have very way. that coming up our reset for phase I feel to very But think feel core businesses

cash overall we're $XX of as left, far the billion I executing ] as to repurchase to have dividend. use a to dry dividend. share $X plan Toby current as is and billion for cash share three, our we Board. As think, -- our We growth. said, invest will we today, of the out as And buyback. said, announced future powder not then the approved [ onetime continue that was we going repurchase And under plan still by is We're stock laid repurchase concerned, have executing and has as that we for the priority number execute consider

cash. for the those plans So the uses our are of

comes Alicia Group. question next Citi with Yap Your from

investments for and exceeded still Taobao relate been room And there's I'm do us have finally, rate have WeChat. if share? this collaboration of And to share management do and recently, as was sustainable more expectations? your do purpose noted you And more to in about results to with And think is we the yielded growth because with could and CMR. is Or users was could that GMV that Group there of market what think ensuring of the areas firstly, regain wondering increasing in us And other questions channels. it XX.XX, you investments better? compared to plans then if investment conversion your WeChat areas what wondering Tmall talk from My these how those coming that about year's you experience investments. more I'm have to of you [Interpreted]

and AI as realizing has innovation. have at brands Well, Trudy. key technology-driven Taobao Group, is Eddie users merchants building and This [indiscernible] first, putting for X Yes. ecosystem an priorities Tmall [Interpreted] explained we and strategic namely and

strategies course, investments the all are and making make to we'll of of strategies. those intended those So and the will be serve we're that

well purchasers. So as of of platform Taobao active we've important as we've building, on payoffs as users, on including in we've the in users. acquiring on spent seen new rate And terms the on of discussed, time competitiveness investments across app well in investing made all increasing repurchase price number as KPIs course, the

terms seeing Taobao, those we're content, investments. our good again, enriching investments certainly payoffs from on of In

in we app We've an us. users, users open spent. increase seen proactively we mentioned very their As and time organic one to up who earlier, user important see a is come increase in

at well, good achieved we've of of time look as number and you If in users terms [indiscernible] spent there. their growth

that technology said, of confidence as growth a continue in with these is investments, enriching we So the going at important commerce. all forward AI to all Eddie the more very of the content our us environment. Also, of very, defining gives need really that driver time

we them course, help invest to grow in platform. continue the their AI term merchants to sustainably of So in develop businesses enable capabilities long on leveraging to the and AI, will,

lot to called be will to effort generated believe become produce strong an a ] be content. is that compelling new we're for platform, It make [indiscernible]. very for to lower easier using our consumers. consumers. of and AI I also example create and product will content AIDC fresh to to fun compelling content [ AI of barrier of the new able experiences unlock leveraging and it As that a the another And consumer-facing part entry

with a very has been and Finally, limited. you asked about stage, initial it's collaboration WeChat. This influence is very

which been with limited collaboration a areas, has traffic. of Our on is one few WeChat focused

provided In recommendation [ capacity. policy worked systems, in million policies, terms terms And of we in also support. co-construction as on enhancing also XXX subsidies ] well as of RMB we bilateral

Of course, all with and Taobao is the to best to our an partners open we ready merchants. to work stand and partners platform, potential provide services

Stanley. Your next Gary with question comes Morgan from Yu

management profitable -- time. unit I specific business capital more in opening increase to target double target the noncore kind can return that the regarding specifically of Can next have we period remarks think achievable the to this of regarding we a Any question targets or with couple the how [indiscernible]. on certain what about a invested of about years, digit. business share

if to like, actually, as take mentioned, Eddie question. in to all few set Gary, the do years. that double our our to question. we looking do want closely thank we core achieve Joe you ways businesses, we to are Okay. There's we will noncore take your as mentioned, I actually, target. In the very for you few next this and we And will Yes, increase [indiscernible] have -- a digit ROIC business. ROIC.

investing In equity addition, in sitting like [ investments even sort or have will also investments ]. the associates our of many we of

explained, use that will the resource a to invest So also our for have we to we all to businesses, those we utilize part that as and ROIC. With innovation to core as -- need growth. resource can investments, enhance Eddie respect we of the in are

longer eventually, early the contribute we profitability the and the these those of of and were hand, increase shareholders. cash to the business with for us as no Eddie think, So which possible. are balance help also to looking utilize the earnings, and noncore on one strategic investments, to I that businesses, all to more or certainly us, our some can monetize, in to ROIC. And generate to which the the for will as growth And sheet investments business give the the would future also will will also core opportunity to to as respect mentioned, become cash give need we return we profitable core

our also ROIC. So to help that will increase

from Alex JPMorgan. with comes Your Yao next question

core regarding question a business have I the group.

prepared proceed the you full condition business. not [indiscernible], in for remarks, you change decision the the a So of of to decision? with Is [indiscernible] guys this the you market central would discussed reconsider [indiscernible] decided a the cloud spinoff withdraw or

to [ think And then the the to develop [indiscernible] related tenable business. a did operation, I for ] cloud guys model growth you

will U.S., restriction thoughts Given you the can be? this talk your on from how about shifts model sustainable AI growth

Alex, this a question. is Okay. X-part [Interpreted]

full So answer the announcement spinoff. the part second the the I'll answer first About and our proceed Eddie part. did not with

the the to circumstances engineering, transparency cloud financial to of right operating show the business independently now, grow to on a is -- of business rather predictable looking we when sort than provide with to focus But was -- Cloud we this of shares our investors announced us, out investors rather who how to thought ability and figuring spin-off, and engineering project way that hold to on Group. were communicate value we that will changed. were And level circumstances the way the a the And the full we of the in business. at Intelligence was a focus have For business. when financial

on full-blown for requires investments a develop the in infrastructure networked based AI investment. because to -- the us business that cash to highly a provide make A to group scaled is and big part for to very -- of [indiscernible] the

cloud operations and the rather would can revenues hopefully, we investors our profits enhance future. -- it So to business rather off. future we growth deliver the And as show spinning than the through of we shareholders value in

sustainable the as model, far I'll that business to let answer As Eddie question.

market. at the been X have Well, question one. critical parts. in is changes I'll the in the in But asked There really situation a come this you've many [Interpreted]

provide the one we going traditional business computing business portfolio where to as model, of terms strong CPU is In [ up cloud part on effects last we effects the we years. ] forward, over public achieve and customers. thereby to In scale good centered going our XX because built place is of a very business cloud the we're said, and money network where focus our cloud for we think value strong can public very to this

will second have And GPU-based business going computing. about in some in changes into there external major changes the important bring that China the market. wise AI is obviously, the policy The the and future part environment, of forward been otherwise

in China China there expect certainly see being the multiple think to multiple going will market we that different demand AI what can meeting I computing forward, providers, for in is chips different market. the used power be

going worry complex is role chip supporting because ever about higher China in can design. AI the in AI not this around of an to important cloud allow think issues have cloud market development more developers play and in efficiency to much I to achieve

X a really been that because cloud offerings well chips, place of different always that's set we've think have multiple I development we with to and have supporting support designed in these we of all to complete with that Chinese I layers, value well support provide place, architecture in to market. these Platform-as-a-Service, model-as-a-Service, heterogeneous great the And we're We're different prepared levels. that think Infrastructure-as-a-Service. to at able So

Shao question comes next Jiong from Barclays. with Your

have growth I which expand there segment. you share has has can been on And the could You was a Choice magnitude I contribution a regions time any revenue wondering, as driver, of fastest and is entered? one the of you was Turkey expect Asia, you earlier. countries highlighted Choice wondering to business, about that bit get one growing talked sort e-commerce Longer a Southeast X? have and the between your of for line unit mix what's term, XX-XX focus? AIDC a breakeven? sort of you Or and to do [indiscernible]. healthy balance cross-border And economics that, you related local in sort a the you to or of

based I Thanks should on is of all, point first Choice the out actually question. [Interpreted] that Well, for AE.

it's and So layered XXX of that's new business, countries. not out of AE in something different is on a AE nowhere. top pre-existing It's over come

model with we a ] platform what pure a [ to the Choice from is we've platform gone model. fully with plus Choice really entrusted is with Choice experience than what user the a model. better we've done platform significantly is And that model, pure So found

point, is major this at So in Choice business. growth our driver of a

So fast certainly growing launched orders. higher it's over accounts year proportion has very a been increasingly Choice of for about and an now,

]. So Choice revenue of from AliExpress in more few account more from will than would say that I now, a XX% [ quarters for

Its So its be certainly being. still is for will Choice But with that's economics stage. is improving. a growth, the in unit time further the investment business profit negative

unit is priority but profitability going placing for we're optimize growth, forward. -- certainly now, achieving the For economics #X and will Choice

of the cross-border wouldn't countries I some percentage demand in in allocate versus best meet markets. So regards user the terms in user have fixed say local you do business. model how as provide we countries works local countries, model model any the mind how cross-border in really that and model, works and those to comes in the It different best better. down experience better, to e-commerce the other

concludes That call earnings for you. today. our Thank

We you quarter. next will see Thank you.

That does today. you for conference conclude Thank participating. our for

may You now disconnect.

transcript marked call.] present were live by this that an [Interpreted] on the spoken interpreter of [Portions are