Alibaba Group Holding Limited (BABA) 15 Aug 242025 Q1 Earnings call transcript

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Alibaba Group's June Quarter 2024 Results Conference Call. [Operator Instructions] I would now like to turn the call 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 June Alibaba 'XX Good Joe Edi Tsai, Officer; are us With Chairman; Chief Officer. Toby Wu, Financial Xu, Executive Chief

Alibaba Fan, We of invited call the A available section is from be join Co-Chairman of International webcasted This Digital on being call later Investor and the have will call. Commerce John today. our replay CEO the also also our to Group website. of website Relations corporate

safe plans harbor. business including expectation and investments the profitability discussion as Now may about growth statements, let cover repurchases. about prospects share me belief, forward-looking The without future rate, the and our of contain quickly return our our as guidance and strategies as our on statements such take limitation business, and business well revenue

our involve risks the statements materially differ discussion our Forward-looking may that website risks uncertainties, documents announced Form uncertainties Kong Exchange. filed and of results U.S. please annual of inherent cause SEC A on Stock with to actual to or XX-F and expected latest detailed these report other expectations. Hong on from and refer

undertake statements, of law. make earnings income, flow non-GAAP diluted forward-looking EBITDA, on margin, obligation cash adjusted EBITDA as Any call do on that non-GAAP a adjusted certain today, share EBITA, and on adjusted margin, that basis. as note any Please except use these EBITA not non-GAAP such expressed we are and net call, the or are adjusted free we per this to ADS as assumptions required we applicable based statements on that under measures financial

growth be otherwise mentioned to our rate GAAP all year. stated, found year-over-year call in versus Unless metrics press Our GAAP earnings the same results last and of this to quarter stated non-GAAP of refers growth release. during measures reconciliation can

will With Eddie. that, to over I turn

year, bear new the In fiscal starting to user our fruit. AI-driven and of are everyone. strategies Hello, first

and returned growth. maintained Tmall subsidiaries, growth Group in growth excluding International revenue consolidated momentum. revenue, orders results Cloud and AI products. segments, Alibaba improvement continued across capabilities This loss-making reflect operational Taobao drove businesses. to cloud GMV. strong in better efficiency we year-over-year Alibaba positive core varying public to other achieved monetization AIDC, in and notably quarter's This significant steady by growth, Alibaba steady and degrees. driven And some Commerce, Digital achieved

services its and user continue first of diverse and to invest Tmall prices [indiscernible] across aimed to capabilities maintained consumers. and Group in at strategy Taobao deliver quality key attractive products

driven a saw our share purchase market This investments validating share quarter volume by GMV trend in in data e-commerce into effectiveness the notable further stabilization, about frequency. a order Internal increase and dynamics steady gradual and external our market growth in indicates positive experience. of players'

VIP XX end. quarter million members reached by

interest product and in expanding -- and program importance rich explore We user continuously improve will offerings matching and premium experiences strategy, enhancing continue and this base. to offerings growth. with traffic for improve product benefits, In focusing experiences. We and products member shopping on attach TTG's to sustainable while diverse investing great operational the our and efficiency service we

to and monetization aim we grow, while purchases algorithm Through of improving merchants to As platform. enhance utilization and tool, efficiency marketing step-by-step our of we're monetization GMV efficiency conversion continue new user the Quanzhantui. on advancing the to our of upgrades, traffic including of orders the launch , also traffic

with growth the gradually over CMR coming align growth to GMV We expect quarters.

strategy. cloud segment, and pursue continue Cloud AI our revenue execute development our plus effectively to we In high-quality integrated

At the of infrastructure to triple choosing major revenue. its as Cloud customers development. large digit revenue, computer language growth increase excluding subsidiaries, time, wider This gaining models more grew sustained share Alibaba's public adoption. revenue cloud public X%, overall same AI-related Alibaba Alibaba's product revenues their consolidated with maintaining We're growth. Alibaba continuing cloud quarter, double-digit seeing proprietary for AI are a

major year, means Olympics, Cloud cloud cloud-based computing signals Cloud history. broadcasters in powered Games, the by Alibaba live for and broadcast for by transmitted satellite live Olympic broadcast Olympic as of provider of over the and providing Paris the as [indiscernible] time OBS. viewers. Olympic billions a cloud Alibaba broadcasting world, primary service the used served of the first services, Cloud around real-time signals This X/X At reaching Alibaba services to

Paris Alibaba Cloud's real Additionally, audience. widespread to saw bringing time, pleasant in Olympics, including technology replays the first application XXX-degree the AI its at surprises

One, high-quality for public cloud growth. margin strategy cloud Alibaba long-term to on our This sustainable, for we'll the focusing Cloud plus competitive offerings Our cloud optimize integrated sustainable forms comprises products. elements. product continue key growth scalable X development AI foundation and

we'll scale and succeed strengthen on Alibaba AI capabilities but existing implementing and not customers AI supporting to committed both between to AI products, on only new Cloud, enabling Two, cloud and synergies platform. native opportunities. also on enterprises capitalizing We're our

and AI cloud ensure to the AI-driven R&D growth in our of invest business. to continue CapEx we'll Three,

to cloud AI long consolidated share intensive are we confident acceleration leadership. Alibaba of double-digit in thereafter. healthy we profitable investment, R&D second Alibaba's and aim market will probability to as overall the excluding while Looking revenue, the ourselves and the service that growth half year fiscal Through medium establishing to provider return gradual term, a with sustain for growth leading subsidiaries, with

this In quarter. AIDC growth revenue international XX% delivered e-commerce,

both International and models in business operational matrix, Our expansion opportunities terms will of offerings numerous Jiang and potential, This cross-border a formats. as comprises presents integrating and market detailed momentarily. Fan segment more diverse both as provide BXB a business and BXC local well update

these higher while our businesses competitiveness, capabilities implemented we've of most priority will now Beyond of place and thorough competitiveness product their technology businesses maintaining e-commerce Internet market a key monetization. and product across a through evaluation cloud, on realignments strategic

businesses profitability, to continue This quarter, quarters. significantly these in we already we've seen this expect trend the and in coming improve

and a expect successes pivotal Alibaba of to is X to set direction year one profitability X as even realized This years We of the new contribute break and transformation. to these our for we businesses fiscal most within our strategic scale. at gradually

fully in the healthy are sustained confident We development future. Alibaba's into

my Hi, everybody. with pleasure business you AIDC's It's to latest share progress.

XX% growth our rapid cross-border AIDC with year-on-year, quarter, past increasing by revenue momentum overall its business. driven the maintained primarily Over

we In the X terms drivers on. consistently focus of

First, to supply orders year-on-year upgrades, choice ongoing business high percentage of rapid and gradually and the be user continuing Ali Express of and maintained the AE growth order chain consistency experience. model and certainty with stabilizing enhancing

nearly of The economics jointly quarter-over-quarter. of and product delivery Ali organic Express semi optimize variance efficiency experience, the optimized to richness models. full by average quarter-over-quarter. across business Choice user the consignment our We continue unit and China significantly and reduced time balance consignment logistics marketplace, further XX% and improved

and and million and description technologies merchants product and across intelligent like optimization, deployed scenarios advanced experience. covered AI innovations were AI recommendations, SKUs. We and and XXX,XXX served customer service, Second, our search across which technology our cross-platform platforms These efficiency user multilingual innovation. price XXX around boosted product placement, product have

Ongoing as in growth AE business we and in partner bolsters sustained AE's We're confidence awareness. exclusive the of markets investments markets. diverse also key expand up user Third, brand the improvement maintain experience base step boosted localized and effectively exploring to European key XXXX, models. e-commerce Trendyol's leadership user to in Cup

product and This profitability milestone for efficiently offerings In months in the to while consolidate to growth. also Southeast user Lazada e-commerce first our solidifying July. and profitability, Asia, In invest Turkey, Asia increased our its the time continuing region monetization EBITDA market enriched reinforces Gulf in and in the achieved market confidence Trendyol marketing in efficiency leadership single share. Southeast

more markets our key while other on drive Thank to conclusion, hand, in and with profitability twofold, substantial in in across growth you. the So all strategic scale focus actively operational the scale the investing of enhancing at efficiency achieving is business goal segments, future. quality

achieving quarter's position. financial At are while commerce revitalize to improving profitability. the strategy our monetization efficiency sustainable business and with goal growth leadership the our past in performance our our loss-making same demonstrate time, This domestic reinforcing the and/or continues to businesses of segments growth we of

Tmall winning to driven Group Express growth quarter, products. Ali quality mind Overall growth. excluding Cloud's increasing Choice. continues adoption to robust improving the back Ali and and X%, share double-digit of is of This in revenue we and consolidated double-digit growth rapid especially Alibaba order cross-border over single-digit by is GMV AI-related businesses, AIDC past revenue, by grew order subsidiaries, achieve our from high growth. growth driven consumers. growth online achieved revenue Taobao public

businesses are monetization, their operating Our efficiency improving loss-making significantly.

example, quarter. For the local during service losses group significantly Lazada narrowed their and

for we of quarter, repurchased XX or XXX a new this total X.X USD billion the with ADS our CV X.X was million concurrent During that total includes USD ordinary shares approximately a million issuance. of ADS XX.X This for buyback of associated billion. million

issued shares June outstanding our reduction XXXX, shares Compared As XX a there shares approximately was to or March XXXX, net XX, ordinary billion outstanding. our billion ESOP. in $X.X accounting XX, after had for X.X% of ADSs we in

remaining repurchase XX, have As USD program. still of XX.X share June XXXX, billion our we in

cash as domestic adjusted last as plan cash reflected part the quarter. of segment annual to minimize have including will our our generated employees starting ESOP utilize portion Additionally, incentives our of Group's incentives by replace costs Ali better These dilution with a to our businesses, started cash EBITDA. long-term Baba financial for of incentives be in we and metrics,

result lower in will the in also dilution it future. adjusted compensation change will less this While ESOP EBITDA, structure in

consolidated On increase decreased billion, to RMB total EBITDA XXX.X X%. RMB revenue a X% year-over-year Total basis, revenue. billion. of Adjusted was an XX

positive cash long-term like-for-like would on Excluding turned basis. incentives, of growth the effects EBITDA adjusted a have

billion, a RMB XX.X decrease X%. X.X billion of non-GAAP income Our was net RMB or

was the Our due some investments. income X of the or changes decrease billion, by decline XX% impairment operations mark-to-market increase billion income from XX and primarily in to net partly our a offset of equity GAAP RMB investments, from a RMB in

investments As XXXX, decrease cash billion year-over-year cloud to billion working other related increase of expenditure sales XX.X in changes our RMB flow including to a XXX.X billion. RMB by position planned billion. mainly USD of direct XX.X infrastructure factors, related we XX.X capital decreased reduction strong cash Alibaba maintain in Free the businesses. of reflected continued net June and to This our RMB or XX, to

SBC development increased of to quarter. Sales revenue of X.X and X.X look let's stable. our at increased during due cost primarily percentage points Cost year-over-year, expenses remained ratio Product excluding businesses. percentage ratio expenses a decreased Now in relatively as this percentage e-commerce ratio marketing trends revenue, investments points.

increased G&A percentage points. expenses X.X ratio

relatively of action expenses class provision our a ratio from X.X onetime billion shareholder RMB the remained lawsuit, Excluding would have stable. G&A

and Taobao segment Now Tmall with starting Group. let's results, the at look

of X% due year-over-year XXX.X from in decrease XXX.X Revenue RMB GMV, a RMB from rate. Group take XXX.X quarter Revenue of was was single-digit online by businesses same Customer partly in the increased Taobao our high in Tmall billion, of management to X% retail a China decline to billion compared offset by decrease commerce and billion, RMB a X%. growth revenue XXXX. year-over-year, primarily

rates. monetization Direct rate from to and retail on new primarily take commerce decrease that year-over-year X%. RMB other have a was revenue due sales generated China was The of GMV business of XX.X models lower the billion, proportion decrease currently increasing

As are including Group. and Tmall mentioned, Taobao businesses, proactively those scaling direct we certain down in sales

to decreased by China by to RMB the members. to user to primarily in value-added commerce and increased revenue billion, XX.X business adjusted Taobao X narrowing in Group and EBITDA experience in primarily wholesale an technology the services Tmall infrastructure, investments revenue businesses. increase XX% provided paying billion, increase due in offset certain to from losses X% RMB due partly

But this feedback of revenue billion, double-digit Cloud excluding purchase shopping year-over-year, year-over-year. product AI-related to adoption driven increase Overall to RMB X% from positive was over by and overall consolidated revenue, increased regarding triple frequency better Alibaba consumer subsidiaries, led increasing increasing AI-related XX.X products. public the grow grew Intelligence at experience. investment Group of and digits an Revenue continued retention, cloud growth the X%.

customers significant strong demand effectively. our capabilities making infrastructure for increase products public to EBITDA on demand this leadership. investment the through investments investments billion, our will XXX% AI Cloud's solutions RMB primarily observing operating the address We're from increasing and and increased technology. to customers mix offset market our cloud AI was in sustained to X.X We help efficiency, and adjusted product partly by strengthen focus believe improving adoption in due and and by are and our

with sustainable retail commerce investments confident Revenue business increase to primarily primarily growth monetization. related We from revenue ability international by improvements, driven from order value-added commerce and by RMB Ali XX.X wholesale business in to billion, our these XX% an value cross-border Revenue are services. X.X to RMB increased our Express' improvements billion, to profitability steady creation. ensuring increased international growth balance Choice as well generated in due as by XX% from in

in due Ali operating EBITDA X.X loss offset reduction to adjusted monetization its loss increase to investments the loss an was billion, and business, improvements Lazada's in primarily AIDC's the in of XXX partly from the same quarter Express in operating RMB increase million of a billion of a year, RMB cross-border X.X in RMB efficiency. and last compared Trendyol's significant by

Revenue from driven XX.X partly EBITDA Cainiao RMB to solutions. increase increased by primarily Smart the was cross-border efficiency. in improved due XX%, Limited from by investments solutions, XXX fulfillment Cainiao's RMB and XX% Logistics to billion Network increased by decreased operating million, offset in revenue cross-border fulfillment primarily

efficiency Revenue increase to as last XX%, primarily of was same a of order from operating in XXX driven the increasing and billion RMB XX.X as revenue scale. loss local improving and was group X AMAP growth billion, of RMB growth Adjusted EBITDA services. loss a compared million well quarter marketing both year, service from due an RMB Urlama by of the to

the of technology Adjusted all RMB by Art, compared same of EBITDA a and loss loss X.X a investment billion, XXXX, XXX Games, to of Freshippo, X.X a of in an from of from Digital RMB & Lingxi offset Adjusted Sun our was Entertainment Revenue RMB X.X was RMB results compared in EBITDA RMB X%. profit loss increased XX Games million increase Media Group from Art. X% Sun increase Alibaba segment due to Lingxi last XX the a the operating primarily increased partly the quarter in billion same revenue businesses. by in Freshippo, Platform, segment billion, million primarily other was quarter Information to improved other Intelligent of offset year. and billion decrease to revenue Health to from and partly all Alibaba from from RMB the due Revenue Health

and we To Jiang GMV Taobao as Group, growth, Fang as Tmall efforts wrap order monetization Eddie and for our step by mentioned, advancing and up, are step.

coming with GMV We align expect over quarters. growth CMR the growth gradually to

For pursuing development Alibaba AI high-quality strategy. effectively are Cloud, revenue cloud execute and integrated plus we our

return the year external to acceleration confident fiscal will half growth of with in second We that gradual are thereafter. customers revenue from the double-digit

lines, AIDC, are For efficiency operating across proactive on businesses business we growth operating enhancing to and monetization all their ending investment focus drive efficiency. high-quality loss-making our

years open We breakeven to of X and Thank gradually of Q&A. to our We prepared businesses expect these remarks. up most to That's X for the contribute profitability scale. end within you. the can

translation are to ask in consecutive today's English. Q&A only. party in case is for Hi, will call, will welcome Please the purposes discrepancy, our everyone, In language for for you questions that interpretation convenience of provide Chinese third their the A translator session. statement or prevail. note any management

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

mentioned quarter. it and take want a just should our single-digit to I question you growth, the narrowing gap about the And rates that about come. growth GMV ask with that high X% CMR does a imply gap the this management, wider But

time that the are with these And align ad take the would should actual for fee Is few what we're service Tmall trajectory, how and about software rate bit it next you the talk GMV? a or can the products rates upgrades, take Tabao think into new on tech how translate respective measures needed So to we doing? quarters? to CMR

much very In This as group, take so Tmall heightened I'll purchase before is the priority enhancing and the the at handing experience on and has that over Toby. shopping to Taobao drive frequency present user and GMV. Eddie, first to been

what to you to pace can as which there monetization start factors efforts. But look certainly Now few accelerate a quarter, the stabilizes, share of seen this at. have we market that is are our we

quarters. the the take and streaming in over user coming But it's and But program going rates. and few including resulted certainly out products First new a of of high to platforms subsidy and bit we've the XX to user at to products the monetization billion have return gain we're roll traction. launched, doing return including all, CNY for time live various to them new high what that's approaches looking repurchase

our second thing Quanzhantui, new we're at The look to introducing. is that product, advertising

you to achieve just in performance, Of for solid more this need in that than product course, place. order

across You different coordination pieces. need and effective synergy X

traffic user platform. on being the first Taobao The

taking it sufficient a of coverage a then algorithms The take, different having the to second say, X to across And of sectors advertisers number sufficient beyond part will with of more the months being data. sufficient kinds number products. optimize different of that, and also user or fully optimize

X achieve really back Quanzhantui take months work So likely things to the April, of to and something together starting in XX rollout to growth. those solid all like from bring of of progress to different it's

come those a for likely about launch to to things all well, at service months short, then XX And few in working over to X say initial looking and be Toby something also to words from this I'll charge. different like to hand together really date. So that, for the technology

[Interpreted] Yes, this is Toby.

about service at on regarding technology that received Just received X.X%, calculated that and actually add merchants. and Fish is the by a Idle of the the started to to we charging actually rate of September Taobao charge on on of as talking GMV, basis be

We've this of in well feedback to opinion of our market as merchants. our come as decision practice consideration prevailing merchants, from both

refunded to that their take for threshold annual or them Of to those SME below course, their GMV ways threshold. merchants, a whose to grow find other is we of and base have actual provide in good special our particular, care either CASA will expand to measures have certain assistance that GMV

of you financials over, difference fiscal see next expect the starting this months would of expect that the can to I X present year. say, as So a September, in this with making this

from question next The is Alicia from Citigroup.

landscape Ali will that and does the the for that in How of What management evolve countries? think are both merchants time? advantage And business. on consumer defend of Express question a position help overall AIDC about you competitive will your market over competitive important some have how I now? your the

starting to Is well? a follow-up that to achieve And is be profitable seems Lazada July. a on that in profitability timeframe Ali turning then target for you as Express with that

the AIDC, a businesses. the you. single unlike thing Jiang Alibaba other is of would business. that Well, I of Fan. not It's a types within first Thank comprises say is different number This businesses the Group,

in markets teams with brands with local local present those are local We markets, many operating them. in different

And both combination of really business. and a is local overall, AIDC cross-border

in being integrating local on our sharpening working So -- context something different in -- markets teams out local that integrating on supply working of and is we're operating local -- supply sharpening of product we're them supply, with broader that different our and China. experienced especially supply advantage brands, around

On on the experience consumer I high working user with brands very AE. past, certainly improving consumer often that. kind is X on we've consumers good have brand very working and advantage to a was side, we efficiency enhance a that recognition user offered low AE think In too experience, of certainly hard the very also platform poor but perhaps the hard relatively been

noted, for a as adjustments Lazada, we'll first earlier, ways in efficiency for I continue of the our EBITDA as have As for yes, we And while enhance increase single to year. we time the positive as finding you profitability. market and said our preserving this July month share, were there

time high-quality investing and come, growth. make important achieve it to that AE those UE in, we'll and continue few higher to Choice to over the we've to it's of next is drive to Choice an get AE model continues efficiency respect is. efforts quarters to where In been optimize. taken and

is next The from Jefferies. Chong from Thomas question

primary about My question our stock into And of about business. a about second stock status and the is connect. the my going management is thoughts Can first comment question connect. cloud triaging about listing our

accelerate in goal long fiscal the from the expecting regard we the want I are AI to and contribution. just we half are to with that in to forward, color AI? external revenue coming that cloud going looking growth revenue year back the some second get of our Given double-digit run What's for

will your answer will then take the first one, thank and Eddie you Okay. Thomas, I the for question. second question.

I Connect, your the primary your the Regarding our guess question is at Stock conversion end. question about about

Hong we primary Currently, pursuing actively Kong listing. are

XXnd the on AGM August. an of have will We

approved. we conversion complete to after the And then and we a we end from have August. it obtained of aiming that's the shareholders the before proposal subject the are completed So shareholders approval to process get

what the joined procedure Connect, of still you like different That's se. was it Then the exchanges to Stock sort one incentive per just to go procedure, subject through.

on update So the that's the status.

pipeline, There's Eddie. cloud. your being is you and I'll is about very that, products. see from our demand still demand satisfied. far if for This robust take customers AI AI And look you question second among [Interpreted] the relevant that can very, at

will a double-digit half clear-cut external that in growth of revenue we year. trend think it's from So achieve the customers the second very fiscal

the revenue. In of product terms AI breakdown that of

driven me, products. probably terms the growth will by be of most pardon In that of revenue, AI

traditional is a development. cloud relatively If as at you AI focused GPU-based growth is for the most computing look the industry on demand whole, limited, now of CPU-based product where

I of say So products. something would expected half will growth that AI like by than more be driven

is from question Macquarie. Ellie Next from Jiang

positive all, cloud follow-up demand. showing momentum the shared management the already on Just indicators quick the the a we first strong of prior and some question. early of Obviously, are

the Given half, enterprise in the softened kind macro comment second of can several and the just kind impact, of you mix next especially quarters? into the positions on demand current

is reacceleration. And Tmall then the second and Taobao the question GMV also, on

return can comment momentum that GMV seen up. industry pace on reacceleration? encouraged catching the second overall rate GMV anything can on reported the drivers talk we've ecosystem? Motoring, behind the we So see quarter, the the And really by across up And for already key actually, MBS. to our to we're caught management you

what that digitalized macroeconomic enterprise the question than investing cloud. do must [Interpreted] to were what own to higher last digitalization seeing. not how on Eddie. is had with we for in higher, that AI in this is do be budgets certainly customers relies our are we're Any investing, I'll has are year. cloud demand. resulting is they your year be see their and among it to softening AI. significantly Look, at first question This enterprise But all What think I with conditions take that's has that

that are leveraging the using enhance and to is industry it efficiency. competitiveness AI now their All are

way its their AI so any do reliant in that's enterprise efficiency. in any digitally and to will certainly not scale competitiveness investment because own So down would impair

a clear that's slowdown that So of kind softening. any not we're or and seeing seeing, we're trend a

the GMV rate at As to on in recovery your growth second question TTG.

Tmall comes down where this And really thing parts overall important for products to underlying in prices. think the allow to e-commerce. group, basic and investing is we're strategy Tabao quality most user quality our I comes really of capabilities the services to the are those on deliver most the that the us attractive experience when it

you Now an product very base. rich if user look and at we extremely diverse assortment also complex, a and have TTG, multifaceted

service for segments. important to different supply those it's So of to us and needs the to segment kinds to of available those of to that range diverse different cater of different consumers kinds product make experience

those ensure quality that to able ongoing in chain to capabilities different optimizing order kinds supply efficiency attractive all consumer have supply of that allows and tiers. underlying us different and segments. those chain be of so for products investment for services to And we develop And supply different at is our quality in prices

of return other about rates. our in industry than This is Toby, [Interpreted] as and are increasing trend. industry take But Alibaba, lower slightly the return rate I'll a the that is Purchase return general question across rates average. the case

returns, going frequency. that's for is that of retention when be is And has favorable a to purchase experience return I thing around second experience very overall. customer a would part experience and The the the good important increasing say consumer

NPS on Net platform note this Score, at NPS, think year, if Promoter And that our mid- our to simple you among has consumers, our improved especially and high-tier it's considerably. I look

from And again, return on doing the to that our going certainly think platform. So business merchants investing slightly our that's overall than average. rate and market don't lower is discourage I

next question from The Yu Morgan Stanley. from is Gary

of of regarding to years. terms My X at well of management as the years management X to breakeven these we is more other most AIDC breakeven in business in timing to of next the question X business should the retail X reach individual segment. segments the comment share local kind power look of individually? target the detail Could aiming including some all next about How services, under making in as

I'll Gary. that question. take you, Thank Okay.

their Tmall I and Eddie serve is this other what previously, and they businesses we businesses are mentioned stage like think Tmall and that the and of Taobao so, their to monetization -- will up sort X efficiency reach X afterwards, and or then of forward. start all Cloud going and next sort significantly breakeven. scalable those Taobao like the year enhance reduce sort deliver losses I still for that they the in be AIDC, was will the loss-making profitability of And a or years businesses, of including except core ramping and explaining some at to

which How it's to, is the making, I scale going and quite to need businesses are was those very we want hand, we -- they as achieve are -- efficiency, important. hear on that, they efficiency one do, what investment explaining, about the of balance the

also hand on the care one they monetization. investment, more need making that Secondly, about are they to

critical it's enhanced business the So their using model. monetization rate

breakeven are spending, more and with in efficiency they income sort So and higher moving the the both of the profitability. towards

examples. We the I my X Lazada. and One -- service, other during local I I can -- is used remarks, prepared is explained clearly a X see, as

Fan think explained I Jiang the Lazada.

about, scale, one hand, I it's on to For local increase the you i.e., service, think need increase all order. you to the need

it the other unit about case, improve to On example, of you improve economics business, in, earnest new it's like unit economics about, the in all for continuously. sort delivery hand, need

improve. all in per economics And the businesses the to for think about, need hailing unit ride I it's then example, all AMAP,

sort are and we with reducing So the and -- are improve, towards able efficiency the we scale to both profitability. of losses moving very significantly

how will this business pretty is and this the towards think execute I profitability. So much move

Barclays. from is Shao Jiong from question next The

watermark the to and the high well. be technology high forward, quarter. single-digit in and Transat launched great. September. digit launched when question My to for high charge gap especially starting The is great between especially It's a comments recently about you the appears X achieved growth start going would gap CMR as -- GMV. you GMV that between Is this be single Any you a service fee

talked wondering, that You Toby percentage net think be the the of of great. CMR? technology was a X.X% clarification that. service in about ones I GMV? that, Any to to GMV fees But the of technology [indiscernible] fees. think I will sort smaller related terms of is would some And for of number bring

you that. question. take Okay. for the Thank I'll

previously, ramped think my G&A CMR rate between of next the high like. prepared in the take remarks, reflect the and I have models some rate. -- the think drop in the as few you currently Why online new also relatively actually take quarters, very in I if still the growth GMV, of currently, GMV the dropped? the low Eddie up will Because a be which with gap monetization,

that's there's a still So why gap.

we As be quarters, rate relatively some means in stabilized. will will start growth GMV, which the same take get next pace said, also of the with few to at

a So than back in And is monetization faster that's because the pace. becomes And we're the to up why our explained from consumers, GMV then the as we will growth take strategy, Eddie the GMVs frequency of currently sort of share we consumers, observe and the soon like then the the sort stabilizing, growth. the expecting. to first invest ramp as by we rate. start reason need more GMV get executing market what gradually grow to The purchase get

is A we're explained few quarters. into out. of rolling The a traffic currently transient, which number doing. take things penetration Eddie be will

which accelerated that certainly we improve will rate, growth. the CMR the means So take

help the other sort rate. on service fee sort of like well. few with the as measures will like of And charge take secondly, A this also software

the GMV, the Why all the we to So currently things share. see and the back of growth these do have started we it are because been. on sign stabilizing see market the we we

clear how the for transaction, your It's is the on completed then GMV. it question completed this -- X.X And about charge.

on GMV. it's So completed the charged

of However, small their is merchants some annual the GMV to refund we will medium certain below back and if threshold.

The next from from question UBS. is Fong Kenneth

the I have high is the tax the explain quarter. what's I we One on X current And the -- that maybe model maybe you the for rationale should financial tax rate. tax how the question on going after behind? number. forward? is quite rate expense Can the noticed

business. planned normalize the the X for direct I understand especially or that on quarters, flow. decline flow investment that expect X well Should related decline, our it one-off cash cloud next the the part? And reduction thing as to sales cash gradually to on as is the expenses direct some in our about other we free or on is AI sales XX% business free in

Thank Kenneth. I'll take question. this you,

Your because is have difference if items, of tax first about lot a of, sort have P&L's there. normally permanent tax tax by does if rate one-off reach not profit, implication Because like, tax a we our effective do real you rate. a like which you question you're the cannot using is divided

stable We are on quarter tax in adjusted on is an the which this monitoring with quarter. rate, relatively basis last compared

sort So like -- in offline. I can to model, looking guess, communicate Tmall can terms team our of of probably sort your we and of

first your is this So question.

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free cash is question flow. second about Your

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reason One of AI the the investments, on like. is infrastructure you if significant expenditure the in increase

of because relation the I some So the like of I sort reason, capital business jobs. the [indiscernible] to working -- think because of in and other -- of is scale some the changes said, as

them, from are a you business majority them planned like, of many those For scale you if these jobs, if scale like. of down,

was and believe these dropped of some is sales the we and business business As business scaled quite in we probably The not within is efficient reason format. these significantly, a Taobao down some I of is XP in format more XP categories, proactively Tmall Tmall. is explaining our why direct reason Taobao

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is the a is To will this impact? relatively that on a contrary, is working you are the it temporary reducing capital. the on have if impact. this me, -- that permanent scale, But think I So -- outflow you're

size process we will But longer During stable, the the no this these when of became outflow. outflow. will reducing see business see types scale, we of

James is The question from next Mizuho. Lee from

into should change more we for related how agents? Great. and the your question we to talk large that about model, adoption as is you question think that transition [indiscernible] in China? use about maybe AI, My language language of merchants for large the you guys. impact think do Can And AI open implication cases may And model of source customers? how how also,

have or your [Interpreted] wave models. In itself Well, choices to this generative companies close develop AI first development, Alibaba Thank a cloud open different on around source is provider. of Cloud made different you. recent whether service question.

for to source for choice They clear developers. of That's want control. large helpful, optimize. us more the very to So Developers has more language course, develop scope models. open been want

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doubly it's advantageous. So

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strategy. entirely with consistent that's So our

more models and larger, of idea agents, becoming more the parameters multimodal, for stronger more and becoming with capable. As the more more and are

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question. last the open Let's

Squali Youssef The is from last from Truist. question

Squali Truist. Youssef from It's

on the in you One, framework us understand it's AI a reference. those for the rest rate as doubled to get year-on-year your follow-up of I off CapEx, than one, on QX. question. of the number the return Number can the investments, if look on good work So more just And is help you that just run year? your at of two,

at which green time maybe get of examples shoots? seeing we the and is in on or and U.S. of key One start kind you're of the or where least the questions investments here, the expect us AI early the you give bearing fruit, framework often kind these of the to timeline with ROI associated

take question. second answer will I question, the the and Okay. will first Eddie

like I very you as think significantly. with from observed reporting, respect to have CapEx, increased our just the

I think very demand the we we strong is clearly see investing. because and reason the why backlog. are That's

a in the quarters, We we expect investments expect in next would forward. similar of would CapEx going level few

Eddie. This is [Interpreted]

we continue the it's this with demand. see you a clients several to in be AI from of and going part a said, to So pace. ongoing to have, the to simply expect lot know that there's clients the you investing demand demand, over Toby continue lot look we Certainly, as at next of because quarters, answer. kind second CapEx pipeline many of those at of unmet And be

it's these get for what or soon of instantly calls, API as up, training There's CapEx as we running making demand. or So whether a we're we a that kind capacity. see full inference at kind server of is when investments, server

and power up building next demand is over capacity day very So we're and at full high quarters we to running see ROI compute online to new these taken meet a coming on instantly compute getting existing X. because can expect that power

everyone, you, for thank Well, joining.

next you quarter. see will We

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

now disconnect. You may

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