Alibaba Q4 Feb 20 Earnings Preview

Alibaba Group Holding Limited is poised to report its December Quarter 2024 results on February 20, 2025, before the U.S. market opens. The upcoming release, covering performance for the December 31, 2024 quarter, follows a strong showing in the September Quarter of 2024.

This analysis examines Alibaba’s financial performance, revenue segmentation, capital intensity, market positioning, and the factors that could drive near-term and long-term outcomes. Notably, the article also reviews key options market data, offering insights into investor expectations.

September Quarter 2024 Financial Highlights

Some highlights from the quarter ending September 30, 2024:

• Total Revenue: RMB 236,503 million (US$33,701 million), up 5% year over year
• GAAP Net Income: RMB 43,547 million (US$6,205 million) — a significant increase from the previous year
• Non-GAAP Net Income: RMB 36,518 million (US$5,204 million), down 9% year over year
• Diluted GAAP EPS: RMB 18.17 (US$2.59) per ADS
• Non-GAAP Diluted EPS: RMB 15.06 (US$2.15) per ADS
• Adjusted EBITA: RMB 40,561 million (US$5,780 million)
• Free Cash Flow: RMB 13,735 million (US$1,957 million), a 70% drop
• Share Buybacks: US$4.1 billion repurchased, reducing shares outstanding by 2.1%

These results indicate robust revenue and GAAP profitability growth, even as significant investments, particularly in cloud infrastructure and logistics, exert pressure on free cash flow.

Revenue Segment Breakdown

A detailed look at the revenue segmentation for the September Quarter of 2024 reveals the performance of Alibaba’s diverse business units:

Taobao & Tmall Group

This segment generated RMB 129,100 million in revenue, a 2% increase year over year. Revenue is driven primarily by GMV-based service fees and the adoption of specialized merchant tools. Taobao and Tmall continue to serve as the backbone of Alibaba’s domestic e-commerce operations, maintaining strong performance despite intense market competition.