Alibaba's earnings in line, cloud revenue growth, introduction of software fees on Taobao

From Morningstar: 2025-05-19 04:48:00

Alibaba Group Holding’s March-quarter cloud revenue grew 18% year on year, with Taobao and Tmall Group customer management revenue growth accelerating to 12%. Adjusted EBITA margin for the cloud business fell to 8.0% due to higher investments. The company introduced a 0.6% software fee on Taobao, aiming to support monetization beyond 2025.

Alibaba’s results met Refinitiv consensus, with the introduction of software fees on Taobao expected to enhance monetization. The company’s adoption of Quanzhantui is projected to boost monetization until fiscal 2026, and the adjusted EBITA margin for the cloud business is expected to remain in the high single digits. Morningstar maintains a $150 fair value estimate for Alibaba.

In 2023, Alibaba held the fourth-largest global market share in public cloud infrastructure as a service, at 7.9%, just behind Google’s 8.2%, according to Gartner. The company’s aggressive AI and cloud capital expenditures, along with its strong AI revenue growth potential, make Morningstar optimistic about Alibaba’s cloud business outlook.



Read more at Morningstar: Alibaba Earnings: Results In Line, With Cloud…