Alibaba reveals $6 billion share buyback as misses EPS forecast

Friday’s Vital Options Data Alibaba Group Holding Ltd., Nvidia Corporation, and Pandora Media Inc

Friday’s Vital Options Data Alibaba Group Holding Ltd., Nvidia Corporation, and Pandora Media Inc

Alibaba acquired online video streaming platform Youku Tudou in November 2015 and Singaporean e-commerce giant Lazada in April 2016, which drove Digital Media and International Retail Commerce revenues, respectively.

The group's revenue was about 38.6 billion yuan (5.6 billion US dollars) in the quarter, beating market expectations, Alibaba said. Similarly, worldwide e-commerce revenues were boosted by the addition of Lazada to Alibaba's Southeast Asian operations. Alibaba's cloud computing business reached triple-digit growth, producing $314 million.

Alibaba's steadily-improving ability to monetize transactions on its massive Taobao and Tmall Chinese marketplaces via revenue streams such as ads, commissions and shipping fees remains a major growth driver.

Revenue from digital media and entertainment businesses jumped 234 percent to 3.9 billion yuan in the quarter ended March 31. This number is expected to increase given the huge demand for internet infrastructure across China and other Asian markets.

Alibaba said it had more than 870,000 customers for its cloud computing services at the end of March.

The growth pushed revenues for the period to $5.6bn (£4.3bn). This U.S. push follows a meeting between Chairman Jack Ma and U.S. President Donald Trump earlier this year, at which Ma pledged to create one million jobs in the country.Revenue from Alibaba's core e-commerce business rose 47 percent to 31.6 billion yuan in the first quarter, up from the previous quarter's growth rate of 45 percent.Last year, Alibaba bought back and canceled roughly 27 million shares, with a large portion coming from early investor Softbank Group Corp (9984.T), for about $2 billion. Additionally, the revenue per buyer (particularly for mobile users) has also surged on a year-over-year basis, as shown below.

Total profits in the quarter were $1.5bn, up 98% year-on-year.

The company said that the figure was mainly driven by robust revenue growth across all its segments, "in particular our China commerce retail revenue growth".

While the company explores new revenue streams with projects related to data, cloud computing, artificial intelligence and logistics, e-commerce continues to generate the vast majority of Alibaba's revenue. While the margins of the loss-making divisions have improved, it could take a year or two for these divisions to become profitable. Its full-year earnings per share stood at 16.97 yuan.