Alibaba Group Announces June Quarter 2026 Results
$BABA #AI--Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988 (HKD Counter) and 89988 (RMB Counter), “Alibaba” or “Alibaba Group”) today announced its financial results for the quarter e...
HONG KONG: $BABA #AI--Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988 (HKD Counter) and 89988 (RMB Counter), “Alibaba” or “Alibaba Group”) today announced its financial results for the quarter ended June 30, 2026.
“We delivered a strong quarter, driven by the improving commercialization of our full‑stack AI capabilities,” said Eddie Wu, Chief Executive Officer of Alibaba Group. “Alibaba Cloud’s external revenue growth accelerated to 45%, with AI-related product revenue delivering triple-digit growth for the twelfth consecutive quarter. We recently launched frontier language, coding, video, audio, image and music models, all delivering top-tier performance. We introduced QwenWork, an AI workforce agent that unleashes enterprise productivity and capabilities. With our full‑stack AI strategy, we have put Alibaba in a superior position to capture the substantial growth of demand for artificial intelligence and AI compute.”
“This quarter, we delivered robust revenue growth and margin improvement across our core businesses. Cloud segment revenue growth continued to accelerate, with quality earnings and operating leverage increasing EBITA margin to 12%. Our quick commerce business continued to improve unit economics while maintaining market share, and our overall e-commerce business delivered resilient profits,” said Toby Xu, Chief Financial Officer of Alibaba Group. “As synergies across our core businesses deepen and AI monetization ramps up, we have greater strategic and financial flexibility to make disciplined and sustained investments in full-stack AI capabilities.”
BUSINESS HIGHLIGHTS
In the quarter ended June 30, 2026:
- Revenue was RMB268,953 million (US$39,639 million), an increase of 9% year-over-year.
- Customer management revenue decreased by 7% year-over-year. Excluding the contra revenue impact from the new business development program, customer management revenue on a like-for-like basis would have grown by 1% year-over-year.
- Income from operations was RMB15,161 million (US$2,234 million), a decrease of 57% year-over-year, primarily due to the decrease in adjusted EBITA, impairment of goodwill and a provision(1) recorded this year. Adjusted EBITA, a non-GAAP measurement, decreased 30% year-over-year to RMB27,329 million (US$4,028 million), primarily attributable to the investment in technology, partly offset by the improved operating results in our Cloud business, as well as enhanced operating efficiencies across various businesses.
- Net income attributable to ordinary shareholders was RMB10,537 million (US$1,553 million). Net income was RMB10,444 million (US$1,539 million), a decrease of 75% year-over-year, primarily attributable to the decrease in income from operations, decrease in net gains from disposal of investments, and the decrease in net gain from mark-to-market changes of our equity investments. Non-GAAP net income in the quarter ended June 30, 2026 was RMB20,715 million (US$3,053 million), a decrease of 38% compared to RMB33,510 million in the same quarter of 2025.
- Diluted earnings per ADS was RMB3.71 (US$0.55). Diluted earnings per share was RMB0.46 (US$0.07 or HK$0.53). Non-GAAP diluted earnings per ADS was RMB8.52 (US$1.26), a decrease of 42% year-over-year. Non-GAAP diluted earnings per share was RMB1.07 (US$0.16 or HK$1.23), a decrease of 42% year-over-year.
- Net cash provided by operating activities was RMB22,945 million (US$3,382 million), an increase of 11% compared to RMB20,672 million in the same quarter of 2025. Free cash flow, a non-GAAP measurement of liquidity, was an outflow of RMB44,670 million (US$6,584 million), compared to an outflow of RMB18,815 million in the same quarter of 2025. The decrease in free cash flow was mainly attributed to the increase in our cloud infrastructure expenditure. As of June 30, 2026, our cash and other liquid investments(2) were RMB474,505 million (US$69,933 million).
Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.
| ____________________ | ||
(1) | See the section entitled “June Quarter Other Financial Results”. | |
(2) | Cash and other liquid investments represent cash and cash equivalents, short-term investments and other treasury investments included in equity securities and other investments on the consolidated balance sheets, of which that are unrestricted for withdrawal and use. | |
BUSINESS AND STRATEGIC UPDATES
During the quarter ended June 30, 2026, we undertook strategic combinations of certain businesses to realize synergies across our commerce platforms and strengthen our full-stack AI capabilities. Alibaba China E-commerce Group, Alibaba International Digital Commerce Group, together with Freshippo, were integrated to form Alibaba E-commerce Group. Cloud Intelligence Group and T-Head were combined to form AI Cloud and Compute Services. In addition, AI model labs, Qwen Consumer Business Group, QwenWork, all previously included in “All Others”, were consolidated to form AI Labs and Applications. Based on this strategic re-alignment, starting from this quarter, our segment reporting will present the following: (1) Alibaba E-commerce Group, (2) AI Cloud and Compute Services, (3) AI Labs and Applications, and (4) All Others.
Alibaba E-commerce Group
The new Alibaba E-commerce Group reflects our strategic focus on unlocking significant synergies across our domestic and cross-border e-commerce businesses. Starting from this quarter, we will present Alibaba E-commerce Group’s revenue as the following: (1) China E-commerce, (2) China Quick Commerce, (3) International E-commerce, and (4) Global Wholesale.
We are deepening the integration of AI capabilities into our e-commerce platforms to enhance experiences for both consumers and merchants. On the consumer side, Qwen Shopping Assistant, a one-stop AI agent which delivers end-to-end assistance across the entire shopping journey from consumer idea inspiration to after-sales services on the Taobao app, demonstrated rapid growth in user adoption since its launch in May. For merchants, we have enhanced our merchant operations management platform with skill-based agentic capabilities that seamlessly automate end-to-end workflows, from product listing and store management to advertising and customer services.
In our China E-commerce business, CMR decreased 7% year-over-year during the quarter. Excluding the contra revenue impact from the new business development program, on a like-for-like basis, CMR would have grown 1% year-over-year. The slow-down in revenue growth was primarily due to weaker transaction activities. We saw incremental customer management revenue driven by the increase in monthly active consumers on the Taobao app because of our growth of quick commerce business.
The China Quick Commerce business includes Taobao Instant Commerce, Freshippo, and other on-demand delivery business. Taobao Instant Commerce continued to improve its unit economics quarter-over-quarter, driven by higher average order value and enhanced fulfillment logistics efficiency, while maintaining market share. We improved the order mix through an increasing focus on high-value food orders and non-food categories. Meanwhile, Freshippo maintained robust year-over-year growth momentum in orders and revenue, driven by its expanding footprint into emerging cities and counties, as well as deeper collaboration with Taobao Instant Commerce to offer differentiated grocery and fresh produce products.
The number of 88VIP members, our highest spending consumer group, continued to increase by double digits year-over-year to approximately 64 million as of June 30, 2026. We remain focused on the growth and retention of 88VIP members through enhanced value proposition to our most valued customers.
In our International E-commerce business, AliExpress achieved operating profit this quarter, driven by logistics optimization and cost efficiency enhancement. We continued to diversify and enrich our product offerings by leveraging the supply chain advantages of the Alibaba ecosystem. The proportion of AliExpress’ sales that are contributed by local product supplies has continued to increase significantly year-over-year.
AI Cloud and Compute Services
For the quarter ended June 30, 2026, revenue from AI Cloud and Compute Services was RMB48,437 million (US$7,139 million). The year-over-year growth of total revenue and revenue from external customers both accelerated to 45%. This momentum was primarily driven by the increasing adoption of AI-related products. AI-related product revenue continued to show strong momentum, achieving RMB12,376 million (US$1,824 million) and delivering the twelfth consecutive quarter of triple-digit year-over-year growth.
Cloud
Alibaba Cloud continues to lead the market, driven by growing customer adoption of our full-stack AI capabilities across AI agents, AI models, AI cloud infrastructure, and orchestration software that manages heterogeneous chip clusters, including our own proprietary chips. Omdia’s “AI Cloud Market: China - 2025” reported that Alibaba Cloud ranked first in China’s AI cloud market with the largest share of 38.1%, highlighting our ability to outperform industry and lead China's fast-growing AI cloud market with our comprehensive full-stack AI capabilities.
Chip Design – T-Head Semiconductor (“T-Head”)
T-Head has established a portfolio of proprietary silicon, spanning GPU, CPU, storage and networking chips. This comprehensive chip portfolio enables integrated hardware optimization across compute, storage and networking, strengthening our ability to deliver high performance and efficiency in AI infrastructure.
The Zhenwu chips, including Zhenwu M890, the latest AI processor, have achieved broad commercial adoption via Alibaba Cloud services from more than 650 external customers across over 20 industries, including autonomous driving, Internet, and financial services. This broad adoption demonstrates its ability to support AI workloads from training and fine-tuning to inference.
AI Labs and Applications
Model
Our model development has demonstrated a combination of capability and fast iteration, with our frontier language, coding, video, audio, image and music models all delivering top-tier performance. In August, we launched our flagship foundation model Qwen3.8-Max within three months of its prior version, and we opened its model weights with 2.4 trillion parameters. Qwen3.8-Max delivers comprehensive improvements across coding, real-world work, research, long-horizon tasks and multimodal agents, enabling it to complete complex tasks with greater reliability.
QwenWork
QwenWork is our flagship unified AI-native workforce agent. Through advanced AI models and agentic capabilities, QwenWork is designed to unlock productivity at the organizational level and drive operating efficiency. It also supports individual users with everyday workplace tasks. On distribution, QwenWork is deeply integrated with Alibaba Cloud and DingTalk’s ecosystem, providing a natural gateway to Alibaba's extensive enterprise user base and established workplace workflows. Its reach is further extended through broad integration with third-party business workflows and productivity platforms.
Qwen App
Qwen app, our flagship consumer-facing AI application, is adding diverse value-added offerings to meet user demands. Qwen app deepens its integration with core services across our ecosystem, including Taobao and Tmall, and Taobao Instant Commerce, to further expand the customer reach of our e-commerce business and enable a wider range of agentic use cases. 250 million users have had their first AI-driven shopping experience through Qwen app’s agentic features across an expanding range of e-commerce and other services since the launch of Qwen app. The integration also creates a flywheel across our AI and e-commerce businesses: broader AI adoption unlocks new growth opportunities, while feedback from real-world use cases enables us to enhance our models and user experiences.
Share Repurchases
During the quarter ended June 30, 2026, we repurchased a total of 13.4 million ordinary shares (equivalent to approximately 1.7 million ADSs) for a total of US$162 million. These purchases were made in the U.S. market under our share repurchase program.
Capital Expenditures
During the quarter ended June 30, 2026, capital expenditures were RMB67,678 million (US$9,975 million), an increase of 75% compared to RMB38,676 million in the same quarter of 2025, reflecting our continued investments in AI infrastructure to meet strong and growing customer demand. The significant year-over-year increase was due to several reasons, including fluctuations in procurement cycles, increase in CPU-compute capacity driven by anticipated growing customer adoption of AI agents, and higher pricing of a broad range of chip components.
JUNE QUARTER SUMMARY FINANCIAL RESULTS
| Three months ended June 30, |
|
| |||||
| 2025 |
| 2026 |
|
| |||
| RMB |
| RMB |
| US$ |
| YoY % | |
| (in millions, except percentages and per share amounts) | |||||||
|
|
|
|
| ||||
Revenue | 247,652 |
| 268,953 |
| 39,639 |
| 9% | |
|
|
|
|
|
|
|
| |
Income from operations | 34,988 |
| 15,161 |
| 2,234 |
| (57)%(2) | |
Operating margin | 14% |
| 6% |
|
|
|
| |
Adjusted EBITDA(1) | 45,735 |
| 39,143 |
| 5,769 |
| (14)%(3) | |
Adjusted EBITDA margin(1) | 18% |
| 15% |
|
|
|
| |
Adjusted EBITA(1) | 38,844 |
| 27,329 |
| 4,028 |
| (30)%(3) | |
Adjusted EBITA margin(1) | 16% |
| 10% |
|
|
|
| |
|
|
|
|
|
|
|
| |
Net income | 42,382 |
| 10,444 |
| 1,539 |
| (75)%(4) | |
Net income attributable to ordinary shareholders | 43,116 |
| 10,537 |
| 1,553 |
| (76)%(4) | |
Non-GAAP net income(1) | 33,510 |
| 20,715 |
| 3,053 |
| (38)%(3) | |
|
|
|
|
|
|
|
| |
Diluted earnings per share(5) | 2.25 |
| 0.46 |
| 0.07 |
| (79)%(4)(6) | |
Diluted earnings per ADS(5) | 17.98 |
| 3.71 |
| 0.55 |
| (79)%(4)(6) | |
Non-GAAP diluted earnings per share(1)(5) | 1.84 |
| 1.07 |
| 0.16 |
| (42)%(3)(6) | |
Non-GAAP diluted earnings per ADS(1)(5) | 14.75 |
| 8.52 |
| 1.26 |
| (42)%(3)(6) | |
| ____________________ | ||
(1) | See the sections entitled “Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP Measures to the Nearest Comparable U.S. GAAP Measures” for more information about the non-GAAP measures referred to within this results announcement. | |
(2) | The year-over-year decrease was primarily due to the decrease in adjusted EBITA, impairment of goodwill and a provision recorded this year (see the section entitled “June Quarter Other Financial Results”). | |
(3) | The year-over-year decreases were primarily attributable to the investment in technology, partly offset by improved operating results in our Cloud business, as well as enhanced operating efficiencies across various businesses. | |
(4) | The year-over-year decreases were primarily attributable to the decrease in income from operations, decrease in net gains from disposal of investments, and the decrease in net gain from mark-to-market changes of our equity investments, while net income attributable to ordinary shareholders and earnings per share/ADS would further take into account the net loss attributable to noncontrolling interests. We excluded non-cash share-based compensation expense, gains/losses of investments, impairment of goodwill and intangible assets, and certain other items from our non-GAAP measurements. | |
(5) | Each ADS represents eight ordinary shares. | |
(6) | The year-over-year percentages as stated are calculated based on the exact amount and there may be minor differences from the year-over-year percentages calculated based on the RMB amounts after rounding. | |
JUNE QUARTER SEGMENT RESULTS
Revenue for the quarter ended June 30, 2026 was RMB268,953 million (US$39,639 million), an increase of 9% year-over-year compared to RMB247,652 million in the same quarter of 2025.
The following table sets forth a breakdown of our revenue by segment for the periods indicated:
| Three months ended June 30, |
| |||||||||
| 2025 | 2026 |
| ||||||||
| RMB | RMB | US$ | YoY % | |||||||
| (in millions, except percentages) | ||||||||||
Alibaba E-commerce Group: |
|
|
|
| |||||||
China E-commerce |
|
|
|
| |||||||
- Customer management | 89,199 |
| 82,547 |
| 12,166 |
| (7)% | ||||
- Direct sales, logistics and others(2) | 31,675 |
| 28,353 |
| 4,179 |
| (10)% | ||||
| 120,874 |
| 110,900 |
| 16,345 |
| (8)% | ||||
China Quick Commerce(3) | 36,725 |
| 53,295 |
| 7,855 |
| 45% | ||||
International E-commerce | 28,177 |
| 27,761 |
| 4,091 |
| (1)% | ||||
Global Wholesale | 13,036 |
| 13,906 |
| 2,049 |
| 7% | ||||
Total Alibaba E-commerce Group | 198,812 |
| 205,862 |
| 30,340 |
| 4% | ||||
|
|
|
|
| |||||||
AI Cloud and Compute Services | 33,418 |
| 48,437 |
| 7,139 |
| 45% | ||||
AI Labs and Applications | 2,882 |
| 3,338 |
| 492 |
| 16% | ||||
All others | 28,629 |
| 28,803 |
| 4,245 |
| 1% | ||||
Unallocated | 519 |
| 783 |
| 116 |
|
| ||||
Inter-segment elimination | (16,608 | ) | (18,270 | ) | (2,693 | ) |
| ||||
Consolidated revenue | 247,652 |
| 268,953 |
| 39,639 |
| 9% | ||||
| ____________________ | ||
(1) | During the quarter ended June 30, 2026, we have implemented a new segment structure, to reflect the strategic re-alignment to realize synergies across our commerce platforms, strengthen our integrated AI infrastructure offering, and accelerate the development of our AI products and services, as follows: | |
|
| |
| i) Alibaba E-commerce Group, a unified group formed by combining Alibaba China E-Commerce Group, Alibaba International Digital Commerce Group, together with Freshippo and certain commerce businesses within Cainiao. | |
|
| |
| ii) AI Cloud and Compute Services, combining Cloud Intelligence Group with T-Head to strengthen the infrastructure and computing layer of our full-stack AI capabilities. | |
|
| |
| iii) AI Labs and Applications, where AI model labs, Qwen Consumer Business Group and QwenWork, formerly classified under All others, were brought together to integrate the full value chain from AI model innovation through to consumer applications and enterprise productivity solutions. | |
|
| |
| iv) All others include mainly Alibaba Health, Hujing Digital Media and Entertainment Group, Amap, Lingxi Games and other technology businesses. | |
|
| |
| Accordingly, the above presentation has been recast to conform with the new reporting structure to reflect how our chief operating decision maker (“CODM”) reviews information under this new structure. | |
(2) | Direct sales, logistics and others revenue under China E-commerce business of Alibaba E-commerce Group primarily represents direct sales businesses of Tmall Supermarket (excluding on-demand delivery business), Tmall Global and other businesses, where revenue and cost of inventory are recorded on a gross basis within the business group, as well as revenue from logistics services and other value-added services. | |
(3) | China Quick Commerce revenue includes revenue generated by Taobao Instant Commerce, Freshippo, and on-demand delivery business of Tmall Supermarket. | |
The following table sets forth a breakdown of our adjusted EBITA by segment for the periods indicated:
| Three months ended June 30, |
| |||||||||
| 2025 |
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