Alibaba Group Announces December Quarter 2025 Results
$BABA #alibaba--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 quar...
HONG KONG: $BABA #alibaba--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 December 31, 2025.
“This quarter, Alibaba maintained strong investments across our core pillars of AI and consumption. AI is and will continue to be one of our primary growth engines. Our Cloud Intelligence Group’s revenue is up 36% with AI-related product revenue delivering triple-digit growth for the tenth consecutive quarter. Our Model-as-a-Service (MaaS) platform is showing strong growth, emerging as a new engine driving cloud business growth. On the consumer side, we have integrated use cases across our consumer ecosystem into Qwen app, which generated significant new users and transactions. Qwen’s consumer interface surpassed 300 million monthly active users, as AI agents perform real-world task execution at scale. Looking ahead, we are well-positioned to drive growth on both enterprise AI and consumer AI fronts, powered by our full-stack AI capabilities spanning foundation models, cloud infrastructure, and proprietary chips, alongside deep integration with our broader ecosystem,” said Eddie Wu, Chief Executive Officer of Alibaba Group.
“The rapid growth of AI + Cloud businesses in recent quarters gives us confidence to scale investments, further strengthening our full-stack AI capabilities. In consumption, our quick commerce business continues to scale while unit economics improved steadily. Our strong liquidity position and resilient cash generation provide a solid foundation to support sustained strategic investment,” said Toby Xu, Chief Financial Officer of Alibaba Group.
BUSINESS HIGHLIGHTS
In the quarter ended December 31, 2025:
- Revenue was RMB284,843 million (US$40,732 million), an increase of 2% year-over-year. Excluding revenue from the disposed businesses of Sun Art and Intime, revenue on a like-for-like basis would have grown by 9% year-over-year.
- Income from operations was RMB10,645 million (US$1,522 million), a decrease of 74% year-over-year, primarily due to the decrease in adjusted EBITA. Adjusted EBITA, a non-GAAP measurement, decreased 57% year-over-year to RMB23,397 million (US$3,346 million), primarily attributable to the investment in quick commerce, user experiences, and technology, partly offset by the improved operating results supported by continued growth in Cloud business, as well as enhanced operating efficiencies across various businesses.
- Net income attributable to ordinary shareholders was RMB16,322 million (US$2,334 million). Net income was RMB15,631 million (US$2,235 million), a decrease of 66% year-over-year, primarily attributable to the decrease in income from operations. Non-GAAP net income in the quarter ended December 31, 2025 was RMB16,710 million (US$2,389 million), a decrease of 67% compared to RMB51,066 million in the same quarter of 2024.
- Diluted earnings per ADS was RMB5.93 (US$0.85). Diluted earnings per share was RMB0.74 (US$0.11 or HK$0.82). Non-GAAP diluted earnings per ADS was RMB7.09 (US$1.01), a decrease of 67% year-over-year. Non-GAAP diluted earnings per share was RMB0.89 (US$0.13 or HK$0.98), a decrease of 67% year-over-year.
- Net cash provided by operating activities was RMB36,032 million (US$5,152 million), a decrease of 49% compared to RMB70,915 million in the same quarter of 2024. Free cash flow, a non-GAAP measurement of liquidity, was RMB11,346 million (US$1,622 million), a decrease of 71% compared to RMB39,020 million in the same quarter of 2024. The decrease in free cash flow was mainly attributed to the investment in quick commerce. As of December 31, 2025, our cash and other liquid investments(1) were RMB560,175 million (US$80,104 million).
Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.
| ____________ | ||
(1) | 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
Consumption Businesses
Alibaba China E-commerce Group
During the quarter, we executed our plan to further grow the scale of our quick commerce business, improve user experience and enhance operating efficiency, with increasing efforts in high-value food orders and non-food categories. The quick commerce business continued to improve unit economics and increase average order value month-over-month during the quarter, driven by fulfillment logistics efficiency enhancement, order mix optimization, and strong customer retention.
We rebranded “Ele.me” to “Taobao Instant Commerce” during the quarter, to closely align it with the Taobao app and strengthen our branding. In addition, Taobao Instant Commerce service was integrated into Qwen app on January 15, 2026, which further expands its customer reach and better meets diverse user needs.
Customer management revenue grew 1% year-over-year to RMB102,664 million (US$14,681 million) during the quarter. The slow-down in revenue growth was primarily due to weaker transaction activities and phase-out of the impact of software service fee implementation. The Taobao app achieved a double-digit year-over-year increase in monthly active consumers during the quarter, driven by the growing mindshare and increasing scale of our quick commerce business.
The number of 88VIP members, our highest spending consumer group, continued to increase by double digits year-over-year, surpassing 59 million. We will continue to focus on improving the retention of 88VIP membership through enhanced value proposition to our most valued customers.
Alibaba International Digital Commerce Group (“AIDC”)
For the quarter ended December 31, 2025, AIDC narrowed loss significantly year-over-year, driven by a combination of logistics optimization and investment efficiency enhancement. The unit economics of the AliExpress’ Choice business also improved on a sequential basis.
AIDC continued to diversify and enrich product offerings by leveraging the supply chain advantage of the Alibaba ecosystem. For example, further to the joint venture that we formed with Shinsegae in South Korea, we have broadened our collaboration to sell high-quality South Korean products on other platforms of AIDC, mainly Lazada. In addition, AliExpress’ “Brand+” program, which provides go-to-market solutions to brands going overseas, accelerated the onboarding of brands during the quarter and achieved substantial sales growth quarter-over-quarter.
AI + Cloud Businesses
Cloud Intelligence Group
For the quarter ended December 31, 2025, revenue from Cloud Intelligence Group was RMB43,284 million (US$6,190 million). The year-over-year growth of total revenue, and revenue excluding Alibaba consolidated subsidiaries, accelerated to 36% and 35% respectively. This momentum was primarily driven by public cloud revenue growth, including the increasing adoption of AI-related products. AI-related product revenue continued to show strong momentum, delivering the tenth consecutive quarter of triple-digit year-over-year growth.
Alibaba Cloud continues to lead the market, attracting more customers to onboard our comprehensive AI + cloud products and services, including high-performance networking, distributed storage, cloud operating system, and services for model training and inference. In the 2025 Gartner® Magic Quadrant™ for Cloud Database Management Systems, Alibaba Cloud has been named a Leader for the sixth consecutive year. In the Gartner® Emerging Market Quadrants for Generative AI Technologies report, Alibaba Cloud has been recognized again as an Emerging Leader across all four quadrants evaluated for Generative AI, the only cloud service provider in Asia Pacific to earn this distinction.
We have maintained our position as the overall leader in China’s financial cloud market for six consecutive years since 2019H1, according to IDC’s China Semiannual Financial Cloud Tracker, 2025H1 report. Backed by our full‑stack AI cloud capabilities, Alibaba Cloud led the public cloud infrastructure market for financial services with a record high of 43% market share. Meanwhile, according to IDC’s 2024 China Hybrid Cloud Market Share report published in November 2025, Alibaba Cloud retained our position as the leader in China’s hybrid cloud PaaS and services market.
We also launched the new Alibaba Cloud Linux, a next‑generation AI infrastructure operating system built for cloud-based AI workloads, capable of supporting the training of trillion‑parameter models while significantly improving efficiency across both training and inference.
With international markets as a key strategic priority, we have continued to expand our global footprints. Alibaba Cloud operated 92 availability zones across 29 regions worldwide as of December 31, 2025, making us China’s number one and a leading global cloud service provider.
Qwen Model Family
Qwen model family, our enterprise-grade large model suite, continues to drive rapid AI adoption across key verticals, including intelligent manufacturing, financial services, consumer retail, and cloud-native development, delivering measurable productivity gains through its full-stack, multimodal capabilities. Underpinned by cutting-edge AI foundation models, extensive real-world deployment, and clear technological leadership, our Qwen models are scaling rapidly in both technology innovation and adoption.
In February, we launched Qwen3.5, marking another important step in advancing our model capabilities. This new launch further strengthens our leadership in multimodal AI with strong performance across reasoning, coding, agentic tasks and multimodal understanding, while delivering higher inference efficiency and broader global accessibility.
Qwen models, the world’s most widely used open-source model family, surpassed 1 billion cumulative downloads on Hugging Face as of January 21, 2026.
Chip Design – T-Head
T-Head Semiconductor Co., Ltd. (“T-Head”), our chip design subsidiary, has brought its proprietary GPU into production at scale, supporting end-to-end AI workloads from training and fine-tuning to inference. Compatible with mainstream AI frameworks, T-Head enhances our long-term computing supply capacity. By combining its capabilities with our Qwen models and cloud computing, it delivers highly cost-effective AI services to external customers. This business has scaled rapidly and now contributes meaningfully to our cloud infrastructure supply.
Qwen App
Powered by our most advanced Qwen3.5 foundation model, Qwen app, our flagship consumer-facing AI application, represents an important milestone in our AI strategy: transforming proprietary model leadership into scalable, real-world applications.
On January 15, 2026, we announced a significant upgrade to Qwen app, enabling deep integration with core services across our ecosystem, including Taobao and Tmall, Taobao Instant Commerce, Amap, Fliggy, and Alipay. Qwen app intelligently coordinates services across multiple platforms, becoming the first AI assistant capable of executing large‑scale, real‑world complex tasks in China. This marks an important shift in the AI industry from chat‑based interactions to a new era of task‑oriented execution. This ecosystem-wide integration further expands our user reach, strengthens engagement across Alibaba’s platforms, and reinforces our leadership in applied AI.
Since launching its Chinese New Year campaign on February 6, Qwen app has seen tremendous user engagement. By the end of February, approximately 140 million users have had their first AI-driven shopping experience through Qwen app’s agentic features from ordering food and groceries to ticketing and travel bookings. In February, consumer-facing Qwen has surpassed 300 million monthly active users across all platforms.
DECEMBER QUARTER SUMMARY FINANCIAL RESULTS
| Three months ended December 31, |
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| 2024 | 2025 |
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| RMB | RMB | US$ | YoY % | ||||
| (in millions, except percentages and per share amounts) | |||||||
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Revenue | 280,154 | 284,843 | 40,732 | 2% | ||||
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Income from operations | 41,205 | 10,645 | 1,522 | (74)%(2) | ||||
Operating margin | 15% | 4% |
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Adjusted EBITDA(1) | 62,054 | 34,057 | 4,870 | (45)%(2) | ||||
Adjusted EBITDA margin(1) | 22% | 12% |
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Adjusted EBITA(1) | 54,853 | 23,397 | 3,346 | (57)%(2) | ||||
Adjusted EBITA margin(1) | 20% | 8% |
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Net income | 46,434 | 15,631 | 2,235 | (66)%(2) | ||||
Net income attributable to ordinary shareholders | 48,945 | 16,322 | 2,334 | (67)%(2) | ||||
Non-GAAP net income(1) | 51,066 | 16,710 | 2,389 | (67)%(2) | ||||
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Diluted earnings per share(3) | 2.55 | 0.74 | 0.11 | (71)%(2)(4) | ||||
Diluted earnings per ADS(3) | 20.39 | 5.93 | 0.85 | (71)%(2)(4) | ||||
Non-GAAP diluted earnings per share(1)(3) | 2.67 | 0.89 | 0.13 | (67)%(2)(4) | ||||
Non-GAAP diluted earnings per ADS(1)(3) | 21.39 | 7.09 | 1.01 | (67)%(2)(4) | ||||
| ____________ | ||
(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 decreases were primarily attributable to the investment in quick commerce, user experiences, and technology, partly offset by the improved operating results supported by continued growth in Cloud business, as well as enhanced operating efficiencies across various businesses. | |
(3) | Each ADS represents eight ordinary shares. | |
(4) | 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. | |
DECEMBER QUARTER SEGMENT RESULTS
Revenue for the quarter ended December 31, 2025 was RMB284,843 million (US$40,732 million), an increase of 2% year-over-year compared to RMB280,154 million in the same quarter of 2024. Excluding revenue from the disposed businesses of Sun Art and Intime, revenue on a like-for-like basis would have grown by 9% year-over-year.
The following table sets forth a breakdown of our revenue by segment for the periods indicated:
| Three months ended December 31, |
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| 2024 | 2025 |
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| RMB | RMB | US$ | YoY % | ||||
| (in millions, except percentages) | |||||||
Alibaba China E-commerce Group: |
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E-commerce |
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- Customer management | 101,834 | 102,664 | 14,681 | 1% | ||||
- Direct sales, logistics and others(2) | 28,824 | 28,919 | 4,135 | 0% | ||||
| 130,658 | 131,583 | 18,816 | 1% | ||||
Quick commerce(3) | 13,356 | 20,842 | 2,980 | 56% | ||||
China commerce wholesale | 6,575 | 6,922 | 990 | 5% | ||||
Total Alibaba China E-commerce Group | 150,589 | 159,347 | 22,786 | 6% | ||||
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Alibaba International Digital Commerce Group: |
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International commerce retail | 31,553 | 32,351 | 4,626 | 3% | ||||
International commerce wholesale | 6,203 | 6,850 | 980 | 10% | ||||
Total Alibaba International Digital Commerce Group | 37,756 | 39,201 | 5,606 | 4% | ||||
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Cloud Intelligence Group | 31,742 | 43,284 | 6,190 | 36% | ||||
All others(4) | 89,234 | 67,340 | 9,629 | (25)% | ||||
Unallocated | 590 | 603 | 86 |
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Inter-segment elimination | (29,757) | (24,932) | (3,565) |
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Consolidated revenue | 280,154 | 284,843 | 40,732 | 2% | ||||
____________ | ||
(1) |
| To advance our “user first” strategy and enhance user experience, during the quarter ended June 30, 2025, we undertook a strategic combination of Taobao and Tmall Group, Ele.me and Fliggy into Alibaba China E-commerce Group. We simplified the financial reporting structure by reclassifying Cainiao, Amap and Digital Media and Entertainment Group (rebranded to Hujing Digital Media and Entertainment Group) into “All others”. The above presentation has been updated to conform with the new reporting structure, as reviewed by our chief operating decision maker. |
(2) |
| Direct sales, logistics and others revenue under Alibaba China E-commerce Group primarily represents direct sales businesses of Tmall Supermarket, 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 value-added services. |
(3) |
| Quick commerce revenue represents quick commerce business revenue, including revenue generated through “Taobao Instant Commerce” and the Ele.me app. Quick commerce revenue is net of subsidies that are contra revenue. |
(4) |
| All others include Freshippo, Cainiao, Alibaba Health, Hujing Digital Media and Entertainment Group, Amap, Qwen Consumer Business Group, Lingxi Games, DingTalk and other businesses. The majority of revenue within All others consists of direct sales, where revenue and cost of inventory are recorded on a gross basis, and revenue from logistics services. The decrease was primarily due to the revenue decrease as a result of the disposal of Sun Art and Intime businesses, as well as the decrease in revenue from Cainiao, partly offset by the increase in revenue from Freshippo and Alibaba Health. |
The following table sets forth a breakdown of our adjusted EBITA by segment for the periods indicated:
| Three months ended December 31, |
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| 2024 | 2025 |
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| RMB | RMB | US$ | YoY % | ||||
| (in millions, except percentages) | |||||||
Alibaba China E-commerce Group | 60,401 | 34,613 | 4,949 | (43)% | ||||
Alibaba International Digital Commerce Group | (4,952) | (2,016) | (288) | 59% | ||||
Cloud Intelligence Group | 3,138 | 3,911 | 559 | 25% | ||||
All others | (3,176) | (9,792) | (1,400) | (208)% | ||||
Unallocated(2) | (165) | (2,722) | (389) |
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Inter-segment elimination | (393) | (597) | (85) |
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Consolidated adjusted EBITA | 54,853 | 23,397 | 3,346 | (57)% | ||||
Less: Non-cash share-based compensation expense | (3,414) | (2,396) | (343) |
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Less: Amortization and impairment of intangible assets | (2,062) | (841) | (120) |
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Less: Impairment of goodwill, and others | (8,172) | (9,515) | (1,361) |
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Income from operations | 41,205 | 10,645 | 1,522 | (74)% | ||||
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