Alibaba (BABA, Financial) delivered a strong December quarter 2014 financial performance with significant growth across its key operating metrics. The company reported gross merchandise volume across China as retail marketplaces grew by 49% year over year. The company said its annual active buyers increased to 334 million in 2014, which represents an increase of 45% year over year. The company’s leadership and momentum in the mobile segment continued, as they added 48 million active users sequentially and witnessed over $1 billion in mobile revenue during the quarter ended December 2014.
During the quarter ended December 2014, the company’s revenue grew 40% year over year. Non-GAAP net income increased by 25% to RMB13,115 million during the quarter ended December 2014 compared to RMB10,463 million in the same quarter last year.
Non-GAAP diluted EPS during the quarter ended December 2014 was reported as RMB5.05 compared to RMB4.45 reported last year, an increase of 13% year over year. The lower non-GAAP diluted EPS growth rate compared to non-GAAP net income growth rate was because of increase in number of diluted shares outstanding during the quarter ended December 2014.
Alibaba’s revenue increased by 40% to RMB26,179 million during the quarter ended December 2014 compared to RMB18,745 million last year. The noticeable thing is that revenue from the China commerce retail business increased by 32% to RMB21,275 million compared to RMB16,149 million last year. This is due to growth in commission revenue and online marketing services revenue. Commission revenue accounted for 37% of China’s commerce retail business during the quarter ended December 2014 as compared to 30% in the same quarter last year.
Moreover, mobile revenue from the China commerce retail business increased by 448% to RMB6,420 million during the quarter ended December 2014 compared to RMB1,171 million last year. This is due to greater proportion of GMV generated on mobile devices and an increase in the mobile monetization rate.
Alibaba’s revenue from China’s commerce wholesale business during the quarter ended December 2014 was RMB860 million when compared to RMB264 million in the same quarter last year, an increase of 110% year over year. This is mainly due to an increase in average revenue from paying members and an increase in paying members.
On the international front Alibaba’s revenue from international commerce retail business during the quarter ended December 2014 was RMB554 million compared to RMB264 million in the same period last year, an increase of 110% year over year. This is mainly due to an increase in GMV transacted on AliExpress, which is partially attributable to AliExpress participation in the singles-day-promotion campaigns.
The company’s revenue from international commerce wholesale business during the quarter ended December 2014, was RMB1,209 million compared to RMB1,000 million reported in the same quarter last year, an increase of 21% year over year. This is mainly due to an increase in the number of paying members and an increase in average revenue from paying members. Alibaba’s China retail marketplaces have 334 million annual active buyers during twelve months ended December 2014 compared to 231 million last year, an increase of 45% year over year.
Since 2015, the company has seen significant growth potential thus making it one of the best talked about stocks on the exchange. So far, many top analysts are backing the stock and investors are sitting on the edge of their seat hoping for a big payoff in dividends soon.
Presently, Alibaba’s stock is trading at $82.05 on the New York Stock Exchange, which is a lower amount from the $93.89 or 12% lower than it entered with on the exchange at the start. Since March 2015, the company’s stock went down 12.81%.
The reason why Alibaba is falling in public confidence is due to fake goods the company sold some time ago. Since the swindle, some consumers are backing away from doing business with the company again. To win back the confidence of consumers, the company must produce goods that are tested and able to stand up to scrutiny. Despite the blunder of Alibaba, top analysts are predicting that they will bounce back again much improved.
As the watch by analysts and investors on Alibaba continues, everyone is hoping for the best and that the company’s turnaround will bring with it a more prosperous outcome so that all key players can benefit greatly. The signs are all pointing in the direction of success for the company.
