Q1 2027 Alibaba Group Holding Ltd Earnings Call Transcript
Key Points
- Alibaba Cloud's external revenue grew 45% year-over-year, marking a 22-quarter high, with EBITDA margin expanding to 11.6%.
- AI-related product revenue maintained triple-digit growth for the 12th consecutive quarter, reaching an annual run rate of RMB49.5 billion (USD7.3 billion).
- Proprietary T-Head chips, including the Zhenwu M890, are commercially deployed, serving over 650 customers and enhancing cost efficiency and margins.
- The company expects cloud revenue growth to further accelerate in coming quarters, with MaaS ARR surpassing RMB16 billion and a year-end target of RMB30 billion.
- Quick commerce business grew 45% while significantly narrowing losses, with unit economics improving quarter-over-quarter and a path to profitability by FY '29.
- Total adjusted EBITDA decreased 30% year-over-year due to heavy investments in AI technology and infrastructure.
- Free cash flow turned negative at RMB44.7 billion outflow, driven by a significant increase in CapEx to RMB67.7 billion.
- Customer management revenue declined 7% year-over-year, reflecting macroeconomic challenges in domestic e-commerce.
- AI Labs and applications segment reported an adjusted EBITDA loss of RMB13.9 billion, though losses narrowed quarter-over-quarter.
- International e-commerce business faced headwinds from tariff policies and geopolitical tensions, pressuring growth.
Good day, ladies and gentlemen. Thank you for standing by. Welcome to Alibaba Group's June quarter 2026 results conference call. (Operator Instructions)
I would now like to turn the call over to Lydia Lu, Head of Investor Relations of Alibaba Group. Please go ahead.
Thank you. Good day, everyone, and welcome to Alibaba Group's June quarter 2026 earnings conference call. Joining the call today are Joe Tsai, Chairman; Eddie Wu, Chief Executive Officer; Toby Xu, Chief Financial Officer; Jiang Fan, Chief Executive Officer of Alibaba E-commerce Business Group.
Before we get started, I would like to remind you that today's discussion may contain forward-looking statements based on management's current expectations that are subject to risks and uncertainties. We also make reference to non-GAAP financial measures. Reconciliations between GAAP and non-GAAP measures are included in today's earnings press release and investor presentation. Our comments will be on year-over-year
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