Alibaba smashes estimates as revenue jumps 54% to $7.67 billion

Alibaba has smashed analyst estimates with its latest financials.

The Chinese e-commerce giant reported (PDF) net income of RMB 17.12 billion ($2.47 billion) with total revenue of RMB 53.25 million ($7.67 billion) for its Q3 2016, the latter was a 54 percent year-on-year jump. Earning per share came in at RMB 6.94 ($1.00).

This was a big win for Alibaba. Analysts predicted net income of RMB 13.7 billion and total revenue of RMB 50.4 billion, according to the Wall Street Journal, but it beat those figures by some margin. In light of that, the firm raised its revenue guidance for the full 2017 year from 48 percent growth to 53 percent.

The primary source of revenue remains Alibaba’s core commerce businesses — its Taobao marketplace and T-Mall service for brands — and they accounted for RMB 46,58 billion ($6.71 billion), up 45 percent year-on-year. Alibaba said its marketplaces now have 493 million monthly users, as of December 2016, with 443 million active buyers. Taobao, it said, grew to 493 million monthly users in December from 450 million in September. For context, China now has 731 million internet users, 95 percent of whom are on mobile.

No new figures were given for T-Mall beyond the data Alibaba shared back on Single’s Day, which is China’s biggest shopping festival on November 11. Alibaba did break its own record by selling RMB 120.7 billion ($17.79 billion) in goods during the 24-hour period, but its annual growth slowed.

Outside of e-commerce, we know Alibaba has been prioritizing its cloud computing business. Revenue from it once again more than doubled (up 115 percent) to reach RMB 1.76 billion ($254 million) in revenue — that’s up nearly 50 percent on the previous quarter alone. Aliyun, the cloud computing business, is getting close to breakeven/profitability, having carded a slim RMB 339 million ($49 million) loss in Q3, an improvement on RMB 439 million ($66 million) in the previous quarter.

Cloud computing may be a fast growing revenue stream, but it still accounts for just a few percent of Alibaba’s total revenue. It is, of course, also an intensively competitive space dominated by Amazon (AWS) with Google and Microsoft among the fierce rivals.

Another area where it is seeing growth is “digital media and entertainment” — revenue rose 273 percent to reach RMB 4.1 billion ($585 million) — while other activities accounted for RMB 845 million ($122 million), up 61 percent.

The firm is looking to plant further roots in China’s e-commerce industry by expanding its offline presence. That explains its $2.6 billion bid to fully acquire one of China’s prominent shopping mall and department store operators, Intime — which it first bought a chunk of back in 2014. Alibaba believes that combining on- and offline services can help enhance the shopping experience for consumers, and also better organize a retailer, too.

Its offline-to-online interests run further. Alibaba’s Koubei offshoot pulled in total revenue of RMB 73.1 billion ($10.5 billion) during Q3. That’s up 52 percent on the previous quarter, but it wasn’t said how much money that the business is losing at this point.

Alibaba is saying even less about Cainiao, another affiliate that covers logistics, other than that it is now “enabling” 57 million package deliveries per day. There’s also no word on how Alibaba’s overseas businesses are performing despite the company “laying the foundation for long-term growth.” Those operations include Lazada in Southeast Asia, secured via a majority $1 billion investment last year, and Paytm in India, which Alibaba and its sister finance firm Ant Financial have both invested in.