Alibaba Group's fiscal second-quarter earnings declined less than expected, though sales missed Wall Street estimates while the company's Cloud revenue showed significant growth year over year. The Chinese e-commerce titan reported adjusted earnings of 15.06 renminbi ($2.15) per American depositary share for the three months ending September 30, a decrease from 15.63 renminbi a year earlier.
The expectations among analysts on Capital IQ were for 14.77 renminbi. Revenue increased 5% year over year to 236.5 billion renminbi, falling short of the predicted 240.04 billion renminbi. Chief Financial Officer Toby Xu highlighted, "Our revenue growth this quarter was driven by improving monetization of Taobao and Tmall Group, which included gross merchandise value-based service fees and merchant adoption of our marketing tool Quanzhantui." He further added that the company continues to invest in core businesses while enhancing operational efficiency. In premarket trading, Alibaba's shares listed on the New York Stock Exchange saw an uptick of 1.7%.
Within the Taobao and Tmall group segment, sales increased by 1% to 98.99 billion renminbi. China commerce retail rose slightly to 93.01 billion renminbi from 92.56 billion renminbi during the same quarter last year, and the wholesale segment saw an impressive jump of 18%. Additionally, the international digital commerce business climbed 29% year over year to reach 31.67 billion renminbi. The cloud segment delivered a revenue boost of 7% year over year, totaling 29.61 billion renminbi.
Eddie Wu, Chief Executive, commented, "Growth in our cloud business accelerated from prior quarters, with revenues from public cloud products growing in double digits and AI-related product revenue delivering triple-digit growth." In other areas, local services revenue rose by 14%, while Cainiao Smart Logistics Network advanced by 8% during the quarter.
Despite these gains, digital media and entertainment revenue saw a decrease of 1% on an annual basis. Wu expressed increased confidence in their core businesses, stating, "We will continue to invest in supporting long-term growth. Our other businesses continued to improve their operating efficiency, with most of them continuing to increase their profitability or reduce losses.".