HANGZHOU, China–(BUSINESS WIRE)–Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988, “Alibaba” or “Alibaba Group”) today announced its financial results for the quarter and fiscal year ended March 31, 2022.
“Alibaba delivered on the goal of serving one billion annual active consumers in China this past quarter and achieved a record RMB 8,317 billion in global GMV for the fiscal year. Despite macro challenges that impacted supply chains and consumer sentiment, we continued to focus on customer value proposition and building the capabilities to deliver value. We saw tangible progress across our businesses, especially in operational improvements in key strategic areas,” said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. “Looking ahead, we will continue to execute on our multi-engine growth strategy by strengthening our digital infrastructure and focusing on quality growth to create long-term value for our customers, shareholders and other stakeholders across our ecosystem.”
“We delivered healthy results this quarter with revenue growth of 9% year-over-year. Total revenue for the fiscal year grew 19% year-over-year, despite a challenging macro environment. Our continued investments in strategic initiatives have generated promising growth momentum and improved operating efficiency,” said Toby Xu, Chief Financial Officer of Alibaba Group. “Looking ahead to fiscal year 2023, we will firmly focus on generating sustainable, high-quality revenue growth and optimizing our operating cost structure to enhance overall return amidst these uncertain times.”
In the quarter ended March 31, 2022:
- Revenue was RMB204,052 million (US$32,188 million), an increase of 9% year-over-year that was primarily driven by the revenue growth of the China commerce segment by 8% year-over-year to RMB140,330 million (US$22,137 million), Local consumer services segment by 29% year-over-year to RMB10,445 million (US$1,647 million) and Cloud segment by 12% year-over-year to RMB18,971 million (US$2,993 million).
- Annual active consumers of Alibaba Group across the world reached approximately 1.31 billion for the twelve months ended March 31, 2022, an increase of 28.3 million from the twelve months ended December 31, 2021. This included over 1 billion consumers in China, a historic milestone, and 305 million consumers overseas, representing quarterly net increases of approximately 24.6 million and 3.7 million, respectively, and annual net increases of 113 million and 64 million, respectively.
- Income from operations was RMB16,717 million (US$2,637 million), compared to a loss from operations of RMB7,663 million in the same quarter of 2021. Excluding one-off and certain other items as identified in “March Quarter Operational and Financial Results” below, income from operations would have decreased by RMB6,894 million year-over-year primarily due to our increased investments in Taocaicai and Taobao Deals, the continued impact of COVID-19 as well as asset impairment and special provisions made by Sun Art. Adjusted EBITA, a non-GAAP measurement, decreased 30% or RMB6,801 million year-over-year to RMB15,811 million (US$2,494 million).
- Net loss attributable to ordinary shareholders was RMB16,241 million (US$2,562 million) and net loss was RMB18,357 million (US$2,896 million), primarily due to decreases in the market prices of our equity investments in publicly-traded companies, which we excluded from our non-GAAP measures, partly offset by income from operations. Non-GAAP net income was RMB19,799 million (US$3,123 million), a decrease of 24% year-over-year.
- Diluted loss per ADS was RMB6.07 (US$0.96) and diluted loss per share was RMB0.76 (US$0.12 or HK$0.94). Non-GAAP diluted earnings per ADS was RMB7.95 (US$1.25), a decrease of 23% year-over-year and non-GAAP diluted earnings per share was RMB0.99 (US$0.16 or HK$1.22), a decrease of 23% year-over-year.
- Net cash used in operating activities was RMB7,040 million (US$1,111 million). Free cash flow, a non-GAAP measurement of liquidity, was an outflow of RMB15,070 million (US$2,377 million), compared to an outflow of RMB658 million in the same quarter of 2021, mainly due to the payment of the final installment of RMB9,114 million (US$1,438 million) of the RMB18,228 million fine levied by China’s State Administration for Market Regulation pursuant to China’s Anti-monopoly Law (the “Anti-monopoly Fine”), and a decrease in profit.
In the fiscal year ended March 31, 2022:
- Revenue was RMB853,062 million (US$134,567 million), an increase of 19% year-over-year that was primarily driven by the revenue growth of the China commerce segment by 18% year-over-year to RMB592,705 million (US$93,497 million), Cloud segment by 23% year-over-year to RMB74,568 million (US$11,763 million) and International commerce segment by 25% year-over-year to RMB61,078 million (US$9,635 million). Excluding the consolidation of Sun Art, our revenue would have grown 14% year-over-year to RMB770,734 million (US$121,580 million).
- Income from operations was RMB69,638 million (US$10,985 million), a decrease of 22% year-over-year. Excluding one-off and certain other items as identified in “Full Fiscal Year Operational and Financial Results” below, income from operations would have decreased by RMB41,683 million year-over-year, primarily due to our increased investments in Taobao Deals and Taocaicai, our increased spending for user growth, as well as our support to merchants. Adjusted EBITA, a non-GAAP measurement, decreased 23% or RMB40,056 million year-over-year to RMB130,397 million (US$20,570 million).
- Net income attributable to ordinary shareholders was RMB61,959 million (US$9,774 million) and net income was RMB47,079 million (US$7,427 million), showing year-over-year decreases of 59% and 67%, respectively, primarily due to the net losses arising from decreases in the market prices of our equity investments in publicly-traded companies, compared to net gains from these investments in last year, which we excluded from our non-GAAP measures. Non-GAAP net income was RMB136,388 million (US$21,515 million), a decrease of 21% year-over-year.
- Diluted earnings per ADS was RMB22.74 (US$3.59) and diluted earnings per share was RMB2.84 (US$0.45 or HK$3.50). Non-GAAP diluted earnings per ADS was RMB52.69 (US$8.31), a decrease of 19% year-over-year and non-GAAP diluted earnings per share was RMB6.59 (US$1.04 or HK$8.13), a decrease of 19% year-over-year.
- Net cash provided by operating activities was RMB142,759 million (US$22,520 million), a decrease of 38% compared to RMB231,786 million in fiscal year 2021. Free cash flow, a non-GAAP measurement, was RMB98,874 million (US$15,597 million), a decrease of 43% year-over-year from RMB172,662 million in fiscal year 2021, mainly due to a decrease in profit and the full payment in the amount of RMB18,228 million of the Anti-monopoly Fine.
Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.
BUSINESS AND STRATEGIC UPDATES
For the twelve months ended March 31, 2022, our global consumer-facing businesses served approximately 1.31 billion annual active consumers and generated RMB8,317 billion (US$1,312 billion) in GMV. Our China consumer-facing businesses, including those in China commerce, Local consumer services and Digital media and entertainment segments, generated GMV of approximately RMB7,976 billion (US$1,258 billion). The combined annual active consumers, after de-duplication, of our consumer-facing businesses in China reached a historic milestone of over 1 billion, up approximately 113 million year-over-year and slightly exceeded our target for fiscal year 2022. Our International commerce retail business, which mainly include Lazada, AliExpress, Trendyol and Daraz, generated GMV of approximately US$54 billion (RMB341 billion) and served 305 million annual active consumers in the twelve months ended March 31, 2022.
Our digital infrastructure, such as smart logistics and cloud computing, which enables and underpins our major commerce, local services and entertainment businesses, equips us with unique technology-driven capabilities to meet changing consumer demand and help our enterprise customers and partners achieve digital transformation in China and internationally. We are committed to investing and developing these digital infrastructure businesses, which we believe will support sustainable growth and yield attractive returns on investment over the long term.
For the twelve months ended March 31, 2022, our China commerce segment had a combined 903 million annual active consumers, representing annual and quarterly net increases of 89 million and 21 million, respectively. The solid consumer growth for the segment reflected the successful execution of our multi-app strategy to create personalized, immersive and engaging experiences for different consumption scenarios and formats, which help attract and retain users of different demographics and shopping behaviors to our commerce ecosystem. The percentage of new annual active consumers from less developed areas continued to be over 70% in fiscal year 2022 and was higher compared to fiscal year 2021.
Taobao and Tmall are an important part of Chinese consumers’ everyday lives and continue to achieve high consumer retention. In fiscal year 2022, more than 124 million annual active consumers each spent over RMB10,000 on Taobao and Tmall. Approximately 98% of annual active consumers who spent over RMB10,000 on Taobao and Tmall in fiscal year 2021 continued to be active in fiscal year 2022. During the year ended March 31, 2022, online physical goods GMV of Taobao and Tmall, excluding unpaid orders, recorded year-over-year low single-digit growth. In the March quarter, the combined GMV growth of January and February was flat, and the overall GMV of the quarter had a low single-digit decline, mainly due to disruptions in supply chain and logistics, as well as demand softening, as a result of the impact of COVID-19 in March.
Taobao Deals (淘特), our value-for-money platform, helped us drive more first-time shoppers into our e-commerce ecosystem. For the twelve months ended March 31, 2022, annual active consumers on Taobao Deals reached a milestone of over 300 million, a quarterly net increase of over 20 million. More than 20% of these annual active consumers using Taobao Deals had not shopped on Taobao or Tmall in fiscal year 2022. Importantly, Taobao Deals has successfully launched and executed several initiatives to optimize logistics costs and improve delivery experience for consumers. During the fiscal year and quarter ended March 31, 2022, the number of paid orders on Taobao Deals grew rapidly at over 100% and 35% year-over-year, respectively. The meaningful slowdown in order growth in the March 2022 quarter was due to the impact of COVID-19.
In March 2021, we launched Taocaicai offering consumers next day pick-up service for grocery and daily necessity products at neighborhood pick-up points. In fiscal year 2022, we successfully completed the development of our core regional distribution centers and warehouse network for the Taocaicai business in targeted regions and cities throughout China. For the twelve months ended March 31, 2022, Taocaicai had over 90 million annual active consumers, of which more than 50% were first-time fresh produce buyers on our various platforms. At the same time, Taocaicai’s unit economics continued to improve quarter-over-quarter during the fiscal year, benefitting from higher order density and improving gross margin from enhanced supply chain capabilities. In the March quarter, Taocaicai GMV continued to grow quarter-over-quarter, primarily driven by improving average order value.
In fiscal year 2022, our direct sales and others revenue grew 43% year-over-year to RMB260,955 million (US$41,165 million), primarily driven by Sun Art and robust growth of our Tmall Supermarket and Freshippo businesses. Excluding the consolidation of Sun Art, direct sales and others revenue would have grown 28% year-over-year in fiscal year 2022. These direct sales businesses enhance our product supply and improve our service capabilities in various verticals, including fast-moving consumer goods (FMCG), fresh produce and electronics and home appliances.
By leveraging our multiple direct sales businesses, we have developed diversified fulfillment networks and are able to offer time-guaranteed delivery, same-day delivery, and next-day delivery in China. We have significantly invested in same-city logistics and developed on-demand instant delivery capabilities for food, grocery and other general merchandise. In fiscal year 2022, we added a next-day pick-up option for customers who purchase grocery and FMCG products through our Taocaicai business. These logistics and fulfilment models meeting various consumer needs form a comprehensive network that serves our self-operated businesses and external merchants in multiple verticals. By leveraging our on-demand instant delivery capability, the online portion of Sun Art’s revenue increased by five percentage points to 29%, while Freshippo’s online GMV contribution remained at over 60% in fiscal year 2022. We believe that continued investment in these fulfillment and logistics capabilities will better serve our e-commerce platforms and our customers.
For the twelve months ended March 31, 2022, our International commerce segment had a combined 305 million annual active consumers, representing annual net increases of 64 million and quarterly net increase of 4 million, respectively.
Our International commerce retail businesses, mainly including the Lazada, AliExpress, Trendyol and Daraz platforms, empower brands and merchants with localized market insights and serve local consumers through wide product selection and improving delivery experience. In fiscal year 2022, the combined order growth of these businesses was around 34% year-over-year. This reflected robust order growth of Lazada of 60% and Trendyol of 68%, which was partially offset by flat order growth of AliExpress due to the European Union’s removal of the value-added tax (“VAT”) exemption for cross-border parcels below €22, which took effect in July 2021, as well as supply chain and logistics disruptions due to the Russia-Ukraine conflict. Lazada continues to execute its localization strategy by increasing the assortment of local and global product supply as well as offering value-added services, such as free shipping, which has resulted in strong order growth as well as improved consumer mindshare.
During the March quarter, the combined order growth of these businesses was around 7% year-over-year, driven by solid growth in Lazada of 32% and Trendyol of 48%, which was partially offset by order decline of AliExpress due to the ongoing impact from the change in the European Union’s VAT rules as well as supply chain and logistics disruptions due to the Russia-Ukraine conflict.
In fiscal year 2022, our International commerce wholesale business exhibited robust growth of 46% year-over-year in value of transactions completed on Alibaba.com, driven by solid export growth of goods from China as well as increasing adoption of value-added services, such as global logistics and trade assurance, by global buyers and sellers. The robust transaction value growth resulted in strong revenue growth of 28% year-over-year, with value-added service revenue growing even faster at 38% year-over-year. During the March quarter, transaction value growth on Alibaba.com slowed to 22% year-over-year primarily due to slowing export growth in China as well as supply chain disruptions as a result of the impact of COVID-19.
Local Consumer Services
For the twelve months ended March 31, 2022, Local consumer services segment had approximately 376 million annual active consumers, representing a yearly net increase of 64 million and a quarterly net increase of 4 million. For the fiscal year and quarter ended March 31, 2022, Local consumer services segment generated year-over-year order volume growth of over 25% and approximately 9%, respectively. The slower order volume growth for the March quarter was due to the impact of COVID-19 that started in March 2022.
In the first half of fiscal year 2022, Ele.me continued its investments in growing paying members and enhancing consumer experience, which resulted in strong growth in annual active consumers and orders. Building on this progress, starting from December quarter 2021, Ele.me has focused on improving user retention and operating efficiency in strategic cities, which resulted in improving average order value during the second half of fiscal year 2022. As part of our strategic initiative to diversify the category mix, non-restaurant orders of Ele.me, such as grocery and pharmacy orders, grew strongly during fiscal year 2022 through situational marketing during various festivals and holidays. For the quarter ended March 31, 2022, Ele.me enjoyed resilient GMV growth driven by higher average order value, partially offset by declining orders in March due to the impact of COVID-19. During the quarter, Ele.me’s unit economics continued to improve year-over-year, driven by optimized user acquisition spending and reduction in delivery cost per order.
In fiscal year 2022, order volume of “To Destination” businesses, which include Amap and Fliggy, grew rapidly, primarily driven by the increasing number of transacting Amap users and increased usage frequency. In fiscal year 2022, Amap continued to be successful in developing content and services that resulted in higher user engagement and loyalty from consumers that sought to discover, connect with and visit local merchants using the Amap app. For the quarter ended March 31, 2022, year-over-year order growth decelerated for Amap and declined for Fliggy due to the impact of COVID-19.
In fiscal year 2022, revenue from Cainiao, before inter-segment elimination, grew 27% year-over-year to RMB66,808 million (US$10,539 million), primarily driven by the increase in revenue from third-party merchants of our cross-border e-commerce retail businesses as well as the growth of fulfillment solutions and value-added services provided to our China commerce retail businesses. During the fiscal year, 69% of Cainiao’s total revenue was generated from external customers. Revenue from Cainiao, after inter-segment elimination, grew 24% year-over-year to RMB46,107 million (US$7,273 million).
Cainiao continues to expand its international logistics network by strengthening its end-to-end logistics capabilities, including eHubs, line-haul, sorting centers and last-mile network. For the fiscal year ended March 31, 2022, Cainiao’s daily average cross-border and international package volume exceeded 4.5 million. During the quarter ended March 31, 2022, Cainiao commenced operation of two new international sorting centers, making a total of nine overseas sorting centers in operation. International eHubs in Kuala Lumpur and Liege, which function as the customs clearance, warehousing and fulfilment centers for their respective regions, officially commenced operation in November 2021 and were already running at near full capacity in March 2022.
In China, Cainiao continues to scale its consumer logistics business by expanding its Cainiao Post network to improve consumer experience and delivery efficiency, and penetrate into less developed areas, which complements our China commerce businesses. For example, during the fiscal year, in partnership with Taobao and Tmall businesses, Cainiao Post introduced additional value-added services (such as home delivery options for consumers) which have gained rapid adoption throughout China. Additionally, Cainiao continued to improve its end-to-end smart supply chain solutions for different industry verticals. For example, in March 2022 quarter, the adoption of Cainiao’s end-to-end smart supply chain solutions for the FMCG category in China continued to gain traction with revenue growth from external merchants accelerating to over 30% year-over-year.
Cainiao also collaborates with DAMO Academy to research and develop advanced technologies to be deployed in products and services to digitalize and enhance the efficiency of the logistics industry. For example, Cainiao has been driving the adoption of our proprietary L4 self-driving vehicle Xiaomanlv (小蛮驴) for unmanned delivery of parcels within gated communities and campuses. From inception through March 31, 2022, Xiaomanlv had delivered over 10 million parcels, leading the industry of unmanned neighborhood delivery.
Our Cloud segment is comprised of Alibaba Cloud and DingTalk. For the twelve months ended March 31, 2022, total revenue from our Cloud segment before inter-segment elimination, which includes revenue from services provided to other Alibaba businesses, was RMB100,180 million (US$15,803 million), an increase of 21% year-over-year. Revenue after inter-segment elimination was approximately RMB74,568 million (US$11,763 million) for fiscal year 2022, an increase of 23% year-over-year. Year-over-year revenue growth moderated in fiscal year 2022 primarily because a top customer in the Internet industry gradually phased out using our cloud services for its international business due to non-product related reasons as well as slowing demand from customers in China’s Internet industry. Excluding revenue generated from this top customer, our Cloud segment revenue after inter-segment elimination would have grown strongly at 29% year-over-year during the twelve months ended March 31, 2022.
In the quarter ended March 31, 2022, revenue from our Cloud segment, after inter-segment elimination, was RMB18,971 million (US$2,993 million), an increase of 12% year-over-year. Year-over-year revenue growth of our Cloud segment was slower in March quarter compared to prior quarters, reflecting slowing economic activities, softening demand from customers in China’s Internet industry and delays in delivery of hybrid cloud projects due to the impact of COVID-19.
Importantly, our Cloud segment revenue is becoming more diversified with revenue contribution from non-Internet industries steadily increasing. For fiscal year and quarter ended March 31, 2022, contribution of Cloud revenue after inter-segment elimination from non-Internet industries was 50% and 52% , respectively.
Alibaba Cloud offers a comprehensive suite of cloud services to customers worldwide, including proprietary servers, chips, elastic computing, storage, network, security, database and big data. We leverage these capabilities and technologies to support businesses within Alibaba Group and provide our customers across various verticals with industry-specific solutions, including those for financial services, telecommunications, retail, and industrial applications. Alibaba Cloud continues to expand internationally with strong customer growth. As of March 31, 2022, Alibaba Cloud offers computing services in 27 regions globally, adding new Internet data centers in Indonesia, Philippines, South Korea, Thailand and Germany in fiscal year 2022.
Alibaba Cloud’s advantages are its proprietary technology and Alibaba Group’s continued commitment to investing in research and development in new product offerings and industry-specific solutions for our customers and partners.
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