Executive Summary

• Alibaba reported 1Q FY18 revenue of ¥50.2 billion, up 56% year over year, and beat the consensus estimate by 4.8%. The company attributed the strong results to a steady increase in revenues from its core commerce segment, as well as the strong growth in emerging businesses, including cloud computing, digital media and entertainment.
• Core commerce revenues reached ¥43.0 billion, up 58% year over year. China retail and wholesale together contributed 76% of total revenues. International retail revenues were up 136% year over year, primarily driven by increasing revenues from AliExpress and Lazada. Management emphasized that international expansion will be its long-term core strategy.
• Cloud computing sales reached ¥2.4 billion, up 96% year over year, driven by robust growth in paying customers, as well as an improving revenue mix of higher valued-added services. The number of paying customers of the cloud computing business reached the 1 million milestone, up 75% on a year-over-year basis.
• Alibaba reiterated its FY18 revenue growth guidance range of 45%–49%. The company remains optimistic about the growth prospects for fiscal year 2018, driven primarily by robust growth of the core business and cloud computing.