Alibaba (BABA) 4Q FY17 Results: Earnings Beat, Highest Revenue Growth Since IPO; “Very Excited” about FY18 Prospects

Executive Summary

• Alibaba reported 4Q FY17 revenue of ¥38.6 billion, up 60% year over year, and beat consensus estimates by 7%. The company attributed the strong results to solid growth of its core commerce segment, as well as accelerating growth in emerging businesses, including cloud computing, digital media and entertainment.
• Core commerce revenue reached ¥31.6 billion, up 47% year over year. International retail revenue growth also accelerated to 312% year over year, driven by AliExpress and Lazada. Management emphasized that international expansion will be its core strategy for the next 5–10 years.
• Cloud computing sales reached ¥2.2 billion, up 103% year over year, driven by an increase in the number of paying customers as well as an increase in their usage of cloud computing. The number of paying customers of the cloud computing business grew to 874,000 from 513,000, as of March 31, 2017.
• Given its more diversified revenue base, management expects future revenue to be driven by multiple growth drivers including international business, cloud computing, digital media and entertainment. Alibaba will provide details at its Investor Day to be held on June 8–9.