Alibaba Group (BABA) Q3 2026 earnings summary

Executive summary

• Revenue for the quarter ended December 31, 2025, rose 2% year-over-year to RMB 284.8 billion, with like-for-like growth excluding disposed businesses at 9%.

• Net income for the quarter dropped 66%–67% year-over-year to RMB 15.6–16.3 billion, and diluted EPS fell 71%.

• Adjusted EBITA decreased 57% year-over-year to RMB 23.4 billion, mainly due to investments in quick commerce, user experience, and technology.

• Focus remains on AI + Cloud and Consumption businesses, with strong momentum in technology, customer adoption, and market share.

• Cloud Intelligence Group revenue surged 35%–36% year-over-year, with AI-related product revenue achieving triple-digit growth for the tenth consecutive quarter.

Financial highlights

• Operating income for the quarter fell 74% year-over-year to RMB 10.6 billion.

• Adjusted EBITDA decreased by 45%–57% to RMB 23.4–34.1 billion.

• Non-GAAP net income was RMB 16.7 billion, down 67% year-over-year.

• Free cash flow was RMB 11.3 billion, down from RMB 39 billion a year ago.

• Cash and liquid investments as of December 31, 2025, were RMB 560.2 billion, with a net cash position of RMB 297.4 billion.

Outlook and guidance

• Management targets over $100 billion in combined cloud and AI external revenue within five years, driven by rapid AI adoption and market expansion.

• Quick Commerce GMV target set at over RMB 1 trillion by FY28, with profitability expected in FY29.

• Continued investment in AI, cloud, and quick commerce is expected to drive future growth.

• Cloud profitability expected to improve as scale and proprietary chip integration drive efficiency, though growth will not be linear.

• Management highlights ongoing momentum in technology adoption and market share gains.