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.

• Maintained strong investment in AI + Cloud and Consumption businesses, with accelerated growth in Cloud Intelligence and Quick Commerce.

• Set a five-year goal to surpass $100 billion in combined cloud and AI external revenue.

Financial highlights

• Total revenue for the quarter was RMB 284.8 billion.

• 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.

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

• Net cash position as of December 31, 2025, was $42.5 billion; cash and liquid investments stood at RMB 560.2 billion.

Outlook and guidance

• Targeting over RMB 1 trillion in Quick Commerce GMV by FY2028, with profitability expected in FY2029.

• Cloud and AI external revenue expected to exceed $100 billion within five years, driven by MaaS, enterprise AI, and traditional cloud expansion.

• Management remains confident in scaling AI and cloud investments, citing strong liquidity and cash generation.

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

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