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Alibaba Group Announces December Quarter 2019 Results


Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988, "Alibaba" or "Alibaba Group") today announced its financial results for the quarter ended December 31, 2019.

"Alibaba Group experienced robust growth across our business this past quarter," said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. "Our digital economy reached new heights with another record 11.11 Global Shopping Festival for our merchants and partners. Continued investment in user engagement, especially through social commerce content, contributed to our strong gains in annual active consumers. As a result of its rapid growth, our cloud computing services for the first time generated revenue of over RMB10 billion in a single quarter. In response to the coronavirus, we mobilized Alibaba ecosystem's powerful forces of commerce and technology to fully support the fight against the outbreak, ensure supply of daily necessities for our communities and introduced practical relief measures for our merchants. No matter past, present or future, we remain true to our mission and we will support our merchants to overcome this challenging time together."

"We had a successful listing on the main board of the Hong Kong Stock Exchange in November and delivered strong results for the quarter, with top-line revenue growth of 38% year-over-year and adjusted EBITDA growth of 37% year-over-year," said Maggie Wu, Chief Financial Officer of Alibaba Group. "Looking forward, we will remain dedicated to investing in digital infrastructure and services, supporting our customers and partners across the Alibaba Digital Economy, especially during the challenging time."

BUSINESS HIGHLIGHTS

In the quarter ended December 31, 2019:

Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.

BUSINESS AND STRATEGIC UPDATES

Core Commerce

We achieved strong results reflecting our strategic focus on user acquisition and engagement as well as on enhancing product variety and increasing our offerings of price-competitive products. In December 2019, our China retail marketplaces had 824 million mobile MAUs, representing a net increase of 39 million from September 2019. Annual active consumers on our China retail marketplaces reached 711 million for the 12 months ended December 31, 2019, an increase of 18 million compared to 693 million for the 12 months ended September 30, 2019. Over 60% of new annual active consumers were from less developed areas.

Taobao ? fast growing and dynamic consumer community. Taobao continues to improve in content innovation and personalized recommendations to serve existing consumers and attract new ones. "Taobao Live," where merchants and key opinion leaders ("KOLs") use live-broadcast to market to their fans and customers, has become one of the fastest growing and an effective selling formats on our China retail marketplaces. In December 2019, GMV generated from Taobao Live and the number of monthly active users who watched Taobao Live both grew over 100% year-over-year.

Tmall ? 11.11 Global Shopping Festival adds to robust GMV growth on China's leading consumer and engagement platform. Tmall continues to expand its leadership position as the consumer engagement and distribution platform of choice for brands in China. Tmall online physical goods GMV, excluding unpaid orders, grew 24% year-over-year in the quarter ended December 31, 2019, with strong growth in fast-moving consumer goods ("FMCG") and consumer electronics. Our consumer segmentation initiatives have been well received by users as we continued to see strong order growth and higher purchase frequency.

Our annual 11.11 Global Shopping Festival in the quarter was another record-breaking event, generating RMB268.4 billion (US$38.4 billion) in GMV settled through Alipay on our retail marketplaces and consumer services platforms, up 26% year-over-year. During this year's festival, we continued to drive consumer value by offering savings and wider product assortment from high quality merchants. We also enabled more brands to generate greater GMV and increase their penetration into less developed areas. Over 200,000 brands, including 22,000 international brands, participated in this year's event, among which 15 brands each generated GMV of over RMB1 billion (US$143.0 million) and 299 brands each generated GMV of over RMB100 million (US$14.3 million). Consumer demand from less developed areas remained robust, accounting for 54% of the GMV during the festival.

New Retail ? developing new business models to enable the digital transformation of brick-and-mortar retailing.

Creating the New ? Our self-operated grocery retail chain Freshippo (known as "Hema" in Chinese) continues to achieve solid same-store sales growth. Freshippo has been implementing multi-format retail strategies and introducing new initiatives to improve user experience and customer loyalty. As of December 31, 2019, we had 197 self-operated Freshippo stores in China, primarily located in tier 1 and tier 2 cities. We will continue to invest in the growth of this business by, among other things, increasing Freshippo's store density in existing cities in order to improve consumer coverage and delivery efficiency.

Transforming the Old ? In September 2019, Tmall Supermarket launched a store-to-door business with Sun Art Retail Group to make half-day delivery of food and daily necessity products to consumers living beyond the catchment area of Sun Art's stores. The service marries Sun Art's store-based inventories with Alibaba's logistics infrastructure powered by Cainiao Network to better serve consumers that live within a 3-to-20 kilometer delivery radius of Sun Art's stores.

Local consumer services ? delivering strong growth in less developed areas by leveraging assets in the Alibaba Digital Economy. During the quarter, we continued to achieve strong growth in GMV driven by robust order growth. We continued to penetrate into less developed areas with strong growth potential and synergies with other businesses in the Alibaba Digital Economy. During the quarter, GMV from less developed areas grew about 40% year-over-year.

We are leveraging our relationship with Ant Financial and other assets in the Alibaba Digital Economy to further benefit our local consumer services business. In the quarter ended December 31, 2019, Ele.me acquired 48% of its new customers from the Alipay app.

Cainiao Network ? increasing merchant adoption of cross-border logistics and fulfillment solutions. Cainiao Network continues to focus on improving domestic and international one-stop-shop logistics services and supply chain management solutions to serve the Alibaba Digital Economy's consumers and merchants. During the quarter, Cainiao Network's revenue grew 67% year-over-year to RMB7,518 million (US$1,080 million). This revenue growth was primarily driven by increased merchant adoption of "Fulfilled by Cainiao" services from our fast growing cross-border businesses.

Cainiao Network and its logistics partners delivered a record 1.29 billion packages generated from this year's 11.11 Global Shopping Festival. During this year's festival, Cainiao Post enabled greater delivery efficiency with 362 million packages picked up at its stations around the country, up 88% year-over-year.

In November 2019, we made an additional investment of RMB23.3 billion (US$3.3 billion) to increase our equity stake in Cainiao Network from approximately 51% to approximately 63%, by subscribing for newly issued Cainiao Network ordinary shares in its latest financing round and purchasing ordinary shares from a third party. With more financial resources, Cainiao Network will be able to continue its investment in technologies and logistics infrastructure services to strengthen its smart logistics network.

International ? strong growth in our global markets.

Lazada ? Our Southeast Asian e-commerce platform Lazada saw robust growth momentum in its marketplace business, driven by strong order volume growth and the doubling of quarterly active merchants year-over-year. Lazada recorded 97% year-over-year quarterly order growth reflecting strong consumer demand in the apparel and accessories and general merchandise categories. Lazada's user engagement programs and promotional campaigns, including the 11.11 Global Shopping Festival, drove strong mobile DAU growth during the quarter.

AliExpress ? AliExpress continues to deliver robust user and GMV growth by leveraging our digital commerce technology and global logistics infrastructure. AliExpress continues to focus on increasing the number of high quality merchants that can offer price competitive products to meet the strong consumption demand of the marketplace's international consumers. During the quarter, AliExpress saw robust merchant and consumer participation in the 11.11 Global Shopping Festival, which generated strong GMV growth of 46% year-over-year.

In October 2019, we completed the contribution of our AliExpress Russia businesses to a joint venture with Mail.ru Group, MegaFon and Russian Direct Investment Fund ("RDIF"). We hold less than a majority of the voting rights to comply with local regulations, and as a result we deconsolidated the AliExpress Russia businesses upon the completion of this transaction in this quarter.

Cloud Computing

Alibaba Cloud maintains its leadership position in China's cloud computing market by developing technology and business solutions that enable the digital transformation of businesses across industries in the public and private sectors. During the quarter, Alibaba Cloud reached two important financial and technological milestones. First, our cloud computing business for the first time generated over RMB10 billion of revenue in a single quarter. Cloud computing revenue grew 62% year-over-year to RMB10,721 million (US$1,540 million), driven by increased revenue contributions from both our public cloud and hybrid cloud businesses.

Second, ahead of this year's 11.11 Global Shopping Festival, Alibaba Cloud enabled the migration of the core systems of our e-commerce businesses onto our public cloud. During the festival, Alibaba Cloud provided a highly scalable, reliable and secure public cloud infrastructure that handled a single day GMV of RMB268.4 billion (US$38.4 billion). Its public cloud infrastructure and technologies enabled Alibaba Group to process over 544,000 orders per second at peak and 970 petabytes of data without disruption for the full 24 hour period during the festival. This year's festival also showcased the strength of our leading cyber security technology in the public cloud environment, which is a key priority of many of our public sector and industry customers.

We believe the migration of the core systems of Alibaba's e-commerce businesses onto the public cloud is a major milestone that not only is generating greater operating efficiencies for Alibaba but also will encourage more customers to adopt our public cloud infrastructure.

Digital Media and Entertainment

For the quarter, Youku's average daily subscribers increased 59% year-over-year. The increase was primarily driven by Youku's more effective targeting of new subscribers during key promotional campaigns, an increase of auto-renewal subscribers and a greater contribution from the 88VIP membership program on our China retail marketplaces. We continue to invest in original content production capabilities while seeking cost efficiencies and return on investment, resulting in narrowing adjusted EBITA losses year-over-year during the quarter.

Initial Public Offering in Hong Kong

On November 26, 2019, we successfully listed our ordinary shares on the main board of The Stock Exchange of Hong Kong Limited ("Hong Kong Stock Exchange") with a global offering of 575,000,000 ordinary shares, comprised of an international offering and a Hong Kong public offering. The Hong Kong-listed shares are fully fungible with our American depositary shares ("ADSs") listed on the New York Stock Exchange ("NYSE") (one ADS representing eight ordinary shares). Our gross proceeds from the global offering, before deducting underwriting fees and the offering expenses, were approximately HK$101.2 billion (US$13.0 billion). We plan to use these proceeds for the further implementation of our strategies to drive user growth and engagement, empower businesses to facilitate digital transformation and improve operational efficiency, and continue to innovate.

Cash Flow from Operating Activities and Free Cash Flow

In the quarter ended December 31, 2019, net cash provided by operating activities was RMB96,505 million (US$13,862 million), an increase of 49% compared to RMB64,898 million in the same quarter of 2018. Free cash flow, a non-GAAP measurement of liquidity, in the quarter ended December 31, 2019 increased by 52% to RMB78,279 million (US$11,244 million), from RMB51,373 million in the same quarter of 2018, which was primarily due to our robust profitability growth as well as a decrease in capital expenditure spending and an increase in annual service fee deposits from merchants. A reconciliation of net cash provided by operating activities to free cash flow is included at the end of this results announcement.

KEY OPERATIONAL METRICS*

 

December
31, 2018

September
30, 2019

December 31,
2019

Net adds

 

YoY

QoQ

China Commerce Retail:

 

 

 

 

 

Annual active consumers(1) (in millions)

636

693

711

75

18

Mobile monthly active users (MAUs)(2) (in millions)

699

785

824

125

39

________________________

*

For definitions of terms used but not defined in this results announcement, please refer to our annual report on Form 20-F for the fiscal year ended March 31, 2019.

(1)

For the twelve months ended on the respective dates.

(2)

For the month ended on the respective dates.

DECEMBER QUARTER SUMMARY FINANCIAL RESULTS

 

Three months ended December 31,

 

 

 

2018

 

 

2019

 

 

 

 

RMB

 

RMB

 

US$(1)

 

YoY %
Change

 

(in millions, except percentages and per share amounts)

 

 

 

 

 

Revenue

117,278

 

161,456

 

23,192

38

%

 

 

 

 

 

Income from operations

26,798

 

39,560

 

5,682

48

%

Operating margin

23

%

25

%

 

 

Adjusted EBITDA(2)

40,708

 

55,880

 

8,027

37

%

Adjusted EBITDA margin(2)

35

%

35

%

 

 

Adjusted EBITA(2)

36,567

 

50,662

 

7,277

39

%

Adjusted EBITA margin(2)

31

%

31

%

 

 

 

 

 

 

 

Net income

30,964

 

50,132

 

7,201

62

%

Net income attributable to ordinary shareholders

33,052

 

52,309

 

7,514

58

%

Non-GAAP net income(2)

29,797

 

46,493

 

6,678

56

%

 

 

 

 

 

Diluted earnings per share(3)

1.58

 

2.44

 

0.35

54

%

Diluted earnings per ADS(3)

12.64

 

19.55

 

2.81

55

%

Non-GAAP diluted earnings per share(2)(3)

1.52

 

2.27

 

0.33

49

%

Non-GAAP diluted earnings per ADS(2)(3)

12.19

 

18.19

 

2.61

49

%

________________________

(1)

This results announcement contains translations of certain Renminbi ("RMB") amounts into U.S. dollars ("US$") for the convenience of the reader. Unless otherwise stated, all translations of RMB into US$ were made at RMB6.9618 to US$1.00, the exchange rate on December 31, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board. The translation of RMB into US$ for the GMV of 11.11 Global Shopping Festival was made at RMB6.9945 to US$1.00, the central parity rate announced by the People's Bank of China ("PBOC") on November 8, 2019. The percentages stated in this announcement are calculated based on the RMB amounts and there may be minor differences due to rounding.

(2)

See the sections entitled "Information about Segments," "Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" for more information about the non-GAAP measures referred to within this results announcement.

(3)

Each ADS represents eight ordinary shares. See the section entitled "Share Subdivision and ADS Ratio Change" for more information.

DECEMBER QUARTER INFORMATION BY SEGMENTS

The table below sets forth selected financial information of our operating segments for the periods indicated:

 

Three months ended December 31, 2019

 

 

Core
commerce

 

Cloud
computing

Digital media
and
entertainment

Innovation
initiatives
and others

 

 

Unallocated(1)

 

 

Consolidated

 

RMB

RMB

RMB

RMB

RMB

RMB

US$

 

(in millions, except percentages)

Revenue

141,475

 

10,721

 

7,396

 

1,864

 

?

 

161,456

 

23,192

 

 

 

 

 

 

 

 

 

Income (loss) from operations

51,347

 

(1,822

)

(3,960

)

(2,856

)

(3,149

)

39,560

 

5,682

 

Add: Share-based compensation expense

3,863

 

1,460

 

332

 

963

 

1,212

 

7,830

 

1,125

 

Add: Amortization of intangible assets

2,865

 

6

 

330

 

23

 

48

 

3,272

 

470

 

 

 

 

 

 

 

 

 

Adjusted EBITA

58,075

(2)

(356

)

(3,298)

(3)

(1,870

)

(1,889

)

50,662

 

7,277

 

Adjusted EBITA margin

41

%

(3

)%

(45

)%

(100

)%

 

 

31

%

 

 

 

Three months ended December 31, 2018

 

 

Core
commerce

 

 

Cloud
computing

 

Digital media
and

entertainment

 

Innovation
initiatives
and others

 

 

 

Unallocated(1)

 

 

 

Consolidated

 

RMB

RMB

RMB

RMB

RMB

RMB

 

(in millions, except percentages)

Revenue

102,843

 

6,611

 

6,491

 

1,333

 

?

 

117,278

 

 

 

 

 

 

 

 

 

Income (loss) from operations

40,368

 

(1,233

)

(7,097

)

(2,549

)

(2,691

)

26,798

 

 

Add: Share-based compensation expense

3,253

 

954

 

769

 

940

 

1,044

 

6,960

 

 

Add: Amortization of intangible assets

2,458

 

5

 

294

 

13

 

39

 

2,809

 

 

 

 

 

 

 

 

 

Adjusted EBITA

46,079

 

(274

)

(6,034)

(3)

(1,596

)

(1,608

)

36,567

 

 

Adjusted EBITA margin

45

%

(4

)%

(93

)%

(120

)%

 

31

 

%

________________________

(1)

Unallocated expenses are primarily related to corporate administrative costs and other miscellaneous items that are not allocated to individual segments.

(2)

Marketplace-based core commerce adjusted EBITA increased 22% year-over-year to RMB66,371 million (US$9,534 million). A reconciliation of adjusted EBITA for core commerce to marketplace-based core commerce adjusted EBITA is included at the end of this results announcement.

(3)

Adjusted EBITA loss in the quarter ended December 31, 2019 included impairment charges on licensed copyrights of RMB2.1 billion (US$302 million), compared to RMB2.8 billion in the same quarter of 2018.

DECEMBER QUARTER OPERATIONAL AND FINANCIAL RESULTS

Revenue

Revenue for the quarter ended December 31, 2019 was RMB161,456 million (US$23,192 million), an increase of 38% compared to RMB117,278 million in the same quarter of 2018. The increase was mainly driven by the robust revenue growth of our China commerce retail business and cloud computing.

The following table sets forth a breakdown of our revenue by segment for the periods indicated:

 

Three months ended December 31,

 

 

 

2018

 

2019

 

 

 

RMB

 

% of
Revenue

 

RMB

 

US$

 

% of
Revenue

 

YoY %
Change

 

(in millions, except percentages)

Core commerce:

 

 

 

 

 

 

China commerce retail

 

 

 

 

 

 

- Customer management

49,592

42

%

61,235

8,796

38

%

23

%

- Commission

20,165

17

%

23,409

3,362

14

%

16

%

- Others*

11,298

10

%

25,814

3,708

16

%

128

%

 

81,055

69

%

110,458

15,866

68

%

36

%

China commerce wholesale

2,694

2

%

3,365

483

2

%

25

%

International commerce retail

5,834

5

%

7,396

1,062

5

%

27

%

International commerce wholesale

2,175

2

%

2,457

353

1

%

13

%

Cainiao logistics services

4,491

4

%

7,518

1,080

5

%

67

%

Local consumer services

5,159

5

%

7,584

1,089

5

%

47

%

Others

1,435

1

%

2,697

389

2

%

88

%

Total core commerce

102,843

88

%

141,475

20,322

88

%

38

%

 

 

 

 

 

 

 

Cloud computing

6,611

6

%

10,721

1,540

7

%

62

%

Digital media and entertainment

6,491

5

%

7,396

1,062

5

%

14

%

Innovation initiatives and others

1,333

1

%

1,864

268

0

%

40

%

Total

117,278

100

%

161,456

23,192

100

%

38

%

________________________

*

"Others" revenue under China commerce retail is primarily generated by our New Retail and direct sales businesses, comprising mainly direct import, Tmall Supermarket, Freshippo and Intime.

Core commerce

Cloud computing

Revenue from our cloud computing business in the quarter ended December 31, 2019 was RMB10,721 million (US$1,540 million), an increase of 62% compared to RMB6,611 million in the same quarter of 2018, primarily driven by increased revenue contributions from both our public cloud and hybrid cloud businesses.

Digital media and entertainment

Revenue from our digital media and entertainment business in the quarter ended December 31, 2019 was RMB7,396 million (US$1,062 million), an increase of 14% compared to RMB6,491 million in the same quarter of 2018. The increase was mainly due to our consolidation of Alibaba Pictures starting in March 2019.

Innovation initiatives and others

Revenue from innovation initiatives and others in the quarter ended December 31, 2019 was RMB1,864 million (US$268 million), an increase of 40% compared to RMB1,333 million in the same quarter of 2018.

Costs and Expenses

The following tables set forth a breakdown of our costs and expenses, share-based compensation expense and costs and expenses excluding share-based compensation expense by function for the periods indicated.

 

Three months ended December 31,

 

% of
Revenue
YoY change

 

2018

 

2019

 

 

RMB

 

% of
Revenue

 

RMB

 

US$

 

% of
Revenue

 

 

(in millions, except percentages)

Costs and expenses:

 

 

 

 

 

 

Cost of revenue

60,813

52

%

84,332

12,114

52

%

0

%

Product development expenses

8,901

8

%

11,077

1,591

7

%

(1

)%

Sales and marketing expenses

12,104

10

%

15,800

2,270

9

%

(1

)%

General and administrative expenses

5,853

5

%

7,415

1,065

5

%

0

%

Amortization of intangible assets

2,809

2

%

3,272

470

2

%

0

%

Total costs and expenses

90,480

77

%

121,896

17,510

75

%

(2

)%

 

 

 

 

 

 

 

Share-based compensation expense:

 

 

 

 

 

 

Cost of revenue

1,582

2

%

1,685

243

1

%

(1

)%

Product development expenses

2,987

3

%

3,644

523

2

%

(1

)%

Sales and marketing expenses

838

0

%

961

138

0

%

0

%

General and administrative expenses

1,553

1

%

1,540

221

1

%

0

%

Total share-based compensation expense

6,960

6

%

7,830

1,125

4

%

(2

)%

 

 

 

 

 

 

 

Costs and expenses excluding share-based compensation expense:

 

 

 

 

 

 

Cost of revenue

59,231

50

%

82,647

11,871

51

%

1

%

Product development expenses

5,914

5

%

7,433

1,068

5

%

0

%

Sales and marketing expenses

11,266

10

%

14,839

2,132

9

%

(1

)%

General and administrative expenses

4,300

4

%

5,875

844

4

%

0

%

Amortization of intangible assets

2,809

2

%

3,272

470

2

%

0

%

Total costs and expenses excluding share-based compensation expense

83,520

71

%

114,066

16,385

71

%

0

%

Cost of revenue ? Cost of revenue in the quarter ended December 31, 2019 was RMB84,332 million (US$12,114 million), or 52% of revenue, compared to RMB60,813 million, or 52% of revenue, in the same quarter of 2018. Without the effect of share-based compensation expense, cost of revenue as a percentage of revenue would have increased from 50% in the quarter ended December 31, 2018 to 51% in the quarter ended December 31, 2019. The increase was primarily due to an increase in revenue mix shift towards direct sales businesses such as Tmall Supermarket and New Retail, which resulted in increased cost of inventory, as well as our consolidation of Kaola, partly offset by a decrease in content cost by Youku and efficiency gains from our technology and infrastructure.

Product development expenses ? Product development expenses in the quarter ended December 31, 2019 were RMB11,077 million (US$1,591 million), or 7% of revenue, compared to RMB8,901 million, or 8% of revenue, in the same quarter of 2018. Without the effect of share-based compensation expense, product development expenses as a percentage of revenue would have remained stable at 5% in the quarter ended December 31, 2019 compared to the same quarter of 2018.

Sales and marketing expenses ? Sales and marketing expenses in the quarter ended December 31, 2019 were RMB15,800 million (US$2,270 million), or 9% of revenue, compared to RMB12,104 million, or 10% of revenue, in the same quarter of 2018. Without the effect of share-based compensation expense, sales and marketing expenses as a percentage of revenue would have decreased from 10% in the quarter ended December 31, 2018 to 9% in the quarter ended December 31, 2019.

General and administrative expenses ? General and administrative expenses in the quarter ended December 31, 2019 were RMB7,415 million (US$1,065 million), or 5% of revenue, compared to RMB5,853 million, or 5% of revenue, in the same quarter of 2018. Without the effect of share-based compensation expense, general and administrative expenses as a percentage of revenue would also have remained stable at 4% in the quarter ended December 31, 2019 compared to the same quarter of 2018.

Share-based compensation expense ? Total share-based compensation expense included in the cost and expense items above in the quarter ended December 31, 2019 was RMB7,830 million (US$1,125 million), an increase of 13% compared to RMB6,960 million in the same quarter of 2018. Share-based compensation expense as a percentage of revenue decreased to 4% in the quarter ended December 31, 2019, as compared to 6% in the same quarter of 2018.

The following table sets forth our analysis of share-based compensation expense for the quarters indicated by type of share-based awards:

 

Three months ended

 

 

 

 

 

December 31,
2018

 

September 30,

2019

 

December 31,
2019

 

 

% Change

 

RMB

 

% of
Revenue

 

RMB

 

% of
Revenue

 

RMB

 

US$

 

% of
Revenue

 

YoY

 

QoQ

 

(in millions, except percentages)

By type of awards:

 

Alibaba Group share-based awards(1)

5,879

5

%

6,899

6

%

6,587

946

4

%

12

%

(5

)%

Ant Financial share-based awards granted to our employees(2)

505

0

%

303

0

%

347

50

0

%

(31

)%

15

%

Others(3)

576

1

%

943

1

%

896

129

0

%

56

%

(5

)%

Total share-based compensation expense

6,960

6

%

8,145

7

%

7,830

1,125

4

%

13

%

(4

)%

________________________

(1)

This includes awards granted to our employees, Ant Financial and other consultants. Awards granted to nonemployees were subject to mark-to-market accounting treatment until March 31, 2019. Beginning on April 1, 2019, we adopted ASU 2018-07, "Compensation ? Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting" under US GAAP. As a result of adopting this new accounting update, these awards are no longer subject to mark-to-market accounting treatment. Commencing upon the receipt of the 33% equity interest in Ant Financial on September 23, 2019, the expense relating to Alibaba Group share-based awards granted to Ant Financial employees are recognized in share of results of equity investees.

(2)

Awards subject to mark-to-market accounting treatment.

(3)

Others primarily relate to share-based awards underlying the equity of our subsidiaries.

Share-based compensation expense related to Alibaba Group share-based awards granted to our employees remained stable in this quarter compared to the previous quarter. We expect that our share-based compensation expense will continue to be affected by changes in the fair value of our shares, our subsidiaries' share-based awards and the quantity of awards that we grant in the future. Furthermore, we expect that our share-based compensation expense will continue to be affected by future changes in the valuation of Ant Financial, although any such changes will be non-cash and will not result in any economic cost or equity dilution to our shareholders.

Amortization of intangible assets ? Amortization of intangible assets in the quarter ended December 31, 2019 was RMB3,272 million (US$470 million), an increase of 16% from RMB2,809 million in the same quarter of 2018.

Income from operations and operating margin

Income from operations in the quarter ended December 31, 2019 was RMB39,560 million (US$5,682 million), or 25% of revenue, an increase of 48% compared to RMB26,798 million, or 23% of revenue, in the same quarter of 2018.

Adjusted EBITDA and Adjusted EBITA

Adjusted EBITDA increased 37% year-over-year to RMB55,880 million (US$8,027 million) in the quarter ended December 31, 2019, compared to RMB40,708 million in the same quarter of 2018. Adjusted EBITA increased 39% year-over-year to RMB50,662 million (US$7,277 million) in the quarter ended December 31, 2019, compared to RMB36,567 million in the same quarter of 2018. A reconciliation of net income to adjusted EBITDA and adjusted EBITA is included at the end of this results announcement.

Adjusted EBITA and adjusted EBITA margin by segments

Adjusted EBITA and adjusted EBITA margin by segments are set forth in the table below. See the section entitled "Information about Segments" above for a reconciliation of income from operations to adjusted EBITA.

 

Three months ended December 31,

 

2018

 

2019

 

RMB

 

% of
Revenue

 

RMB

 

US$

 

% of
Revenue

 

(in millions, except percentages)

 

 

 

 

 

 

Core commerce

46,079

 

45

%

58,075

 

8,342

 

41

%

Cloud computing

(274

)

(4

)%

(356

)

(51

)

(3

)%

Digital media and entertainment

(6,034

)

(93

)%

(3,298

)

(474

)

(45

)%

Innovation initiatives and others

(1,596

)

(120

)%

(1,870

)

(269

)

(100

)%

Core commerce segment ? Adjusted EBITA increased by 26% to RMB58,075 million (US$8,342 million) in the quarter ended December 31, 2019, compared to RMB46,079 million in the same quarter of 2018, primarily due to an increase in marketplace-based core commerce adjusted EBITA to RMB66,371 million (US$9,534 million), as well as our reduced loss in strategic businesses, partly offset by the effects of our consolidation of Kaola, which was also one of the factors that led to adjusted EBITA margin decreasing from 45% in the quarter ended December 31, 2018 to 41% in the quarter ended December 31, 2019. The continuing revenue mix shift towards self-operated New Retail and direct sales businesses, where revenue is recorded on a gross basis, including the cost of inventory, also contributed to the decrease in adjusted EBITA margin.

A reconciliation of adjusted EBITA for core commerce to marketplace-based core commerce adjusted EBITA is included at the end of this results announcement.

We expect that our core commerce adjusted EBITA margin will continue to be affected by the pace of our investment in new businesses and by a continuing revenue mix shift to self-operated New Retail and direct sales businesses.

Cloud computing segment ? Adjusted EBITA in the quarter ended December 31, 2019 was a loss of RMB356 million (US$51 million), compared to a loss of RMB274 million in the same quarter of 2018. Adjusted EBITA margin improved to negative 3% in the quarter ended December 31, 2019 from negative 4% in the quarter ended December 31, 2018.

Digital media and entertainment segment ? Adjusted EBITA in the quarter ended December 31, 2019 was a loss of RMB3,298 million (US$474 million), compared to a loss of RMB6,034 million in the same quarter of 2018. Adjusted EBITA margin improved to negative 45% in the quarter ended December 31, 2019 from negative 93% in the quarter ended December 31, 2018, primarily due to reduced content cost by Youku as a result of our more disciplined content spending policy.

Innovation initiatives and others segment ? Adjusted EBITA in the quarter ended December 31, 2019 was a loss of RMB1,870 million (US$269 million), compared to a loss of RMB1,596 million in the same quarter of 2018.

Interest and investment income, net

Interest and investment income, net in the quarter ended December 31, 2019 was RMB17,136 million (US$2,462 million), compared to RMB11,560 million in the same quarter of 2018. The increase was primarily due to net gains arising from changes in the fair value of our equity investments in the quarter ended December 31, 2019 compared to net losses recorded in the same quarter of 2018, a one-time gain of RMB10.3 billion (US$1.5 billion) in relation to our contribution of the AliExpress Russia businesses into a joint venture we set up with Russian partners, which resulted in our deconsolidation of these businesses in this quarter, and a one-time non-cash gain in the same quarter of 2018 arising from the revaluation of our previously held equity interest in Koubei when we obtained control in December 2018.

In relation to the 33% equity interest in Ant Financial that we received in September 2019, we recognized in this quarter an upward adjustment of RMB2.3 billion (US$330 million) to the amount of the one-time gain we recognized in the previous quarter. This amount primarily represents adjustment of the fair value of our share of Ant Financial's net assets as of the completion date of the transaction.

The above-mentioned gains and losses are excluded from our non-GAAP net income.

Other income, net

Other income, net in the quarter ended December 31, 2019 was RMB987 million (US$142 million), compared to RMB387 million in the same quarter of 2018.

Income tax expenses

Income tax expenses in the quarter ended December 31, 2019 were RMB8,407 million (US$1,208 million), compared to RMB5,586 million in the same quarter of 2018.

Our effective tax rate remained stable at 15% in the quarter ended December 31, 2019 compared to the same quarter of 2018. Excluding share-based compensation expense, revaluation and disposal gains/losses of investments and impairment of investments, our effective tax rate would have been 19% in the quarter ended December 31, 2019.

Share of results of equity investees

Share of results of equity investees in the quarter ended December 31, 2019 was a profit of RMB2,165 million (US$311 million), compared to a loss of RMB861 million in the same quarter of 2018. We record our share of results of equity investees one quarter in arrears. Share of results of equity investees in the quarter ended December 31, 2019 and the comparative periods consisted of the following:

 

Three months ended

 

December 31, 2018

 

September 30, 2019

 

December 31, 2019

 

RMB

 

RMB

 

RMB

 

US$

 

(in millions)

Share of profit (loss) of equity investees

 

 

 

- Ant Financial(1)

?

 

?

 

215

 

31

 

- Others

22

 

(2

)

2,229

 

320

 

Impairment loss

(493

)

(11,590

)

?

?

Dilution gain (loss)

26

 

(20

)

166

 

24

 

Others(2)

(416

)

(348

)

(445

)

(64

)

Total

(861

)

(11,960

)

2,165

 

311

 

________________________

(1)

We received the 33% equity interest in Ant Financial on September 23, 2019. Similar to other equity method investees, we record our share of results of Ant Financial one quarter in arrears. As such, the share of profit of Ant Financial in the quarter ended December 31, 2019 reflects our share of profit of Ant Financial for the period from the day following receipt of the equity interest to the end of the quarter on September 30, 2019.

(2)

Others mainly include amortization of intangible assets of equity investees and share-based compensation expense.

The share of profit of other equity investees in the quarter ended December 31, 2019 mainly include our share of profit in Suning, which primarily reflected a significant gain arising from Suning's deconsolidation of one of its subsidiaries.

Net income and Non-GAAP net income

Our net income in the quarter ended December 31, 2019 was RMB50,132 million (US$7,201 million), an increase of 62% compared to RMB30,964 million in the same quarter of 2018.

Excluding share-based compensation expense, revaluation and disposal gains/losses of investments, impairment of investments and certain other items, non-GAAP net income in the quarter ended December 31, 2019 was RMB46,493 million (US$6,678 million), an increase of 56% compared to RMB29,797 million in the same quarter of 2018. A reconciliation of net income to non-GAAP net income is included at the end of this results announcement.

Net income attributable to ordinary shareholders

Net income attributable to ordinary shareholders in the quarter ended December 31, 2019 was RMB52,309 million (US$7,514 million), an increase of 58% compared to RMB33,052 million in the same quarter of 2018.

Diluted earnings per ADS/share and non-GAAP diluted earnings per ADS/share

Diluted earnings per ADS in the quarter ended December 31, 2019 was RMB19.55 (US$2.81) on a weighted average of 21,393 million diluted shares outstanding during the quarter, an increase of 55% compared to RMB12.64 on a weighted average of 20,913 million diluted shares outstanding during the same quarter in 2018 (giving effect, in each case, to our share split in July 2019). Excluding share-based compensation expense, revaluation and disposal gains/losses of investments, impairment of investments and certain other items, non-GAAP diluted earnings per ADS in the quarter ended December 31, 2019 was RMB18.19 (US$2.61), an increase of 49% compared to RMB12.19 in the same quarter of 2018.

Diluted earnings per share in the quarter ended December 31, 2019 was RMB2.44 (US$0.35), an increase of 54% compared to RMB1.58 in the same quarter of 2018. Excluding share-based compensation expense, revaluation and disposal gains/losses of investments, impairment of investments and certain other items, non-GAAP diluted earnings per share in the quarter ended December 31, 2019 was RMB2.27 (US$0.33), an increase of 49%, compared to RMB1.52 in the same quarter of 2018.

A reconciliation of diluted earnings per ADS/share to non-GAAP diluted earnings per ADS/share is included at the end of this results announcement. Each ADS represents eight ordinary shares. See the section entitled "Share Subdivision and ADS Ratio Change" for more information.

Cash, cash equivalents and short-term investments

As of December 31, 2019, cash, cash equivalents and short-term investments were RMB351,946 million (US$50,554 million), compared to RMB235,251 million as of September 30, 2019. The increase in cash, cash equivalents and short-term investments during the quarter ended December 31, 2019 was primarily due to net proceeds of RMB90,610 million (US$13,015 million) from the issuance of shares in connection with our global offering and free cash flow generated from operations of RMB78,279 million (US$11,244 million), partly offset by net cash used in investment and acquisition activities of RMB20,590 million (US$2,957 million), repayment of unsecured senior notes of US$2,250 million and cash used to acquire additional shares of Cainiao Network from a third party.

Cash flow from operating activities and free cash flow

Net cash provided by operating activities in the quarter ended December 31, 2019 was RMB96,505 million (US$13,862 million), an increase of 49% compared to RMB64,898 million in the same quarter of 2018. Free cash flow, a non-GAAP measurement of liquidity, in the quarter ended December 31, 2019 increased by 52% to RMB78,279 million (US$11,244 million), from RMB51,373 million in the same quarter of 2018, which was primarily due to our robust profitability growth as well as a decrease in capital expenditure spending and an increase in annual service fee deposits from merchants. A reconciliation of net cash provided by operating activities to free cash flow is included at the end of this results announcement.

Net cash used in investing activities

During the quarter ended December 31, 2019, net cash used in investing activities of RMB32,588 million (US$4,681 million) primarily reflected (i) cash outflow of RMB22,482 million (US$3,229 million) for investment and acquisition activities, including the acquisition of Kaola and investment in Meinian Onehealth Healthcare, (ii) capital expenditures of RMB6,659 million (US$956 million), which included cash outflow for the acquisition of land use rights and construction in progress relating to office campuses of RMB910 million (US$131 million), as well as (iii) the acquisition of licensed copyrights and other intangible assets of RMB5,274 million (US$758 million). These cash outflows were partly offset by cash inflow of RMB1,892 million (US$272 million) from the disposal of various investments.

Employees

As of December 31, 2019, we had a total of 116,519 employees, compared to 111,524 as of September 30, 2019.

Share Subdivision and ADS Ratio Change

On July 30, 2019, we effected a 1-to-8 share subdivision, as a result of which each ordinary share was subdivided into eight ordinary shares (the "Share Subdivision"). At the same time, we changed our ordinary share-to-ADS ratio. Following the ADS ratio change, each ADS now represents eight ordinary shares. Because the ADS ratio change was exactly proportionate to the Share Subdivision, no new ADSs were issued to any ADS holder and the total number of our outstanding ADSs remains unchanged.

The tables below set forth the pre- and post-share subdivision earnings per share/ADS attributable to ordinary shareholders and weighted average number of shares used in calculating earnings per ordinary share for the periods indicated.

 

Three months ended December 31,

 

2018

 

2019

 

Pre-Share
Subdivision

 

Post-Share
Subdivision

 

Pre-Share
Subdivision

 

Post-Share
Subdivision

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

US$

 

(except share data)

Earnings per share attributable to ordinary shareholders

 

 

 

 

 

 

Basic

12.83

1.60

19.87

2.85

2.48

0.36

Diluted

12.64

1.58

19.55

2.81

2.44

0.35

Non-GAAP diluted

12.19

1.52

18.19

2.61

2.27

0.33

 

 

 

 

 

 

 

Earnings per ADS attributable to ordinary shareholders

 

 

 

 

 

 

Basic

12.83

12.83

19.87

2.85

19.87

2.85

Diluted

12.64

12.64

19.55

2.81

19.55

2.81

Non-GAAP diluted

12.19

12.19

18.19

2.61

18.19

2.61

 

 

 

 

 

 

 

Weighted average number of shares used in calculating earnings per ordinary share (million shares)

 

 

 

 

 

 

Basic

2,576

20,608

2,632

 

21,058

 

Diluted

2,614

20,913

2,674

 

21,393

 

 

Nine months ended December 31,

 

2018

 

2019

 

Pre-Share
Subdivision

 

Post-Share
Subdivision

 

Pre-Share
Subdivision

 

Post-Share
Subdivision

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

US$

 

(except share data)

Earnings per share attributable to ordinary shareholders

 

 

 

 

 

 

Basic

23.94

2.99

55.98

8.04

7.00

1.01

Diluted

23.54

2.94

55.14

7.92

6.89

0.99

Non-GAAP diluted

29.83

3.73

43.88

6.30

5.49

0.79

 

 

 

 

 

 

 

Earnings per ADS attributable to ordinary shareholders

 

 

 

 

 

 

Basic

23.94

23.94

55.98

8.04

55.98

8.04

Diluted

23.54

23.54

55.14

7.92

55.14

7.92

Non-GAAP diluted

29.83

29.83

43.88

6.30

43.88

6.30

 

 

 

 

 

 

 

Weighted average number of shares used in calculating earnings per ordinary share (million shares)

 

 

 

 

 

 

Basic

2,580

20,642

2,610

 

20,878

 

Diluted

2,623

20,984

2,649

 

21,187

 

WEBCAST AND CONFERENCE CALL INFORMATION

Alibaba Group's management will hold a conference call to discuss the financial results at 7:30 a.m. U.S. Eastern Time (8:30 p.m. Hong Kong Time) on February 13, 2020.

Details of the conference call are as follows:
International: +65 6713 5090
U.S.: +1 845 675 0437
U.K.: +44 203 621 4779
Hong Kong: +852 3018 6771
Conference ID: 9549246

A live webcast of the earnings conference call can be accessed at http://www.alibabagroup.com/en/ir/earnings. An archived webcast will be available through the same link following the call. A replay of the conference call will be available for one week (dial-in number: +61 2 8199 0299; conference ID: 9549246).

Our results announcement and accompanying slides are available at Alibaba Group's Investor Relations website at http://www.alibabagroup.com/en/ir/home on February 13, 2020.

ABOUT ALIBABA GROUP

Alibaba Group's mission is to make it easy to do business anywhere. The company aims to build the future infrastructure of commerce. It envisions that its customers will meet, work and live at Alibaba, and that it will be a company that lasts for 102 years.

SAFE HARBOR STATEMENTS

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "potential," "continue," "ongoing," "targets," "guidance" and similar statements. In addition, statements that are not historical facts, including statements about Alibaba's strategies and business plans, Alibaba's beliefs, expectations and guidance regarding the growth of its business and its revenue, the business outlook and quotations from management in this announcement, as well as Alibaba's strategic and operational plans, are or contain forward-looking statements. Alibaba may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Alibaba's expected revenue growth; Alibaba's goals and strategies; Alibaba's future business development; Alibaba's ability to maintain the trusted status of its ecosystem, reputation and brand; risks associated with increased investments in Alibaba's business and new business initiatives; risks associated with strategic acquisitions and investments; Alibaba's ability to retain or increase engagement of consumers, merchants and other participants in its ecosystem and enable new offerings; Alibaba's ability to maintain or grow its revenue or business; risks associated with limitation or restriction of services provided by Alipay; changes in laws, regulations and regulatory environment that affect Alibaba's business operations; privacy and regulatory concerns; competition; security breaches; the continued growth of the e-commerce market in China and globally; risks associated with the performance of our business partners, including but not limited to Ant Financial; and fluctuations in general economic and business conditions in China and globally and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Alibaba's filings with the SEC and announcements on the website of The Hong Kong Stock Exchange. All information provided in this results announcement is as of the date of this results announcement and are based on assumptions that we believe to be reasonable as of this date, and Alibaba does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

NON-GAAP FINANCIAL MEASURES

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: for our consolidated results, adjusted EBITDA (including adjusted EBITDA margin), adjusted EBITA (including adjusted EBITA margin), marketplace-based core commerce adjusted EBITA, non-GAAP net income, non-GAAP diluted earnings per share/ADS and free cash flow. For more information on these non-GAAP financial measures, please refer to the section entitled "Information about Segments" and the table captioned "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" in this results announcement.

We believe that adjusted EBITDA, adjusted EBITA, marketplace-based core commerce adjusted EBITA, non-GAAP net income and non-GAAP diluted earnings per share/ADS help identify underlying trends in our business that could otherwise be distorted by the effect of certain income or expenses that we include in income from operations, net income and diluted earnings per share/ADS. We believe that these non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. We present three different income measures, namely adjusted EBITDA, adjusted EBITA and non-GAAP net income, as well as one measure that provides supplemental information on our core commerce segment, namely marketplace-based core commerce adjusted EBITA, in order to provide more information and greater transparency to investors about our operating results.

We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by our business that can be used for strategic corporate transactions, including investing in our new business initiatives, making strategic investments and acquisitions and strengthening our balance sheet.

Adjusted EBITDA, adjusted EBITA, marketplace-based core commerce adjusted EBITA, non-GAAP net income, non-GAAP diluted earnings per share/ADS and free cash flow should not be considered in isolation or construed as an alternative to income from operations, adjusted EBITA for core commerce, net income, diluted earnings per share/ADS, cash flows or any other measure of performance or as an indicator of our operating performance. These non-GAAP financial measures presented here do not have standardized meanings prescribed by U.S. GAAP and may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data.

Adjusted EBITDA represents net income before (i) interest and investment income, net, interest expense, other income or loss, net, income tax expenses and share of results of equity investees, (ii) certain non-cash expenses, consisting of share-based compensation expense, amortization, depreciation, operating lease cost relating to land use rights and impairment of goodwill, which we do not believe are reflective of our core operating performance during the periods presented.

Adjusted EBITA represents net income before (i) interest and investment income, net, interest expense, other income or loss, net, income tax expenses and share of results of equity investees, (ii) certain non-cash expenses, consisting of share-based compensation expense, amortization and impairment of goodwill, which we do not believe are reflective of our core operating performance during the periods presented.

Marketplace-based core commerce adjusted EBITA represents adjusted EBITA for core commerce excluding the effects of (i) local consumer services, (ii) New Retail and direct import, (iii) Lazada and (iv) Cainiao Network. Marketplace-based core commerce adjusted EBITA reflects the performance of our most established businesses, namely, those of our China retail marketplaces and wholesale marketplaces which primarily adopt a marketplace-based approach. By excluding certain businesses that are in the earlier stages of their development and with business approaches that continue to evolve, marketplace-based core commerce adjusted EBITA enables investors to clearly evaluate the performance of our most established businesses on a like-for-like basis.

Non-GAAP net income represents net income before share-based compensation expense, amortization, impairment of investments and goodwill, gain or loss on deemed disposals/disposals/revaluation of investments, gain in relation to the receipt of the 33% equity interest in Ant Financial, amortization of excess value receivable arising from the restructuring of commercial arrangements with Ant Financial and others, as adjusted for the tax effects on non-GAAP adjustments.

Non-GAAP diluted earnings per share represents non-GAAP net income attributable to ordinary shareholders divided by the weighted average number of shares outstanding during the periods on a diluted basis. Non-GAAP diluted earnings per ADS represents non-GAAP diluted earnings per share after adjustment to the ordinary share-to-ADS ratio.

Free cash flow represents net cash provided by operating activities as presented in our consolidated cash flow statement less purchases of property and equipment (excluding acquisition of land use rights and construction in progress relating to office campuses), licensed copyrights and other intangible assets, as well as adjustments to exclude from net cash provided by operating activities the consumer protection fund deposits from merchants on our China retail marketplaces. We deduct certain items of cash flows from investing activities in order to provide greater transparency into cash flow from our revenue-generating business operations. We exclude "acquisition of land use rights and construction in progress relating to office campuses" because the office campuses are used by us for corporate and administrative purposes and are not directly related to our revenue-generating business operations. We also exclude consumer protection fund deposits from merchants on our China retail marketplaces because these deposits are restricted for the purpose of compensating consumers for claims against merchants.

The section entitled "Information about Segments" and the table captioned "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" in this results announcement have more details on the non-GAAP financial measures that are most directly comparable to GAAP financial measures and the related reconciliations between these financial measures.

ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONSOLIDATED INCOME STATEMENTS

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions, except per share data)

 

(in millions, except per share data)

Revenue

117,278

 

161,456

 

23,192

 

283,346

 

395,397

 

56,795

 

Cost of revenue

(60,813

)

(84,332

)

(12,114

)

(151,319

)

(209,865

)

(30,145

)

Product development expenses

(8,901

)

(11,077

)

(1,591

)

(28,776

)

(32,493

)

(4,667

)

Sales and marketing expenses

(12,104

)

(15,800

)

(2,270

)

(30,131

)

(38,494

)

(5,529

)

General and administrative expenses

(5,853

)

(7,415

)

(1,065

)

(17,277

)

(20,326

)

(2,920

)

Amortization of intangible assets

(2,809

)

(3,272

)

(470

)

(7,524

)

(9,344

)

(1,342

)

Impairment of goodwill

?

?

?

?

(576

)

(83

)

 

 

 

 

 

 

 

Income from operations

26,798

 

39,560

 

5,682

 

48,319

 

84,299

 

12,109

 

Interest and investment income, net

11,560

 

17,136

 

2,462

 

25,441

 

80,671

 

11,588

 

Interest expense

(1,334

)

(1,309

)

(188

)

(3,887

)

(4,015

)

(577

)

Other income (loss), net

387

 

987

 

142

 

(1,228

)

6,259

 

899

 

 

 

 

 

 

 

 

Income before income tax and share of results of equity investees

37,411

 

56,374

 

8,098

 

68,645

 

167,214

 

24,019

 

Income tax expenses

(5,586

)

(8,407

)

(1,208

)

(11,528

)

(17,934

)

(2,576

)

Share of results of equity investees

(861

)

2,165

 

311

 

(262

)

(9,278

)

(1,333

)

 

 

 

 

 

 

 

Net income

30,964

 

50,132

 

7,201

 

56,855

 

140,002

 

20,110

 

Net loss attributable to noncontrolling interests

2,156

 

2,042

 

293

 

5,118

 

6,211

 

892

 

 

 

 

 

 

 

 

Net income attributable to Alibaba Group Holding Limited

33,120

 

52,174

 

7,494

 

61,973

 

146,213

 

21,002

 

 

 

 

 

 

 

 

Accretion of mezzanine equity

(68

)

135

 

20

 

(203

)

(112

)

(16

)

Net income attributable to ordinary shareholders

33,052

 

52,309

 

7,514

 

61,770

 

146,101

 

20,986

 

 

 

 

 

 

 

 

Earnings per share attributable to ordinary shareholders(1)

 

 

 

 

 

 

Basic

1.60

 

2.48

 

0.36

 

2.99

 

7.00

 

1.01

 

Diluted

1.58

 

2.44

 

0.35

 

2.94

 

6.89

 

0.99

 

 

 

 

 

 

 

 

Earnings per ADS attributable to ordinary shareholders(1)

 

 

 

 

 

 

Basic

12.83

 

19.87

 

2.85

 

23.94

 

55.98

 

8.04

 

Diluted

12.64

 

19.55

 

2.81

 

23.54

 

55.14

 

7.92

 

 

 

 

 

 

 

 

Weighted average number of shares used in calculating earnings per ordinary share (million shares)(1)

 

 

 

 

 

 

Basic

20,608

 

21,058

 

 

20,642

 

20,878

 

 

Diluted

20,913

 

21,393

 

 

20,984

 

21,187

 

 

________________________

(1)

Each ADS represents eight ordinary shares. See the section entitled "Share Subdivision and ADS Ratio Change" for more information.

ALIBABA GROUP HOLDING LIMITED
REVENUE

The following table sets forth our revenue by segments for the periods indicated:

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions)

 

(in millions)

Core commerce(1)

102,843

141,475

20,322

244,506

342,239

49,160

Cloud computing(2)

6,611

10,721

1,540

16,976

27,799

3,993

Digital media and entertainment(3)

6,491

7,396

1,062

18,406

21,004

3,017

Innovation initiatives and others(4)

1,333

1,864

268

3,458

4,355

625

 

 

 

 

 

 

 

Total

117,278

161,456

23,192

283,346

395,397

56,795

________________________

(1)

Revenue from core commerce is primarily generated from our China retail marketplaces, Freshippo, 1688.com, Lazada.com, AliExpress, Alibaba.com, Cainiao logistics services and local consumer services.

(2)

Revenue from cloud computing is primarily generated from the provision of services, such as elastic computing, database, storage, network virtualization services, large scale computing, security, management and application services, big data analytics, a machine learning platform and IoT services.

(3)

Revenue from digital media and entertainment is primarily generated from Youku and UCWeb.

(4)

Revenue from innovation initiatives and others is primarily generated from businesses such as Amap, Tmall Genie and other innovation initiatives. Other revenue also includes SME annual fee received from Ant Financial and its affiliates.

ALIBABA GROUP HOLDING LIMITED
INFORMATION ABOUT SEGMENTS

The following table sets forth our income (loss) from operations by segments for the periods indicated:

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions)

 

(in millions)

Core commerce

40,368

 

51,347

 

7,375

 

87,680

 

118,465

 

17,016

 

Cloud computing

(1,233

)

(1,822

)

(262

)

(4,472

)

(5,259

)

(755

)

Digital media and entertainment

(7,097

)

(3,960

)

(569

)

(16,192

)

(10,446

)

(1,500

)

Innovation initiatives and others

(2,549

)

(2,856

)

(410

)

(8,525

)

(8,929

)

(1,283

)

Unallocated

(2,691

)

(3,149

)

(452

)

(10,172

)

(9,532

)

(1,369

)

 

 

 

 

 

 

 

Total

26,798

 

39,560

 

5,682

 

48,319

 

84,299

 

12,109

 

The following table sets forth our adjusted EBITA by segments for the periods indicated:

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions)

 

(in millions)

Core commerce

46,079

 

58,075

 

8,342

 

108,683

 

137,674

 

19,775

 

Cloud computing

(274

)

(356

)

(51

)

(994

)

(1,235

)

(177

)

Digital media and entertainment

(6,034

)

(3,298

)

(474

)

(12,968

)

(7,738

)

(1,111

)

Innovation initiatives and others

(1,596

)

(1,870

)

(269

)

(4,039

)

(5,752

)

(826

)

Unallocated

(1,608

)

(1,889

)

(271

)

(4,458

)

(5,640

)

(811

)

 

 

 

 

 

 

 

Total

36,567

 

50,662

 

7,277

 

86,224

 

117,309

 

16,850

 

ALIBABA GROUP HOLDING LIMITED
INFORMATION ABOUT SEGMENTS (CONTINUED)

The table below sets forth selected financial information of our operating segments for nine months ended December 31, 2019:

 

Nine months ended December 31, 2019

 

 

Core
commerce

 

 

Cloud
computing

 

Digital media
and
entertainment

 

Innovation
initiatives
and others

 

 

 

Unallocated(1)

 

 

 

Consolidated

 

RMB

 

RMB

 

RMB

 

RMB

 

RMB

 

RMB

 

US$

 

(in millions, except percentages)

Revenue

342,239

 

27,799

 

21,004

 

4,355

 

?

 

395,397

 

56,795

 

 

 

 

 

 

 

 

 

Income (loss) from operations

118,465

 

(5,259

)

(10,446

)

(8,929

)

(9,532

)

84,299

 

12,109

 

Add: Share-based compensation expense

11,074

 

4,007

 

1,718

 

3,114

 

3,177

 

23,090

 

3,316

 

Add: Amortization of intangible assets

8,135

 

17

 

990

 

63

 

139

 

9,344

 

1,342

 

Add: Impairment of goodwill

?

 

?

 

?

 

?

 

576

 

576

 

83

 

 

 

 

 

 

 

 

 

Adjusted EBITA

137,674

(2)

(1,235

)

(7,738

)

(5,752

)

(5,640

)

117,309

 

16,850

 

Adjusted EBITA margin

40

%

(4

)%

(37

)%

(132

)%

 

30

%

 

 

 

Nine months ended December 31, 2018

 

 

Core
commerce

 

Cloud
computing

Digital media
and
entertainment

Innovation
initiatives
and others

 

 

Unallocated(1)

 

 

Consolidated

 

RMB

RMB

RMB

RMB

RMB

RMB

 

(in millions, except percentages)

Revenue

244,506

 

16,976

 

18,406

 

3,458

 

?

 

283,346

 

 

 

 

 

 

 

 

 

Income (loss) from operations

87,680

 

(4,472

)

(16,192

)

(8,525

)

(10,172

)

48,319

 

 

Add: Share-based compensation expense

14,640

 

3,463

 

2,297

 

4,456

 

5,525

 

30,381

 

 

Add: Amortization of intangible assets

6,363

 

15

 

927

 

30

 

189

 

7,524

 

 

 

 

 

 

 

 

 

Adjusted EBITA

108,683

 

(994

)

(12,968

)

(4,039

)

(4,458

)

86,224

 

 

Adjusted EBITA margin

44

%

(6

)%

(70

)%

(117

)%

 

30

%

________________________

(1)

Unallocated expenses are primarily related to corporate administrative costs and other miscellaneous items that are not allocated to individual segments.

(2)

Marketplace-based core commerce adjusted EBITA increased 25% year-over-year to RMB158,781 million (US$22,807 million). A reconciliation of adjusted EBITA for core commerce to marketplace-based core commerce adjusted EBITA is included at the end of this results announcement.

ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS

 

As of March 31,

As of December 31,

 

2019

2019

 

RMB

RMB

US$

 

 

(in millions)

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

189,976

350,575

50,357

Short-term investments

3,262

1,371

197

Restricted cash and escrow receivables

8,518

20,949

3,009

Investment securities

9,927

5,264

756

Prepayments, receivables and other assets

58,590

81,287

11,676

Total current assets

270,273

459,446

65,995

 

Investment securities

157,090

178,155

25,590

Prepayments, receivables and other assets(1)

28,018

54,715

7,860

Investment in equity investees

84,454

183,882

26,413

Property and equipment, net

92,030

101,520

14,582

Intangible assets, net

68,276

64,748

9,301

Goodwill

264,935

277,029

39,793

Total assets

965,076

1,319,495

189,534

 

 

 

 

Liabilities, Mezzanine Equity and Shareholders' Equity

 

 

 

Current liabilities:

 

 

 

Current bank borrowings

7,356

4,215

605

Current unsecured senior notes

15,110

?

?

Income tax payable

17,685

21,883

3,143

Escrow money payable

8,250

9,205

1,322

Accrued expenses, accounts payable and other liabilities(1)

117,711

165,275

23,741

Merchant deposits

10,762

23,967

3,443

Deferred revenue and customer advances

30,795

37,913

5,446

Total current liabilities

207,669

262,458

37,700

ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS (CONTINUED)

 

 

As of March 31,

 

As of December 31,

 

 

2019

 

2019

 

 

RMB

 

RMB

 

US$

 

 

(in millions)

 

 

 

 

 

Deferred revenue

 

1,467

 

1,939

 

278

 

Deferred tax liabilities

 

22,517

 

43,879

 

6,303

 

Non-current bank borrowings

 

35,427

 

38,797

 

5,573

 

Non-current unsecured senior notes

 

76,407

 

79,375

 

11,401

 

Other liabilities(1)

 

6,187

 

25,937

 

3,726

 

Total liabilities

 

349,674

 

452,385

 

64,981

 

 

 

 

 

 

Commitments and contingencies

 

?

?

?

 

Mezzanine equity

 

6,819

 

7,795

 

1,120

 

 

Shareholders' equity:

 

 

 

 

Ordinary shares

 

1

 

1

 

?

Additional paid-in capital

 

231,783

 

337,046

 

48,414

 

Treasury shares at cost

 

?

?

?

 

Restructuring reserve

 

(97

)

?

 

?

 

Subscription receivables

 

(49

)

(50

)

(7

)

Statutory reserves

 

5,068

 

5,969

 

857

 

Accumulated other comprehensive loss

 

(2,335

)

(2,048

)

(294

)

Retained earnings

 

257,886

 

403,198

 

57,916

 

 

 

 

 

 

Total shareholders' equity

 

492,257

 

744,116

 

106,886

 

Noncontrolling interests

 

116,326

 

115,199

 

16,547

 

 

 

 

 

 

Total equity

 

608,583

 

859,315

 

123,433

 

 

 

 

 

Total liabilities, mezzanine equity and equity

 

965,076

 

1,319,495

 

189,534

 

________________________

(1)

We adopted ASU 2016-02, "Leases (Topic 842)" beginning in the first quarter of fiscal year 2020 using the modified retrospective method and no adjustments are made to the comparative periods. Adoption of the standard resulted in the recognition of operating lease right?of?use assets of approximately RMB24.9 billion and operating lease liabilities of approximately RMB19.4 billion on the consolidated balance sheet as of April 1, 2019.

 

Operating lease right-of-use assets are included in non-current prepayments, receivables and other assets, and operating lease liabilities are included in current accrued expenses, accounts payable and other liabilities and other non-current liabilities on the consolidated balance sheets.

ALIBABA GROUP HOLDING LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions)

 

(in millions)

 

 

 

 

 

 

 

Net cash provided by operating activities

64,898

 

96,505

 

13,862

 

132,422

 

178,443

 

25,632

 

Net cash used in investing activities

(31,055

)

(32,588

)

(4,681

)

(134,309

)

(75,077

)

(10,784

)

Net cash (used in) provided by financing activities

(8,915

)

61,287

 

8,803

 

(8,111

)

67,886

 

9,751

 

Effect of exchange rate changes on cash and cash equivalents, restricted cash and escrow receivables

(66

)

(1,952

)

(280

)

4,387

 

1,778

 

255

 

 

 

 

 

 

 

 

Increase (Decrease) in cash and cash equivalents, restricted cash and escrow receivables

24,862

 

123,252

 

17,704

 

(5,611

)

173,030

 

24,854

 

Cash and cash equivalents, restricted cash and escrow receivables at beginning of period

172,253

 

248,272

 

35,662

 

202,726

 

198,494

 

28,512

 

 

 

 

 

 

 

 

Cash and cash equivalents, restricted cash and escrow receivables at end of period

197,115

 

371,524

 

53,366

 

197,115

 

371,524

 

53,366

 

ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

The table below sets forth a reconciliation of our net income to adjusted EBITA and adjusted EBITDA for the periods indicated:

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions)

 

(in millions)

Net income

30,964

 

50,132

 

7,201

 

56,855

 

140,002

 

20,110

 

Less: Interest and investment income, net

(11,560

)

(17,136

)

(2,462

)

(25,441

)

(80,671

)

(11,588

)

Add: Interest expense

1,334

 

1,309

 

188

 

3,887

 

4,015

 

577

 

Less: Other income (loss), net

(387

)

(987

)

(142

)

1,228

 

(6,259

)

(899

)

Add: Income tax expenses

5,586

 

8,407

 

1,208

 

11,528

 

17,934

 

2,576

 

Add: Share of results of equity investees

861

 

(2,165

)

(311

)

262

 

9,278

 

1,333

 

Income from operations

26,798

 

39,560

 

5,682

 

48,319

 

84,299

 

12,109

 

Add: Share-based compensation expense

6,960

 

7,830

 

1,125

 

30,381

 

23,090

 

3,316

 

Add: Amortization of intangible assets

2,809

 

3,272

 

470

 

7,524

 

9,344

 

1,342

 

Add: Impairment of goodwill

?

?

?

?

 

576

 

83

 

Adjusted EBITA

36,567

 

50,662

 

7,277

 

86,224

 

117,309

 

16,850

 

Add: Depreciation and amortization of property and equipment, and operating lease cost relating to land use rights

4,141

 

5,218

 

750

 

10,553

 

14,910

 

2,142

 

Adjusted EBITDA

40,708

 

55,880

 

8,027

 

96,777

 

132,219

 

18,992

 

ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES (CONTINUED)

The table below sets forth a reconciliation of adjusted EBITA for core commerce to marketplace-based core commerce adjusted EBITA for the periods indicated:

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions)

 

(in millions)

Adjusted EBITA for core commerce

46,079

58,075

8,342

108,683

137,674

19,775

Less: Effects of local consumer services, New Retail and direct import, Lazada and Cainiao Network

8,224

8,296

1,192

18,218

21,107

3,032

Marketplace-based core commerce adjusted EBITA

54,303

66,371

9,534

126,901

158,781

22,807

ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES (CONTINUED)

The table below sets forth a reconciliation of our net income to non-GAAP net income for the periods indicated:

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions)

 

(in millions)

 

 

 

 

 

 

 

Net income

30,964

 

50,132

 

7,201

 

56,855

 

140,002

 

20,110

 

Add: Share-based compensation expense

6,960

 

7,830

 

1,125

 

30,381

 

23,090

 

3,316

 

Add: Amortization of intangible assets

2,809

 

3,272

 

470

 

7,524

 

9,344

 

1,342

 

Add: Impairment of investments and goodwill

7,552

 

4,842

 

695

 

7,910

 

24,947

 

3,583

 

Less: Gain on deemed disposals/disposals/ revaluation of investments and others

(16,859

)

(17,015

)

(2,444

)

(27,564

)

(15,098

)

(2,168

)

Less: Gain in relation to the receipt of the 33% equity interest in Ant Financial

?

 

(2,336

)

(336

)

?

 

(71,561

)

(10,279

)

Add: Amortization of excess value receivable arising from the restructuring of commercial arrangements with Ant Financial

66

 

?

 

?

 

198

 

97

 

14

 

Adjusted for tax effects on non-GAAP adjustments(1)

(1,695

)

(232

)

(33

)

(1,953

)

(629

)

(90

)

 

 

 

 

 

 

 

Non-GAAP net income

29,797

 

46,493

 

6,678

 

73,351

 

110,192

 

15,828

 

________________________

(1)

Tax effects on non-GAAP adjustments primarily comprised of tax effects relating to the share-based compensation expense, certain gains and losses from investments and amortization of intangible assets.

ALIBABA GROUP HOLDING LIMITED
RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES (CONTINUED)

The table below sets forth a reconciliation of our diluted earnings per share/ADS to non-GAAP diluted earnings per share/ADS for the periods indicated:

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions, except per share data)

 

(in millions, except per share data)

 

 

 

 

 

 

 

Net income attributable to ordinary shareholders ? basic

33,052

 

52,309

 

7,514

 

61,770

 

146,101

 

20,986

 

Dilution effect on earnings arising from option plans operated by equity investees and subsidiaries

(16

)

(32

)

(5

)

(31

)

(47

)

(7

)

Net income attributable to ordinary shareholders ? diluted

33,036

 

52,277

 

7,509

 

61,739

 

146,054

 

20,979

 

Add: Non-GAAP adjustments to net income(1)

(1,167

)

(3,639

)

(523

)

16,496

 

(29,810

)

(4,282

)

 

 

 

 

 

 

 

Non-GAAP net income attributable to ordinary shareholders for computing non-GAAP diluted earnings per share/ADS

31,869

 

48,638

 

6,986

 

78,235

 

116,244

 

16,697

 

 

 

 

 

 

 

 

Weighted average number of shares on a diluted basis (million shares)(5)

20,913

 

21,393

 

 

20,984

 

21,187

 

 

 

 

 

 

 

 

 

Diluted earnings per share(2)(5)

1.58

 

2.44

 

0.35

 

2.94

 

6.89

 

0.99

 

Add: Non-GAAP adjustments to net income per share(3)(5)

(0.06

)

(0.17

)

(0.02

)

0.79

 

(1.40

)

(0.20

)

 

 

 

 

 

 

 

Non-GAAP diluted earnings per share(4)(5)

1.52

 

2.27

 

0.33

 

3.73

 

5.49

 

0.79

 

 

 

 

 

 

 

 

Diluted earnings per ADS(2)(5)

12.64

 

19.55

 

2.81

 

23.54

 

55.14

 

7.92

 

Add: Non-GAAP adjustments to net income per ADS(3)(5)

(0.45

)

(1.36

)

(0.20

)

6.29

 

(11.26

)

(1.62

)

 

 

 

 

 

 

 

Non-GAAP diluted earnings per ADS(4)(5)

12.19

 

18.19

 

2.61

 

29.83

 

43.88

 

6.30

 

________________________

(1)

See the table above for the reconciliation of net income to non-GAAP net income for more information of these non-GAAP adjustments.

(2)

Diluted earnings per share is derived from net income attributable to ordinary shareholders for computing diluted earnings per share divided by weighted average number of shares on a diluted basis. Diluted earnings per ADS is derived from the diluted earnings per share after adjustment to the ordinary share-to-ADS ratio.

(3)

Non-GAAP adjustments to net income per share is derived from non-GAAP adjustments to net income divided by weighted average number of shares on a diluted basis. Non-GAAP adjustments to net income per ADS is derived from the non-GAAP adjustments to net income per share after adjustment to the ordinary share-to-ADS ratio.

(4)

Non-GAAP diluted earnings per share is derived from non-GAAP net income attributable to ordinary shareholders for computing non-GAAP diluted earnings per share divided by weighted average number of shares on a diluted basis. Non-GAAP diluted earnings per ADS is derived from the non-GAAP diluted earnings per share after adjustment to the ordinary share-to-ADS ratio.

(5)

Each ADS represents eight ordinary shares. See the section entitled "Share Subdivision and ADS Ratio Change" for more information.

ALIBABA GROUP HOLDING LIMITED RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES (CONTINUED)

The table below sets forth a reconciliation of net cash provided by operating activities to free cash flow for the periods indicated:

 

Three months ended December 31,

 

Nine months ended December 31,

 

2018

 

2019

 

2018

 

2019

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

(in millions)

 

(in millions)

Net cash provided by

operating activities

64,898

 

96,505

 

13,862

 

132,422

 

178,443

 

25,632

 

Less: Purchase of property and equipment (excluding land use rights and construction in progress relating to office campuses)

(10,011

)

(5,749

)

(825

)

(26,648

)

(20,781

)

(2,985

)

Less: Acquisition of licensed copyrights and other intangible assets

(3,514

)

(5,274

)

(758

)

(12,010

)

(10,120

)

(1,454

)

Less: Changes in the consumer protection fund deposits

?

 

(7,203

)

(1,035

)

?

 

(12,414

)

(1,783

)

 

 

 

 

 

 

 

Free cash flow

51,373

 

78,279

 

11,244

 

93,764

 

135,128

 

19,410

 

ALIBABA GROUP HOLDING LIMITED
SELECTED OPERATING DATA

Annual active consumers

The table below sets forth the number of annual active consumers on our China retail marketplaces for the periods indicated:

 

Twelve months ended

 

Mar 31,
2018

 

Jun 30,
2018

 

Sep 30,
2018

 

Dec 31,
2018

 

Mar 31,
2019

 

Jun 30,
2019

 

Sept 30,
2019

 

Dec 31,
2019

 

(in millions)

Annual active consumers

552

 

576

 

601

 

636

 

654

 

674

 

693

 

711

Mobile

The table below sets forth the number of mobile MAUs on our China retail marketplaces for the periods indicated:

 

The month ended

 

Mar 31,
2018

 

Jun 30,
2018

 

Sep 30,
2018

 

Dec 31,
2018

 

Mar 31,
2019

 

Jun 30,
2019

 

Sept 30,
2019

 

Dec 31,
2019

 

(in millions)

Mobile MAUs

617

 

634

 

666

 

699

 

721

 

755

 

785

 

824

 


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