By Senad Karaahmetovic
Shares of Alibaba (NYSE:BABA) are trading 7% up in premarket Thursday after the Chinese e-commerce titan reported better-than-expected FQ1 earnings.
Alibaba reported adjusted earnings per American depositary receipts (ADRs) of 11.73 yuan to beat the estimate of 10.33 yuan. Revenue came in at 205.56 billion yuan, slightly ahead of the 203.97 billion yuan consensus. The adjusted EBITDA margin was reported at 20%, much better than the analyst estimate of 17.4%.
Alibaba stock was also boosted by the $25 billion share buyback program, which will be effective through March 2024, in addition to the unutilized $12 billion under the previous buyback program.
"During the past quarter, we actively adapted to changes in the macro environment and remained focused on our long-term strategy by continuing to strengthen our capability for customer value creation," said Daniel Zhang, Chairman and CEO of Alibaba Group.
Zhang also commented on the business trends concerning the current quarter.
"Following a relatively slow April and May, we saw signs of recovery across our businesses in June. We are confident in our growth opportunities in the long term given our high-quality consumer base and the resilience of our diversified business model catering to different demands of our customers."
The company’s top executive also discussed the delisting risk and said BABA aims to become primary listed on both Hong Kong and NYSE with an “aim to further expand and diversify our investor base."
A Goldman Sachs analyst added that BABA delivered earnings beat “on cost controls across multiple business lines.”
A Benchmark analyst added that Alibaba delivered a strong beat on EBITA margins, which indicates a “substantial narrowing of investment loss.”