Alibaba Reports $4.8B in Revenue Q2 2016 But Net Income Drops 76% YoY

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Alibaba saw record growth in Q2 2016 as the company’s Chinese retail marketplaces surged and revenue from its users on mobile overtook that of desktops for the first time.

The ecommerce giant reported revenue of $4.8 billion (RMB 32.2 billion), which is a 59% increase year-on-year — the highest growth since Alibaba went public in September 2014 in the largest US IPO in history.

While revenue growth was undoubtedly the highlight for Alibaba executives, the company’s net income dropped 76% year-on-year to $1.1 billion. Alibaba did note that non-GAAP net income increased 28% over the same period, while operating profit rose 71%.

Alibaba broke out increased financial data — including revenue and profit/loss — for business units like such as digital media, cloud computing, food delivery and more for the first time in response to recent FCC investigation of its accounting of affiliates like logistics firm Cainao, and Youku, Tudou.

Highlights of Alibaba Q2 results

The company’s China marketplaces pulled in total sales of $3.5 billion (RMB 23.4 billion), 49% higher than the same time last year.

75% of revenue came from mobile devices — $2.6 billion (RMB 17.5 billion) — up 119% year-over-year.

From the official press release,

China retail marketplaces had 434 million annual active buyers in the 12 months ended June 30, 2016, compared to 423 million in the 12 months ended March 31, 2016.

Alibaba’s affiliates are burning cash — per the chart below — but Alibaba is betting that they will supplement its core business in the future.

alibaba revenue q2 2016

“We’re starting to serve local consumers in Southeast Asia, a market with over 500 million potential consumers,”Alibaba Vice President Joe Tsai said. “That’s going to be a very important potential market for us.”

A version of this appeared in TechCrunch on Aug 11. Read the full article here or the full press release here.