Alibaba misses on Q3 revenue, soars with mobile

Hangzhou, China – Although Alibaba Holding Group Inc. reported a healthy sales increase for the third quarter of fiscal 2015, it became a victim of its own expectations as it still missed on revenue projections and also reported declining profits. Net income totaled $964 million, a 28% drop from $1.36 billion in the same quarter a year earlier.



The drop in net income was primarily due to increases in share-based compensation expenses, as well as financing fees and income tax expenses. Revenue grew 40% to $4.22 billion from $3.04 billion, driven by driven by growth in commission revenue, online marketing services revenue and mobile revenue from China. However, Wall Street had expected even higher revenue growth.



Mobile revenue soared 448% to $1.03 billion from $189.94 million. Alibaba added 48 million active mobile users sequentially.



In addition, Alibaba’s China retail marketplaces had 334 million annual active buyers in the twelve months ended Dec. 31, 2014, a 45% increase from 231 million active China buyers in the twelve months ended Dec. 31, 2013. The growth in annual active buyers was driven by an increase in active buyers throughout China, with substantially faster growth from lower tier cities.



“Alibaba performed very well this quarter, with revenue growing 40% year on year,” said Maggie Wu, CFO of Alibaba Group. “We continue to execute our focused growth strategy, and the fundamental strength of our business gives us the confidence to invest in new initiatives to add new users, improve engagement and customer experience, expand our products and services and drive long-term shareholder value.”