Alibaba posts stronger revenue amid AI, quick delivery push
By Josh White
Date: Tuesday 25 Nov 2025
(Sharecast News) - Alibaba reported stronger-than-expected quarterly revenue on Tuesday, as rapid expansion in its instant retail operations and accelerating demand for artificial intelligence services lifted sales, even as profit fell sharply on heavy investment in cloud infrastructure, subsidies and marketing.
The Chinese ecommerce giant posted September-quarter revenue of CNY 247.8bn (£26.59bn), up 5% year-on-year and slightly above market expectations.
On a like-for-like basis, excluding divested assets, revenue grew 15%.
Chief executive Eddie Wu said Alibaba had "entered into an investment phase to build long-term strategic value in AI technologies and infrastructure and a consumption platform integrating daily life services and e-commerce," adding that "robust AI demand further accelerated our Cloud Intelligence Group business, with revenue up 34% and AI-related product revenue achieving triple-digit year-over-year growth."
Alibaba's core China e-commerce division expanded 16% in the period, supported by rapid user growth on Taobao and stronger take rates.
The company continued to scale its "quick commerce" one-hour delivery service, which had become the focal point of a fierce price war with JD.com and Meituan.
While the unit showed improved economics in recent months, the competition had triggered heavy industry-wide cash burn as retailers offered deep subsidies over the extended Singles' Day shopping season.
Sales across major platforms reached CNY 1.7trn during the festival, and Alibaba recorded 9.3% growth.
Cloud remained the standout business.
Revenue in the Cloud Intelligence Group rose 34% to CNY 39.82bn, propelled by broad adoption of Alibaba's expanding suite of AI products.
The company highlighted surging demand for its Qwen family of models, with more than 180,000 derivative models now on Hugging Face.
Alibaba Cloud retained its lead in China's AI cloud market with a 35.8% share, according to Omdia.
The group unveiled a major upgrade to its full-stack AI capabilities in September, spanning foundation models, networking, storage and intelligent computing clusters.
Profit, however, fell sharply as Alibaba stepped up spending on AI, cloud infrastructure and instant retail incentives.
Net income dropped 53% to CNY 20.99bn. Income from operations fell 85% to CNY 5.37bn, while adjusted EBITA declined 78% as spending on quick commerce, user experience and technology surged.
Free cash flow swung to an outflow of CNY 21.84bn from an inflow of CNY 13.74bn a year earlier, reflecting increased capital expenditure.
"We are re-investing our profits and free cash flow for the future while near-term profitability is expected to fluctuate," said chief financial officer Toby Xu, noting roughly CNY 120bn of capital expenditure on AI and cloud infrastructure over the past four quarters.
Alibaba maintained its push overseas through its international commerce arm, which grew revenue 10% to CNY 34.80bn and generated a modest adjusted EBITA profit.
AliExpress continued to improve unit economics, expanded the use of local inventories across more than 30 countries and launched a 'Brand+' programme to support Chinese brands entering global markets.
At 0744 ET (1244 GMT), shares in Alibaba Group Holding were up 1.91% in premarket trading in New York at $163.86, after the company closed ahead 2.14% in Hong Kong overnight.
Reporting by Josh White for Sharecast.com.
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