Shares of Alibaba (NYSE:BABA) declined about 4% in premarket trading on Thursday after the Chinese technology group reported fourth-quarter results that came in below market expectations.
The e-commerce and cloud computing company posted adjusted earnings of RMB7.09 per American Depositary Share, falling short of the analyst consensus of RMB10.94 by RMB3.85.
Quarterly revenue totaled RMB284.84 billion, missing the RMB289.73 billion forecast and marking a 2% year-over-year increase. Excluding divested operations Sun Art and Intime, revenue would have risen 9% compared with the same period last year.
Adjusted EBITA dropped 57% year on year to RMB23.40 billion, mainly reflecting heavier spending on quick commerce initiatives, improvements to user experience and additional technology investments.
Alibaba’s Cloud Intelligence Group delivered strong growth, with revenue rising 36%. Sales tied to AI-related products posted triple-digit growth for the tenth straight quarter.
“The rapid growth of AI + Cloud businesses in recent quarters gives us confidence to scale investments, further strengthening our full-stack AI capabilities,” said Toby Xu, Chief Financial Officer of Alibaba Group.
During the quarter, the company’s Qwen AI consumer interface exceeded 300 million monthly active users. Free cash flow fell 71% year on year to RMB11.35 billion, largely due to increased spending on quick commerce operations.
Separately, Bloomberg News reported on Wednesday that Alibaba plans to increase prices for several AI computing and storage services. T-Head AI computing chips are expected to rise between 5% and 34%, while Cloud Parallel File Storage will see a price increase of about 30%.