Shares of Alibaba Group (NYSE:BABA) moved lower in U.S. premarket trading on Wednesday after the company posted quarterly revenue that came in slightly below analyst expectations, even as its cloud computing and artificial intelligence operations continued to deliver strong growth.
Alibaba reported revenue of 243.4 billion yuan for the quarter ended March 31, representing a 3% increase from a year earlier but falling short of the 247.1 billion yuan consensus estimate.
The company said that, excluding divested operations including Sun Art and Intime, revenue increased 11% on a like-for-like basis.
Alibaba shares were down nearly 2% in premarket trading by 06:03 ET.
Cloud and AI businesses continue rapid expansion
Revenue from Alibaba’s Cloud Intelligence Group surged 38% year-on-year to 41.6 billion yuan, slightly ahead of analyst expectations of 41.27 billion yuan.
Growth from external cloud customers accelerated to 40% during the quarter, highlighting continued demand for the company’s cloud infrastructure and enterprise services.
Revenue generated from AI-related products reached 8.97 billion yuan, marking the eleventh consecutive quarter of triple-digit annual growth. Alibaba said the increase was driven by rising adoption of public cloud services and artificial intelligence products.
Domestic e-commerce supported by government subsidies
China’s online retail sector received additional support during the quarter from a new round of government subsidy programmes encouraging consumers to trade in electronic products.
Revenue from Alibaba’s domestic e-commerce operations totaled 122.22 billion yuan, exceeding analyst forecasts of 119.85 billion yuan.
Alibaba approves annual cash dividend
Alibaba’s board also approved an annual cash dividend of $0.13125 per ordinary share, equivalent to $1.05 per American depositary share.
The dividend will be paid to shareholders on record as of June 11.