Alibaba Group reported a 9% year-over-year increase in total revenue for the quarter ended June 30, 2026, reaching RMB 268.95 billion ($39.6 billion), as AI-driven cloud services offset declines in core e-commerce operations. The company’s GAAP net income fell 75% to RMB 10.44 billion, reflecting elevated capital expenditures and investment in artificial intelligence infrastructure.
Adjusted EBITA, a non-GAAP measure, declined 30% to RMB 27.33 billion, while operating income dropped 57% to RMB 15.16 billion. Non-GAAP net income decreased 38% to RMB 20.72 billion, with diluted earnings per ADS falling 42% to RMB 8.52. Operating cash flow rose 11% to RMB 22.95 billion, but free cash flow worsened to a negative RMB 44.67 billion, compared with a negative RMB 18.82 billion in the prior-year period.
Capital expenditures surged 75% to RMB 67.68 billion ($9.98 billion), as part of a three-year RMB 380 billion investment plan, with cumulative spending reaching RMB 190 billion through June 2026. Share repurchases totaled $162 million for the quarter, covering 13.4 million ordinary shares, a sharp decline from $4.1 billion in the September 2024 quarter.
The Alibaba E-commerce Group generated RMB 205.86 billion in revenue, up 4% year-over-year, accounting for 77% of total revenue. Adjusted EBITA for the segment was essentially flat at RMB 39.75 billion. China e-commerce revenue declined 8% to RMB 110.9 billion, with customer management revenue down 7%. Quick commerce revenue, including Taobao Instant Commerce and Freshippo, surged 45% to RMB 53.30 billion. International e-commerce revenue fell 1% to RMB 27.76 billion, while global wholesale revenue increased 7% to RMB 13.91 billion.
AI Cloud and Compute Services revenue accelerated 45% to RMB 48.44 billion ($7.14 billion), marking the fastest growth in 22 quarters. Adjusted EBITA for the segment more than doubled, rising 133% to RMB 5.63 billion. The unit holds a 38.1% share of China’s AI cloud market, with AI-related product revenue reaching RMB 12.38 billion for the quarter. The Zhenwu M890 AI processor has gained commercial adoption from over 650 external customers.
AI Labs and Applications revenue increased 16% to RMB 3.34 billion ($492 million), but adjusted EBITA losses widened 330% to RMB 13.86 billion. The Qwen3.8-Max foundation model features 2.4 trillion parameters, while the Qwen App has surpassed 250 million users. Alibaba’s stock declined 2.94% to $23.13 following the presentation, with ADRs closing at $128.90 and trading at $130.07 in after-hours.
