Alibaba's Q1 Revenue Below Expectations, Cloud Revenue Grows by 38%, and AI Product ARR Disclosed for the First Time

Alibaba announced its financial report for the fourth quarter of the 2026 fiscal year, with cloud and AI continuing to accelerate, but the group's revenue and core profits both fell below market expectations. For the quarter ending March 31, 2026, the company reported revenue of 243.38 billion yuan, a year-on-year increase of 3%, below the market forecast of approximately 246.5 billion yuan.

Adjusted EBITA was 5.102 billion yuan, a year-on-year decrease of 84%; adjusted EBITDA was 16.435 billion yuan, a year-on-year decrease of 61%. The Wall Street Journal mentioned that Alibaba's net profit under non-GAAP for this quarter was only 86 million yuan, compared to 29.847 billion yuan for the same period last year; this metric, after excluding items such as share-based compensation and investment gains or losses, is closer to the core operating performance.

The net profit attributable to ordinary shareholders was 25.476 billion yuan, a year-on-year increase of 106%, but doubling of net profit does not mean a synchronized improvement in operating profit. This quarter, Alibaba shifted from an operating profit of 28.465 billion yuan in the same period last year to an operating loss of 848 million yuan, mainly due to the concentrated release of investments in AI, technology, instant retail, and user experience.

After the release of the financial report, Alibaba's pre-market share price in the US stock market fell by 2.6%.

Core data:

• Quarterly revenue: 243.38 billion yuan, year-on-year increase of 3%, market expectation of about 246.5 billion yuan

• Full-year revenue: 1.0237 trillion yuan, year-on-year increase of 3%, growth of 11% at the same proportion

• Cloud Intelligence Group quarterly revenue: 41.626 billion yuan, year-on-year increase of 38%

• AI-related products quarterly revenue: 8.971 billion yuan, triple-digit growth for the eleventh consecutive quarter

• Net profit attributable to ordinary shareholders: 25.476 billion yuan, year-on-year increase of 106%

• Adjusted EBITDA: 16.435 billion yuan, year-on-year decrease of 61%

• Adjusted EBITA: 5.102 billion yuan, year-on-year decrease of 84%