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Alibaba is operating in Suqian City, Jiangsu Province, China, on December 29, 2023.
Costfoto | Nurphoto | Getty Images
Shares of Alibaba jumped in premarket trade, as the company missed market expectations for revenue in the December quarter, but announced it is increasing the size of its share buyback program by $25 billion.
U.S.-listed shares in the Chinese e-commerce giant were more than 4% higher in pre-market trade.
Alibaba said the $25 billion increase is added to its share repurchase program through the end of March 2027, bringing the total available under the scheme to $35.3 billion.
The announcement comes as Alibaba released financial results for its December quarter.
Here’s how Alibaba did in its fiscal third quarter, compared to LSEG estimates:
- Revenue: 260.35 billion Chinese yuan ($36.6 billion) versus 262.07 billion yuan expected.
Revenue missed expectations, growing just 5% year-over-year, logging a slowdown from the previous quarters as growth in the company’s China e-commerce business and cloud computing division remained slow.
Alibaba has been grappling with a difficult macroeconomic environment in China, where the consumer has remained weak, even after Beijing removed its Covid-era restrictions. Amid economic uncertainties, local shoppers have flocked to discounting platforms such as Alibaba rival Pinduoduo.
The Taobao and Tmall business, Alibaba’s China e-commerce platforms, brought in revenue of 129.1 billion Chinese yuan in the December quarter, up just 2% year-on-year.
Alibaba’s cloud computing business, which investors have seen as critical to the tech giant’s future growth, brought in sales of 28.1 billion yuan, posting a 3% year-on-year rise.
Alibaba had a tumultuous year in 2023, when it carried out its largest-ever corporate structure overhaul. It also separately implemented several high-profile management changes, with company veteran Eddie Wu taking over the reins as chief executive in September.
Daniel Zhang, the previous CEO of Alibaba Group who became acting head of the cloud business in December 2022, was supposed to stay on to lead the business unit, but unexpectedly quit in September last year.
On top of its structural changes, Alibaba also scrapped the hotly-anticipated spinoff of its cloud computing business last year.
More recently, two of Alibaba’s co-founders, Jack Ma and Joe Tsai, in January bought shares worth around $200 million in the Chinese e-commerce giant.
– CNBC’s Evelyn Cheng contributed to this report.
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