Alibaba Latest Earnings: Net Profit Drops over 60% YoY, AI Revenue Sees Triple-Digit Growth

On March 19, Alibaba Group released its Q3 FY2026 earnings report (for the three months ended December 31, 2025). The results showed group revenue reached RMB 284.843 billion, representing a 9% year-on-year increase after adjusting for the disposal of Intime and Gaoxin Retail. Adjusted net profit stood at RMB 16.71 billion, down 67% year-on-year. Alibaba attributed the decline in overall profitability primarily to investments in instant retail, user experience, and technology. 

By specific business segments, instant retail revenue surged 56% year-on-year this quarter, marking the strongest growth among all business units, primarily driven by Taobao Flash Sale launched at the end of April 2025. Cloud Intelligence Group revenue reached RMB 43.28 billion, up 36% year-on-year, mainly fueled by growth in public cloud services. The "All Others" category, which includes businesses such as Hema, Cainiao, Alibaba Health, Hujing Digital Media & Entertainment Group, AutoNavi, Qianwen C-end Business Group, Lingxi Interactive Entertainment, DingTalk, and other operations, saw revenue decline 25% year-on-year, primarily due to revenue decreases from the disposal of Gaoxin Retail and Intime businesses, as well as reduced revenue from Cainiao.

Additionally, T-Head's self-developed GPU chips have achieved mass production and scaled deployment, with cumulative shipments reaching 470,000 units.

Alibaba stated that the company continues to increase investments in AI and consumption two core areas during the quarter. Although overall profits faced pressure due to strategic investments, the AI and cloud computing businesses delivered impressive growth, with AI-related product revenue achieving triple-digit growth for the tenth consecutive quarter, establishing AI as one of Alibaba's primary growth engines.

Alibaba Group CEO Eddie Wu announced a new AI strategic goal during the earnings call, outlining the group's plan to achieve annual revenue exceeding $100 billion from its cloud and AI businesses, including MaaS, within the next five years.