China-based Alibaba Group has announced that revenue for its fiscal second quarter ended Sept. 30 reached $5.142 billion (34.29 billion yuan), a growth rate of 55% year-over-year. The ecommerce giant also posted earnings of 5.26 yuan per share, versus 3.61 a year ago. Analysts had expected revenue of 34.02 billion yuan and earnings of 4.68 yuan per share.
Meanwhile, net profit decreased 69% versus a year ago, to $1.06 billion, the result of a one-time accounting gain that temporarily raised the bottom line, according to the company.
Alibaba’s Chinese commerce retail sector, which makes up 70% of total revenue, increased 40% year-over-year to $3.615 billion. Meanwhile, the international commerce wholesale business, which includes Alibaba.com (the entity that most affects the promotional product industry) reached $226 million in revenue in Q2, with an 11% increase year-over-year.
Alibaba credited its overall revenue increase of 55% to continuing growth in its core commerce segment, which increased 41% year-over-year to $4.273 billion; adding video streaming company Youku Tudou to its Digital Media and Entertainment division; strong growth in its cloud computing business; and monetizing customers of UCWeb, Alibaba’s mobile browser and search company.
“Our highly profitable and cash flow generative core commerce business enables us to invest in our future growth areas of cloud computing, digital media and entertainment and innovation initiatives,” said Maggie Wu, CFO of Alibaba, in a statement. “We expect each of these businesses to drive long-term value for both our customers and shareholders.”
Mobile revenue from the China commerce retail business for the quarter was $2.806 billion, an increase of 78% year-over-year. Mobile makes up 78% of that segment’s revenue. “Alibaba Group had a great quarter,” said Daniel Zhang, CEO of Alibaba Group, in an official statement. “Our results reflect our increasing ability to monetize our 450 million mobile users through new and innovative social commerce experiences.”
In the midst of its solid Q2 showing, the company has been under increased scrutiny over the past six months. It’s currently being investigated by the Securities and Exchange Commission, which since May has been examining “controversial accounting practices” between its logistics division Cainiao and several affiliates, as well as its reporting practices for its annual Singles Day shopping festival. Last month, the American Apparel & Footwear Association, the largest apparel trade group in the U.S., asked the American government to add Alibaba as a Notorious Market, an annual designation applied to websites and markets with large-scale copyright infringement.
In August, Alibaba reported Q1 revenue of $3.52 billion in its China commerce retail sector, the highest growth rate since its IPO in 2014. At the time, Alibaba stock increased 5% to 92.10 on the New York Stock Exchange, its highest price in a year.