According to the Zhitong Finance App, Alibaba-W (09988) announced its quarterly results for the quarter ended June 30, 2026, with revenue of 268.953 billion yuan (US$39.639 billion), an increase of 9% over the previous year. Operating profit was $15.161 billion ($2,234 billion), down 57% year over year. Net profit attributable to common shareholders was $10.537 billion ($1,553 billion), a year-on-year decrease of 75.56%; non-GAAP net profit was $20.715 billion ($3,053 billion), down 38% year over year. Net cash flow from operating activities was $22.95 billion ($3.382 billion), an increase of 11% over the same period in 2025. Free cash flow (a non-GAAP financial liquidity measure) was a net outflow of $44.67 billion ($6.584 billion), compared to a net outflow of $18.815 billion for the same period in 2025.
Among them, AI cloud and computing power service revenue was 48.437 billion yuan (US$7.139 billion), and total revenue and external customer revenue both accelerated to 45% year-on-year. This growth is mainly driven by increased adoption of AI-related products. Revenue from AI-related products continued to be strong, reaching $12.376 billion (US$1.824 billion), achieving the twelfth consecutive quarter of three-digit year-on-year growth.
For the quarter ended June 30, 2026, capital expenditure was 67.678 billion yuan (US$9.975 billion), an increase of 75% over 38.676 billion yuan in the same period in 2025, due to the Group's continued investment in AI infrastructure to meet strong and growing customer demand. The year-on-year increase was significant, driven by many factors, including fluctuations in procurement cycles, increased CPU computing power driven by expected customers to continue using AI agents, and rising prices of various chip components.
According to the announcement, the decrease in operating profit was mainly due to a reduction in adjusted EBITA, impairment of goodwill accrued during the year, and reserves relating to a €550 million fine imposed by the European Union on the Digital Services Act. The decrease in net profit is mainly due to a decrease in operating profit, a decrease in net income from disposal investments, and a decrease in net income from changes in the market value of our equity investments.
Wu Yongming, CEO of Alibaba Group, said, “We have achieved strong results this quarter, and full-stack AI capabilities have continued to improve commercial returns. Among them, Alibaba Cloud's external commercialization revenue has accelerated to 45%, and revenue from AI-related products has achieved three-digit year-on-year growth for the 12th consecutive quarter. The performance of cutting-edge language, programming, video, voice, image, and music models that have been continuously released recently all ranked first. We have launched the AI productivity platform Qianmen Office to improve the productivity and capabilities of enterprises. Thanks to our full-stack AI strategy, Alibaba is in a very good position to seize the huge growth opportunities in the artificial intelligence and AI computing power market.”
Xu Hong, Chief Financial Officer of Alibaba Group, said, “This quarter, the Group achieved strong revenue growth, and the profit margin of its core business continued to rise. Among them, the revenue of the cloud division continued to accelerate, and high-quality earnings and operating leverage increased the EBITA profit margin to 12%; while maintaining market share, instant retail continued to optimize efficiency, and the overall profit of e-commerce was steady. As the synergy effects of our core business are further unleashed and more AI commercialization is gradually implemented, we will have more flexibility in terms of strategic and financial resources, and continue to invest in full-stack AI capabilities in a disciplined manner.”