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Sep 30, 2025
Alibaba Q2 2026 Earnings Report
Alibaba reported its Q2 2026 earnings with modest revenue growth driven by cloud and AI demand, but profitability declined sharply due to ongoing strategic investments.
Key Takeaways
Alibaba posted revenue of $34.81 billion for Q2 FY26, with cloud and AI segments showing strong growth. However, operating income and net income saw steep declines due to increased investment in quick commerce and technology infrastructure.
Cloud Intelligence Group revenue rose 34% YoY, driven by AI demand.
Adjusted EBITA dropped 78% due to higher investment in quick commerce and tech.
Alibaba repurchased $253 million in shares during the quarter.
Free cash flow turned negative due to capital outlays in AI and logistics.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Alibaba remains focused on long-term investments in AI, cloud, and quick commerce. While these areas show growth potential, profitability is expected to remain under pressure in the near term.
Positive Outlook
- Cloud Intelligence business continues to grow with strong AI adoption.
- Quick commerce unit economics improved significantly.
- Customer management revenue increased on stronger take rate.
- 88VIP membership base saw double-digit growth.
- AIDC returned to profitability after prior losses.
Challenges Ahead
- Operating margin compressed sharply to 2%.
- Free cash flow swung to a significant outflow.
- Adjusted EBITA declined 78% YoY.
- Profitability affected by strategic reinvestments.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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