Alibaba’s March 2025 quarter results suggest a company determined to prove its transformation is more than just rhetoric. Revenue rose 7% year-on-year (YoY) to RMB 236.5 billion (USD 33.1 billion), while adjusted EBITA surged 36% to RMB 32.6 billion (USD 4.6 billion). These gains stemmed from both top-line growth and tighter cost control, including a steep decline in share-based compensation expenses that lifted operating margins.
But market reception was tepid. Alibaba’s US-listed shares slid 7.6% on the day of the announcement, weighed down in part by a miss on EPS (earnings per share). Non-GAAP diluted earnings per ADS came in at RMB 12.52 (USD 1.8), shy of consensus expectations. For Alibaba, which is trying to reset investor expectations around long-term value creation, the shortfall served as a reminder that the path to regaining Wall Street’s confidence is still under construction.
Alibaba’s clearest growth story came from its cloud unit. Revenue here rose 18% to RMB 30.1 billion (USD 4.2 billion), with artificial intelligence-related products posting triple-digit growth for the seventh consecutive quarter. The launch of Qwen3, a suite of open-source and hybrid reasoning AI models, highlights a bid to win both technical credibility and broad developer adoption amid intensifying competition from the likes of Amazon, Microsoft, and Tencent.
Closer to home, the Taobao and Tmall businesses continued to provide ballast. Customer management revenue climbed 12% YoY to RMB 71.1 billion (USD 10 billion), helped by improved take rates and tools like Quanzhantui that use AI to help merchants target users more effectively. Alibaba’s 88VIP program grew at a double-digit rate, surpassing 50 million members.
This core commerce unit also delivered an 8% EBITA increase, despite heavier investment in customer service and AI-powered product upgrades. It’s a sign that Alibaba still has pricing power and user stickiness in China’s competitive retail market.
Globally, the picture is more mixed. Alibaba’s international e-commerce arm grew 22%, driven by stronger cross-border sales through AliExpress and Trendyol. Segment losses narrowed, helped by improved monetization and better operating efficiency at Lazada, but the unit remains unprofitable. In logistics, revenue at Cainiao fell 12%, largely due to increased internal integration of services. Meanwhile, digital media turned a corner: Youku, Alibaba’s streaming platform, swung to profitability on the back of better ad sales and film earnings.
Alibaba also leaned on financial levers to reinforce its narrative. The company bought back USD 11.9 billion worth of shares during fiscal year 2025, achieving a 5.1% net reduction in outstanding shares. It’s also paying out USD 4.6 billion in dividends, including a one-time distribution from recent asset sales. These moves signal discipline and a willingness to return capital to investors amid ongoing uncertainty.
Overall, Alibaba’s March quarter offers signs of stabilization and ambition. Core earnings are up, its cloud and AI business is gathering traction, and losses in international commerce appear to be narrowing. But the EPS miss, coupled with uneven performance in segments like logistics, suggests Alibaba still has ground to cover.
The company’s next phase will depend on execution. Turning AI-fueled cloud growth into dependable profits, and clarifying the path ahead for its overseas operations, will be critical. For now, Alibaba has made its case. It’s what comes next that counts.