Alibaba (BABA) Surges After Beating on Most Key Metrics

Alibaba (NYSE: BABA) reported financial results today before the market open and the stock is trading up 6.8% on the news. Revenue rose 32% to $3.49 billion and beat expectations of $3.367 billion. EBITDA of $1.754 billion beat consensus of $1.664 billion. EPS of RMB3.63 beat the analyst estimate of RMB3.46.

China commerce revenue was $2.72 billion compared with consensus of $2.721 billion. The elevated volatility in the Chinese stock market did not appear to impact BABA’s home market.

GMV of US $112 billion slightly missed the consensus estimate of US $113 billion. The combination of the GMV and the overall take rate gives an indication of both demand as well as pricing power. The blended take rate of 2.42% was better than the 2.3% for prior year period. The key to the take rate is the split between desktop and mobile. Last year, the take rate for mobile transactions was 1.87% and the non-mobile take rate was 2.53%. This year the take rate for mobile transactions jumped to 2.39%. As this gap closes, Alibaba could inherently see an uplift in margins.

The conference call will be held at 7:30 Eastern time and can be accessed at 845 675 0437, passcode is 52573326. A note summarizing the call will be available shortly after the event.

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