Alibaba Group (BABA Quick QuoteBABA - Free Report) reported non-GAAP earnings of 9 cents per ADS for the fourth quarter of fiscal 2026, which missed the Zacks Consensus Estimate by 92.62%. In domestic currency, the company reported non-GAAP earnings of RMB 0.62, down 95% year over year.

The company posted fourth-quarter fiscal 2026 revenues of $35.28 billion. The top line beat the Zacks Consensus Estimate by 0.15%. In domestic currency, revenues of RMB 243.4 billion increased 3% year over year. Excluding disposed businesses of Sun Art and Intime, revenues increased 11% on a like-for-like basis.

The revenue growth was driven by accelerated performance in Cloud Intelligence Group and continued expansion of the quick commerce business, while aggressive investments in technology, quick commerce and user experiences significantly pressured margins. The company continues focusing on two strategic pillars: consumption and AI + Cloud.

Revenues by Segments

Alibaba China E-commerce Group (50.2% of Total Revenues): Alibaba generated RMB 122.2 billion ($17.7 billion) of revenues from the segment, which increased 6% from the year-ago quarter. Customer management revenues grew 1% year over year. Excluding the contra revenue impact from the new business development program, CMR would have grown 8% year over year on a like-for-like basis.

During the quarter, the company integrated Taobao and Tmall e-commerce services into the Qwen app and launched the Qwen Shopping Assistant, an AI agent providing end-to-end support across the shopping journey. For merchants, it rolled out Wukong, an AI-native enterprise agent.

The number of 88VIP members, BABA's highest-spending consumer group, continued to increase by double digits year over year, surpassing 62 million, demonstrating strong platform momentum to attract and retain a high-spending and loyal consumer base.

E-commerce Business (78.8% of China E-commerce Revenues): The core e-commerce vertical generated revenues of RMB 96.3 billion ($14 billion), reflecting a 1% decrease from the year-ago quarter, primarily due to lower revenues from certain direct sales businesses.

Quick Commerce (16.4% of China E-commerce Revenues): The quick commerce business generated revenues of RMB 20 billion ($2.9 billion), which grew 57% year over year, driven by order growth from the rollout of "Taobao Instant Commerce." The business continued to improve unit economics and increase average order value quarter over quarter, driven by order mix optimization.

China Commerce Wholesale (4.9% of China E-commerce Revenues): The China wholesale business generated revenues of RMB 5.9 billion ($861 million), up 3% year over year, primarily due to an increase in revenues from value-added services provided to paying members.

Alibaba International Digital Commerce Group or AIDC (14.6% of Total Revenues): The segment comprises AliExpress, Trendyol, Lazada and other international businesses. BABA generated RMB 35.4 billion ($5.1 billion) in revenues from the segment, which grew 6% from the year-ago quarter. AIDC narrowed losses significantly year over year, approaching break-even, driven by logistics optimization and operating efficiency. AliExpress' "Brand+" program saw the penetration of quarterly transacting consumers surpass 30%.

International Commerce Retail (81.6% of International Revenues): Revenues were RMB 28.9 billion ($4.2 billion), up 5% from the year-ago quarter, driven by revenue increases contributed by AliExpress and other international businesses, partly offset by a decrease in Lazada revenues.

International Commerce Wholesale (18.4% of International Revenues): The business generated revenues of RMB 6.5 billion ($944 million), which rose 9% year over year, primarily due to an increase in revenues from cross-border related value-added services. Alibaba.com launched Accio Work, an agentic business platform for global small and medium-sized businesses.

Cloud Intelligence Group (17.1% of Total Revenues): The segment generated revenues of RMB 41.6 billion ($6 billion), up 38% from the year-ago quarter. Revenues from external customers grew 40% year over year, primarily driven by public cloud revenue growth and the increasing adoption of AI-related products.

AI-related product revenues reached RMB 9 billion and maintained triple-digit year-over-year growth for the 11th consecutive quarter, accounting for 30% of external cloud revenue. In March, the company launched Qwen3.6-Plus, delivering significant performance gains in coding and agentic programming with a native context window of up to 1 million tokens.

Alibaba also advanced specialized models, including HappyOyster, a world model for real-time creation and interaction, and HappyHorse, a multimodal model for video generation. T-Head Semiconductor's proprietary Zhenwu PPUs have been deployed in over 100,000 units on Alibaba Cloud's public cloud platform, with more than 30 leading automakers and autonomous driving companies leveraging the chips.

All Others (26.9% of Total Revenues): The segment's revenues were RMB 65.5 billion ($9.5 billion), reflecting a 21% year-over-year decrease, primarily due to the disposal of Sun Art and Intime businesses and a decrease in Cainiao revenues, partly offset by growth in Freshippo and Amap.

Operating Details

In the fiscal fourth quarter, sales and marketing expenses were RMB 53.4 billion ($7.7 billion), up significantly from the year-ago quarter. As a percentage of total revenues, the figure expanded to 21.9% from 15.3%, reflecting heavy investment in quick commerce and user acquisition of the Qwen app.

General and administrative expenses were RMB 9.9 billion ($1.4 billion), down year over year. Product development expenses were RMB 19 billion ($2.7 billion), or 7.8% of revenues, reflecting continued investment in technology and innovation, particularly in AI.

Adjusted EBITDA was RMB 16.4 billion ($2.4 billion), down 61% year over year due to strategic investments in technology, quick commerce and user experiences, partly offset by continued growth in customer management service and Cloud business and enhanced operating efficiencies. The adjusted EBITDA margin contracted to 7% from 18% in the prior year. Adjusted EBITA fell 84% to RMB 5.1 billion ($740 million), with the adjusted EBITA margin declining to 2% from 14%. The company reported a loss from operations of RMB 848 million ($123 million) against income from operations of RMB 28.5 billion in the prior-year quarter.

Balance Sheet & Cash Flow

As of March 31, 2026, cash and other liquid investments were RMB 520.8 billion ($75.5 billion), down from RMB 560.2 billion ($80.1 billion) as of Dec. 31, 2025.

Alibaba generated RMB 9.4 billion ($1.4 billion) in cash from operations, down 66% from RMB 27.5 billion in the prior-year quarter. Free cash flow was an outflow of RMB 17.3 billion ($2.5 billion), compared with an inflow of RMB 3.7 billion in the same quarter a year ago, mainly attributed to investments in quick commerce, user acquisition of the Qwen app and increased cloud infrastructure expenditure.

The board approved an annual cash dividend for fiscal 2026 of $0.13125 per ordinary share, or $1.05 per ADS, with the aggregate dividend amount totaling approximately $2.5 billion.

Zacks Rank & Stocks to Consider

Alibaba currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader Zacks Retail-Wholesale sector are CAVA Group, Inc. (CAVA Quick QuoteCAVA - Free Report) , Advance Auto Parts (AAP Quick QuoteAAP - Free Report) and Kohl's (KSS Quick QuoteKSS - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cava, Advanced Auto Parts and Kohl’s are scheduled to report their respective first-quarter 2026 results on May 19, May 21 and May 28.