Document 419880

September Quarter 2014 Results
November 4, 2014
Disclaimer
This presentation contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,”
“expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “potential,” “continue,” “ongoing,” “targets” and
similar statements. Among other things, statements that are not historical facts, including statements about Alibaba’s beliefs and
expectations, the business outlook and quotations from management in this presentation, as well as Alibaba’s strategic and
operational plans, are or contain forward-looking statements. Alibaba may also make written or oral forward-looking statements in
its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in press releases and other written materials and
in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks
and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking
statement, including but not limited to the following: Alibaba’s goals and strategies; Alibaba’s future business development;
Alibaba’s ability to maintain the trusted status of its ecosystem, reputation and brand; Alibaba’s ability to retain or increase
engagement of buyers, sellers and other participants in its ecosystem and enable new offerings; Alibaba’s ability to successfully
monetize traffic on its mobile platform; risks associated with limitation or restriction of services provided by Alipay; risks associated
with increased investments in Alibaba’s business; risks associated with acquisitions; privacy and regulatory concerns; competition;
security breaches; the continued growth of the e-commerce market in China and globally; and fluctuations in general economic
and business conditions in China and globally and assumptions underlying or related to any of the foregoing. Further information
regarding these and other risks is included in Alibaba’s filings with the SEC. All information provided in this presentation is as of the
date of this presentation and are based on assumptions that we believe to be reasonable as of this date, and Alibaba does not
undertake any obligation to update any forward-looking statement, except as required under applicable law.
This presentation contains certain financial measures that are not recognized under generally accepted accounting principles in the
United States (“GAAP”), including Non-GAAP EBITDA, Non-GAAP net income and free cash flow. For a reconciliation of these nonGAAP financial measures to the most directly comparable GAAP measures, see GAAP to Non-GAAP Reconciliation.
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September Quarter 2014 Highlights
49%
307MM
54%
YoY GMV
Growth
Annual
Active Buyers (2)
YoY Revenue
Growth
US$ 95Bn
217MM
12-MTH
Mobile GMV (1)(2)
Mobile MAUs (3)
Note: Unless otherwise indicated, all figures above are for the three months ended September 30, 2014
(1) Assumes 1 US$ = 6.1380 RMB
(2) For the twelve months ended September 30, 2014
(3) For the month ended September 30, 2014. Based on the aggregate mobile MAUs of apps that contribute GMV on our China retail marketplaces
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GMV
Quarterly GMV (China Retail Marketplaces)
(RMB Bn)
YoY
Growth
62%
62%
65%
65%
64%
53%
46%
45%
49%
556
529
501
183
159
374
346
91
345
294
176
430
135
99
88
71
228
49
346
255
179
For 3M Sep 30,
ended
2012
Dec 31,
2012
223
Mar 31,
2013
257
275
Jun 30,
2013
Sep 30,
2013
Taobao Marketplace
342
380
295
Dec 31,
2013
Mar 31,
2014
Jun 30,
2014
Sep 30,
2014
Tmall
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Active Buyers & Mobile MAUs
Annual Active Buyers
Mobile MAUs
(In Millions)
(In Millions)
YoY
Growth
39%
44%
48%
51%
52%
307
279
255
217
231
188
202
163
136
For 12M Sep 30,
ended
2013
Dec 31,
2013
Mar 31,
2014
Jun 30,
2014
Sep 30,
2014
For 1M Dec 31,
2013
ended
Mar 31,
2014
Jun 30,
2014
Sep 30,
2014
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Mobile GMV Contribution
Mobile GMV and Mobile Penetration (China Retail Marketplaces)
(RMB Bn)
(%)
35.8%
32.8%
27.4%
19.7%
199
14.7%
10.7%
164
12.0%
7.4%
104
5.6%
For 3M
ended
13
26
32
Sep 30,
2012
Dec 31,
2012
Mar 31,
2013
41
Jun 30,
2013
Mobile GMV
118
55
Sep 30,
2013
Dec 31,
2013
Mar 31,
2014
Jun 30,
2014
Sep 30,
2014
Mobile GMV as % of total GMV
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September Quarter 2014 Financial Highlights
GMV and Mobile Penetration
Monetization Rate
(RMB Bn)
(%)
Mobile monetization rate
35.8%
Blended monetization rate
2.31%
14.7%
(1)
+48.7%
2.30%
1.87%
556
0.61%
Sep 30, 2014
Sep 30, 2013
374
Sep 30, 2013
GMV
Sep 30, 2014
Mobile GMV as % of total GMV
Non-GAAP EBITDA (2) and Margin
Revenue
(RMB Bn)
(RMB Bn)
Margin
59.4%
50.5%
+53.7%
16.8
11.0
Sep 30, 2013
8.5
6.5
Sep 30, 2014
Sep 30, 2013
Sep 30, 2014
Note: For the three months ended on the respective dates
(1) Derived from China commerce retail mobile revenue / mobile GMV
(2) Non-GAAP EBITDA represents income from operations (which excludes interest and investment income, net, interest expense, other income, net, income tax expenses
and share of results of equity investees) before certain non-cash expenses, consisting of share-based compensation expense, amortization, depreciation and impairment
of goodwill and intangible assets that Alibaba Group does not believe are reflective of its core operating performance during the periods presented.
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Monetization Rate
We manage the business for growth in GMV and active buyers, not for monetization rate
• Blended monetization rate is at expected level, consistent with prior years
• Blended monetization rate is lower sequentially, due to strong GMV growth on Taobao Marketplace
Quarterly Monetization Rate (China Retail Marketplaces)
(%)
3.53%
Non-mobile
monetization 2.57%
rate(1)
3.03%
2.95%
2.77%
2.61%
2.52%
2.77%
2.51%
Blended 2.46%
monetization
rate
2.30%
3.05%
2.54%
2.30%
2.52%
2.31%
2.18%
1.87%
1.49%
1.12%
Mobile
monetization
0.47%
rate(2)
0.55%
0.47%
Sep 30,
2012
Dec 31,
2012
Mar 31,
2013
For 3M
ended
2.63%
Mobile monetization rate
0.58%
0.61%
Jun 30,
2013
Sep 30,
2013
Dec 31,
2013
Non-mobile monetization rate
Notes:
(1) Derived from China commerce retail non-mobile revenue / non-mobile GMV
(2) Derived from China commerce retail mobile revenue / mobile GMV
0.98%
Mar 31,
2014
Jun 30,
2014
Sep 30,
2014
Blended monetization rate
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Quarterly Revenue
Total Revenue
Revenue Breakdown by Business
(RMB Bn)
YoY
Growth
(% of Total Revenue)
47%
62%
39%
46%
54%
18.7
15.8
16.8
12.0
11.0
Alibaba Cloud
Computing
International and Internet
Wholesale Infrastructure
Marketplace
2%
International
7%
Retail
2%
Marketplace
5%
China
Wholesale
Marketplace
For 3M Sep 30,
ended 2013
Dec 31,
2013
Mar 31,
2014
Jun 30,
2014
Others
8%
76%
China Retail Marketplaces
Sep 30,
2014
Revenue from newly acquired businesses
Revenue Growth of Major Businesses
For 3M ended Sep 30, 2014
(YoY growth % )
99.5%
47.7%
50.0%
39.1%
24.0%
1
2
3
4
5
1.
2.
3.
4.
5.
China Retail Marketplaces
China Wholesale Marketplace
International Retail Marketplace
International Wholesale Marketplace
Alibaba Cloud Computing and Internet Infrastructure
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Margin Trends
• We don’t manage to a margin target
• Lower adjusted EBITDA margin was attributable to:
• Consolidation of newly acquired businesses (mainly UC Web, AutoNavi) with lower margins
• Investments in new initiatives, including our mobile OS, local services and digital entertainment
• Tactical marketing, largely brand campaigns during the quarter
• We will continue to invest in new and existing businesses to drive long-term growth in GMV, revenue
and profit
Non-GAAP EBITDA (1) and Margin
Non-GAAP Net Income (2) and Margin
(RMB Bn)
(RMB Bn)
Margin
59.4%
54.4%
50.5%
8.6
8.5
6.5
Sep 30,
2013
Margin
53.8%
46.4%
7.3
40.5%
6.8
5.9
Jun 30,
2014
Sep 30,
2014
Sep 30,
2013
Jun 30,
2014
Sep 30,
2014
Note: For the three months ended on the respective dates
(1) Non-GAAP EBITDA represents income from operations (which excludes interest and investment income, net, interest expense, other income, net, income tax expenses and share of
results of equity investees) before certain non-cash expenses, consisting of share-based compensation expense, amortization, depreciation and impairment of goodwill and intangible
assets that we do not believe are reflective of its core operating performance during the periods presented.
(2) Non-GAAP net income represents net income before share-based compensation expense, amortization, impairment of goodwill, intangible assets and investments, gain (loss) on deemed
disposals/disposals/revaluation of investments, amortization of excess value receivable arising from the restructuring of commercial arrangement with Ant Financial, and a one-time
expense item consisting of the expenses relating to the sale of shares by existing shareholders in our initial public offering.
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Cost Trends
Product Development Expenses (Pre-SBC)
Costs of Revenue (Pre-SBC)
(RMB Bn)
(% of revenue)
25.2%
25.3%
26.4%
4.0
4.4
(RMB Bn)
(% of revenue)
10.8%
11.2%
1.0
1.7
1.9
Sep 30, 2013
Jun 30, 2014
Sep 30, 2014
8.7%
2.8
Sep 30, 2013
Jun 30, 2014
Sep 30, 2014
General & Administrative Expenses (Pre-SBC)
Sales & Marketing Expenses (Pre-SBC)
(RMB Bn)
(% of revenue)
5.5%
7.3%
(% of revenue)
9.4%
0.6
1.2
1.6
Sep 30, 2013
Jun 30, 2014
Sep 30, 2014
Note: For the three months ended on the respective dates
(RMB Bn)
4.1%
4.9%
5.8%
0.5
0.8
1.0
Sep 30, 2013
Jun 30, 2014
Sep 30, 2014
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Free Cash Flow, Capital Expenditures and Cash
• Our capex increased sequentially mainly due to the purchase of land for office space in Shanghai (RMB1.4B)
• Non-real estate capex increased due to the investment in Alibaba Cloud and our data platform
Free Cash Flow
(1)
Capital Expenditures
(% of revenue)
(RMB Bn)
Cash, Cash Equivalents and
Short-term Investments
(% of revenue)
(RMB Bn)
(RMB Bn)
109.9
67.2%
61.0%
10.6
21.8
10.1%
53.1%
9.1%
8.9
7.3%
57.9
3.4
6.7
6.0
1.7
43.6
88.1
10.6
1.1
Sep 30, 2013 Jun 30, 2014 Sep 30, 2014
Free Cash Flow
1.3
0.1
0.1
1.0
1.2
51.9
1.7
Sep 30, 2013 Jun 30, 2014 Sep 30, 2014
Non-real estate capital expenditures
Acquisition of land use rights and construction
in progress
33.0
As of Mar31,
2014
As of Jun 30,
2014
As of Sep 30,
2014
Cash and cash equivalents
Short-term investments
Non-real estate capital expenditures
Note: Unless otherwise indicated, all figures in the above charts are for the three months ended on the respective dates
(1) Free cash flow represents net cash provided by operating activities as presented in Alibaba Group’s consolidated cash flow statement less purchases of property and equipment and
intangible assets (excluding acquisition of land use rights and construction in progress) and adjusted for changes in loan receivables relating to micro loans of its SME loan business.
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GAAP to Non-GAAP Reconciliation
For the Three Months Ended
RMB MM
Sep 30, 2013
Jun 30, 2014
Sep 30, 2014
5,248
6,844
4,345
864
1,073
3,010
Non-GAAP EBITDA
Income from operations
Add: Share based compensation expense
Add: Amortization of intangible assets
39
234
598
310
423
540
44
-
-
6,505
8,574
8,493
4,937
12,438
3,030 *
864
1,073
3,010
Add: Amortization of intangible assets
39
234
598
Add: Impairment of goodwill, intangible assets and investments
53
(6,428)**
Add: Depreciation and amortization of property and equipment and land use rights
Add: Impairment of goodwill and intangible assets
Non-GAAP EBITDA
Non-GAAP net income
Net income
Add: Share based compensation expense
-
Add: Gain on deemed disposals /disposals/revaluation of investments
-
Add: Amortization of excess value receivable arising from the restructuring of
commercial arrangements with Ant Financial
-
-
35
Add: Expenses relating to the sale of shares by existing shareholders in initial public
offering
-
-
195
5,893
7,317
6,808
Net cash provided by operating activities
4,526
10,177
5,865
Less: Purchase of property, equipment and intangible assets
(excluding land use rights and construction in progress)
(996)
(1,155)
(1,693)
Add: Changes in loan receivables, net
3,153
1,572
4,766
Free cash flow
6,683
10,594
8,938
Non-GAAP net income
(60)
Free cash flow
Note:
* YoY declined largely driven by the increase of share based compensation
** A one-time deemed disposal gain (associated with the acquisition of UCWeb and OneTouch) in the June quarter
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