NEW YORK (AP) — Chinese e-commerce company Alibaba's second-quarter net income fell 39 percent as it spent more on investing in its mobile business and marketing and gave some executives stock grants, but its revenue surged 54 percent on strong user demand.
It was the first earnings report from Alibaba, which operates popular e-commerce platforms Taobao and Tmall in China, since it went public on the New York Stock Exchange in September. The $25 billion initial public offering was the largest ever. Its platforms account for some 80 percent of Chinese online commerce.
Chinese e-commerce is growing fast. Online spending by Chinese shoppers is forecast to triple from its 2011 size by 2015. Beyond that, Alibaba has said it plans to expand into emerging markets and, eventually, into Europe and the U.S.
The company does not compete with its merchants or hold inventory, serving instead as a conduit that links buyers and sellers of all kinds.
For the three months ended Sept. 30 net income after paying preferred dividends fell to $485 million, or 20 cents per share. Excluding one-time items, net income was 45 cents per share. Analysts expected 45 cents per shares, according to FactSet.
Alibaba, based in Hangzhou, China, said the decline was due partly to a $490 million stock-option expenses due to performance-based and retention grants to some executives before its IPO, with vesting periods of four to six years.
Other costs that the company took during the quarter included consolidating newly acquired businesses, investing in its mobile operating system and digital entertainment, and marketing costs.
Revenue, as expected, was a strong spot. Revenue rose 54 percent to $2.74 billion, beating analyst expectations of revenue of $2.61 billion, boosted by more mobile commerce and growth across its platforms.
Gross merchandise volume, the total amount of goods sold, rose 49 percent during the quarter. Annual active buyers rose 52 percent to 307 million. Mobile monthly active users more than doubled to 217 million.
Shares of Alibaba Group Holding Ltd. fell 84 cents to $100.96 about 45 minutes before the market open.