Alibaba’s 2Q FY25 Revenue Up 4.8% on Cloud & AI Tailwinds, Adjusted Net Profit Falls 72%
Alibaba Group Holding Ltd. reported second-quarter revenue of 247.80 billion yuan (34.2 billion USD), up 4.8 % year-on-year, while adjusted net profit dropped 72 % to 10.35 billion yuan (1.43 billion USD), reflecting mounting pressure on profitability. The results underscore a stark divergence across the e-commerce giant's business units, with cloud computing and instant retail emerging as key growth drivers while margins contract sharply.
Cloud Intelligence Group delivered the standout performance, revenue jumping 34 % to 39.82 billion yuan (5.49 billion USD), beating the consensus estimate of 37.99 billion yuan. Chief Financial Officer Xu Hong disclosed that Alibaba has poured 120 billion yuan (16.55 billion USD) into AI-and-cloud infrastructure over the past four quarters. Instant-retail revenue surged 60 % to 22.91 billion yuan (3.16 billion USD), propelled by strong order growth from Taobao Flash Purchase, launched in late April.
The company’s shares rose more than 4 % in pre-market trading following the release. The performance comes as Alibaba intensifies its push into artificial intelligence, with its Qwen app surpassing 10 million downloads within a week of public testing, marking the fastest adoption rate for any AI application to date.
Adjusted net profit came in at 10.35 billion yuan (1.43 billion USD), down 72 % year-on-year and below the Street’s 16.8 billion yuan forecast. Adjusted EBITDA fell 64 % to 17.26 billion yuan (2.38 billion USD), missing the 19.3 billion yuan consensus. Adjusted earnings per ADS were 4.36 yuan (0.60 USD), compared with 15.06 yuan a year earlier and the 6.34 yuan estimate.
Cloud Business Extends Market Lead on AI Demand
Cloud Intelligence Group maintained its position as the quarter’s standout performer, with the 34 % revenue growth rate marking the highest expansion in recent periods. AI-related product revenue has now posted triple-digit year-on-year growth for nine consecutive quarters, cementing Alibaba Cloud’s dominance in China’s AI cloud market with a share exceeding the combined total of the second- through fourth-ranked competitors.
The company’s latest Qwen3-Max model ranks among the top three globally, outperforming GPT-5 and Claude Opus 4, according to Alibaba. The cloud unit’s comprehensive AI technology stack—spanning advanced foundational models to high-performance infrastructure—has translated into tangible market gains. During the quarter Alibaba Cloud secured AI partnerships with global brands including the NBA, Marriott, China UnionPay and Bosch.
The cloud division expanded its international footprint, operating 91 availability zones across 29 regions as of 30 September, with new data centers announced in Brazil, France and the Netherlands. Singapore’s national artificial-intelligence programme has adopted Alibaba’s open-source ecosystem to develop Southeast Asia’s multilingual large language models.
E-Commerce Units Show Uneven Performance
China Commerce Business, Alibaba’s largest revenue contributor, generated 132.58 billion yuan (18.29 billion USD), up 16 % year-on-year and surpassing the 128.53 billion yuan estimate. The domestic e-commerce operation benefited from the rapid scaling of instant-retail services, which saw revenue climb 60 % as Taobao Flash Purchase gained traction.
International Digital Commerce Group posted revenue of 34.80 billion yuan (4.80 billion USD), up 9.9 % yet below the 37.85 billion yuan consensus. Other revenue dropped 25 % to 62.97 billion yuan (8.69 billion USD), largely in line with the 61.87 billion yuan forecast.
AI Consumer Push Gains Traction
Alibaba has accelerated its consumer-facing AI initiatives, with the Qwen app achieving 10 million downloads within one week of its public-beta launch. The adoption pace surpasses that of ChatGPT, Sora and DeepSeek, positioning the application as the fastest-growing AI product launch on record. Industry observers view the move as a strategic effort to capture critical ground in the battle for AI consumer entry points.
Kenny Ng, strategist at Everbright Sun Hung Kai International, noted that Alibaba’s ability to leverage the Qwen app to drive its consumer-facing businesses“will be a key factor affecting the company’s future valuation.”The app is designed as a personal AI assistant built on the Qwen3 model, extending the company’s AI capabilities beyond enterprise applications into the consumer market.
The company signaled its commitment to sustained investment in cloud and AI infrastructure to support customer growth and technological innovation, aiming to accelerate the adoption of cloud-based AI applications across industries.