BlackRock, Inc., the world’s largest asset manager, has reported a highly successful third quarter for 2024, marked by strong financial growth. The firm’s total assets under management (AUM) surged to a record $11.5 trillion, driven by $221 billion in net inflows during the quarter. This represents a significant year-over-year increase of $2.4 trillion in AUM, showcasing BlackRock's continued leadership in the asset management industry.
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Alibaba Announces June Quarter 2024 Results: Revenue Growth but Declining Profit
Alibaba Group Holding Limited (NYSE: BABA, HKEX: 9988) has published its financial results for the quarter ending June 30, 2024. Despite a 4% increase in revenue year-over-year, the company faces several challenges, leading to a drop in net income and cash flow. Investors have shown concern as pre-market trading prices indicate a 2.6% drop following the earnings report.
Financial Performance Overview
Alibaba's revenue for the June quarter 2024 reached RMB 243,236 million (US$33,470 million), representing a 4% increase year-over-year. However, income from operations decreased by 15% to RMB 35,989 million (US$4,952 million), primarily due to a significant decrease in share-based compensation reversals that impacted the previous year’s results.
Decline in Net Income and Earnings Per Share
The company’s net income attributable to ordinary shareholders was RMB 24,269 million (US$3,340 million), marking a steep 27% year-over-year decline. Alibaba also reported a drop in diluted earnings per ADS, which fell from RMB 13.30 in the same quarter of 2023 to RMB 9.89 (US$1.36) in Q2 2024.
Non-GAAP net income, excluding non-cash share-based compensation, was RMB 40,691 million (US$5,599 million), reflecting a 9% decline year-over-year.
Cloud and International Business Continue to Grow
Despite challenges in core retail operations, Alibaba’s Cloud Intelligence Group experienced a 6% revenue increase, driven by the growth of public cloud products and AI-related services. The segment's adjusted EBITA saw a significant improvement, increasing by 155% to RMB 2,337 million.
Alibaba's international commerce segment also delivered strong results, with revenue from the international retail business growing 38% year-over-year. This was largely due to increased order volumes from platforms like AliExpress and Trendyol.
Challenges in Core E-commerce Operations
The Taobao and Tmall Group, which represents the bulk of Alibaba's revenue, saw a 2% decline in total revenue. The company’s strategy to reduce direct sales in consumer electronics and appliances contributed to this decrease. However, Alibaba emphasized that its investments in user experience, including AI-powered marketing tools, are expected to drive future growth.
Free Cash Flow and Investments
One of the notable points in the report was the significant drop in free cash flow, which decreased by 56% year-over-year to RMB 17,372 million (US$2,390 million). This was attributed to increased investments in Alibaba Cloud infrastructure and other capital expenditures.
Market Reaction and Outlook
Following the release of these results, Alibaba's stock price has fallen by 2.6% in pre-market trading. Investors are cautious about the company's slower net income growth and declining cash flow, despite ongoing investments in cloud and international businesses.
Alibaba's share repurchase program was a positive takeaway for shareholders, with the company buying back US$5.8 billion worth of shares during the quarter. However, the broader economic uncertainties, increasing regulatory scrutiny, and competition in both domestic and international markets continue to weigh on Alibaba's future performance.
Source: BABA
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