Alibaba Group Holding Limited (NASDAQ: BABA) reported Tuesday with mixed June quarter results, sending its U.S.-listed stock lower.
The Cloud Computing segment, touted as a key business for the Chinese e-commerce giant, saw further moderation in growth in the quarter. Here’s a look at how the business fared relative to the company’s U.S. rivals:
Alibaba’s Cloud Revenue Declines Sequentially: Alibaba said its Cloud Computing business fetched revenues of $2.49 billion in the June quarter, accounting for 8% of the company’s total.
The June quarter performance represented a 29% increase from the year-ago period but a 2.7% drop from the previous quarter.
The Cloud business’s year-over-year growth was primarily driven by robust growth in revenue from customers in the internet, financial services and retail industries.
The year-on-growth began to moderate from the March quarter, as a top cloud customer, supposedly TikTok parent ByteDance, stopped using Alibaba’s overseas cloud services for its international business.
The severing of ties is due to non-product related requirements, Alibaba said.
With the integration of DingTalk, an application development platform, into Alibaba Cloud early this year, more customers have adopted both cloud and DingTalk, including large enterprises such as Fosun Group, Shandong Energy and Mengniu Dairy, Alibaba said.
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Alibaba’s Cloud Business Vs. Amazon’s: Amazon.com, Inc.’s (NASDAQ: AMZN) AWS segment brought revenues of $14.81 billion for the U.S. e-commerce giant in the second quarter.
On a year-over-year basis, the business climbed 37% and, on a quarter-over-quarter basis, the increase was 9.7%. The division fetched $4.19 billion in operating profit.
For search giant Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG), the cloud business contributed revenues of $4.63 billion, up about 54% year-over-year. The segment posted an operating loss of $1.4 billion.
Software giant Microsoft Corporation’s (NASDAQ: MSFT) Azure cloud revenues jumped 51% year-over-year.
Alibaba’s cloud business, despite the tag of a promising business for the e-commerce company, has underperformed those of rivals.
“Going forward, we believe that our cloud computing revenue will be further diversified across customers and industries,” Alibaba said in the June quarter earnings release.
BABA Price Action: At last check, Alibaba shares were down 1.79% to $196.50.
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