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BEIJING, February 24 (TMTPOST)— Alibaba Group posted better-than-expected quarterly results on both the top and the bottom line thanks to its ongoing cost cuts and the ease of the Covid-19 related disruptions.

Source: Visual China

In the quarter ended December 31, Alibaba reported revenue of RMB247.76 billion (US$35.92 billion) with a 2% year-over-year (YoY) growth, beating the Wall Street consensus of RMB245.87 billion. Non-GAAP diluted earnings per American depositary share (ADS) surged 14% YoY to RMB19.26 (US$2.79), compared with RMB16.57 expected. Net income attributable to ordinary shareholders was RMB46.815 billion, increasing 69% from a year earlier, while the analyst expected to be RMB44.437 billion.

Alibaba said growth of net income was mainly owing to narrowed losses of retail segment of International Commerce include Lazada, AliExpress, Trendyol and Daraz, Local Consumer Services, a segment including food delivery platform Ele.me and travel platform Fliggy, and Digital Media and Entertainment segment including YouTub-style platform YouKu. And the profit increase from China commerce, Aliababa’s core business segment including Taobao and Tmall, also played a role.

“During the past quarter, we continued to improve operating efficiency and cost optimization that resulted in robust profit growth,” said Toby Xu, Chief Financial Officer of Alibaba. Financial report showed the company laid off 19,576 employees in total last year, or 7.5% of its workforce.Total costs and expenses that quarter amounted to RMB212.725 billion, or 86% of revenue, down from 97% a year earlier.

Through further cost reduction and efficiency improving, multiple businesses delivered better operating efficiency. The direct sales and others revenue had a 10% YoY increase, primarily driven by strong revenue growth of Freshippo and Alibaba Health. Ele.me’s economics per order continued to be positive and non-restaurant orders saw robust growth as Covid restrictions eased. The To-Destination businesses benefited from China’s reopening as well. January witnessed Amap’s recovering demand for usage, and rapid growth of Fliggy’s outbound travel business.

Alibaba CEO Daniel Zhang said his company expected recovery in consumer sentiment and economic activity continued. At an earnings call later Thursday, Zhang commented the promising era of generative artificial intelligence (AI). On the one hand, we will continue to build our own pretrained large models, and on the other hand, will fully seize market opportunities and provide computing power for the incoming models and applications, Zhang told analysts.