Our GAAP results and reconciliations of GAAP to non-GAAP measures is included in today's earnings press release and investor presentation. Over the past quarter, Alibaba's high-intensity investment in our two strategic priorities of AI plus cloud and consumption is rapidly translating into tangible business results, with group revenue growing 11% year-over-year. This quarter, Cloud Intelligence Group's external revenue growth accelerated to 40%, and AI-related product revenue achieved triple-digit growth for the 11th consecutive quarter. China E-commerce CMR grew 8% year-over-year on a like-for-like basis, and the quick commerce market achieved significant unit economics improvement while maintaining market share.
We are at a pivotal inflection point in the evolution from conversational chatbots to autonomous AI agents, which is directly driving explosive growth across three core workload categories: training, inference, and agent orchestration. This quarter, Cloud Intelligence Group's annualized AI-related product revenue has surpassed RMB 35.8 billion, continuing to maintain triple-digit growth. AI-related product revenue now accounts for 30% of Cloud Intelligence Group's external revenue. We expect that in about one year, AI-related product revenue will cross the 50% threshold, becoming the primary engine driving the cloud business's revenue growth.
As a result, Cloud Intelligence Group's external revenue growth is expected to continue accelerating beyond its current 40% rate over the coming quarters. Given the certainty of long-term AI demand and our full stack technology advantages, we expect this trajectory to sustain strong growth over the medium to long term. This reflects AI's role in driving a comprehensive upgrade of Alibaba Cloud's entire business as its growth engine fully pivots from traditional compute and storage to models AI compute and agent services. We're also seeing exponential growth in AI model and application services revenue, a new revenue engine driven jointly by foundation model services and AI native software.
| Metric | Period | Current guidance |
|---|---|---|
| Model and application services ARR (incl. Model Studio) | June quarter FY2027 | surpass RMB 10 billion (increase) |
| Model and application services ARR (incl. Model Studio) | By year-end (FY2027) | RMB 30 billion (increase) |
| Cloud external revenue growth | Coming quarters | expected to continue accelerating beyond 40% (increase) |
| AI-related product revenue share of cloud external revenue | In about one year | cross the 50% threshold (increase) |
| Group CapEx (three-year plan) | Multi-year | likely to overshoot RMB 380 billion (increase) |
| Quick commerce unit economics (UE) | End of FY2027 | turn positive (improve) |
| Annual dividend per ADS | FY2026 | $1.05 |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +11% on a like-for-like basis (RMB 243.4 billion) | Growth in cloud and customer management service; like-for-like excludes Sun Art and Intime. |
| Cloud external revenue | +40% | AI-related products leading momentum; 11th consecutive quarter of triple-digit AI revenue growth. |
| AI-related product revenue | triple-digit growth (RMB 9 billion in quarter; RMB 36 billion run rate) | Shift from conversational chatbots to autonomous AI agents driving training, inference, and agent orchestration workloads. |
| China E-commerce Group revenue | +6% (RMB 122 billion) | Customer management revenue up 1% as reported; quick commerce revenue up 57%. |
| Customer management revenue (CMR) | +1% reported / +8% like-for-like | Merchant subsidy program reclassified to contra revenue; underlying growth 8%. |
| Total adjusted EBITDA | -84% | Strategic investment in technology, quick commerce, and user experience. |
| GAAP net income | +96% (RMB 23.5 billion) | Mark-to-market equity gains and lapping prior-year disposal losses, partly offset by lower EBITDA. |
| Cloud adjusted EBITDA margin | relatively stable at 9.1% | — |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| AI + cloud commercialization inflection | initial investment phase | commercialization at scale; AI 30% of cloud external revenue, MaaS ARR over RMB 8 billion | Accelerating |
| Cloud external revenue growth | 36% (prior quarter, per management) | 40%, expected to accelerate further | Up |
| T-Head proprietary AI chips | scaled mass production | over 60% of compute serving external customers; only China AI cloud with self-developed chips at scale | Expanding |
| Quick commerce unit economics | loss-making, improving | significant UE and AOV improvement; targeting positive UE by end of FY2027 | Improving |
| CapEx / compute supply | RMB 380 billion three-year plan | likely to overshoot; new-server cost up over 100% year-over-year | Up |
| Consumption / CMR | weaker prior quarter | CMR +8% like-for-like, rebounding | Recovering |