Alibaba CFO says expects revenue growth of 45-49 percent in FY2018
- Author: Zachary Reyes Jun 08, 2017,
Jun 08, 2017, 23:28
In pre-market USA trading, Alibaba Group Holding (BABA) shares rose more than 13% before paring gains after the company early Thursday announced revenue growth guidance that was well ahead of analyst expectations. The guidance implies revenue of $34.3 billion compared to the $31.42 billion Wall Street was looking for.
In an announcement that the Financial Times said drew "gasps of wow" from investors, Alibaba Chief Financial Officer Maggie Wu revealed that the company now expects revenue growth of 45% to 49% in the 2018 fiscal year. "After adjusting for the consolidation, Alibaba's revenue growth would've been around 44% to 45%". Wu told investors that with the target it is on track to have the largest rise in sales, noting that the revenue jump of 56% previous year included Lazada, the ecommerce company in South East Asia. Alibaba has been spending billions of dollars to branch into other areas as a result.
Wu also stated that Alibaba will start reporting "annual active consumers" instead of just "annual active buyers" to reflect its increasingly diverse customer base.
Dt Dream is a cloud computing and big data solutions provider with an integrated big data terminal called "DThink".
"Profitability is still not the priority for our cloud business", said Wu adding that the company's goal is to "quickly expand cloud leadership" over the next quarters.
Wu told investors that Alibaba will continue to sacrifice a small amount of its profitability to help fund its new businesses such as cloud computing, which only account 5% of its total sales. While it is one of the fastest growing units the focus is on expanding it even more for now. Year-to-date its share price was up 43%, and with today's 10% gain, Alibaba shareholders are looking at 58% gains for the year.
Meanwhile on Thursday, shares of (NASDAQ: YHOO) climbed more than 10%.