BABA 3QFY26 First Take: As the most watched player in China’s on-demand retail and the AI race, Alibaba delivered results that were weak as expected.

First, note that some Bloomberg consensus numbers shown in the table are stale, as the company had already guided lower in recent conversations with top overseas sell-side, while domestic brokers remained a bit high. As such, the print was not a broad miss versus what matters now. It was broadly in line with the updated expectations.

However, while not worse than the lowered bar, the absolute performance was still soft. Details below.

1) China commerce CMR rose 0.8% YoY, roughly in line with expectations but a sharp deceleration. Similar to JD, fading state subsidies and the late Lunar New Year made 4Q25 a tough quarter for domestic e-commerce.

Segment adj. EBITA was RMB 34.6bn, down 43% YoY (≈RMB 26.5bn). Assuming Taotian’s profit was roughly flat YoY, this implies Taobao Flash Sales lost about RMB 25bn, at the high end of the earlier guided RMB 20–25bn loss range, suggesting UE improvement is slower than hoped.

2) The flagship Cloud Intelligence segment grew revenue 36% YoY, continuing to accelerate as expected. While the total growth was only in line and did not beat again, a positive sign is that external revenue growth (ex-internal demand) reached 35% vs. 29% last quarter. Segment margin held at 9%, in line.

3) Intl commerce was notably weak, with revenue growth under 4%, below the already-lowered bar and a true miss. Adj. EBITA swung back to a RMB 2bn loss but was in line. Management attributed this to the seasonality of the 4Q promotion period; YoY, losses still narrowed and this does not signal a return to an investment-heavy cycle.

4) Other segments saw revenue continue to decline due to the deconsolidation of Intime, in line. However, losses widened sharply to nearly RMB 9.8bn on increased spend for Amap’s street-sweeping list and R&D and traffic for consumer-facing AI apps such as Qianwen and Quark. Even with the latest loss guidance raised to RMB 8.5bn, this was still a genuine miss. $Alibaba(BABA.US) $BABA-W(09988.HK) $阿里巴巴 (BABA-TEST.US)