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Alibaba’s cloud surpasses Amazon and Microsoft
The technology giant of Chinese origin, Alibaba (NYSE 🙂 Group Holdings Ltd (NYSE: BABA) reported its second quarter earnings above expectations.
In the earnings version reported on Thursday, the company recorded annual revenue growth of 30% that translates to $ 22.8 billion, with the core business segment accounting for 84% of its total revenue share and the business. of cloud computing would be 9.6%.
Reported earnings for diluted announcements of $ 1.54 declined 62% year-on-year and diluted earnings per share stood at HK $ 1.31 (approximately $ 0.19). Each ADS is equivalent to eight ordinary shares of the company.
What happened: Alibaba-owned cloud segment confirmed a record $ 2.19 billion quarterly revenue, with annual growth of 60%, driven by an increase in commercial, financial and Internet activities.
The growth rate is much higher than market-leading cloud services like AWS developed by Amazon Inc (NASDAQ: NASDAQ 🙂 and Azure from Microsoft Corporation (NASDAQ: NASDAQ :), according to CNBC. AWS experienced 29% growth, and Azure, for its part, grew 48% annually in the last quarter, according to TV network reports.
Why it matters: A large number of Alibaba’s cloud service customers increased their spend this quarter by up to 45 percent over the previous year.
Its cloud services portfolio served approximately 60% of publicly traded companies by the end of the second quarter. Alibaba reported a second quarter operating loss of 3.8 billion yuan (about $ 570 million) from the cloud segment.
Maggie Wu, Alibaba’s CFO, estimates this segment will break even and reach profitability in the next two quarters, CNBC reported. The entrepreneur indicated EBITDA as an indicator of profitability.
Alibaba’s cloud segment posted an EBITDA margin of -1% during the current quarter, which represents an improvement from -6% last year as it benefited from economies of scale.
The price movement: The company’s shares fell 2.69% to close at $ 287.75 on Thursday.
Image Courtesy: Wikimedia
Read the rest of the article on Benzinga Spain
Read the article also on Benzinga Spain
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