Alibaba.com Reports Record High Total Customer Net Additions in Q1 2009.* Record high quarterly net addition of 49,544 paying members to reach 481,575, up 47 percent y-o-y * Registered users topped 40 million, up 36 percent y-o-y, as more buyers move their sourcing online to achieve higher efficiency and greater selection of suppliers and products * Revenue up 19 percent y-o-y * Deferred revenue and recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. free cash flow both up 28 percent and 25 percent y-o-y respectively * Net income declined 16 percent y-o-y, as expected, as a result of previously announced investments in customers, people and technology to position the Company for future growth * Most cash-rich Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the company in China with RMB RMB Right Mouse Button RMB Regional Management Board (USACE) RMB Rolf Maier Bode (musician, band) RMB Ren Min Bi (currency of People's Republic of China) 6.9 billion (US$1 billion(*)) and no debt HONG KONG Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. -- Alibaba.com Limited (HKSE HKSE Hong Kong Stock Exchange :1688) (HK.1688), the world's leading business-to-business  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. company, today announced unaudited financial results for the quarter ended March 31, 2009 that show steps taken in 2008 and ongoing investments to help small and medium-size Adj. 1. medium-size - intermediate in size medium-sized, moderate-size, moderate-sized sized - having a specified size enterprises (SMEs) through the economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. are bearing fruit for both buyers and sellers and for the Company. [TABLE OMITTED] "Our results show, above all, that investing in our customers and helping them achieve their business goals was also good for Alibaba.com, and that the launch of the Gold Supplier Starter Pack A starter pack (or starter deck) is a sealed package of cards or figurines, designed to serve as the beginning of a collection, in collectible card games and collectible miniature wargames. Starter packs usually contain a fairly large number of items. in November November: see month. was what our customers wanted as it has led to record increases in net additions of our paying members," said David Wei, chief executive officer of Alibaba.com. "Although the worldwide economy weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. during the first quarter and China's export sector
declined by nearly 20 percent, our increase in revenue and paying
members shows that we are providing SMEs around the world with an
affordable and effective global trade solution when they need it most.
We are pleased that Alibaba.com helps sustain the operations of so many
SMEs which are the backbone of most economies around the world."
"While our Q1 revenues increased 19 percent year-on-year, we have taken the decision, as previously announced, to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. our profit margin into customers, people, and technology innovation in order to position ourselves for future growth. Our strong recurring free cash flow, growing 25 percent year-on-year, affords us the financial strength to make these investments. Although this resulted in a year-on-year decline in GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income, we have conviction that investment today will reward Alibaba.com's shareholders in the long run. Our investments in customer satisfaction include the introduction of the Gold Supplier Starter Pack, the free trial of value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. for China TrustPass members, and our global marketing campaign to drive even greater worldwide buyer awareness. At the same time, we are hiring new employees and increasing our performance-based incentive compensation as well as increasing investments in R&D to support these initiatives and drive growth. Effective e-commerce solutions are in ever-increasing demand by global traders Traders Individuals who take positions in securities and their derivatives with the objective of making profits. Traders can make markets by trading the flow. When they do this, their objective is to earn the bid/ask spread. and entrepreneurs because they bring efficiency and greater selection of suppliers and products. As a result, we will continue to invest in the coming quarters to develop more advanced and useful products for our customers." Outlook "There are still a lot of uncertainties in front of us and the business environment is expected to remain challenging for some time to come. However, we are seeing clear trends in the growing penetration of e-commerce despite weak economic conditions. While we understand that the healthy growth rate of users and paying members that we have experienced over the past half-year could temper tem·per n. 1. A state of mind or emotions; mood. 2. A tendency to become easily angry or irritable. 3. An outburst of rage. later in 2009, we remain cautiously optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op , and are committed to executing on our investment and strategic initiatives to drive customer penetration and retention because we believe that leads to long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. and sustainable growth in revenue and profit," Wei added. First Quarter 2009 Financial and Operating Results Paying Members and Revenue The number of paying members in our two marketplaces continued to grow significantly. As of March 31, 2009, we had 481,575 paying members, representing a 47 percent increase from the first quarter of 2008 and a 12 percent increase from the fourth quarter of 2008. In Q1 2009, Alibaba.com posted record high quarterly net additions of Gold Supplier members of 12,782. The combined net addition of paying members for Q1 2009 across our three key products - Gold Supplier, International TrustPass and China TrustPass - was also a record high of 49,544. As a result of the strong increase in the number of paying members, deferred revenue and customer advances grew by RMB191 million (US$28 million) during the quarter to reach RMB2.4 billion (US$359 million) as of March 31, 2009, representing an increase of 28 percent year-on-year and 8 percent quarter-on-quarter. Given our subscription-based revenue model, we believe deferred revenue is a good indicator of future revenue growth. Total revenue was RMB807 million (US$118 million) in the first quarter of 2009, representing a 19 percent increase from the same period of 2008 and was flat from the fourth quarter of 2008. The China marketplace continued to grow as a proportion of overall revenue, contributing 37 percent of total revenue in the first quarter compared to 32 percent in the corresponding period in 2008. International Marketplace Revenue from our international marketplace was RMB506 million (US$74 million) for the first quarter, an increase of 9 percent year-on-year and 3 percent quarter-on-quarter. The growth was primarily due to the increase in the number of Gold Supplier Starter Pack members. Revenue in the first quarter of 2008 included other revenue of RMB8 million (US$1 million) from cross-selling Alisoft Export Edition, which was handed back to Alisoft in November last year as we focused on the acquisition of Gold Supplier members. Excluding Alisoft's contribution, annual growth would have been 11 percent. The momentum in Gold Supplier membership acquisition continued from the fourth quarter of 2008 into the first quarter of 2009. During the first quarter, we added 12,782 Gold Supplier customers to our marketplace, bringing the total number to 55,810 as of March 31, 2009. Even though China's export sector declined by nearly 20 percent during the quarter, we achieved a historical high in Gold Supplier net adds. We believe Gold Supplier Starter Pack was the right product for our export customers at the right time, and our strong execution on product development, sales, marketing and service made the strategy successful. International TrustPass members increased in the first quarter by 1,444 to 17,580, which was in line with gains in previous quarters. Steady progress has been made in building awareness and interest in Alibaba.com through our overseas expansion initiatives in key regions where we see promising potential for growth. Registered users on the international marketplace grew by more than 700,000 in the first quarter to a total of 8.6 million at the end of the quarter, representing an increase of 76 percent year-on-year and 9 percent sequentially. Storefronts on the international marketplace grew by more than 77,000 in the first quarter to a total of 1.0 million at the end of the quarter, representing an increase of 39 percent year-on-year and 8 percent sequentially. China Marketplace Revenue from our China marketplace was RMB301 million (US$44 million), representing an increase of 39 percent year-on-year and a 5 percent decrease quarter-on-quarter. The growth year-on-year was mainly due to the increase in China TrustPass members. The sequential decline was mainly attributable to reduced revenue from the sale of keywords based on the old fixed-placement keyword bidding service. During the quarter we transitioned our customers to Ali-ADvance(TM), a new pay-for-performance keyword bidding service, which replaced the old fixed-placement service. We also recognized less display advertising revenue in the first quarter compared to the prior quarter due to seasonality. China TrustPass members had a net increase of 35,318 during the quarter to reach a total of 408,185 as of March 31, 2009. Although the first quarter is traditionally the slowest season, we achieved the highest net addition of China TrustPass paying members on record for the same quarter of the year. In response to more sophisticated customer demand, we announced a series of new value-added-services for China TrustPass members with free one-year trial periods. One major feature was "Mobile China TrustPass," our first step towards providing a mobile e-commerce solution that allows suppliers to enjoy seamless linkage linkage In mechanical engineering, a system of solid, usually metallic, links (bars) connected to two or more other links by pin joints (hinges), sliding joints, or ball-and-socket joints to form a closed chain or a series of closed chains. between their mobile phones and Alibaba.com membership account. Other feature upgrades, such as a more vibrant storefront and advanced traffic analyzer See network analyzer. tool, will be launched in the coming months and will be available as value-added service options for paying members. Our Ali-ADvance(TM) program was officially launched in March 2009 and the market response to date has been positive. Under the program, paying members can bid for keyword placement on a cost-per-click basis while product listings in search results will be determined by factors such as relevance of the customer's product to the search and the keyword bid price. This will help improve the efficiency of suppliers' marketing efforts while allowing for better monetization Monetization The securitization of the gross revenues of a contract. of the ever-increasing user traffic on our China marketplace. Registered users on the China marketplace grew by 1.5 million in the first quarter to a total of 31.6 million at the end of the quarter, representing an increase of 27 percent year-on-year and 5 percent sequentially. Storefronts on the China marketplace grew by nearly 350,000 in the first quarter to a total of 4.0 million at the end of the quarter, representing an increase of 62 percent year-on-year and 10 percent sequentially. Gross profit for the first quarter of 2009 was RMB698 million (US$102 million), an increase of 16 percent year-on-year and nearly 1.5 percent quarter-on-quarter. Gross margin reduced slightly from 88.4 percent in the same period last year to 86.5 percent but was better than the 85.3 percent in the fourth quarter of 2008. The year-on-year margin reduction was a result of the launch of Gold Supplier Starter Pack, a new entry-level product, and the upgrade of our Gold Supplier service, which led to higher staff costs and bandwidth and depreciation expenses as a percentage of revenue. Our gross margin improved quarter-on-quarter mainly because we incurred less training expenses in the first quarter of 2009. Profit from operations (which represents profit from operations after deducting share-based compensation expense) for the first quarter of 2009 was RMB277 million (US$41 million), representing an 11 percent decrease year-on-year and a 56 percent increase quarter-on-quarter. Our operating profit margin Operating profit margin The ratio of operating profit to net sales. was 34.3 percent in the period, a decrease from 45.9 percent in the same period last year and an increase from 22.0 percent in the fourth quarter of 2008. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: decrease year-on-year was mainly due to increased direct acquisition costs to acquire Gold Supplier Starter Pack members, higher product development expenses and lower other operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. as a percentage of revenue. This trend reflected the previously announced strategy of expanding our market leadership by growing our paying membership base and enhancing our technology. The margin increase quarter-on-quarter represented lower marketing expenses incurred as a percentage of revenue. Profit from operations before share-based compensation expense (non-GAAP) was RMB316 million (US$46 million) in the period, down 11 percent year-on-year and up 42 percent quarter-on-quarter. Operating margin excluding share-based compensation expense (non-GAAP) was 39.2 percent, a decrease from 52.5 percent in the same period of 2008 and an increase from 27.7 percent in the fourth quarter of 2008 due to the reasons stated above. Net income (profit attributable to equity owners) for the first quarter of 2009 was RMB253 million (US$37 million), a decrease of 16 percent year-on-year and an increase of 27 percent quarter-on-quarter. The decrease year-on-year was a result of the ongoing investments we are making in our customers, people and technology to expand our market leadership position and to position the Company for future growth. The sequential increase primarily reflected the seasonality of these investments, which will mainly be incurred in the latter three quarters of the year. Earnings per share, basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , were 5.69 Hong Kong cents (0.73 US cents(#)) and 5.68 Hong Kong cents (0.73 US cents), respectively, a decrease of 12 percent compared to 6.47 Hong Kong cents (0.83 US cents) (basic and diluted) in the first quarter of 2008, and an increase of 27 percent compared to 4.48 Hong Kong cents (0.58 US cents) (basic and diluted) in the fourth quarter of 2008. Recurring free cash flow (non-GAAP) in the period was RMB343 million (US$50 million), representing a 25 percent increase year-on-year and a 32 percent decrease quarter-on-quarter. The improvement year-on-year was mainly due to the strong increase of paying members, who pre-pay for their full-year memberships, as reflected in the increase in our deferred revenue and customer advances. The sequential decline was mainly due to a refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies of prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay ment n. enterprise income tax that
was received in the fourth quarter of 2008 as well as the payment of
year-end bonuses to employees in the first quarter of 2009.
Cash and bank balances as of March 31, 2009 were RMB6.9 billion (US$1 billion), representing a 28 percent increase year-on-year and a 5 percent increase quarter-on-quarter. (#) All HK dollar conversions are based on an exchange rate of 1USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. =7.78HKD HKD In currencies, this is the abbreviation for the Hong Kong Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. About Alibaba.com Limited Alibaba.com Limited (HKSE: 1688) (HK.1688) is the global leader in business-to-business (B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business ) e-commerce and the flagship company of Alibaba Group
Alibaba.com "Global Trade starts here..." (Chinese: 阿里巴巴; Pinyin: ā lǐ bā bā . Founded in 1999, Alibaba.com makes it easy for millions of buyers and suppliers around the world to do business online through three marketplaces: a global trade marketplace (www.alibaba.com) for importers and exporters, a Chinese marketplace (www.alibaba.com.cn) for domestic trade in China, and, through an associated company associated company associate n → Partnerfirma f associated company n → società collegata , a Japanese marketplace (www.alibaba.co.jp) facilitating trade to and from Japan. Together, its marketplaces form a community of 40 million registered users from more than 240 countries and regions. Headquartered in Hangzhou, Alibaba.com has offices in more than 40 cities across Greater China as well as in Europe and the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . For photos and broadcast-standard video supporting this press release, please visit www.thenewsmarket.com/alibaba. If you are a first-time user, please take a moment to register. If you have any questions, please email journalisthelp@thenewsmarket.com. [TABLE OMITTED] [TABLE OMITTED] |
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