Earnings recap Q4 FY24 (31st March) China commerce $13b International commerce $4b Cloud $3.5b Logistics $3.4b All others $6.7b Total revenue $30.7b Cost of revenue $22.5b Sales and marketing $4b General and admin $2b Amortizations $0.3b* Share based compensations $1b* Total costs $28.7b Operating Income $2b Alibaba is stuck in the $30b revenue range for some years now. The same goes for the operating income, hovering between $2b and $3b. It's not a fast grower in any of its segment, with the cloud again being disappointing. Management started to reorganize the business, to focus more on the core and its growth. Let's see how this plays out in the coming quarters and years. Growth or not, Alibaba is a consistent earner, a money printing machine, with its operating income available, quarter after quarter, for what follows, the financial transactions. Tax and Financial Income -$1.9b Alibaba paid $800m in taxes. The average is around 25% in China, but depending on accruals and deferrals, this time Alibaba had to pay 40% of its operating to the Man. Alibaba is a mid-sized bank, excluding goodwill and property, after paying all the bills and short term debts, using the receivables and some other assets, Alibaba has $130 billion in cash, equity and investments left, with (only!) $31b in long term debt. $100 billion in net assets, all to be managed responsibly. Not an easy task, even a merely 1% revaluation results in a $1b financial profit or loss, making P&L swings part of Alibaba's earnings. Adding interest income & expenses, this quarter it took a negative hit of $1.1b. Net income close to $0 Taxes and the revaluations took out most of the operating income. But as taxes weren't due yet, and the revaluations being non-cash transactions, and some operating costs* also being non-cash items, Alibaba was again in the money with a +3b cash-flow. 65 million ADRs bought back. Alibaba is on a mission to return capital, it added $2b of its assets to the quarter's cash-flow, and bought $5b worth of stock. Realizing a 2.6% net reduction in outstanding shares, which now stands at a total of 2,434 million ADRs. Overall, another solid quarter delivered, this is a good company at a good value. But to become that 'wonderful company', the growth commitments will have to deliver results.
Selling the company at its all-time low, just because SR needs some money? That doesn't seem right.
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