Alibaba reports slowest ever revenue growth as it misses expectations in the December quarter

Alibaba on Thursday reported its slowest quarterly revenue growth since going public and missed expectations, but the Chinese e-commerce giant did beat on earnings.

Here’s how Alibaba did in its fiscal third-quarter, versus Refinitiv consensus estimates: 

• Revenue: 242.58 billion ($38.06 billion) vs. 246.37 billion yuan estimated, a 10% year-on-year rise.
• EPS: 16.87 ($2.65) yuan per share vs. 16.18 yuan per share estimated, a 23% year-on-year fall.

The 10% revenue growth is the slowest quarterly year-on-year growth rate for the company since its 2014 U.S. listing.

Alibaba has been facing macroeconomic headwinds in China which have weighed on the e-commerce giant’s business. Chinese retail sales remained sluggish in the fourth quarter of the year, for example.

Meanwhile, the company’s shares have fallen over 50% in the last year as China tightened regulation on the country’s technology sector in areas from antitrust to data protection. Last year, Alibaba was hit with a 18.23 billion yuan ($2.8 billion) fine by regulators as part of an antitrust investigation.

Scrutiny on China’s tech giants continues which is another factor weighing on the company.

Investors are watching a few key metrics including customer management revenue (CMR), cloud computing revenue and the company’s forward guidance.

Analysts expect Alibaba’s core commerce revenue, which includes CMR, to come in at 222 billion yuan, according to Refinitiv estimates.

CMR, the single largest portion of sales, is revenue Alibaba gets from services such as marketing that the company sells to merchants on its Taobao and Tmall e-commerce platforms.

During the December quarter, China had its annual Singles Day shopping festival, a multi-day extravaganza in which retailers offer huge discounts. Alibaba said gross merchandise volume (GMV) during the 11-day period hit a record 540.3 billion yuan.

But GMV, which is effectively the amount of money transacted across a platform, does not translate into direct revenue for Alibaba.

Cloud computing revenue is expected to hit 20.62 billion yuan.