Chinese online retail conglomerate Alibaba posted mixed results for the quarter ended March 31, reporting better-than-expected revenue and net losses for the first time since going public as a result of its record-setting $2.8 billion antitrust penalty.

Why it matters: Regulation was a major uncertainty for Alibaba following a probe of the company launched late last year. With the penalty issued in April, the e-commerce giant is now seeking to move forward and focus on business such as long-term rivalries from competitors like JD.com and Pinduoduo, which recently overtook Alibaba in user numbers.

Details: Alibaba is planning to invest all of incremental profits in the coming year into core strategic areas, the company’s management said in a call held Thursday with analysts.

• The company reported an operational loss of RMB 7.7 billion after accounting for a $2.8 billion fine levied by Chinese market watchdog in April. The net losses attributable to ordinary shareholders was RMB 5.48 billion.
• Alibaba posted RMB 187.4 billion ($28.6 billion) revenue for the quarter ended March, a 64% year-over-year increase compared with RMB 114.3 billion in the same quarter a year ago. Revenue beat the high end of analyst estimates compiled by Yahoo Finance.  
• Revenue for fiscal year ended March jumped 41% year on year to RMB 717.29 billion, driven by growth in the core commerce businesses as well as Alibaba Cloud, Wu said in a statement.
• Sun Art, the supermarket chain Alibaba acquired for $3.6 billion in October, was a major contributor to revenue growth, contributing RMB 42.9 billion or around 6% of the total annual revenue.
• Priorities include technology innovation, merchant solutions, user acquisition and experience enhancement, supply chain, and infrastructure, company executives said without specifying the expected investment sum.
• Chief financial officer Maggie Wu encouraged investors to look at the long-term profit when responding to concern about profits in the coming year. The company promised that its investments will be “highly targeted and disciplined.”
• Tiger Brokers analyst Mark Meng said that for Alibaba to deal with the impact from the regulators all in one quarter was positive. “There’s no need to be pessimistic given Alibaba’s business growth is still robust and the penalty, though hefty, is one-time and small in proportion to Alibaba’s overall quarterly revenue” (our translation).
• Growth in Alibaba Cloud, once a reliable engine for the company, is losing momentum. Revenue of Alibaba’s cloud business increased only 37% year-on-year, slowest pace since 2014. Wu attributed the drop to the loss of a “top-class customer in the internet industry” without naming the firm.
• Meng said that the former client was TikTok, which was forced to end its partnership with Alibaba when it began facing scrutiny from the US.
• Alibaba forecasted that revenue for the year ending March 2022 will rise at least 30% year on year to exceed RMB 930 billion.
• Alibaba shares fell 6% in New York trading on Thursday, while its Hong Kong shares dipped 5% Friday morning.

Context: China’s top antitrust regulator issued a RMB 18.2 billion ($2.8 billion) fine to e-commerce giant Alibaba on April 10 for anti-competitive practices including forced exclusivity. 

READ MORE: What is ‘forced exclusivity’? And why did it get Alibaba fined $2.8 billion?