Alibaba’s cloud computing business is booming.
The Chinese tech giant is growing faster than all the other cloud providers, according to research firm Gartner. And its latest earnings report reflects that momentum.
Overall, Alibaba blew past analysts’ expectations for the second quarter, reporting sales growth of 61 percent to $8.3 billion. That allowed Alibaba to hike its full-year revenue forecast by 49 to 53 percent — and Wall Street ate it up. Alibaba stocks are riding high off the outperforming quarter.
In the cloud, Alibaba also easily exceeded analysts’ expectations, growing the segment by 99 percent to $447 million in revenue. That’s up from $224 million in cloud sales during the same time a year ago. Analysts’ were projecting revenue around $422 million. Cloud also accounted for 5 percent of the company’s sales during the most recent quarter, the highest to date.
Total cloud revenue for the first six months of the current fiscal year is about $813 million, essentially doubling since last year.
While impressive, that’s still miles behind cloud market leader Amazon, which reported $4 billion in cloud revenue for its most recent quarter and is now projecting $18 billion for the year. Alibaba has set a target to replace Amazon atop the cloud computing rankings, but that’s not happening any time soon.
Another sign of Alibaba’s cloud growth: the company’s employee headcount during the quarter increased by more than 2,200, and that’s “primarily due to the continued expansion of our cloud computing.”
One question mark from Alibaba’s most recent earnings: how many new paying cloud customers did it add during the quarter? For the first time in recent earnings reports, Alibaba did not break out that number after crossing the 1 million paying customer threshold in the June quarter. The company’s cloud division has been clocking new paying customers at a tremendous pace, adding more than 100,000 in each of the last three quarters. For now, there’s no sense if that trend continued into the most recently reported quarter.