08:56 AM EST, 11/25/2025 (MT Newswires) -- Alibaba Group ( BABA ) reported better-than-expected fiscal second-quarter revenue on Tuesday, driven by growth in its cloud business, though the Chinese e-commerce giant's earnings fell year over year.

The company posted adjusted earnings of 4.36 renminbi ($0.61) per American depositary share for the September quarter, down from 15.06 renminbi a year earlier. Revenue rose 5% to about 247.8 billion renminbi, beating the FactSet-polled consensus of 243.75 billion renminbi.

Alibaba's ( BABA ) New York Stock Exchange-listed shares rose 3.1% in the most recent premarket activity.

"Our core businesses continued to deliver solid revenue growth, with AI revenue contributing to an expanding share of our cloud revenues from external customers," Chief Financial Officer Toby Xu said in a statement. "We are re-investing our profits and free cash flow for the future while near-term profitability is expected to fluctuate."

Revenue in the cloud intelligence business jumped 34% to 39.82 billion renminbi, buoyed by strong demand for AI amid increasing adoption of the technology. AI-related product revenue grew by triple digits for the ninth consecutive quarter, Chief Executive Eddie Wu said.

Sales in the China e-commerce segment advanced 16% to 132.58 billion renminbi. Within this division, e-commerce inclined to 102.93 billion renminbi from 94.47 billion in the prior-year quarter. China commerce wholesale sales climbed 13% to 6.74 billion renminbi.

The international digital commerce business grew 10% to about 34.8 billion renminbi, reflecting double-digit gains in retail and wholesale. The all others segment, which includes Cainiao, Amap and Hujing digital media and entertainment, fell 25% to 62.97 billion renminbi, mainly due to the disposal of the Sun Art and Intime businesses, the company said.

"We have entered into an investment phase to build long-term strategic value in AI technologies and infrastructure and a consumption platform integrating daily life services and e-commerce," Wu said.