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Alibaba has announced a $25 billion share buyback program following a disappointing December quarter. This decision aims to instill confidence in the company’s business outlook and cash flow after a stock free fall that led to a 5% drop. The expanded repurchase program, now totaling $35.3 billion, is set to run through the end of March 2027.

U.S.-listed shares in the Chinese e-commerce giant were at one point more than 5% higher in pre-market trade, but reversed their course. The company stated that the increased buyback shows confidence in the business outlook and cash flow.

Alibaba’s financial results for the December quarter revealed a revenue of 260.35 billion Chinese yuan ($36.6 billion), slightly below the expected 262.07 billion yuan. The 5% year-over-year growth in revenue reflected a slowdown compared to previous quarters, with China’s e-commerce business and cloud computing division experiencing sluggish growth.

The company’s net income dropped by 69% year-on-year to 14.4 billion yuan due to mark-to-market changes in equity investments and reduced income from operations—primarily related to impairments in its video streaming service Youku and supermarket chain Sun Art.

The challenging macroeconomic environment in China, coupled with consumer weakness, has posed difficulties for Alibaba. The Taobao and Tmall e-commerce platforms, major revenue sources, recorded a modest 2% year-on-year growth, reaching 129.1 billion yuan. Alibaba’s cloud computing business, crucial for future growth, saw a 3% year-on-year rise in sales, totaling 28.1 billion yuan. Despite the hurdles, Alibaba’s international commerce business emerged as a bright spot, posting a revenue of 28.5 billion yuan, a 44% year-on-year increase.

Alibaba’s CEO, Eddie Wu, highlighted a focus on growth in e-commerce and cloud, expressing a commitment to improving user experiences and reinforcing market leadership in the coming year. The company remains open to exploring separate financing for its business units, but is not in a hurry to proceed, considering the current market conditions. Alibaba’s recent corporate restructuring and the unexpected departure of key figures like Daniel Zhang have added to the challenges the company faces.

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