Alibaba CFO Toby Xu Touts 5% Drop In Share Count Thanks To Aggressive Buybacks As Jack Ma-Founded Company Basks In Stellar Q3 Results

Alibaba Group Holding Ltd. BABA BABAF has achieved a significant 5% reduction in share count over the past nine months through aggressive buyback initiatives, demonstrating strong capital return commitment amid robust financial performance.

What Happened: The Chinese tech giant repurchased $1.3 billion worth of shares in the December quarter alone, following approximately $10 billion in buybacks during the first half of fiscal 2024. The company maintains substantial dry powder with $20.7 billion remaining in its buyback authorization.

“Combined with approximately $10 billion were purchased in the first half of this fiscal year, we had achieved a 5% net reduction in share count over the last nine months,” Chief Financial Officer Toby Xu stated during the company’s third-quarter earnings call.

Why It Matters: The buyback strategy comes amid strong financial fundamentals, with Alibaba reporting $83.6 billion in cash reserves as of Dec. 31. The company’s third-quarter revenue grew 8% year-over-year to $38.38 billion, exceeding analyst estimates, while adjusted earnings per ADS of $2.93 beat consensus expectations of $2.66.

Alibaba’s board-level capital management committee continues to oversee shareholder return initiatives through a combination of dividends, share buybacks, and strategic investments. The stock has gained 85% over the past 12 months, supported by China’s economic stimulus measures and growing traction in Alibaba’s AI offerings.

Price Action: Alibaba’s ADR closed at $135.97 on Thursday, gaining 8.09% for the day. In after-hours trading, the stock rose an additional 0.82%. Year to date, Alibaba shares have surged 60.06%, according to data from Benzinga Pro.

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