Alibaba Group Holding Limited American Depositary Shares, each represents eight Ordinary Shares 2027 Q1 Earnings Call

Good evening, good morning, and welcome to Alibaba Group's earnings call for the first quarter of fiscal year 2027. Over the past quarter, Alibaba's strategic AI investments have translated into robust results, with a total group revenue growing 9% year over year. AI commercialization has also accelerated across the board. Alibaba Cloud's external revenue grew 45%, and EBITDA increased 133% year over year, continuing to deliver on our commitment to accelerate growth. Revenue from AI-related products has maintained triple-digit growth for the 12th consecutive quarter, with annual revenue run rate surpassing RMB 49.5 billion, around $7.3 billion. It is the core engine of Alibaba Cloud's growth acceleration. I will now walk you through four key areas: AI and cloud commercialization, full-stack AI capabilities, AI application ecosystem, and consumption business. First, AI and cloud commercialization accelerated across the board and is expected to sustain high growth going forward.

This quarter, Alibaba Cloud's external revenue growth accelerated to 45%, a 22-quarter high, while adjusted EBITDA margin reached 11.6%. Notably, this 45% growth was broad-based, driven by compute storage Model as a Service, MaaS, and AI applications. We proactively scaled back low-margin business, continuing to improve the quality of our growth. This quarter, annual revenue run rate from AI-related products exceeded RMB 49.5 billion, and its share of Alibaba Cloud's external revenue rose to 35%. AI-related products generate significantly higher gross margins than the average cloud portfolio. Our recurring AI-related product revenue spans multiple layers: AI compute, MaaS, and AI applications. This multilayered mix of AI revenue sources and monetization models means growing customer demand at any layer converts directly into commercial opportunity for us. This structural advantage will underpin sustained rapid growth in recurring AI-related product revenue going forward.

The surge in AI agents directly drives demand for tokens and GPU compute, while also significantly boosting demand for our traditional cloud products across CPU compute, storage databases, and networking. Alibaba Cloud is undergoing a comprehensive upgrade to an agentic cloud. Based on the latest data, the ARR of our model and application services, including MaaS, has surpassed 16 billion RMB. Based on current market feedback and our contract pipelines, compute demand will continue to outstrip supply. As we continue to ramp up our supply, our AI and cloud revenue growth will accelerate further in the coming quarters, alongside continued improvement in profitability. Second, our full-stack AI capabilities continue to strengthen, marked by the scaled commercialization of proprietary chips, faster model iteration, and a thriving open-source ecosystem. This quarter, deepening synergy between proprietary T-Head chips and proprietary foundation models further improved our AI commercialization efficiency.

T-Head has established a full-stack proprietary silicon portfolio spanning GPU, CPU, and networking chips. As of early August, Zhenwu chips have served more than 650 customers on Alibaba Cloud. The SuperNode instance, powered by T-Head's next-generation Zhenwu M890 AI processor, recently launched on Alibaba Cloud at commercial scale. We expect supply to continue ramping up in the second half of the year to meet strong customer demand. Alibaba Cloud's Zhenwu M890 SuperNode can efficiently run inference workload for foundation models with more than 2 trillion parameters. Both Kibi K3 and Qwen 3.8 Max are already using it to provide MaaS services to external customers. At the data center layer, Alibaba Cloud has cut the delivery time for hyperscale AI data centers to 100 days, a world-leading pace that will significantly speed up our global compute infrastructure buildup.

At the model layer, our model release cadence has intensified over the past month with major iterations across our large language, image, audio, video, and music models, all ranking among the world's top tier. Last week, we opened the model weights of Qwen 3.8 Max with 2.4 trillion parameters and the Qwen 3.8 27B model series. To date, the Qwen model series has been downloaded more than 3 billion times globally, with more than 300,000 derivative models built on it. We believe a thriving open source model ecosystem drives greater demand for our cloud computing services, creating a virtual cycle. Third, our AI native applications span both enterprise and consumer use cases, driving rapid growth in token consumption. On the enterprise side, we launched QwenWork, a new AI productivity product built for enterprise workforce scenarios, delivering agentic capabilities at scale.

We expect productivity agents to become another engine of ARR growth. On the consumer side, the Qwen app continued to steadily grow its user base and is expanding the range of its value-added offerings. Through close coordination between Alibaba Token Hub and Alibaba Cloud, we're running a highly efficient commercial flywheel across compute models, tokens, applications, and monetization. Fourth, our e-commerce businesses remained solid this quarter. In quick commerce, we continued to narrow losses substantially while growing business scale by 45%, with unit economics improving quarter-over-quarter. Having crossed the AI commercialization inflection point last quarter, we're now seeing growth accelerate and margins expand this quarter. Our AI business' own capacity to self-fund and sustain itself is strengthening, giving us greater confidence to keep investing. Looking ahead, AI has become Alibaba's most certain growth engine.

We will stay strategically disciplined and drive long-term growth through our full stack AI capabilities. I will now hand over to Toby to walk you through our financial results.