NEW YORK — Alibaba's second-quarter net income fell 39 percent as the Chinese e-commerce company spent more on investing in its mobile business and marketing and gave some executives stock grants, but its revenue surged 54 percent on strong user demand.
It was the first earnings report from Alibaba, which operates the popular e-commerce platforms Taobao and Tmall in China, since it went public on the New York Stock Exchange in September. The $25 billion initial public offering was the largest ever. Alibaba's platforms account for some 80 percent of Chinese online commerce.
Chinese e-commerce is growing fast. Online spending by Chinese shoppers is forecast to triple from its 2011 size by 2015. Alibaba has said it plans to expand into emerging markets and, eventually, Europe and the United States.
For the three months ended Sept. 30, net income after paying preferred dividends fell to $485 million, or 20 cents per share. Excluding one-time items, net income was 45 cents per share. Analysts expected 45 cents per share, according to FactSet.
Alibaba, based in Hangzhou, China, said the decline was due partly to a $490 million stock-option expense tied to performance-based and retention grants to some executives before the IPO, with vesting periods of four to six years.
Other costs that the company took during the quarter included those for consolidating newly acquired businesses, investing in its mobile operating system and digital entertainment, and marketing costs.
Revenue, as expected, was a strong spot. Revenue rose 54 percent to $2.74 billion, beating analyst expectations for $2.61 billion, boosted by more mobile commerce and growth across Alibaba's platforms.
Gross merchandise volume, the total amount of goods sold, rose 49 percent during the quarter. Annual active buyers rose 52 percent to 307 million.
Mobile monthly active users more than doubled to 217 million.
The results, released Tuesday, show Alibaba has a similar strategy as Amazon.com: Invest profit back into the company to spur long-term growth. Last month, Amazon.com reported a large loss in the third quarter, despite a 20 percent increase in revenue.
Still, the two companies operate differently. Amazon works with third-party sellers but also sells and distributes products directly. Alibaba does not compete with its merchants or hold inventory; instead, it serves as a conduit that links buyers and sellers of all kinds. It makes money from transaction fees and marketing services.
Alibaba's biggest competitors in China are Tencent Holdings Ltd., which operates online games and the popular WeChat messaging service, and Baidu Inc., a search engine. All three companies aim to capture revenue as users shift to shopping and spending time on mobile devices.
Shares of Alibaba Group Holding Ltd. rose 4.2 percent to $106.07.