Alibaba (NYSE: BABA) reported Q2 EPS of RMB3.63, RMB0.17 better than the analyst estimate of RMB3.46. Revenue for the quarter came in at RMB22.17 billion versus the consensus estimate of RMB21.36 billion.

Business Highlights and Strategic Updates

In the quarter ended September 30, 2015:

GMV transacted on our China retail marketplaces was RMB713 billion (US$112 billion), an increase of 28% year-over-year;

Revenue was RMB22,171 million (US$3,488 million), an increase of 32% year-over-year;

Mobile GMV accounted for 62% of total GMV transacted on our China retail marketplaces; mobile revenue was RMB10,520 million (US$1,655 million), representing a year-on-year increase of 183%;

Growth of our cloud computing and Internet infrastructure business accelerated, with revenue increasing 128% year-over-year to RMB649 million (US$102 million); and

Non-GAAP free cash flow was RMB13,624 million (US$2,144 million).

China retail marketplaces – Our ecosystem continues to thrive. By the end of the September quarter, our annual active buyers grew to 386 million, and mobile MAUs grew to 346 million, which demonstrates the continuous growth of our unrivaled leadership in mobile commerce. User engagement is healthy with more buyers purchasing across more categories. We are fortifying our market leadership in the major cities. In addition to Beijing and Shanghai, we have added Chengdu, Guangzhou, Hangzhou, Suzhou and Wuhan for same-day delivery of groceries. We continue to develop commerce in the lower-tier cities and rural areas. In the September quarter, we increased our presence in over 4,000 additional rural villages, where we provide purchasing and delivery services. At the same time, we remain committed to providing a trusted consumer experience with authentic products by driving merchants that peddle counterfeit products off our marketplaces through effective implementation of our proprietary data technology and consumer protection programs.

Monetization – We have made significant progress on monetization. The overall monetization of our China retail marketplaces increased from the same period last year, resulting in an increase of our blended monetization rate to 2.42% in the current quarter from 2.30% in the same quarter of 2014. This increase reflects our focus on high-quality merchants and delivering better value proposition to our merchants, thereby enabling us to optimize online marketing efficiency and increased online marketing inventory on both mobile and the PC screen.

Mobile GMV and MAUs – Mobile GMV transacted on our China retail marketplaces in the quarter ended September 30, 2015 was RMB440 billion (US$69 billion), an increase of 121% compared to the same quarter of 2014. Mobile GMV accounted for 62% of total GMV transacted on our China retail marketplaces in this quarter, compared to 55% in the quarter ended June 30, 2015 and 36% in the quarter ended September 30, 2014. The growth was driven primarily by an increase in consumers accessing our platforms through mobile devices and also by an increase in the level of their spending.

Mobile MAUs on our China retail marketplaces grew to 346 million in the month ended September 30, 2015, compared to 307 million in the month ended June 30, 2015, representing a net addition of 39 million MAUs over the quarter and a 59% increase from 217 million in the month ended September 30, 2014. The growth in mobile MAUs in this quarter was primarily due to increased promotion of our Taobao Mobile App.

Conclusion of SEC Inquiry

As previously announced, we received an inquiry from the U.S. Securities and Exchange Commission (“SEC”) in February seeking information regarding our interaction with one of our Chinese regulators, the State Administration for Industry and Commerce, and related matters. We voluntarily cooperated with the SEC’s inquiry. The SEC has notified us that it has concluded its inquiry and, based on the information it has received, it does not intend to recommend an enforcement action against us.

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