Alibaba Brings the Numbers

 | Aug 27, 2014 | 5:30 PM EDT  | Comments
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Alibaba Group came out with an updated F-1 filing this morning that contained updated numbers for the second quarter, which turned out to be quite good.

I had heard rumblings that the numbers were going to disappoint. The second and third quarters are funny quarters for Alibaba; they can occasionally seem like the quarter-on-quarter sequential growth has hit a rough patch. That happened last year, and Yahoo! (YHOO) investors freaked out and started selling Yahoo! stock.

This morning, however, the Alibaba numbers looked good. Revenue came in at $2.54 billion, which was up 46% from a year ago. Income from operations was up 26% from a year ago to $1.1 billion. There was also a big one-time gain from the repricing of a bunch of private investments that made the non-GAAP earnings before interest, taxes, depreciation and amortization look even better.

Here's what grabbed me, though: Alibaba's free cash flow in the quarter was $1.7 billion. The next relevant U.S. Internet company with free cash flow like that in the second quarter was eBay (EBAY) at $1.2 billion. Amazon (AMZN) had free cash flow in that period of $862 million and Facebook (FB) had $872 million.

Alibaba is a cash machine, and, if anything, this production should get even stronger over time.

So what does this mean? Facebook had FCF of $872 million in the second quarter and Alibaba's was double that at $1.7 billion. So what is Alibaba worth? Its revenues were virtually the same as Facebook's in the quarter, too.

The roadshow for Alibaba's initial public offering is expected to kick off next week and the latest new rumored date for the actual IPO is Sept. 23.

Stay tuned. This could be a massive IPO.

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