Alibaba Group Holding Ltd., which raised its revenue guidance for fiscal 2018 to a range of 55% to 56%, announced that it has agreed to acquire a 33% equity stake in Ant Financial Services Group on Feb. 1.
The Hangzhou, China-based e-commerce giant previously gave a revenue outlook for fiscal 2018 of 49% to 53%.
In return for the newly issued equity in Ant Financial, a payments company that operates Alipay, Alibaba will provide "certain intellectual property rights owned by Alibaba exclusively related to Ant Financial." In a joint statement, the two companies said there would be no cash impact to Alibaba after the acquisition closes.
Once the deal is completed, both companies would terminate an existing profit-sharing arrangement. Under this arrangement, Ant Financial pays royalty and technology service fees in an amount equal to 37.5% of its pretax profits to Alibaba.
Alibaba said Feb. 1 that its diluted GAAP earnings per share for the fiscal third quarter ended Dec. 31, 2017, came in at $1.41, a 33% increase from the prior year.
Non-GAAP diluted EPS of $1.63 represented an increase of 18% year over year.
Net income on a GAAP basis rose 36% to $3.59 billion. Revenue rose 56% to $12.76 billion.
Income from operations jumped 26% year over year to $4 billion.
Annual active consumers on the company's China retail marketplaces reached 515 million, an increase of 27% from the same period a year ago.
Tmall saw year-over-year growth of 43% for the gross merchandise volume of physical goods.
