Alibaba's results beat estimates, Q1 revenue up 42% at $16.32 billion

China's Alibaba Group Holding Ltd reported better- than-expected quarterly revenue and profit on Thursday, aided by growth in its e-commerce and cloud computing businesses.

U.S.-listed shares in the company, which makes money primarily by selling advertising and promotional services to third-party merchants on its Taobao and Tmall sites, rose 3% to $166.72 in trading before the bell.

Two of the world's biggest e-commerce sites, Taobao and Tmall are booming in tandem with internet adoption and mobile phone penetration in China.

Both Alibaba and smaller rival JD.com, however, are seeking to diversify amid slowing e-commerce revenue growth at home - due in part to markets in China's biggest cities saturating.

JD also reported better-than-expected second-quarter revenue on Tuesday, boosted by stronger sales in its online retail business.

Alibaba's revenue rose 42% to 114.92 billion yuan ($16.32 billion) in its first quarter ended June 30 from 80.92 billion yuan, a year earlier.

Analysts had expected revenue of 111.73 billion yuan, according to IBES data from Refinitiv.

Revenue at its cloud computing business rose 66% to 7.79 billion yuan, while revenue from its core commerce business rose 44% to 99.54 billion yuan.

Net income attributable to ordinary shareholders was 21.25 billion yuan.

Excluding items, the company earned 12.55 yuan per American Depository Share. Analysts were expecting 10.25 yuan per ADS, according to IBES data from Refinitiv.