DingTalk, the workplace collaboration app developed by Alibaba Group Holding, generated more than $200 million in core revenue over the past six months, a sign of its business potential.

The app achieved annual recurring revenue (ARR) of more than $200 million in the six months ended September 30, the first half of Alibaba’s fiscal 2025, the unit said Thursday from Alibaba. ARR is a metric for how much money is generated each year from subscriptions, which in DingTalk’s case are software subscriptions.

This milestone means that DingTalk has found a viable business model in China’s business-to-business (B2B) services market, said DingTalk President Ye Jun. “DingTalk has established a monetization path suitable for China’s B2B sector,” Ye said at a corporate event in the southern city of Zhuhai on Thursday.

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Alibaba’s workplace tool, which enables project collaboration and document sharing, competes with similar products from TikTok owner ByteDance and Tencent Holdings aimed at business users.

Ye was quoted Thursday by China’s Caijing magazine as saying that Alibaba’s unit planned to break even in 2025. He said DingTalk had to rely on capital injections from Alibaba Group to survive in a past “unhealthy,” and stressed that the unit must “operate independently like a normal business.”

This is in line with the broader strategy outlined by Alibaba Group CEO Eddie Wu Yongming in August.

In a conference call with analysts that month, Wu said Alibaba expects most of its business units, beyond e-commerce and cloud services, to “break even.” within one to two years and gradually contribute to large-scale profitability,” as the e-commerce giant continues to improve its profitability across the board.

DingTalk, once a unit of Alibaba’s cloud computing unit, became a separate company last August as part of the tech giant’s largest-ever corporate restructuring, unveiled in March of last year. The unit has ramped up its monetization efforts over the past year, leveraging artificial intelligence (AI) and a comprehensive software ecosystem within the app to attract new business customers.

This latest step comes at a time when DingTalk, which had 700 million users and 25 million business customers at the end of 2023, faces increased competition from online work apps developed by other Chinese telecom giants. technology, including ByteDance’s Feishu and Tencent’s WeCom, the company’s version of WeChat.

Feishu, which has yet to reach profitability, expects its ARR to exceed $300 million for the full year 2024, its CEO Xie Xin said in September. WeCom has not disclosed its revenue data, but said in January that it would reach profitability sooner than DingTalk and Feishu.

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