Alibaba Group Holding Co. (BABA) - Get Report posted modestly stronger-than-expected second quarter revenues Friday, as cloud sales hit $1.3 billion, sending shares higher in pre-market trading.

Alibaba said sales for the three months ending in September, the company's fiscal second quarter, rose 40% from last year to just over 119 billion Chinese yuan ($16.651 billion) a figure that topped the Street consensus forecast but showed a notable slowdown in growth from the 54% pace recorded over the second quarter of 2018. The e-commerce giant also said non-GAAP dilutred earnings per each of its U.S.-listed shares was pegged at $1.83, firmly ahead of the consensus estimate of $1.51 per share .

"Alibaba Group celebrated its 20th anniversary in September, marking an important milestone on our 102 year journey to make it easy to do business anywhere," said CEO Daniel Zhang. "Our digital economy continues to thrive and prosper. We aim to serve over one billion annual active consumers and help our merchants achieve over RMB10 trillion in annual gross merchandise volume by end of fiscal 2024."

"We will continue to invest in the user experience and innovative technology to create new value for consumers, as well as the millions of enterprises undergoing digital transformation in the new digital economy," he added.

Alibaba's U.S.-listed shares were marked 1.1% higher at the start of trading following the earnings release to change hands at $178.94 each, a move that would extend the stock's year-to-date gain to around 31%.

Cloud computing revenues rose 64%, Alibab said, to $1.3 billion, the highest on record and 85% higher on a quarter-per-quarter basis as the group continues to challenge the global market dominance of Amazon's (AMZN) - Get Report AWS and Microsoft's (MSFT) - Get Report Azure. 

As of August 2019, 59% of companies listed in China are customers of Alibaba Cloud. The adoption of cloud services in China's public sector and traditional industries is driven not only by demand for cost-effective IT solutions," Alibaba said. "But also by transformation of business models and processes through digitization of customer insight, inventory, work flow, resource planning and other aspects."