Alibaba, Chinese e-commerce and entertainment giant, says that  the worst of the economic fallout from the coronavirus is now behind it. Indeed, the health and economic crisis is accelerating digital transformation.

The company revealed a 34% surge in revenues and net profits between April and June, the first quarter of its new financial year, climbed by 28% to $5.59 billion.

“Our domestic core commerce business has fully recovered to pre-COVID-19 levels across the board, while cloud computing revenue grew 59% year-over-year,” said group CEO Daniel Zhang. “Our strong profit growth and cash flow enable us to continue to strengthen our core business and invest for long term growth.”

The group’s entertainment businesses continue to lose money, but a slower rate. Its digital and media sector, which stretches from operating browsers for mobile devices to cinema ticket selling, saw revenues grow a modest 9% to RMB6.99 billion ($990 million) and losses trimmed by 38% to RMB2.02 billion ($286 million). Alibaba said that its streaming video business Youku increased daily average subscriber numbers by 60% year-on-year. The biggest revenue gain in the digital entertainment segment came from online games and membership subscriptions, “partly offset by the decrease in revenue from customer management.”

Alibaba also said that Youku’s losses were reduced “mainly as a result of the decrease in content cost.” But it did not disclose further details.

At group level, Alibaba enjoyed revenues of $21.8 billion (RMB154 billion). Net income attributable to ordinary shareholders was up by 124% to RMB47.6 billion ($6.736 billion), and net income was up 143% to RMB46.4 billion ($6.573 billion). A different measure of profitability, non-GAAP net income was RMB39.5 billion ($5.59 billion), an increase of 28% year-over-year.

The company has recently been in the spotlight as Chinese apps have been rebuffed by governments in India and the U.S., and as Donald Trump has hinted at ejecting Chinese companies from U.S. stock markets.

“We are closely monitoring U.S. government policy shifts.. a very fluid situation,” said Zhang on a conference call with analysts and media. “We will take action to comply with any new regulation.”