JD.com, Inc. (NASDAQ: JD)

JD.com’s Q2 2025 financial performance demonstrated the company’s commitment to growth investments while maintaining strong revenue momentum. Total net revenues reached RMB356.7 billion (US$49.8 billion), representing a robust 22.4% year-over-year increase. This growth was driven by strong performance across all business segments, with net product revenues increasing 20.7% and net service revenues growing 29.1%.

However, profitability metrics showed pressure due to strategic investments in new business initiatives. Net income attributable to ordinary shareholders declined to RMB6.2 billion from RMB12.6 billion in Q2 2024, primarily due to increased marketing expenses which rose 127.6% to RMB27.0 billion. This significant marketing investment was largely attributed to promotional efforts for new business initiatives, particularly JD Food Delivery.

Operating performance reflected the impact of strategic investments, with operating loss of RMB0.9 billion compared to operating income of RMB10.5 billion in Q2 2024. The operating margin turned negative at -0.2% versus 3.6% in the prior year. On a non-GAAP basis, operating income was RMB0.9 billion with a 0.3% margin, demonstrating underlying operational capability despite investment pressures.

Cash flow generation remained robust with free cash flow of RMB22.0 billion (US$3.1 billion), though down from RMB49.6 billion in Q2 2024. The company maintained strong cash and cash equivalents of RMB223.4 billion (US$31.2 billion), providing significant financial flexibility for continued strategic investments and growth initiatives.

The company’s revenue mix continued to evolve, with Electronics and home appliances revenues growing 23.4% to RMB179.0 billion, while General merchandise revenues increased 16.4% to RMB103.4 billion. Service revenues showed particularly strong growth of 29.1%, driven by logistics and marketplace services expansion.

JD Retail demonstrated exceptional performance with revenues increasing 20.6% to RMB310.1 billion. Most notably, the segment achieved an operating margin of 4.5%, representing a historic high across all promotion quarters and improving from 3.9% in Q2 2024. This margin expansion reflects the successful execution of operational efficiency improvements and the benefits of scale in JD’s core retail business.

JD Retail’s strong performance was driven by robust growth in user traffic, quarterly active customers, and user shopping frequency. The segment benefited from successful promotional activities during the JD 618 Grand Promotion, where JD Supermarket introduced distinctive products with JD features, such as branded milk and yogurt in 211 milliliters and Chinese liquor in specialized packaging volumes.

JD Logistics continued its solid growth trajectory with revenues increasing 16.6% to RMB51.6 billion. However, operating margin compressed to 3.8% from 4.9% in Q2 2024, reflecting investments in expanding the company’s “Global Smart Supply Chain Network” and the development of overseas capabilities. The segment opened new overseas warehouses in multiple countries including the United States, United Kingdom, France, Poland, South Korea, Vietnam, and Saudi Arabia.

JD Logistics’ international expansion efforts showed tangible progress, with over 130 bonded warehouses, direct mail warehouses, and overseas warehouses covering 23 countries and regions worldwide. The launch of “JoyExpress” self-operated express delivery brand in Saudi Arabia marked a significant milestone in establishing comprehensive localized logistics capabilities.

New Businesses showed explosive growth with revenues surging 198.8% to RMB13.9 billion, primarily driven by the rapid expansion of JD Food Delivery. However, the segment recorded an operating loss of RMB14.8 billion, resulting in a -106.7% operating margin as the company invested heavily in building market share and expanding the service footprint. This significant investment phase reflects JD’s strategic commitment to diversifying beyond traditional retail.

JD Food Delivery demonstrated strong operational metrics during Q2 2025, with daily order volume exceeding 25 million during the JD 618 Grand Promotion and over 1.5 million high-quality merchants on the platform. The business successfully recruited over 150,000 full-time riders by the end of Q2, establishing the operational infrastructure necessary for sustainable growth.

JD.com advanced several key strategic initiatives during Q2 2025, demonstrating its commitment to innovation and market expansion across multiple fronts:

JD Retail Initiatives

• “One Step Ahead – Accelerated Upgrade Program”: Launched on April 15 for 3C electronics products, supporting manufacturers in driving new product sales and enhancing user experience, with focus on emerging categories like AI glasses and embodied intelligent robots
• JD MALL Expansion: Opened new stores in Beijing, Shenzhen, Nanjing, Wuhan, and Taiyuan, reaching a total of 24 stores by end of Q2. These stores leverage JD’s supply chain strengths to offer immersive, digitalized shopping experiences
• Product Innovation: JD Supermarket introduced distinctive products with JD features, including specialized packaging sizes that help suppliers avoid price competition and create new growth opportunities

JD Logistics Global Expansion

• International Network Growth: Expanded overseas warehousing capabilities with new facilities in seven countries, demonstrating commitment to serving Chinese brands and international customers
• “Zhilang” Intelligent System: Deployed advanced intelligent warehousing solution nationwide in key cities, enabling high-density storage and completing order sorting in seconds even in warehouses with tens of thousands of SKUs
• Local Delivery Capabilities: Launched “JoyExpress” self-operated delivery brand in Saudi Arabia, establishing comprehensive logistics network from warehousing to last-mile delivery

New Business Development

• JD Food Delivery Growth: Achieved strategic milestones with over 25 million daily orders during promotion periods and exceeded 150,000 full-time riders, focusing on synergies with existing JD ecosystem
• 7Fresh Kitchen Launch: Introduced in July 2025 with distinctive partnership model to develop signature dishes, aiming to innovate and reform food delivery supply chain
• JD Health Expansion: Strengthened position as “First Online Marketplace for New and Specialty Medicine Launches” with innovative drugs like Xin Er Mei and Yi Su Da becoming available on the platform

These strategic initiatives reflect JD’s comprehensive approach to building long-term competitive advantages through supply chain innovation, technology advancement, and ecosystem expansion. The company’s focus on synergies between different business units positions it well for sustainable growth across multiple markets and segments.

JD.com maintained strong cash generation capabilities despite increased strategic investments, demonstrating the underlying strength of its business model:

Cash Flow Performance

• Free Cash Flow: RMB22.0 billion (US$3.1 billion) for Q2 2025, compared to RMB49.6 billion in Q2 2024
• Trailing twelve-month free cash flow: RMB10.1 billion, down from RMB55.6 billion due to investment phase
• Operating cash flow: RMB24.4 billion for Q2 2025, reflecting strong underlying business fundamentals
• Capital expenditures: RMB3.0 billion, focused on technology infrastructure and fulfillment capabilities

Share Repurchase Program

JD.com demonstrated strong commitment to shareholder returns through its comprehensive share repurchase program:

• Program Scale: US$5.0 billion authorization effective through August 2027
• H1 2025 Activity: Repurchased approximately 80.7 million Class A ordinary shares for US$1.5 billion
• Impact on Share Count: Repurchased shares represented approximately 2.8% of ordinary shares outstanding as of December 31, 2024
• Remaining Capacity: US$3.5 billion remaining under the program as of the announcement date

The combination of ongoing cash generation and active capital returns demonstrates JD’s ability to balance growth investments with shareholder value creation. The company’s strong balance sheet with RMB223.4 billion in cash and cash equivalents provides significant strategic flexibility for future initiatives.