--- title: "JD (Trans): Profit inflection confirmed, Q3 revenue back to growth" type: "News" locale: "en" url: "https://longbridge.com/en/news/295810026.md" datetime: "2026-08-13T13:48:04.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295810026.md) - [en](https://longbridge.com/en/news/295810026.md) - [zh-HK](https://longbridge.com/zh-HK/news/295810026.md) --- # JD (Trans): Profit inflection confirmed, Q3 revenue back to growth **Dolphin Research's compiled Trans of** $ JD.com.US **FY26Q2 earnings call.** **I. Core takeaways** 1\. **Shareholder returns**: Repurchased approx. 69.9 mn Class A ordinary shares (equivalent to 34.9 mn ADSs) in 1H for a total of $1.0 bn, equal to about 2.5% of ordinary shares outstanding as of Dec 31, 2025. Roughly $1.0 bn remains under the $5.0 bn 3-year buyback program, which is progressing as planned. The company does not set a fixed payout ratio, aiming to return capital via business growth, dividends, and buybacks. 2\. **Outlook** a) Revenue: Group revenue to return to positive growth in 2H. JD Retail to inflect to positive in Q3, then accelerate sequentially; electronics & appliances growth to improve notably vs. 1H, with general merchandise sustaining healthy growth. b) Profit: Group profit growth to further accelerate in 2H. JD Retail GPM to keep expanding on supply-chain efficiency, while R&D spend (esp. AI applications) will remain on an upward trajectory near term. c) New biz.: JD Food Delivery to sharply narrow YoY losses in 2H. Overseas investment to rise alongside scale, but remain disciplined and controllable. d) Long-term target: No change to JD Retail OP margin target at high single digits. 3\. **Key financials this quarter** a) Aggregates: Revenue of RMB 346.0 bn (-2.9% YoY). Group GPM up 120 bps YoY to 17.1%, near a record high; total Opex -4.4% YoY with Opex ratio down 30 bps YoY. Non-GAAP net income attributable to shareholders RMB 8.9 bn (+20.8% YoY), with NPM up 50 bps YoY to 2.6%. b) Revenue mix: Services revenue +6.8% YoY, within which platform & ads +8.3% (ads faster), and logistics & other services +5.9% (food delivery growth normalized after reaching a full YoY comparable base). c) Segments: JD Retail revenue RMB 295.0 bn (-4.7% YoY), GPM +130 bps YoY to 18.5% (17th consecutive quarter of YoY expansion). Non-GAAP OP RMB 13.5 bn with OPM up 7 bps YoY to 4.6% (a record for a major promo season); JD Logistics revenue RMB 68.1 bn (+24.3% YoY), non-GAAP OP RMB 2.3 bn (+15.6% YoY), OPM 3.5%. New biz. revenue RMB 7.3 bn with OP loss narrowing sharply YoY to RMB 9.9 bn. d) Opex & investment: Operating leverage mainly from marketing optimization, partly offset by higher R&D (esp. scalable AI applications). JD Retail marketing ratio has fallen YoY for four straight quarters, while R&D spend rose meaningfully this quarter. 4\. **Cash flow & balance sheet**: LTM FCF at quarter-end was RMB 31.0 bn vs. RMB 10.0 bn a year ago, driven by faster AR collections and normalization of cash outflows related to trade-in programs. Cash, cash equivalents, restricted cash and ST investments totaled RMB 235.0 bn. 5\. **Reporting change**: From Q1 FY26, on-demand delivery revenue moved from New Biz to JD Logistics, the main driver of lower New Biz revenue YoY and higher JD Logistics growth. **II. Details from the call** **2.1 Management highlights** 1\. **Users & traffic** a) MAU, quarterly active users, and PLUS members all maintained double-digit YoY growth. 618 delivered a record number of purchasing users. b) User expansion coincided with lower group marketing spend, driven by better operating efficiency and marketing optimization in JD Food Delivery and JD Retail. c) Growth this quarter was led by deeper engagement from existing users as strategy shifted from rapid acquisition to improving user quality and LTV. d) Diversified services increased stickiness: the health biz offers full online-to-offline services from consultation to pharmacy and in-home care; home services posted exponential YoY revenue growth; JD Auto Care has offline coverage across 1,000+ counties/districts as of Q2. 2\. **JD Retail — Electronics & appliances** a) Q2 was pressured by last year's trade-in high base and upstream raw-material cost inflation driving price hikes in electronics, though momentum improved in Jun, in line with prior expectations. b) Market share rose steadily across major appliance categories, with the omnichannel strategy taking hold and faster growth offline, outperforming the industry. c) JD MALLs have opened in Shanghai and Hong Kong. d) Three reasons for 2H improvement: base effects will normalize from Q3 as last year's trade-in comp fades; supply-chain strength, proactive stocking, and flexible inventory management will cushion price inflation while keeping consumer pricing competitive; and co-developing AI products with brands, now covering nearly 200 brands, enabling smarter interactions across appliances and robotics. e) Management view: near-term sales may be volatile, but in a more uncertain environment, 1P supply-chain efficiency provides greater value to brands by delivering a highly predictable and efficient sales channel. 3\. **JD Retail — General merchandise** a) Growth slowed in Q2 due to the high base from last year's Q3 trade-in boost to home categories and the incremental traffic and cross-sell lift from food delivery. b) Market share kept rising across all sub-categories. Supermarket (the largest within GM) delivered near double-digit YoY revenue growth, while pharma and industrial supplies maintained solid double-digit growth. c) Three drivers going forward: 1P supply-chain capability still has room to improve user experience, especially in supermarkets via broader assortment, sharper pricing, and better service; new biz. such as food delivery and Jingxi add traffic and new users, with improved conversion and cross-sell through user ops; and ecosystem upgrades by onboarding quality merchants, incubating emerging brands, and improving end-to-end operations. 4\. **JD Retail — Platform ecosystem & ads** a) 3P GMV growth has outpaced 1P for three consecutive quarters, with 3P share of GMV up QoQ in Q2. b) Ads growth drivers: AI-enhanced algorithms are improving targeting and conversion; higher-growth, higher ad-yield categories like GM are gaining mix, providing structural support; and new biz. such as food delivery add incremental traffic while its own ad product is maturing and contributing. c) Positioning: prioritize user experience and avoid monetization at its expense, advancing monetization through efficiency gains. 5\. **JD Food Delivery** a) Orders continued healthy growth in Q2, with total losses narrowing by over 50% YoY. b) Unit economics improved rapidly within a year, driven by refined ops and more efficient subsidies (lower subsidies per order YoY), better fulfillment efficiency at scale, and rising contributions from commissions and ads. d) Management sees substantial room to further optimize unit economics. 6\. **Joybuy (Overseas)** a) The focus is exporting JD's supply-chain capabilities and localizing them in Europe, with strength in appliances and electronics. Leveraging efficient 1P retail and logistics fulfillment, Joybuy offers differentiated services such as delivery with installation. b) Revenue doubled within two quarters. With a self-operated warehouse network in Europe, major cities now have same-day and next-day delivery (morning order, afternoon delivery), covering 40+ mn consumers across Europe. c) Unlike traditional cross-border models, JD pursues a localized, supply-chain-centered e-commerce model, proactively partnering with leading brands and suppliers. d) During the Jun summer sale in Europe, 211 same-day delivery and delivery-with-installation boosted electronics and appliance sales; heatwaves drove strong AC demand. e) Investment ticked up QoQ in Q2; absolute OP loss widened as Joybuy entered a rapid expansion phase, though loss margin improved QoQ. With higher order volumes, better fulfillment efficiency, and wider service coverage, investments will increase accordingly but remain disciplined and controlled. 7\. **Jingxi** a) Penetrating lower-tier markets with differentiated supply, quarterly active users rose over 40% YoY and contributed 40% of new actives in Q2. b) It is bringing in many new users and lifting platform engagement, with orders expected to grow rapidly and unit economics to keep improving. 8\. **AI & logistics automation** a) Shopping and conversion: upgraded search, recommendation, ad targeting engines, and in-house AI shopping agent to better infer intent, match, and allocate traffic, driving visible gains in engagement, conversion, and brand ROI. b) Enterprise efficiency: embedded GenAI in automated customer service and cross-dept workflows to improve satisfaction while structurally optimizing cost. c) Warehousing & sorting: JD Logistics is expanding deployment of its in-house goods-to-person solution across more warehouses and categories. d) Autonomous delivery: by Q2, thousands of ground robots were deployed across 20+ provinces, with the first 24/7 overnight autonomous route launching in Shenzhen; powered by a logistics foundation model for real-time intelligent decisions. **2.2 Q&A** **Q: Electronics and appliances faced a tough base, demand pull-forward, and ongoing price hikes in Q2. How will growth trend in 2H?** A: Category revenue tracked expectations in Q2, with near-term pressure from last year's high base and price increases driven by raw-material costs. Even so, leveraging supply-chain capability and user mindshare, our position strengthened with steady share gains across major appliance categories and a successful omnichannel push, with offline growth much faster and resilience above the industry. JD MALLs in Shanghai and Hong Kong are open, and analysts and investors are welcome to visit. In 2H, despite continued price pressure in consumer electronics, we expect a clear growth improvement for three reasons. First, base effects normalize as the drag from last year's trade-in comp fades from Q3, allowing growth to re-accelerate. Second, supply-chain capabilities, proactive planning, and flexible inventory will cushion price inflation while maintaining competitive consumer prices and operational resilience. Third, product innovation: rapid AI advances open up category innovation, and our co-development with nearly 200 brands enables smarter interactions across appliances and robotics. We remain highly confident in our long-term leadership. Near-term sales may fluctuate, but in uncertainty, JD's value to brands is even clearer: 1P supply-chain efficiency delivers competitive pricing and service to consumers and a highly predictable, efficient channel for brands. **Q: What drove the slower growth in general merchandise in Q2, and how will it trend in coming quarters?** A: GM was also affected by the high base in last year's Q3. The trade-in program directly lifted home-category sales and, together with food delivery, brought significant traffic and some cross-sell, creating a tough comp this year. Even so, we kept gaining share across all GM sub-categories, with supermarkets delivering resilient near double-digit growth and pharma and industrial goods maintaining solid double-digit growth. Key drivers going forward are: better category ops and 1P supply-chain strength to elevate user experience, especially in supermarkets through broader assortment, stronger price competitiveness, and higher service quality; continued user growth, as new biz. like food delivery and Jingxi add meaningful traffic and new users, with better conversion and cross-sell through user ops; and ecosystem upgrades by onboarding quality merchants, incubating emerging brands, and improving end-to-end ops. Overall, JD Retail growth should accelerate QoQ in 2H, with electronics & appliances recovering steadily and GM sustaining healthy growth; as conversion improves, ads have room to accelerate visibly. **Q: JD's FCF cycle is clearly stronger than peers whose CapEx exceeds operating cash flow. Given incremental investments including real estate, will you adopt a clearer annual profit payout ratio?** A: We repurchased approx. 69.9 mn shares in 1H for $1.0 bn, equal to ~2.5% of shares outstanding as of Dec 31, 2025, with about $1.0 bn left under the $5.0 bn 3-year buyback plan that is on track. On shareholder returns, we will continue investing in operations and supply-chain capabilities to strengthen long-term competitiveness and value, while returning capital via business growth, dividends, and buybacks to maximize long-term TSR. Since 2023, we have returned about $13.0 bn via dividends and buybacks. We have paid annual dividends since 2022 and kept per-share dividends stable in 2025 despite profit fluctuations, providing steady cash returns; on buybacks, we have repurchased about 17% of shares outstanding since 2023. **Q: Joybuy is scaling fast and a German retailer acquisition is pending. How will you further differentiate on price, UX, or logistics, and what is the investment budget for 2H and next year?** A: Joybuy's core edge is localizing JD's supply-chain capabilities in Europe, especially in appliances and electronics. Through efficient 1P retail and logistics, it delivers a differentiated experience including delivery with installation, which is boosting user recognition and retention and helped revenue double within two quarters. With a self-operated European warehouse network, Joybuy offers same-day and next-day delivery (order in the morning, receive in the afternoon) in major cities, covering 40+ mn consumers. Unlike traditional cross-border platforms, JD builds a localized, supply-chain-centered model, proactively partnering with leading brands and suppliers to deliver high-quality goods to European consumers. In Jun's European summer sale, 211 same-day delivery and one-stop delivery-with-installation drove strong electronics and appliance sales; heatwaves further lifted AC demand, with delivery-with-installation enhancing brand perception and customer satisfaction. Overseas remains early in capability buildout: 2Q investment rose slightly QoQ, absolute losses widened with rapid expansion, but loss margin improved QoQ. As orders scale, fulfillment efficiency improves, and coverage expands, investments will increase accordingly while remaining disciplined and controllable, with scale economies improving unit economics. **Q: With competition stabilizing, what are JD Food Delivery's latest plans and targets for share, user growth, and cross-sell synergy?** A: Orders grew healthily in Q2 and total losses narrowed by over 50% YoY. Unit economics improved markedly within a year, driven by refined ops and subsidy efficiency (lower subsidy per order YoY), better delivery efficiency at scale, and increasing contributions from commissions and ads. On synergies: first, strong collaboration with core retail on acquisition and cross-sell supported double-digit YoY growth in quarterly active users this quarter; second, the offering expanded location-based supply and the merchant ecosystem; third, we are integrating base capacity procurement across food delivery and logistics to enhance on-demand delivery capability and efficiency. Long term, we aim for healthy scale growth while improving operating efficiency and unit economics, and, more importantly, deeper integration with core retail to unlock ecosystem synergies that drive sustainable user and revenue growth and lift overall efficiency and profitability. **Q: In a tougher competitive and consumption backdrop, how will platform and ad revenue sustain faster growth, and what is the 2H outlook?** A: We prioritize user experience and advance monetization via efficiency gains without compromising that priority. In Q2, platform & ads grew faster than total revenue, with stronger momentum in ads. With sales recovery in 2H, we are confident ad revenue growth will accelerate. Tech-driven efficiency, mix upgrades, and a larger traffic pool will support momentum: using AI in algorithms to improve ad delivery, targeting, and conversion to accelerate ad revenue; structurally higher mix of faster-growing, higher ad-yield GM categories; and incremental traffic from new biz. like food delivery, whose maturing ad product contributes incremental ad revenue. Over the long run, as the ecosystem scales and technology further lifts efficiency, ad revenue should see steady growth and become a core driver of both revenue and profit. **Q: What is the margin outlook for JD Retail in 2H?** A: JD Retail OPM improved steadily in Q2 on two drivers: continued GPM expansion from better ops and supply-chain efficiency lifting merchandise GP, plus rising contributions from high-margin commissions and ads; and marketing expense and ratio improved YoY for four straight quarters. At the same time, we continue to invest in R&D, especially AI applications, with JD Retail R&D spend up notably in Q2. In 2H, supply-chain efficiency should keep lifting JD Retail GPM. We will maintain long-term investment, particularly in AI-related R&D, which is expected to keep growing near term, while gradually translating into operating gains that improve long-term efficiency and optimize the overall cost structure. We remain confident in achieving a high single-digit OPM long term. Key drivers include stronger 1P supply-chain capability and scale effects steadily improving merchandise GP; category upside, with supermarkets still having ample room to improve profitability and electronics & appliances benefiting from mix optimization; and the platform ecosystem, with faster growth of high-margin services such as commissions and ads structurally driving margin expansion. **Q: How should we think about investment in new businesses, and how does that translate to group profitability and NPM?** A: New-biz investments are long-term and focused on leveraging and strengthening supply-chain advantages across international, lower-tier markets, and on-demand retail. As these businesses mature, ecosystem synergies will support healthy long-term growth and profit contribution. Different new businesses are at different stages and investment cycles, and we maintain strict financial discipline focused on ROI, dynamically allocating resources across them to keep group profitability on a healthy trajectory. Specifically, JD Food Delivery cut losses by 50% YoY in Q2 and will keep improving unit economics, with further efficiency gains and a sharp YoY loss reduction expected in 2H; international is still early but scaling fast with healthy momentum and improving unit economics, and we will invest at a disciplined pace to keep overall investment controlled; and Jingxi is effectively penetrating lower-tier markets with differentiated supply, bringing many new users and raising engagement, with orders set to grow rapidly and unit economics to improve. At group level, Q2 marked a clear inflection back to healthy YoY profit expansion. With core retail strength and disciplined investment, we expect faster group profit growth in 2H. Longer term, core retail still has room to lift profitability, while new businesses will keep improving ROI, unlocking synergies and gradually becoming new growth engines, supporting steady long-term profit expansion. **Risk disclosure & statements:**[**Dolphin Research Disclaimer and General Disclosures**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [02618.HK](https://longbridge.com/en/quote/02618.HK.md) - [09618.HK](https://longbridge.com/en/quote/09618.HK.md) - [89618.HK](https://longbridge.com/en/quote/89618.HK.md) - [HJDD.SG](https://longbridge.com/en/quote/HJDD.SG.md) - [JD.US](https://longbridge.com/en/quote/JD.US.md) ## Related News & Research - [JD.com in charts: JD Logistics remains a growth engine in Q2, while retail revenue slips](https://longbridge.com/en/news/295782474.md) - [JD Logistics: Revenue up 26.5% and profit up 10.5% year-over-year, driven by supply chain and express growth](https://longbridge.com/en/news/295772875.md) - [JD.com Breaks A 12-Year Streak: Revenue Falls For First Time Since 2014 Listing](https://longbridge.com/en/news/295798767.md) - [JD.com Q2 2026 Earnings Call: Complete Transcript](https://longbridge.com/en/news/295811245.md) - [China's JD.com beats quarterly revenue estimates](https://longbridge.com/en/news/295778331.md)