JD.com, Inc. (NASDAQ: JD), China’s leading technology driven
e-commerce company and retail infrastructure service provider,
today announced its unaudited financial results for the quarter
ended September 30, 2018.
Third Quarter 2018
Highlights
- Net revenues1 for
the third quarter of 2018 were RMB104.8 billion (US$215.3 billion),
an increase of 25.1% from the third quarter of 2017. Net service
revenues for the third quarter of 2018 were RMB10.9 billion (US$1.6
billion), an increase of 49.4% from the third quarter of 2017.
- Operating margin of JD
Mall before unallocated items3 for the third quarter of
2018 was 2.2%, as compared to 2.3% for the same period last
year.
- Net income from continuing
operations attributable to ordinary
shareholders for the third quarter of 2018 was RMB3.0
billion (US$0.4 billion), compared to RMB1.0 billion for the same
period last year. Non-GAAP net income from continuing
operations attributable to ordinary
shareholders4 for the third quarter of 2018 was RMB1.2
billion (US$0.2 billion), compared to RMB2.2 billion for the same
period last year.
- Diluted EPS and Non-GAAP
Diluted EPS. Diluted net income per ADS from continuing
operations for the third quarter of 2018 was RMB2.03 (US$0.30),
compared to RMB0.69 for the third quarter of 2017. Non-GAAP diluted
net income per ADS from continuing operations for the third quarter
of 2018 was RMB0.80 (US$0.12), compared to RMB1.52 for the same
quarter last year.
- Annual active customer
accounts increased to 305.2 million in the twelve months
ended September 30, 2018 from 266.3 million in the twelve months
ended September 30, 2017.
“We are pleased to report solid results for the
third quarter, with our core JD Mall business driving consistent
growth under its highly experienced management team,”
said Richard Liu, Chairman and CEO of JD.com. “JD’s
commitment to convenient, reliable service and high-quality,
authentic products continues to translate into an increasingly
loyal user base. Our ‘Retail as a Service’ strategy is also gaining
traction as we provide a wide range of partners with innovative
retail infrastructure solutions.”
“JD’s strategic focus on improving customer
experience helped drive strong performance across the business,”
said Sidney Huang, Chief Financial Officer of JD.com. “We will
continue our disciplined strategy of investing in key technologies
as we focus on optimizing operations and driving economies of scale
over the coming quarters.”
Recent Business
Developments
- In September, JD.com’s premium
membership program JD Plus surpassed 10 million users. Since
launching the program in 2016, JD has continued to introduce new
benefits to JD Plus members, including free shipping coupons, VIP
customer service, exclusive discounts on selected product offerings
and access to premium online content provided by our partners such
as iQIYI, among others.
- In the third quarter, JD.com
continued to attract major international brands, enhancing its
reputation as the most reliable online channel for accessing the
Chinese market. Cosmetics brands including L’Occitane de Provence,
HOUSE 99 and Hera, and fashion brands including Salvatore Ferragamo
and Furla, opened flagship stores on the JD.com platform. JD’s
dedicated luxury platform TOPLIFE also welcomed John Galliano,
Buccellati, Shang Xia and other major international brands.
- In the third quarter, JD.com
entered into strategic agreements with textile and fashion giant
Ruyi to provide premium technology and infrastructure solutions
covering smart logistics, inventory management and marketing. Four
international menswear brands under Ruyi-owned Trinity Group,
including Gieves & Hawkes, Kent & Curwen, Cerruti 1881 and
D'Urban opened flagship stores on JD.com.
- In September, JD.com launched its
“Zu Chongzhi” platform, leveraging its comprehensive big data and
supply chain capabilities to enable offline retailers to conduct
real-time store performance analysis, marketing campaigns,
merchandise selection, site selection and public opinion monitoring
and management. As part of JD’s “Retail as a Service” initiative,
the Zu Chongzhi platform helps offline retailers improve the
efficiency and precision of their operations through
digitalization, data mining and visualization capabilities.
- In October, JD Logistics opened up
its leading logistics network to consumers, offering parcel
delivery service to users, beginning in Beijing, Shanghai and
Guangzhou. Leveraging JD’s extensive delivery network, users in
these areas can conveniently send items intra-city and throughout
most of mainland China with JD’s same fast and reliable delivery
service.
- In the third quarter, JD Logistics
launched an initiative allowing consumers to receive reward points
by choosing recycled packaging for their orders. The service was
trial launched in Beijing, Shanghai and Guangzhou and is expected
to expand to dozens of cities in the near future. JD Logistics also
joined hands with corporate partners to promote recycled packaging
across the entire supply chain.
- In August, JD.com’s joint venture,
Dada-JD Daojia, announced the completion of a new US$500 million
financing round with investments from Walmart and JD. The financing
marks a new stage in the companies’ partnership to explore
innovative “Boundaryless Retail” solutions. Leveraging Dada’s
crowd-sourcing delivery network, Dada-JD Daojia has partnered with
Walmart, Yonghui, Carrefour, CR Vanguard, Family Mart, LAWSON, and
numerous other supermarkets and grocery stores covering 63 cities,
to provide a premium online fresh grocery shopping experience with
one-hour home delivery service. Dada-JD Daojia is China’s leading
on-demand logistics and omnichannel e-commerce platform.
- During the third quarter, JD
expanded its leadership position in fulfillment capabilities among
China’s e-commerce companies. As of September 30, 2018, JD.com
operated over 550 warehouses covering an aggregate gross floor area
of approximately 11.9 million square meters in China.
- JD.com had approximately 200,000
merchants on its online marketplace, and a total of 175,366
full-time employees as of September 30, 2018.
Third Quarter 2018 Financial Results
Net Revenues. For the
third quarter of 2018, JD.com reported net revenues of RMB104.8
billion (US$15.3 billion), representing a 25.1% increase from the
same period in 2017. Net product revenues increased by 22.8%, while
net service revenues increased by 49.4% in the third quarter of
2018, from the third quarter of 2017.
Cost of
Revenues. Cost of
revenues increased by 25.3% to RMB88.7 billion (US$12.9 billion) in
the third quarter of 2018 from RMB70.8 billion in the third quarter
of 2017. This increase was primarily due to the growth of the
company’s direct sales business, and costs related to the logistics
services provided to merchants and other partners.
Fulfillment
Expenses. Fulfillment expenses,
which primarily include procurement, warehousing, delivery,
customer service and payment processing expenses, increased by
21.8% to RMB7.8 billion (US$1.1 billion) in the third quarter of
2018 from RMB6.4 billion in the third quarter of 2017. Fulfillment
expenses as a percentage of net revenues were 7.4%, compared to
7.6% in the same period last year.
Marketing
Expenses. Marketing expenses
increased by 25.2% to RMB4.1 billion (US$0.6 billion) in the third
quarter of 2018 from RMB3.3 billion in the third quarter of
2017.
Technology and Content
Expenses. Technology and content
expenses increased by 96.4% to RMB3.4 billion (US$0.5 billion) in
the third quarter of 2018 from RMB1.8 billion in the third quarter
of 2017, as a result of the company’s continued investment in top
R&D talent and technology infrastructure.
General and Administrative
Expenses. General and
administrative expenses increased by 33.0% to RMB1.4 billion
(US$0.2 billion) in the third quarter of 2018 from RMB1.1 billion
in the third quarter of 2017.
Income/(loss) from operations and
Non-GAAP income from operations5. Operating loss
from continuing operations for the third quarter of 2018 was
RMB650.7 million (US$94.7 million), compared to operating income
from continuing operations of RMB502.4 million for the same period
last year. Non-GAAP operating income from continuing operations for
the third quarter of 2018 was RMB638.3 million (US$92.9 million),
as compared to RMB1,472.1 million in the third quarter of 2017.
Operating margin of JD Mall before unallocated items for the third
quarter of 2018 was 2.2%, as compared to 2.3% for the same period
last year.
Non-GAAP EBITDA6 from
continuing operations for the third quarter of 2018 was RMB1.7
billion (US$0.2 billion), as compared to RMB2.1 billion for the
third quarter of 2017.
Others,
net. Others, net from continuing
operations for the third quarter of 2018 was an income of RMB3.4
billion (US$0.5 billion), compared with an income of RMB0.5 billion
in the third quarter of 2017. The substantial increase was
primarily attributable to gain from fair value change of long-term
investments of RMB3.6 billion (US$0.5 billion), which mainly
resulted from the fair value change of Farfetch in connection with
its initial public offering.
Net income attributable
to ordinary shareholders and Non-GAAP Net
income attributable to ordinary
shareholders. Net income from
continuing operations attributable to ordinary shareholders for the
third quarter of 2018 was RMB3.0 billion (US$0.4 billion), compared
to RMB1.0 billion for the same period last year. Non-GAAP net
income from continuing operations attributable to ordinary
shareholders for the third quarter of 2018 was RMB1.2 billion
(US$0.2 billion), compared to RMB2.2 billion for the same period
last year.
Diluted EPS and Non-GAAP Diluted
EPS. Diluted net income per ADS
from continuing operations for the third quarter of 2018 was
RMB2.03 (US$0.30), compared to RMB0.69 for the third quarter of
2017. Non-GAAP diluted net income per ADS from continuing
operations for the third quarter of 2018 was RMB0.80 (US$0.12), as
compared to RMB1.52 for the third quarter of 2017.
Cash Flow and Working
Capital
As of September 30, 2018, the company’s cash and
cash equivalents, restricted cash and short-term investments
totaled RMB42.9 billion (US$6.2 billion), compared to RMB38.4
billion as of December 31, 2017. For the third quarter of 2018,
free cash flow from continuing operations of the company was as
follows:
|
|
For the three months ended |
|
|
September 30,
2017 |
September 30,2018 |
September
30,2018 |
|
|
RMB |
RMB |
US$ |
|
|
(In thousands) |
|
|
|
|
|
Net cash provided by
operating activities from continuing operations |
|
352,289 |
2,212,661 |
322,170 |
Add: Impact from JD
Finance related credit products included in the operating cash
flow |
|
(1,559,382) |
(1,775,639) |
(258,538) |
Less:
Capital expenditures |
|
|
|
|
Land use rights
and construction in progress |
|
(5,384,486) |
(3,563,886) |
(518,912) |
Other CAPEX |
|
(1,812,924) |
(5,060,015) |
(736,752) |
Free
cash flow |
|
(8,404,503) |
(8,186,879) |
(1,192,032) |
|
|
|
|
|
Net cash used in investing activities from
continuing operations was RMB2.6 billion (US$0.4 billion) for the
third quarter of 2018, consisting primarily of cash paid for
capital expenditures of RMB8.6 billion, and increases in
investments in equity investees and investment securities of RMB7.6
billion, offset by decreases in short-term investments of RMB7.6
billion and decreases in loans to JD Finance of RMB6.3 billion.
Net cash used in financing activities from
continuing operations was RMB3.0 billion (US$0.4 billion) for the
third quarter of 2018, consisting primarily of repayment of
nonrecourse securitization debt of RMB3.7 billion, partially offset
by proceeds from short-term borrowings of RMB1.1 billion.
For working capital turnover days, see table
under “Supplemental Financial Information and Business
Metrics.”
Fourth Quarter 2018
Guidance
Net revenues for the fourth quarter of 2018 are
expected to be between RMB130 billion and RMB135 billion,
representing a growth rate between 18% and 23% compared with the
fourth quarter of 2017. This forecast reflects JD.com’s current and
preliminary expectation, which is subject to change.
Conference Call
JD.com’s management will hold a conference call
at 7:00 am, Eastern Time on November 19, 2018, (8:00 pm,
Beijing/Hong Kong Time on November 19, 2018) to discuss the third
quarter 2018 financial results.
Listeners may access the call by dialing the
following numbers:
US Toll Free: |
+1-845-675-0437 or
+1-866-519-4004 |
Hong
Kong |
+852-3018-6771 or 800-906-601 |
Mainland China |
400-6208-038 or 800-8190-121 |
International |
+65-6713-5090 |
Passcode: |
7794136 |
A telephone replay will be available from 10:00
am, Eastern Time on November 19, 2018 through 08:59 am, Eastern
Time on November 27, 2018. The dial-in details are as follows:
US Toll Free: |
+1-855-452-5696 or
+1-646-254-3697 |
International |
+61-2-8199-0299 |
Passcode: |
7794136 |
Additionally, a live and archived webcast of the
conference call will also be available on the company’s investor
relations website at http://ir.jd.com.
About JD.com
JD.com is a leading technology driven e-commerce
company and retail infrastructure service provider in China. Its
cutting-edge retail infrastructure enables consumers to buy
whatever they want, whenever and wherever they want it. The company
has opened its technology and infrastructure to partners, brands
and other sectors, as part of its Retail as a Service offering to
help drive productivity and innovation across a range of
industries. JD.com is the largest retailer in China, a member of
the NASDAQ100 and a Fortune Global 500 company.
Non-GAAP Measures
In evaluating the business, the company
considers and uses non-GAAP measures, such as non-GAAP
income/(loss) from operations, non-GAAP operating margin, non-GAAP
net income/(loss) attributable to ordinary shareholders, non-GAAP
net margin, free cash flow, non-GAAP EBITDA, non-GAAP EBITDA
margin, non-GAAP net income/(loss) per weighted average number of
shares and non-GAAP net income/(loss) per ADS, as supplemental
measures to review and assess operating performance. The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with accounting
principles generally accepted in the United States of America
(“U.S. GAAP”). The company defines non-GAAP income/(loss) from
operations as income/(loss) from operations excluding share-based
compensation, amortization of intangible assets resulting from
assets and business acquisitions, revenue from business cooperation
arrangements with equity investees and impairment of goodwill and
intangible assets. The company defines non-GAAP net income/(loss)
attributable to ordinary shareholders as net income/(loss)
attributable to ordinary shareholders excluding share-based
compensation, amortization of intangible assets resulting from
assets and business acquisitions, revenue from business cooperation
arrangements with equity investees, gain on disposals/revaluation
of investments, income from non-compete agreement, reconciling
items on the share of equity method investments, fair value change
of long-term investments, impairment of goodwill, intangible assets
and investments, and tax effects on non-GAAP adjustments. The
company defines free cash flow as operating cash flow adding back
the impact from JD Finance related credit products included in the
operating cash flow and less capital expenditures, which include
purchase of property, equipment and software, cash paid for
construction in progress, purchase of intangible assets and land
use rights. The company defines non-GAAP EBITDA as non-GAAP
income/(loss) from operations plus depreciation and amortization
excluding amortization of intangible assets resulting from assets
and business acquisitions.
The company presents these non-GAAP financial
measures because they are used by management to evaluate operating
performance and formulate business plans. Non-GAAP income/(loss)
from operations, non-GAAP net income/(loss) attributable to
ordinary shareholders and non-GAAP EBITDA reflect the company’s
ongoing business operations in a manner that allows more meaningful
period-to-period comparisons. Free cash flow enables management to
assess liquidity and cash flow while taking into account the impact
from JD Finance related credit products included in the operating
cash flow and the demands that the expansion of fulfillment
infrastructure and technology platform has placed on financial
resources. The company also believes that the use of the non-GAAP
financial measures facilitates investors to understand and evaluate
the company’s current operating performance and future prospects in
the same manner as management does, if they so choose. The company
also believes that the non-GAAP financial measures provide useful
information to both management and investors by excluding certain
expenses, gain/loss and other items that are not expected to result
in future cash payments or that are non-recurring in nature or may
not be indicative of the company's core operating results and
business outlook.
The non-GAAP financial measures have limitations
as analytical tools. The company’s non-GAAP financial measures do
not reflect all items of income and expense that affect the
company’s operations or not represent the residual cash flow
available for discretionary expenditures. Further, these non-GAAP
measures may differ from the non-GAAP information used by other
companies, including peer companies, and therefore their
comparability may be limited. The company compensates for these
limitations by reconciling the non-GAAP financial measures to the
nearest U.S. GAAP performance measure, all of which should be
considered when evaluating performance. The company encourages you
to review the company’s financial information in its entirety and
not rely on a single financial measure.
CONTACTS:
Investor RelationsRuiyu
LiSenior Director of Investor Relations+86 (10)
8912-6805IR@JD.com
Media+86 (10)
8911-6155Press@JD.com Safe Harbor Statement
This announcement contains forward-looking
statements. These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates," "confident" and
similar statements. Among other things, the business outlook and
quotations from management in this announcement, as well as
JD.com's strategic and operational plans, contain forward-looking
statements. JD.com may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission (the “SEC”), in its annual report to
shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to
third parties. Statements that are not historical facts, including
statements about JD.com's beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: JD.com's growth strategies; its future business
development, results of operations and financial condition; its
ability to attract and retain new customers and to increase
revenues generated from repeat customers; its expectations
regarding demand for and market acceptance of its products and
services; trends and competition in China's e-commerce market;
changes in its revenues and certain cost or expense items; the
expected growth of the Chinese e-commerce market; Chinese
governmental policies relating to JD.com's industry and general
economic conditions in China. Further information regarding these
and other risks is included in JD.com's filings with the SEC. All
information provided in this press release and in the attachments
is as of the date of this press release, and JD.com undertakes no
obligation to update any forward-looking statement, except as
required under applicable law.
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Balance
Sheets |
(In thousands) |
|
|
|
|
|
As of |
|
|
December
31, 2017 |
September
30, 2018 |
September
30, 2018 |
|
|
RMB |
RMB |
US$ |
ASSETS |
|
|
|
|
Current
assets |
|
|
|
|
Cash and
cash equivalents |
|
25,688,327 |
33,997,437 |
4,950,122 |
Restricted cash |
|
4,110,210 |
3,716,025 |
541,064 |
Short-term investments |
|
8,587,852 |
5,172,369 |
753,111 |
Accounts
receivable, net (including JD Baitiao of RMB12.0 billion and
RMB14.3 billion as of September 30, 2018 and December 31, 2017,
respectively)(1) |
|
16,359,147 |
15,742,233 |
2,292,113 |
Advance
to suppliers |
|
394,574 |
446,717 |
65,043 |
Inventories, net |
|
41,700,379 |
39,855,172 |
5,803,024 |
Prepayments and other current assets |
|
7,391,602 |
9,568,218 |
1,393,159 |
Amount
due from related parties |
|
10,796,561 |
1,036,055 |
150,853 |
Total current
assets |
|
115,028,652 |
109,534,226 |
15,948,489 |
Non-current
assets |
|
|
|
|
Property,
equipment and software, net |
|
12,574,178 |
18,412,892 |
2,680,969 |
Construction in progress |
|
3,196,516 |
6,210,668 |
904,291 |
Intangible assets, net |
|
6,692,717 |
5,508,325 |
802,028 |
Land use
rights, net |
|
7,050,809 |
9,657,695 |
1,406,187 |
Goodwill |
|
6,650,570 |
6,816,875 |
992,556 |
Investment in equity investees |
|
18,551,319 |
30,292,838 |
4,410,722 |
Investment securities |
|
10,027,813 |
19,820,354 |
2,885,899 |
Deferred
tax assets |
|
158,250 |
134,345 |
19,561 |
Other
non-current assets (including JD Baitiao of RMB0.7 billion and
RMB0.9 billion as of September 30, 2018 and December 31, 2017,
respectively)(1) |
|
2,227,942 |
5,254,955 |
765,135 |
Amount
due from related parties |
|
1,896,200 |
1,896,200 |
276,092 |
Total
non-current assets |
|
69,026,314 |
104,005,147 |
15,143,440 |
Total
assets |
|
184,054,966 |
213,539,373 |
31,091,929 |
|
|
|
|
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Balance
Sheets |
(In thousands) |
|
|
|
|
|
As of |
|
|
December 31,
2017 |
September 30,
2018 |
September 30,
2018 |
|
|
RMB |
RMB |
US$ |
LIABILITIES |
|
|
|
|
Current
liabilities |
|
|
|
|
Short-term borrowings |
|
200,000 |
1,137,584 |
165,635 |
Nonrecourse securitization debt(1) |
|
12,684,881 |
8,438,515 |
1,228,671 |
Accounts
payable |
|
74,337,708 |
78,164,188 |
11,380,924 |
Advances
from customers |
|
13,605,298 |
12,832,634 |
1,868,467 |
Deferred
revenues |
|
1,592,332 |
1,941,598 |
282,702 |
Taxes
payable |
|
658,220 |
254,934 |
37,119 |
Amount
due to related parties |
|
54,342 |
122,472 |
17,832 |
Accrued
expenses and other current liabilities |
|
15,117,840 |
18,802,023 |
2,737,628 |
Total current
liabilities |
|
118,250,621 |
121,693,948 |
17,718,978 |
Non-current
liabilities |
|
|
|
|
Deferred
revenues |
|
1,273,545 |
664,923 |
96,815 |
Nonrecourse securitization debt(1) |
|
4,475,238 |
- |
- |
Unsecured
senior notes |
|
6,447,357 |
6,798,361 |
989,860 |
Deferred
tax liabilities |
|
882,248 |
868,588 |
126,469 |
Long-term
borrowings |
|
- |
3,095,640 |
450,734 |
Other
non-current liabilities |
|
337,254 |
293,608 |
42,751 |
Total
non-current liabilities |
|
13,415,642 |
11,721,120 |
1,706,629 |
Total
liabilities |
|
131,666,263 |
133,415,068 |
19,425,607 |
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Balance
Sheets |
(In thousands) |
|
|
|
|
|
|
|
As of |
|
|
December 31,
2017 |
September 30,
2018 |
September 30,
2018 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
Redeemable
non-controlling interests |
|
- |
15,616,852 |
2,273,857 |
|
|
|
|
|
SHAREHOLDERS’
EQUITY |
|
|
|
|
Total
JD.com, Inc. shareholders’ equity (US$0.00002 par value,
100,000,000 shares authorized, 2,965,816 shares issued and
2,893,566 shares outstanding as of September 30, 2018) |
|
52,040,814 |
63,953,723 |
9,311,840 |
Non-controlling interests |
|
347,889 |
553,730 |
80,625 |
Total
shareholders’ equity |
|
52,388,703 |
64,507,453 |
9,392,465 |
Total
liabilities, redeemable non-controlling interests and shareholders’
equity |
|
184,054,966 |
213,539,373 |
31,091,929 |
|
|
|
|
|
(1) Due to certain pre-existing contractual
arrangement, the company remains as the legal owner of the consumer
credit (known as JD Baitiao) receivables until they are repaid or
sold through the new asset-backed securitization (“ABS”) plan as
described below. JD Finance continues to perform the credit risk
assessment services for the JD Baitiao business and purchase the
over-due receivables from the company at carrying value to absorb
the risks and obtain the rewards from JD Baitiao business. The
company also assisted JD Finance in various ABS to raise funds to
support the JD Baitiao business. JD Finance acts as the servicer of
the ABS and also subscribes to the subordinate tranche. Due to the
company’s continuing involvement right in ABS under the historical
arrangement prior to October 2017, the company was not able to
derecognize the related Baitiao receivables through the legacy ABS
under U.S. GAAP. Beginning from October 2017, the company revised
certain structural arrangements for the issuance of ABS to
relinquish its continuing involvement right, and has been able to
derecognize certain Baitiao receivables through the new ABS plan.
As a result, the balances of Baitiao receivables are expected to
decrease gradually in the future with the adoption of the new ABS
plan, and nonrecourse securitization debt balance will gradually
decrease upon the settlement of the legacy ABS plan. |
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Operations |
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the nine months ended |
|
September 30,2017 |
September
30,2018 |
September 30,2018 |
|
September
30,2017 |
September 30,2018 |
September
30,2018 |
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
Net
revenues |
|
|
|
|
|
|
|
Net
product revenues |
76,466,266 |
93,890,315 |
13,670,692 |
|
231,677,728 |
295,877,172 |
43,080,543 |
Net
service revenues |
7,279,992 |
10,877,964 |
1,583,862 |
|
20,488,692 |
31,310,038 |
4,558,829 |
Total net
revenues |
83,746,258 |
104,768,279 |
15,254,554 |
|
252,166,420 |
327,187,210 |
47,639,372 |
Operating
expenses(4)(5) |
|
|
|
|
|
|
|
Cost of
revenues |
(70,763,508) |
(88,658,757) |
(12,908,963) |
|
(215,711,390) |
(280,405,430) |
(40,827,815) |
Fulfillment |
(6,373,789) |
(7,760,786) |
(1,129,992) |
|
(17,905,031) |
(23,149,139) |
(3,370,579) |
Marketing |
(3,300,107) |
(4,131,639) |
(601,578) |
|
(10,174,781) |
(12,884,197) |
(1,875,975) |
Technology and content |
(1,756,050) |
(3,448,739) |
(502,146) |
|
(4,591,501) |
(8,642,324) |
(1,258,347) |
General
and administrative |
(1,050,418) |
(1,396,780) |
(203,375) |
|
(3,022,992) |
(3,764,030) |
(548,053) |
Impairment of goodwill and intangible assets |
- |
(22,317) |
(3,249) |
|
- |
(22,317) |
(3,249) |
Total operating
expenses |
(83,243,872) |
(105,419,018) |
(15,349,303) |
|
(251,405,695) |
(328,867,437) |
(47,884,018) |
Income/(loss)
from operations |
502,386 |
(650,739) |
(94,749) |
|
760,725 |
(1,680,227) |
(244,646) |
Other
income/(expenses) |
|
|
|
|
|
|
|
Share of
results of equity investees |
(477,077) |
(184,975) |
(26,933) |
|
(1,369,766) |
(941,821) |
(137,132) |
Interest
income(2) |
804,044 |
576,287 |
83,909 |
|
1,718,651 |
1,728,034 |
251,607 |
Interest
expense(3) |
(282,727) |
(241,133) |
(35,110) |
|
(681,267) |
(709,691) |
(103,333) |
Others,
net |
484,711 |
3,428,978 |
499,269 |
|
643,868 |
4,046,546 |
589,188 |
Income before
tax |
1,031,337 |
2,928,418 |
426,386 |
|
1,072,211 |
2,442,841 |
355,684 |
|
|
|
|
|
|
|
|
(2) Interest income charged to JD Finance in relation
to nonrecourse securitization debt were RMB216.7 million and
RMB120.0 million for the three months ended September 30, 2017 and
2018, respectively, same as the interest expense below. |
|
(3) Interest expense in relation to nonrecourse
securitization debt were RMB216.7 million and RMB120.0 million for
the three months ended September 30, 2017 and 2018,
respectively. |
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Operations |
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the nine months ended |
|
September
30,2017 |
September
30,2018 |
September
30,2018 |
|
September
30,2017 |
September
30,2018 |
September
30,2018 |
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
Income before
tax |
1,031,337 |
|
2,928,418 |
|
426,386 |
|
|
1,072,211 |
|
2,442,841 |
|
355,684 |
|
Income
tax expenses |
(53,177) |
|
(51,553) |
|
(7,506) |
|
|
(126,593) |
|
(365,905) |
|
(53,277) |
|
Net income from
continuing operations |
978,160 |
|
2,876,865 |
|
418,880 |
|
|
945,618 |
|
2,076,936 |
|
302,407 |
|
Net income from
discontinued operations, net of tax |
- |
|
- |
|
- |
|
|
6,915 |
|
- |
|
- |
|
Net
income |
978,160 |
|
2,876,865 |
|
418,880 |
|
|
952,533 |
|
2,076,936 |
|
302,407 |
|
Net loss from
continuing operations attributable to non-controlling interests
shareholders |
(36,130) |
|
(124,504) |
|
(18,128) |
|
|
(80,434) |
|
(237,810) |
|
(34,626) |
|
Net loss from
discontinued operations attributable to non-controlling interests
shareholders |
- |
|
- |
|
- |
|
|
(5,030) |
|
- |
|
- |
|
Net income from
continuing operations attributable to mezzanine classified
non-controlling interests shareholders |
- |
|
746 |
|
109 |
|
|
- |
|
1,653 |
|
241 |
|
Net income from
discontinued operations attributable to mezzanine classified
non-controlling interests shareholders |
- |
|
- |
|
- |
|
|
281,021 |
|
- |
|
- |
|
Net income
attributable to ordinary shareholders |
1,014,290 |
|
3,000,623 |
|
436,899 |
|
|
756,976 |
|
2,313,093 |
|
336,792 |
|
|
|
|
|
|
|
|
|
Including: Net loss from discontinued operations
attributable to ordinary shareholders |
- |
|
- |
|
- |
|
|
(269,076) |
|
- |
|
- |
|
Net income from continuing operations attributable to
ordinary shareholders |
1,014,290 |
|
3,000,623 |
|
436,899 |
|
|
1,026,052 |
|
2,313,093 |
|
336,792 |
|
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Operations |
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the nine months ended |
|
|
September
30,2017 |
September
30,2018 |
September
30,2018 |
|
September
30,2017 |
September
30,2018 |
September
30,2018 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
(4)
Includes share-based compensation expenses as follows: |
Cost of
revenues |
|
(7,235) |
|
(20,041) |
|
(2,918) |
|
|
(16,551) |
|
(47,997) |
|
(6,988) |
|
Fulfillment |
|
(115,632) |
|
(127,691) |
|
(18,592) |
|
|
(312,170) |
|
(324,096) |
|
(47,189) |
|
Marketing |
|
(38,079) |
|
(53,075) |
|
(7,728) |
|
|
(97,541) |
|
(138,247) |
|
(20,129) |
|
Technology and content |
|
(185,138) |
|
(344,789) |
|
(50,202) |
|
|
(477,866) |
|
(811,769) |
|
(118,196) |
|
General
and administrative |
|
(388,160) |
|
(505,455) |
|
(73,596) |
|
|
(1,113,532) |
|
(1,300,833) |
|
(189,405) |
|
(5)
Includes amortization of intangible assets resulting from assets
and business acquisitions as follows: |
Fulfillment |
|
(40,678) |
|
(41,897) |
|
(6,100) |
|
|
(122,895) |
|
(125,676) |
|
(18,299) |
|
Marketing |
|
(307,759) |
|
(310,469) |
|
(45,205) |
|
|
(913,290) |
|
(921,420) |
|
(134,161) |
|
Technology and content |
|
(20,661) |
|
(27,073) |
|
(3,942) |
|
|
(61,983) |
|
(75,595) |
|
(11,007) |
|
General
and administrative |
|
(77,314) |
|
(77,314) |
|
(11,257) |
|
|
(230,460) |
|
(230,460) |
|
(33,556) |
|
|
|
|
|
|
|
|
|
|
Net
income/(loss) per share: |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
Continuing operations |
|
0.36 |
|
1.04 |
|
0.15 |
|
|
0.36 |
|
0.81 |
|
0.12 |
|
Discontinued operations |
|
- |
|
- |
|
- |
|
|
(0.09 |
) |
- |
|
- |
|
Net
income per share |
|
0.36 |
|
1.04 |
|
0.15 |
|
|
0.27 |
|
0.81 |
|
0.12 |
|
Diluted |
|
|
|
|
|
|
|
|
Continuing operations |
|
0.35 |
|
1.02 |
|
0.15 |
|
|
0.35 |
|
0.79 |
|
0.11 |
|
Discontinued operations |
|
- |
|
- |
|
- |
|
|
(0.09 |
) |
- |
|
- |
|
Net
income per share |
|
0.35 |
|
1.02 |
|
0.15 |
|
|
0.26 |
|
0.79 |
|
0.11 |
|
|
|
|
|
|
|
|
|
|
Net
income/(loss) per ADS: |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
Continuing operations |
|
0.71 |
|
2.07 |
|
0.30 |
|
|
0.72 |
|
1.61 |
|
0.23 |
|
Discontinued operations |
|
- |
|
- |
|
- |
|
|
(0.19 |
) |
- |
|
- |
|
Net
income per ADS |
|
0.71 |
|
2.07 |
|
0.30 |
|
|
0.53 |
|
1.61 |
|
0.23 |
|
Diluted |
|
|
|
|
|
|
|
|
Continuing operations |
|
0.69 |
|
2.03 |
|
0.30 |
|
|
0.71 |
|
1.57 |
|
0.23 |
|
Discontinued operations |
|
- |
|
- |
|
- |
|
|
(0.19 |
) |
- |
|
- |
|
Net
income per ADS |
|
0.69 |
|
2.03 |
|
0.30 |
|
|
0.52 |
|
1.57 |
|
0.23 |
|
JD.com, Inc. |
Unaudited Non-GAAP Net Income Per ADS from Continuing
Operations |
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the nine months ended |
|
|
September
30,2017 |
September 30,2018 |
September
30,2018 |
|
September 30,2017 |
September 30,2018 |
September 30,2018 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
Non-GAAP net
income from continuing operations attributable to ordinary
shareholders |
|
2,220,602 |
1,184,318 |
172,439 |
|
4,519,082 |
2,709,870 |
394,564 |
|
|
|
|
|
|
|
|
|
Weighted
average number of shares: |
|
|
|
|
|
|
|
|
Basic |
|
2,847,511 |
2,893,373 |
2,893,373 |
|
2,843,363 |
2,872,166 |
2,872,166 |
Diluted |
|
2,924,929 |
2,956,244 |
2,956,244 |
|
2,907,204 |
2,945,231 |
2,945,231 |
|
|
|
|
|
|
|
|
|
Non-GAAP net
income per ADS from continuing
operations(6): |
|
|
|
|
|
|
|
|
Basic |
|
1.56 |
0.82 |
0.12 |
|
3.18 |
1.89 |
0.27 |
Diluted |
|
1.52 |
0.80 |
0.12 |
|
3.11 |
1.84 |
0.27 |
|
|
|
|
|
|
|
|
|
(6) Non-GAAP basic net income/(loss) per share is
calculated by dividing non-GAAP net income/(loss) attributable to
ordinary shareholders by the weighted average number of ordinary
shares outstanding during the periods. Non-GAAP diluted net
income/(loss) per share is calculated by dividing non-GAAP net
income/(loss) attributable to ordinary shareholders by the weighted
average number of ordinary shares and dilutive potential ordinary
shares outstanding during the periods, including the dilutive
effect of share-based awards as determined under the treasury stock
method. Non-GAAP net income/(loss) per ADS is equal to non-GAAP net
income/(loss) per share multiplied by two. |
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Cash Flows and Free Cash Flow |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the nine months ended |
|
|
September 30,2017 |
September
30,2018 |
September 30,2018 |
|
September
30,2017 |
September 30,2018 |
September 30,2018 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
Net cash provided by
continuing operating activities |
|
352,289 |
2,212,661 |
322,170 |
|
25,955,834 |
14,853,292 |
2,162,681 |
Net cash used in
discontinued operating activities |
|
- |
- |
- |
|
(2,485,741) |
- |
- |
Net cash provided by
operating activities |
|
352,289 |
2,212,661 |
322,170 |
|
23,470,093 |
14,853,292 |
2,162,681 |
Net cash used in
continuing investing activities |
|
(6,089,881) |
(2,602,581) |
(378,943) |
|
(26,639,250) |
(23,890,877) |
(3,478,578) |
Net cash used in
discontinued investing activities |
|
- |
- |
- |
|
(17,871,171) |
- |
- |
Net cash used in
investing activities |
|
(6,089,881) |
(2,602,581) |
(378,943) |
|
(44,510,421) |
(23,890,877) |
(3,478,578) |
Net cash provided
by/(used in) continuing financing activities |
|
(1,546,127) |
(2,995,312) |
(436,126) |
|
8,981,511 |
15,140,806 |
2,204,544 |
Net cash provided by
discontinued financing activities |
|
- |
- |
- |
|
14,054,620 |
- |
- |
Net cash provided
by/(used in) financing activities |
|
(1,546,127) |
(2,995,312) |
(436,126) |
|
23,036,131 |
15,140,806 |
2,204,544 |
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
(298,381) |
1,074,601 |
156,465 |
|
(428,459) |
1,811,704 |
263,789 |
Net increase/(decrease)
in cash, cash equivalents and restricted cash |
|
(7,582,100) |
(2,310,631) |
(336,434) |
|
1,567,344 |
7,914,925 |
1,152,436 |
Cash, cash equivalents
and restricted cash at beginning of period |
|
33,313,094 |
40,024,093 |
5,827,620 |
|
24,163,650 |
29,798,537 |
4,338,750 |
Cash, cash equivalents
and restricted cash at end of period |
|
25,730,994 |
37,713,462 |
5,491,186 |
|
25,730,994 |
37,713,462 |
5,491,186 |
|
|
|
|
|
|
|
|
|
Net cash provided by
continuing operating activities |
|
352,289 |
2,212,661 |
322,170 |
|
25,955,834 |
14,853,292 |
2,162,681 |
Add: Impact from JD
Finance related credit products included in the operating cash
flow |
|
(1,559,382) |
(1,775,639) |
(258,538) |
|
2,584,595 |
(1,575,460) |
(229,391) |
Less: Capital
expenditures |
|
|
|
|
|
|
|
|
Land use rights
and construction in progress |
|
(5,384,486) |
(3,563,886) |
(518,912) |
|
(6,675,136) |
(8,720,462) |
(1,269,724) |
Other CAPEX |
|
(1,812,924) |
(5,060,015) |
(736,752) |
|
(2,490,803) |
(8,413,504) |
(1,225,030) |
Free cash flow |
|
(8,404,503) |
(8,186,879) |
(1,192,032) |
|
19,374,490 |
(3,856,134) |
(561,464) |
|
JD.com, Inc. |
Supplemental Financial Information and Business
Metrics |
|
|
Q3 2017 |
Q4 2017 |
Q1 2018 |
Q2 2018 |
Q3 2018 |
|
|
|
|
|
|
|
Free cash
flow (in RMB billions) |
|
(8.4) |
(1.7) |
(8.8) |
13.1 |
(8.2) |
Inventory
turnover days(7) – trailing twelve months (“TTM”) |
|
36.9 |
38.1 |
37.2 |
37.9 |
37.8 |
Accounts
payable turnover days(8) – TTM |
|
58.4 |
59.1 |
58.2 |
60.9 |
59.7 |
Accounts
receivable turnover days(9) – TTM |
|
1.3 |
1.4 |
1.6 |
1.9 |
2.3 |
GMV(10)
(in RMB billions) |
|
302.5 |
403.4 |
330.2 |
437.4 |
394.8 |
Annual
active customer accounts(11) (in millions) |
|
266.3 |
292.5 |
301.8 |
313.8 |
305.2 |
(7) Inventory turnover days are the quotient of average
inventory over five quarter ends to total cost of revenues for the
last twelve months and then multiplied by 360 days. (8) Accounts
payable turnover days are the quotient of average accounts payable
over five quarter ends to total cost of revenues for the last
twelve months and then multiplied by 360 days. Presented are the
accounts payable turnover days for the direct sales business. (9)
Accounts receivable turnover days are the quotient of average
accounts receivable over five quarter ends to total net revenues of
the last twelve months and then multiplied by 360 days. Presented
are the accounts receivable turnover days excluding the impact from
JD Baitiao. (10) GMV is defined as the total value of all orders
for products and services placed in the company’s online direct
sales business and on the company’s online marketplaces, regardless
of whether the goods are sold or delivered or whether the goods are
returned. GMV includes orders placed on our websites and mobile
apps as well as orders placed on third-party websites and mobile
apps that are fulfilled by us or by our third-party merchants. GMV
includes shipping charges paid by buyers to sellers and for prudent
consideration excludes certain transactions over certain amounts
that are comparable to the disclosed parameters in GMV definition
by our major industry peer. The company believes that GMV provides
a measure of the overall volume of transactions that flow through
our platform in a given period and is only useful for the purposes
of industry and peer comparisons. (11) Annual active customer
accounts are customer accounts that made at least one purchase
during the twelve months ended on the respective dates, whether
through online direct sales or online marketplaces. |
|
JD.com, Inc. |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
(In thousands, except percentage data) |
|
For the three months ended |
|
For the nine months ended |
|
September 30,2017 |
September 30,2018 |
September 30,2018 |
|
September 30,2017 |
September 30,2018 |
September 30,2018 |
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
Income/(loss) from
operations from continuing operations |
502,386 |
(650,739) |
(94,749) |
|
760,725 |
(1,680,227) |
(244,646) |
Reversal of: Revenue
from business cooperation arrangements with equity investees |
(210,970) |
(241,131) |
(35,109) |
|
(625,569) |
(718,597) |
(104,630) |
Add: Share-based
compensation |
734,244 |
1,051,051 |
153,036 |
|
2,017,660 |
2,622,942 |
381,907 |
Add: Amortization of
intangible assets resulting from assets and business
acquisitions |
446,412 |
456,753 |
66,504 |
|
1,328,628 |
1,353,151 |
197,023 |
Add: Impairment of
goodwill, intangible assets, and investments |
- |
22,317 |
3,249 |
|
- |
22,317 |
3,249 |
Non-GAAP income
from operations from continuing operations |
1,472,072 |
638,251 |
92,931 |
|
3,481,444 |
1,599,586 |
232,903 |
Add: Depreciation and
amortization excluding amortization of intangible assets resulting
from assets and business acquisitions |
641,143 |
1,034,789 |
150,669 |
|
1,681,287 |
2,592,168 |
377,426 |
Non-GAAP EBITDA
from continuing operations |
2,113,215 |
1,673,040 |
243,600 |
|
5,162,731 |
4,191,754 |
610,329 |
|
|
|
|
|
|
|
|
Total net revenues |
83,746,258 |
104,768,279 |
15,254,554 |
|
252,166,420 |
327,187,210 |
47,639,372 |
|
|
|
|
|
|
|
|
Non-GAAP
operating margin from continuing operations |
1.8% |
0.6% |
0.6% |
|
1.4% |
0.5% |
0.5% |
|
|
|
|
|
|
|
|
Non-GAAP EBITDA
margin from continuing operations |
2.5% |
1.6% |
1.6% |
|
2.0% |
1.3% |
1.3% |
|
|
|
|
|
|
|
|
JD.com, Inc. |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
(In thousands, except percentage data) |
|
|
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the nine months ended |
|
|
September
30,2017 |
September
30,2018 |
September
30,2018 |
|
September
30,2017 |
September
30,2018 |
September 30,2018 |
|
|
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
Net income from
continuing operations attributable to ordinary shareholders |
|
1,014,290 |
3,000,623 |
436,899 |
|
1,026,052 |
2,313,093 |
336,792 |
Add: Share-based
compensation |
|
734,244 |
1,051,051 |
153,036 |
|
2,017,660 |
2,622,942 |
381,907 |
Add: Amortization of
intangible assets resulting from assets and business
acquisitions |
|
446,412 |
456,753 |
66,504 |
|
1,328,628 |
1,353,151 |
197,023 |
Add: Reconciling items
on the share of equity method investments(12) |
|
239,816 |
159,147 |
23,172 |
|
693,257 |
623,031 |
90,715 |
Add: Impairment of
goodwill, intangible assets, and investments |
|
16,666 |
415,256 |
60,462 |
|
139,823 |
421,344 |
61,349 |
Reversal of: Gain from
fair value change of long-term investments |
|
- |
(3,621,257) |
(527,265) |
|
- |
(2,551,671) |
(371,530) |
Reversal of: Revenue
from business cooperation arrangements with equity investees |
|
(210,970) |
(241,131) |
(35,109) |
|
(625,569) |
(718,597) |
(104,630) |
Reversal of: Gain on
disposals/revaluation of investments |
|
- |
(17,622) |
(2,566) |
|
- |
(1,427,823) |
(207,895) |
Reversal of: Income
from non-compete agreement |
|
(19,856) |
(20,235) |
(2,946) |
|
(60,769) |
(58,178) |
(8,471) |
Add: Tax effects on
non-GAAP adjustments |
|
- |
1,733 |
252 |
|
- |
132,578 |
19,304 |
Non-GAAP net
income from continuing operations attributable to ordinary
shareholders |
|
2,220,602 |
1,184,318 |
172,439 |
|
4,519,082 |
2,709,870 |
394,564 |
|
|
|
|
|
|
|
|
|
Total net revenues |
|
83,746,258 |
104,768,279 |
15,254,554 |
|
252,166,420 |
327,187,210 |
47,639,372 |
|
|
|
|
|
|
|
|
|
Non-GAAP net
margin from continuing operations |
|
2.7% |
1.1% |
1.1% |
|
1.8% |
0.8% |
0.8% |
|
|
|
|
|
|
|
|
(12) To exclude the non-GAAP to GAAP reconciling items
on the share of equity method investments, net of share of
amortization of intangibles not on their books. Earning from equity
method investments in publicly listed companies and certain
privately held companies is recorded one quarter in arrears. |
______________________________
1 The financial information and non-GAAP
financial information disclosed in this press release is presented
on a continuing operations basis, unless otherwise specifically
stated.
2 The U.S. dollar (US$) amounts disclosed in
this press release, except for those transaction amounts that were
actually settled in U.S. dollars, are presented solely for the
convenience of the readers. The conversion of Renminbi (RMB) into
US$ in this press release is based on the exchange rate set forth
in the H.10 statistical release of the Board of Governors of the
Federal Reserve System as of September 28, 2018, which was
RMB6.8680 to US$1.00. The percentages stated in this press release
are calculated based on the RMB amounts.
3 Unallocated items are consistent with non-GAAP
adjustments and include revenue from business cooperation
arrangements with equity investees, share-based compensation,
amortization of intangible assets resulting from assets and
business acquisitions, and impairment of goodwill and intangible
assets, which are not allocated to segments.
4 Non-GAAP net income/(loss) attributable to
ordinary shareholders is defined to exclude share-based
compensation, amortization of intangible assets resulting from
acquisitions, fair value changes of long-term investments, gain on
disposals/revaluation of investments, and certain other non-cash
gain or loss items from net income/(loss) attributable to ordinary
shareholders. See “Unaudited Reconciliation of GAAP and Non-GAAP
Results” at the end of this press release.
5 Non-GAAP income/(loss) from operations is
defined to exclude share-based compensation, amortization of
intangible assets resulting from acquisitions, and certain other
non-cash gain or loss items from income/(loss) from operations.
Non-GAAP operating margin is calculated by dividing non-GAAP
income/(loss) from operations by net revenues. See “Unaudited
Reconciliation of GAAP and Non-GAAP Results” at the end of this
press release.
6 Non-GAAP EBITDA is defined as non-GAAP
income/(loss) from operations plus depreciation and amortization
excluding amortization of intangible assets resulting from assets
and business acquisitions, and non-GAAP EBITDA margin is calculated
by dividing non-GAAP EBITDA by net revenues. See “Unaudited
Reconciliation of GAAP and Non-GAAP Results” at the end of this
press release.
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