JD.com, Inc. (NASDAQ: JD and HKEX: 9618), a leading supply
chain-based technology and service provider, today announced its
unaudited financial results for the quarter ended March 31, 2023.
First Quarter 2023
Highlights
- Net
revenues for the first quarter of 2023 were RMB243.0
billion (US$135.4 billion), an increase of 1.4% from the first
quarter of 2022. Net service revenues for the first quarter of 2023
were RMB47.4 billion (US$6.9 billion), an increase of 34.5% from
the first quarter of 2022.
- Income
from operations for the first quarter of 2023 was RMB6.4
billion (US$0.9 billion), compared to RMB2.4 billion for the same
period last year. Non-GAAP2
income from operations was RMB7.9 billion (US$1.1
billion) for the first quarter of 2023, as compared to RMB4.7
billion for the first quarter of 2022. Operating margin of JD
Retail before unallocated items for the first quarter of 2023 was
4.6%, compared to 3.6% for the first quarter of 2022.
- Net
income attributable to the company's ordinary shareholders
for the first quarter of 2023 was RMB6.3 billion (US$0.9 billion),
compared to a net loss of RMB3.0 billion for the same period last
year. Non-GAAP net income attributable to the company's
ordinary shareholders for the first quarter of 2023 was
RMB7.6 billion (US$1.1 billion), as compared to RMB4.0 billion for
the same period last year.
- Diluted
net income per ADS for the first quarter of 2023 was
RMB3.93 (US$0.57), compared to a diluted net loss per ADS of
RMB1.92 for the first quarter of 2022. Non-GAAP diluted net
income per ADS for the first quarter of 2023 was RMB4.76
(US$0.69), compared to RMB2.53 for the same period last year.
“JD saw strong growth in profitability in the
first quarter as we continued to streamline our operations,
optimize our product portfolio and expand our service offerings,”
said Lei Xu, CEO of JD.com. “In the quarters ahead, we will further
enhance our business structure in order to drive the expansion of
our user base throughout China. JD.com has built China’s most
trusted brand in retail, and is uniquely positioned to provide our
loyal user base with the superior quality, value, speed and
selection they have come to expect, while maintaining the
flexibility to seize upon multiple growth opportunities across our
businesses.”
“During the first quarter, we were pleased to
see service revenues grow to account for 20% of our total revenues,
helping deliver strong margins and reflecting our success in
attracting a record number of third-party merchants to the JD.com
platform,” said Sandy Xu, Chief Financial Officer of JD.com. “We
also see more encouraging trends in Q2, both financially and
operationally, as we push forward our proactive adjustment. Looking
ahead, we will continue to focus on the quality of our businesses
while providing a superior platform for our merchants and suppliers
in terms of exposure, traffic and lower costs, in order to drive
sustainable growth for the long term.”
Business Highlights
Environment, Social and
Governance
- In January, JD
Health actively contributed to support the epidemic prevention in
rural areas. Together with the National Rural Revitalization
Administration and the People’s Daily, JD Health launched an
anti-epidemic project that provided approximately six million packs
of anti-epidemic medication to over 20,000 clinics, pharmacies, and
other medical channels at county and village level across the
country. JD Health endeavors to enhance the medicine supply
capabilities in rural areas, and enable more people there to have
easy access to medicines anytime at nearby locations.
- On May 5, 2023,
Fortune released the “2023 China ESG Impact List.” JD.com was named
on the list for two consecutive years, together with other 39
companies. This is a testament to JD’s outstanding ESG efforts in
the past year in building green supply chain, fighting against
COVID and ensuring supplies, and supporting employee
well-being.
JD Retail
- In March, JD.com
launched its first county-level home appliance and home goods store
in Jintang county, Sichuan province. Targeting a differentiated
“home scenario,” the store provides a diversified product portfolio
of home appliances and home goods and creates an integrated home
solution better adapted to the needs of consumers in lower-tier
markets. In addition, JD.com launched a new home appliance and
electronics flagship store in Chengdu, offering more than 100,000
SKUs. Through its innovative online and offline integration model,
JD MALL, JD home appliance and electronics city-level flagship
stores, JD Home Appliance Stores and other offline stores have
achieved equal SKU selection, price and service compared to its
online channel.
- In February,
Tesla launched its official flagship store on JD.com, offering a
variety of auto products, including charging equipment, premium
accessories, selected apparel and other products totaling over 200
SKUs. Going forward, JD will further leverage its omnichannel
advantages to promote the development of Tesla's online store on
its platform.
- In March,
Longines, a renowned Swiss watchmaking brand, launched its official
flagship store on JD.com, offering consumers a diverse collection
of new and classic products. By leveraging JD’s intelligent supply
chain capabilities, the ecosystem of authentic products, logistics
fulfillment, and high-quality service assurance, JD will continue
to build an efficient operating environment for business partners,
while providing consumers best-in-class shopping experience.
JD Health
- In February, JD
Health further enhanced its service capability for rare diseases,
and expand the aid scale to approximately 20 million patients in
China by launching the new “doctor-searching map for rare
diseases.” JD Health also formed a strategic collaboration with
Bo’ao Winhealth Rare Disease Medical Center to effectively reduce
the financial burden for rare disease patients.
- In February, JD
Health officially announced the establishment of the intelligent
medical engine on its online healthcare service platform, which
leverages the latest internet and AI technologies and places
medical values as fundamentals. The engine aims to improve the
efficiency and quality of doctors’ online diagnosis and treatment,
and establishes JD Health Internet Hospital as the first
“integrated medical education and research” internet hospital in
China.
- During the first
quarter, JD Health signed strategic cooperation agreements for 2023
with global pharmaceutical and healthcare brands including H&H
Group, Tongrentang Health, and Abbott Medical Nutrition. JD Health
also reached a strategic partnership with Zoetis Inc., a leading
global animal healthcare company, to delve more deeply into the pet
healthcare market through comprehensive cooperation and provide
quality pet vaccines and medications to customers in China. Going
forward, JD Health will further strengthen its supply chain
capabilities, optimize and open up its ecosystem, and continue to
promote its omnichannel initiative, with the goal of achieving
quality growth together with its partners and merchants.
JD Logistics
- In February, JD
Logistics and Master Kong Holdings Limited signed a strategic
cooperation agreement on “Intelligent Supply Chain Transformation.”
Under the agreement, the two parties will leverage technological
and digital tools to cooperate closely on supply chain consultation
and planning, warehouse network planning, intelligent logistics,
refined management, and exploration of differentiated service
models, among others. The cooperation aims to improve the service
quality and customer experience across omnichannels and diversified
scenarios along the supply chain, and drive the transformation of
integrated supply chain for the FMCG industry.
- In the first
quarter, JD Logistics announced the opening of its third
self-operating warehouse and distribution center in California,
United States. The new warehouse, together with the other existing
ones, each of which with different functional positioning, have
expanded JD Logistics’s warehousing footprint to 1.3 million square
feet in the U.S., and further enhanced JD Logistics’s supply chain
service capabilities overseas.
- As of March 31,
2023, JD Logistics operated over 1,500 warehouses. Including
warehouse space managed through the Open Warehouse Platform, JD
Logistics’s warehouse network had an aggregate gross floor area of
over 31 million square meters.3
JD Industrials
- In the first
quarter, JD Industrials continued to drive the application of
intelligent supply chain for industrial enterprises, by leveraging
its Industrial Performance Neuroscience Programme (“IPNP”) that
consists of a set of technological products and aims to integrate
the up- and down-stream along the industrial supply chain to act as
a “neural network.” For example, in the cooperation JD Industrials’
IPNP helps Foxconn to standardize massive SKU parameters, mitigate
inventory risk and related cost of capital, and enable Foxconn’s
suppliers with intelligent decision-making capabilities and improve
the efficiency of the supply chain.
Dada
- On March 30,
2023, JDDJ were among the first sales channels to launch the new
Huawei P60 models. As Huawei’s official on-demand retail partner,
JDDJ has had more than 2,000 Huawei authorized stores joining its
platform that cover more than 260 cities in China to ensure
adequate inventories to better address customer demands. JD.com’s
on-demand retail has become an important sales channel for new
mobile phone models and digital products with high recognition
among brands and merchants.
- In April,
YeeHoO, a high-end daily necessities brand for infants and children
in China, initiated an in-depth collaboration with JDDJ. There have
been more than 200 YeeHoO offline stores in China launched on JD
App and JDDJ App, providing one-hour delivery services. The two
parties will also work together to drive the digital transformation
of offline stores, explore new growth models for omni-channel
business, and provide consumers on-demand shopping experience of
“online ordering, offline shipping, and one-hour or faster delivery
of apparel for infants and youngsters.”
- Since its launch
in July 2021, Dada’s autonomous delivery service platform has
leveraged its advantages as a standardized open platform and built
numerous on-demand delivery scenarios and strong capabilities in
order distribution, route planning, human-vehicle interaction, and
last-mile delivery. In collaboration with unmanned vehicle
developers, the platform has been applied by 7Fresh, Yonghui and
Sam’s Club. As of March 31, 2023, the platform has supported
deliveries of over 100,000 supermarket orders, further
strengthening its leading position in autonomous delivery for
supermarkets in China.
First Quarter 2023 Financial
Results
Net Revenues. For the first
quarter of 2023, JD.com reported net revenues of RMB243.0 billion
(US$35.4 billion), representing a 1.4% increase from the same
period of 2022. Net product revenues decreased by 4.3%, while net
service revenues increased by 34.5% for the first quarter of 2023,
as compared to the same period of 2022.
Cost of
Revenues. Cost of revenues increased by
0.4% to RMB206.9 billion (US$30.1 billion) for the first quarter of
2023 from RMB206.2 billion for the first quarter of 2022.
Fulfillment
Expenses. Fulfillment expenses, which
primarily include procurement, warehousing, delivery, customer
service and payment processing expenses, decreased by 0.7% to
RMB15.4 billion (US$2.2 billion) for the first quarter of 2023 from
RMB15.5 billion for the first quarter of 2022. Fulfillment expenses
as a percentage of net revenues was 6.3% for the first quarter of
2023, compared to 6.5% for the same period last year.
Marketing
Expenses. Marketing expenses decreased by
8.0% to RMB8.0 billion (US$1.2 billion) for the first quarter of
2023 from RMB8.7 billion for the first quarter of 2022.
Research and Development
Expenses. Research and development
expenses decreased by 4.5% to RMB4.2 billion (US$0.6 billion) for
the first quarter of 2023 from RMB4.4 billion for the first quarter
of 2022.
General and Administrative
Expenses. General and
administrative expenses was RMB2.5 billion (US$0.4 billion) for the
first quarter of 2023, kept relatively steady as compared to RMB2.5
billion for the first quarter of 2022.
Income from Operations and Non-GAAP
Income from Operations. Income from operations
for the first quarter of 2023 was RMB6.4 billion (US$0.9 billion),
compared to RMB2.4 billion for the same period last year. Non-GAAP
income from operations was RMB7.9 billion (US$1.1 billion) for the
first quarter of 2023, as compared to RMB4.7 billion for the first
quarter of 2022. Operating margin of JD Retail before unallocated
items for the first quarter of 2023 was 4.6%, compared to 3.6% for
the first quarter of 2022.
Non-GAAP EBITDA. Non-GAAP
EBITDA increased by 56.6% to RMB9.5 billion (US$1.4 billion) for
the first quarter of 2023 from RMB6.1 billion for the first quarter
of 2022.
Share of Results of Equity
Investees. Share of results of equity
investees was a loss of RMB0.8 billion (US$0.1 billion) for the
first quarter of 2023, as compared to RMB1.1 billion for the first
quarter of 2022. The loss for the first quarter of 2022 and 2023
was primarily due to share of losses from certain equity
investees.
Others, net. Other
non-operating income was RMB2.8 billion (US$0.4 billion) for the
first quarter of 2023, as compared to other non-operating loss of
RMB3.9 billion for the first quarter of 2022. The increase was
primarily due to a loss of RMB3.6 billion recognized resulting from
the change of Dada’s share price prior to the closing of the
acquisition of Dada in the first quarter of 2022, and the fair
value change of investment securities.
Net Income/(Loss)
Attributable to the Company's Ordinary
Shareholders and Non-GAAP Net Income
Attributable to the Company's Ordinary
Shareholders. Net income attributable to
the company's ordinary shareholders for the first quarter of 2023
was RMB6.3 billion (US$0.9 billion), compared to a net loss of
RMB3.0 billion for the same period last year. Non-GAAP net income
attributable to the company's ordinary shareholders for the first
quarter of 2023 was RMB7.6 billion (US$1.1 billion), as compared to
RMB4.0 billion for the same period last year.
Diluted EPS and Non-GAAP Diluted
EPS. Diluted net income per ADS for the first quarter of
2023 was RMB3.93 (US$0.57), compared to a diluted net loss per ADS
of RMB1.92 for the first quarter of 2022. Non-GAAP diluted net
income per ADS for the first quarter of 2023 was RMB4.76 (US$0.69),
compared to RMB2.53 for the first quarter of 2022.
Cash Flow and Working Capital
As of March 31, 2023, the company’s cash and
cash equivalents, restricted cash and short-term investments
totaled RMB203.2 billion (US$29.6 billion), compared to RMB226.2
billion as of December 31, 2022. For the first quarter of 2023,
free cash flow of the company was as follows:
|
|
For the three months ended |
|
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
|
RMB |
RMB |
US$ |
|
|
(In millions) |
|
|
|
Net cash used in operating activities |
|
(3,485 |
) |
(21,607 |
) |
(3,146 |
) |
Less: Impact from JD Baitiao
receivables included in the operating cash flow |
|
(1,734 |
) |
(582 |
) |
(85 |
) |
Less: Capital expenditures,
net of related sales proceeds |
|
|
|
|
Capital expenditures for development properties |
|
(2,676 |
) |
(2,145 |
) |
(312 |
) |
Other capital expenditures* |
|
(902 |
) |
(1,068 |
) |
(156 |
) |
Free cash flow |
|
(8,797 |
) |
(25,402 |
) |
(3,699 |
) |
|
|
|
|
|
* Including capital expenditures related to the
company’s headquarters in Beijing and all other CAPEX.
Net cash provided by investing activities was
RMB16.7 billion (US$2.4 billion) for the first quarter of 2023,
consisting primarily of the decrease in short-term investments,
partially offset by cash paid for capital expenditures.
Net cash provided by financing activities was
RMB1.3 billion (US$0.2 billion) for the first quarter of 2023,
consisting primarily of proceeds from JD Industrials’
non-redeemable series B preferred share financing and net proceeds
from bank loans, partly offset by cash paid for share repurchase.
In the first quarter of 2023, the company has repurchased
approximately 3.8 million of its ADSs for approximately RMB1.1
billion (US$0.2 billion) under its share repurchase program.
For the twelve months ended March 31, 2023, free
cash flow of the company was as follows:
|
|
For the twelve months ended |
|
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
|
RMB |
RMB |
US$ |
|
|
(In millions) |
|
|
|
Net cash provided by operating activities |
|
46,325 |
|
39,697 |
|
5,780 |
|
(Less)/Add: Impact from JD
Baitiao receivables included in the operating cash flow |
|
(467 |
) |
908 |
|
132 |
|
Less: Capital expenditures,
net of related sales proceeds |
|
|
|
|
Capital expenditures for development properties |
|
(14,563 |
) |
(16,974 |
) |
(2,471 |
) |
Other capital expenditures |
|
(4,122 |
) |
(4,641 |
) |
(676 |
) |
Free cash flow |
|
27,173 |
|
18,990 |
|
2,765 |
|
|
|
|
|
|
Supplemental Information
The company reports four segments, JD Retail, JD
Logistics, Dada and New businesses. JD Retail, including JD Health
and JD Industrials, among other components, mainly engage in online
retail, online marketplace and marketing services in China. JD
Logistics includes both internal and external logistics businesses.
Dada is a local on-demand delivery and retail platform in China.
New businesses mainly include JD Property, Jingxi and overseas
businesses.
The table below sets forth the segment operating
results:
|
For the three months ended |
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
RMB |
RMB |
US$ |
|
(In millions) |
Net revenues: |
|
|
|
JD Retail |
217,524 |
|
212,358 |
|
30,922 |
|
JD Logistics |
27,351 |
|
36,728 |
|
5,348 |
|
Dada |
688 |
|
2,576 |
|
375 |
|
New businesses |
5,756 |
|
3,450 |
|
502 |
|
Inter-segment eliminations * |
(11,664 |
) |
(12,156 |
) |
(1,770 |
) |
Total consolidated net
revenues |
239,655 |
|
242,956 |
|
35,377 |
|
|
|
|
|
Operating income/(loss): |
|
|
|
JD Retail |
7,891 |
|
9,844 |
|
1,433 |
|
JD Logistics |
(661 |
) |
(1,123 |
) |
(164 |
) |
Dada |
(191 |
) |
(217 |
) |
(32 |
) |
New businesses |
(2,386 |
) |
(157 |
) |
(21 |
) |
Including: gain on sale of development properties |
— |
|
472 |
|
69 |
|
Total segment operating
income |
4,653 |
|
8,347 |
|
1,216 |
|
Unallocated items** |
(2,244 |
) |
(1,920 |
) |
(280 |
) |
Total consolidated operating
income |
2,409 |
|
6,427 |
|
936 |
|
|
|
|
|
* The inter-segment eliminations mainly consist
of revenues from supply chain solutions and logistics services
provided by JD Logistics to JD Retail, on-demand delivery and
retail services provided by Dada to JD Retail and JD Logistics, and
property leasing services provided by JD Property to JD
Logistics.
** Unallocated items include share-based
compensation, amortization of intangible assets resulting from
assets and business acquisitions, effects of business cooperation
arrangements, and impairment of goodwill and intangible assets,
which are not allocated to segments.
The table below sets forth the revenue
information:
|
For the three months ended |
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
RMB |
RMB |
US$ |
|
(In millions) |
Electronics and home
appliances revenues |
118,368 |
116,999 |
17,036 |
General merchandise
revenues |
86,048 |
78,565 |
11,440 |
Net product revenues |
204,416 |
195,564 |
28,476 |
|
|
|
|
Marketplace and marketing
revenues |
17,676 |
19,062 |
2,776 |
Logistics and other service
revenues |
17,563 |
28,330 |
4,125 |
Net service revenues |
35,239 |
47,392 |
6,901 |
|
|
|
|
Total net revenues |
239,655 |
242,956 |
35,377 |
|
|
|
|
Conference Call
JD.com’s management will hold a conference call
at 8:00 am, Eastern Time on May 11, 2023, (8:00 pm, Beijing/Hong
Kong Time on May 11, 2023) to discuss the first quarter of 2023
financial results.
Please register in advance of the conference
using the link provided below and dial in 15 minutes prior to the
call, using participant dial-in numbers, the Passcode and unique
access PIN which would be provided upon registering. You will be
automatically linked to the live call after completion of this
process, unless required to provide the conference ID below due to
regional restrictions.
PRE-REGISTER LINK:
https://s1.c-conf.com/diamondpass/10030318-tfg7rc.html
CONFERENCE ID: 10030318
A telephone replay will be available for one
week until May 18, 2023. The dial-in details are as follows:
US: |
+1-855-883-1031 |
International: |
+61-7-3107-6325 |
Hong Kong: |
800-930-639 |
Mainland China: |
400-120-9216 |
Passcode: |
10030318 |
Additionally, a live and archived webcast of the conference call
will also be available on the JD.com’s investor relations website
at http://ir.jd.com.
About JD.com
JD.com is a leading supply chain-based
technology and service provider. The company’s cutting-edge retail
infrastructure seeks to enable 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.
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 the company's ordinary
shareholders, non-GAAP net margin, free cash flow, non-GAAP EBITDA,
non-GAAP EBITDA margin, non-GAAP net income/(loss) per share 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,
effects of business cooperation arrangements, gain on sale of
development properties and impairment of goodwill and intangible
assets. The company defines non-GAAP net income/(loss) attributable
to the company's ordinary shareholders as net income/(loss)
attributable to the company's ordinary shareholders excluding
share-based compensation, amortization of intangible assets
resulting from assets and business acquisitions, effects of
business cooperation arrangements and non-compete agreements,
gain/(loss) on disposals/deemed disposals of investments and
others, reconciling items on the share of equity method
investments, loss/(gain) from fair value change of long-term
investments, impairment of goodwill, intangible assets and
investments, gain in relation to sale of development properties and
tax effects on non-GAAP adjustments. The company defines free cash
flow as operating cash flow adjusting the impact from JD Baitiao
receivables included in the operating cash flow and capital
expenditures, net of the proceeds from sale of development
properties. Capital expenditures 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.
Non-GAAP basic net income/(loss) per share is calculated by
dividing non-GAAP net income/(loss) attributable to the company's
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 the company's 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.
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 the
company's 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 Baitiao receivables 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 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 RelationsSean Zhang+86
(10) 8912-6804IR@JD.com
Media Relations+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 announcements made on the
website of the Hong Kong Stock Exchange, 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; laws, regulations
and governmental policies relating to the industries in which
JD.com or its business partners operate; potential changes in laws,
regulations and governmental policies or changes in the
interpretation and implementation of laws, regulations and
governmental policies that could adversely affect the industries in
which JD.com or its business partners operate, including, among
others, initiatives to enhance supervision of companies listed on
an overseas exchange and tighten scrutiny over data privacy and
data security; risks associated with JD.com’s acquisitions,
investments and alliances, including fluctuation in the market
value of JD.com’s investment portfolio; impact of the COVID-19
pandemic; natural disasters and geopolitical events; change in tax
rates and financial risks; intensity of competition; and general
market and economic conditions in China and globally. Further
information regarding these and other risks is included in JD.com’s
filings with the SEC and the announcements on the website of the
Hong Kong Stock Exchange. All information provided herein is as of
the date of this announcement, 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 millions, except otherwise noted) |
|
|
|
|
|
As of |
|
|
December 31,2022 |
March 31,2023 |
March 31,2023 |
|
|
RMB |
RMB |
US$ |
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
78,861 |
74,373 |
10,830 |
Restricted cash |
|
6,254 |
6,397 |
931 |
Short-term investments |
|
141,095 |
122,440 |
17,829 |
Accounts receivable, net (including JD Baitiao of RMB3.1 billion
and RMB1.8 billion as of December 31, 2022 and March 31, 2023,
respectively)(1) |
|
20,576 |
15,583 |
2,269 |
Advance to suppliers |
|
3,838 |
2,914 |
424 |
Inventories, net |
|
77,949 |
63,299 |
9,217 |
Prepayments and other current assets |
|
15,156 |
14,762 |
2,149 |
Amount due from related parties |
|
6,142 |
5,347 |
779 |
Assets held for sale |
|
1,203 |
— |
— |
Total current assets |
|
351,074 |
305,115 |
44,428 |
Non-current assets |
|
|
|
|
Property, equipment and software, net |
|
55,080 |
57,296 |
8,343 |
Construction in progress |
|
11,161 |
9,805 |
1,428 |
Intangible assets, net |
|
9,139 |
8,798 |
1,281 |
Land use rights, net |
|
33,848 |
33,939 |
4,942 |
Operating lease right-of-use assets |
|
22,267 |
21,983 |
3,201 |
Goodwill |
|
23,123 |
23,123 |
3,367 |
Investment in equity investees |
|
57,641 |
57,121 |
8,317 |
Investment securities |
|
11,611 |
10,476 |
1,525 |
Deferred tax assets |
|
1,536 |
1,460 |
213 |
Other non-current assets |
|
18,770 |
21,920 |
3,192 |
Total non-current assets |
|
244,176 |
245,921 |
35,809 |
Total assets |
|
595,250 |
551,036 |
80,237 |
|
|
|
|
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Balance Sheets |
(In millions, except otherwise noted) |
|
|
|
|
|
As of |
|
|
December 31,2022 |
March 31,2023 |
March 31,2023 |
|
|
RMB |
RMB |
US$ |
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Short-term debts |
|
12,146 |
14,280 |
2,079 |
Accounts payable |
|
160,607 |
121,432 |
17,682 |
Advance from customers |
|
33,713 |
29,938 |
4,359 |
Deferred revenues |
|
3,351 |
2,355 |
343 |
Taxes payable |
|
5,926 |
3,592 |
523 |
Amount due to related parties |
|
488 |
259 |
38 |
Accrued expenses and other current liabilities |
|
42,570 |
44,361 |
6,459 |
Operating lease liabilities |
|
7,688 |
7,964 |
1,160 |
Liabilities held for sale |
|
72 |
— |
— |
Total current liabilities |
|
266,561 |
224,181 |
32,643 |
Non-current liabilities |
|
|
|
|
Deferred revenues |
|
1,107 |
1,001 |
146 |
Unsecured senior notes |
|
10,224 |
10,091 |
1,469 |
Deferred tax liabilities |
|
6,511 |
6,344 |
924 |
Long-term borrowings |
|
20,009 |
19,245 |
2,802 |
Operating lease liabilities |
|
14,978 |
14,493 |
2,110 |
Other non-current liabilities |
|
1,737 |
1,676 |
245 |
Total non-current liabilities |
|
54,566 |
52,850 |
7,696 |
Total liabilities |
|
321,127 |
277,031 |
40,339 |
|
|
|
|
|
MEZZANINE EQUITY |
|
590 |
592 |
86 |
|
|
|
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
Total JD.com, Inc. shareholders’ equity (US$0.00002 par value,
100,000 million shares authorized, 3,180 million shares issued and
3,133 million shares outstanding as of March 31, 2023) |
|
213,366 |
211,506 |
30,798 |
Non-controlling interests |
|
60,167 |
61,907 |
9,014 |
Total shareholders’ equity |
|
273,533 |
273,413 |
39,812 |
Total liabilities, mezzanine equity and shareholders’
equity |
|
595,250 |
551,036 |
80,237 |
|
|
|
|
|
(1) JD Technology
performs credit risk assessment services for JD Baitiao business
and absorbs the credit risk of the underlying Baitiao receivables.
Facilitated by JD Technology, the company periodically securitizes
Baitiao receivables through the transfer of those assets to
securitization plans and derecognizes the related Baitiao
receivables through sales type arrangements. |
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Operations |
(In millions, except per share data) |
|
|
For the three months ended |
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
RMB |
RMB |
US$ |
Net
revenues |
|
|
|
Net product revenues |
204,416 |
|
195,564 |
|
28,476 |
|
Net service revenues |
35,239 |
|
47,392 |
|
6,901 |
|
Total net
revenues |
239,655 |
|
242,956 |
|
35,377 |
|
Cost of revenues |
(206,209 |
) |
(206,938 |
) |
(30,133 |
) |
Fulfillment |
(15,486 |
) |
(15,371 |
) |
(2,237 |
) |
Marketing |
(8,705 |
) |
(8,005 |
) |
(1,166 |
) |
Research and development |
(4,384 |
) |
(4,186 |
) |
(610 |
) |
General and administrative |
(2,462 |
) |
(2,501 |
) |
(364 |
) |
Gain on sale of development properties |
— |
|
472 |
|
69 |
|
Income from
operations(2)(3) |
2,409 |
|
6,427 |
|
936 |
|
Other
income/(expenses) |
|
|
|
Share of results of equity investees |
(1,081 |
) |
(821 |
) |
(120 |
) |
Interest expense |
(345 |
) |
(590 |
) |
(86 |
) |
Others, net(4) |
(3,898 |
) |
2,792 |
|
407 |
|
Income/(Loss) before
tax |
(2,915 |
) |
7,808 |
|
1,137 |
|
Income tax expenses |
(603 |
) |
(1,609 |
) |
(234 |
) |
Net
income/(loss) |
(3,518 |
) |
6,199 |
|
903 |
|
Net loss attributable to
non-controlling interests shareholders |
(532 |
) |
(62 |
) |
(9 |
) |
Net income attributable to
mezzanine equity classified as non-controlling interests
shareholders |
5 |
|
— |
|
— |
|
Net income/(loss)
attributable to the company's ordinary shareholders |
(2,991 |
) |
6,261 |
|
912 |
|
|
|
|
|
Net income/(loss) per
share: |
|
|
|
Basic |
(0.96 |
) |
1.99 |
|
0.29 |
|
Diluted |
(0.96 |
) |
1.96 |
|
0.29 |
|
Net
income/(loss) per
ADS: |
|
|
|
Basic |
(1.92 |
) |
3.99 |
|
0.58 |
|
Diluted |
(1.92 |
) |
3.93 |
|
0.57 |
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Operations |
(In millions, except per share data) |
|
|
|
For the three months ended |
|
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
(2) Includes share-based compensation expenses as follows: |
Cost of revenues |
|
(32 |
) |
(37 |
) |
(5 |
) |
Fulfillment |
|
(227 |
) |
(199 |
) |
(29 |
) |
Marketing |
|
(149 |
) |
(135 |
) |
(20 |
) |
Research and development |
|
(415 |
) |
(332 |
) |
(48 |
) |
General and administrative |
|
(1,028 |
) |
(771 |
) |
(113 |
) |
|
|
|
|
|
(3) Includes amortization of business cooperation arrangement and
intangible assets resulting from assets and business acquisitions
as follows: |
Fulfillment |
|
(73 |
) |
(105 |
) |
(15 |
) |
Marketing |
|
(217 |
) |
(219 |
) |
(32 |
) |
Research and development |
|
(38 |
) |
(90 |
) |
(13 |
) |
General and administrative |
|
(64 |
) |
(32 |
) |
(5 |
) |
|
|
|
|
|
(4) Others are other non-operating income/(loss), primarily consist
of gains/(losses) from fair value change of long-term investments,
gains/(losses) from business and investment disposals, impairment
of investments, government incentives, foreign exchange
gains/(losses), interest income and gains/(losses) from fair value
change of short-term investments. |
JD.com, Inc. |
Unaudited Non-GAAP Net Income Per Share and Per ADS |
(In millions, except per share data) |
|
|
|
For the three months ended |
|
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
Non-GAAP net income
attributable to the company's ordinary shareholders |
|
4,032 |
7,591 |
1,105 |
|
|
|
|
|
Weighted average
number of shares: |
|
|
|
|
Basic |
|
3,116 |
3,139 |
3,139 |
Diluted |
|
3,116 |
3,180 |
3,180 |
Diluted (Non-GAAP) |
|
3,188 |
3,180 |
3,180 |
|
|
|
|
|
Non-GAAP net income per
share: |
|
|
|
|
Basic |
|
1.29 |
2.42 |
0.35 |
Diluted |
|
1.26 |
2.38 |
0.35 |
|
|
|
|
|
Non-GAAP net income
per ADS: |
|
|
|
|
Basic |
|
2.59 |
4.84 |
0.70 |
Diluted |
|
2.53 |
4.76 |
0.69 |
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of Cash Flows
and Free Cash Flow |
(In millions) |
|
|
|
For the three months ended |
|
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
Net cash used in operating activities |
|
(3,485 |
) |
(21,607 |
) |
(3,146 |
) |
Net cash provided by investing
activities |
|
4,562 |
|
16,692 |
|
2,431 |
|
Net cash provided by financing
activities |
|
12,695 |
|
1,255 |
|
183 |
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
(459 |
) |
(726 |
) |
(106 |
) |
Net increase/(decrease) in
cash, cash equivalents and restricted cash |
|
13,313 |
|
(4,386 |
) |
(638 |
) |
Cash, cash equivalents and
restricted cash at beginning of period, including cash and cash
equivalents classified within assets held for sale |
|
76,693 |
|
85,156 |
|
12,399 |
|
Less: cash, cash equivalents,
and restricted cash classified within assets held for sale at
beginning of period |
|
— |
|
(41 |
) |
(5 |
) |
Cash, cash equivalents, and
restricted cash at beginning of period |
|
76,693 |
|
85,115 |
|
12,394 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
90,006 |
|
80,770 |
|
11,761 |
|
|
|
|
|
|
Net cash used in operating
activities |
|
(3,485 |
) |
(21,607 |
) |
(3,146 |
) |
Less: Impact from JD Baitiao
receivables included in the operating cash flow |
|
(1,734 |
) |
(582 |
) |
(85 |
) |
Less: Capital expenditures,
net of related sales proceeds |
|
|
|
|
Capital expenditures for development properties |
|
(2,676 |
) |
(2,145 |
) |
(312 |
) |
Other capital expenditures |
|
(902 |
) |
(1,068 |
) |
(156 |
) |
Free cash flow |
|
(8,797 |
) |
(25,402 |
) |
(3,699 |
) |
JD.com, Inc. |
Supplemental Financial Information and Business Metrics |
|
|
|
Q1 2022 |
Q2 2022 |
Q3 2022 |
Q4 2022 |
Q1 2023 |
|
|
|
|
|
|
|
Free cash flow (in RMB billions) – trailing twelve months
(“TTM”) |
|
27.2 |
27.7 |
25.8 |
35.6 |
19.0 |
Inventory turnover days(5)– TTM |
|
30.2 |
31.5 |
31.7 |
33.2 |
32.4 |
Accounts payable turnover days(6)– TTM |
|
45.0 |
49.4 |
50.4 |
52.5 |
51.3 |
Accounts receivable turnover days(7)– TTM |
|
3.2 |
3.6 |
4.0 |
4.5 |
4.8 |
|
(5) TTM inventory turnover days are the quotient of average
inventory over the immediately preceding five quarters, up to and
including the last quarter of the period, to cost of revenues of
retail business for the last twelve months, and then multiplied by
360 days.(6) TTM accounts payable turnover days are the quotient of
average accounts payable for retail business over the immediately
preceding five quarters, up to and including the last quarter of
the period, to cost of revenues of retail business for the last
twelve months, and then multiplied by 360 days. (7) TTM accounts
receivable turnover days are the quotient of average accounts
receivable over the immediately preceding five quarters, up to and
including the last quarter of the period, to total net revenues for
the last twelve months and then multiplied by 360 days. Presented
are the accounts receivable turnover days excluding the impact from
JD Baitiao. |
JD.com, Inc. |
Unaudited Reconciliation of GAAP and Non-GAAP Results |
(In millions, except percentage data) |
|
|
For the three months ended |
|
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
Income from operations |
|
2,409 |
|
6,427 |
|
936 |
|
Add: Share-based
compensation |
|
1,851 |
|
1,474 |
|
215 |
|
Add: Amortization of
intangible assets resulting from assets and business
acquisitions |
|
258 |
|
336 |
|
49 |
|
Add: Effects of business
cooperation arrangements |
|
134 |
|
110 |
|
16 |
|
Reversal of: Gain on sale of
development properties |
|
— |
|
(472 |
) |
(69 |
) |
Non-GAAP income from
operations |
|
4,652 |
|
7,875 |
|
1,147 |
|
Add: Depreciation and other
amortization |
|
1,414 |
|
1,624 |
|
236 |
|
Non-GAAP EBITDA |
|
6,066 |
|
9,499 |
|
1,383 |
|
|
|
|
|
|
Total net revenues |
|
239,655 |
|
242,956 |
|
35,377 |
|
|
|
|
|
|
Non-GAAP operating
margin |
|
1.9 |
% |
3.2 |
% |
3.2 |
% |
|
|
|
|
|
Non-GAAP EBITDA margin |
|
2.5 |
% |
3.9 |
% |
3.9 |
% |
JD.com, Inc. |
Unaudited Reconciliation of GAAP and Non-GAAP Results |
(In millions, except percentage data) |
|
|
|
For the three months ended |
|
|
March 31,2022 |
March 31,2023 |
March 31,2023 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
Net income/(loss) attributable to the company's ordinary
shareholders |
|
(2,991 |
) |
6,261 |
|
912 |
|
Add: Share-based
compensation |
|
1,593 |
|
1,256 |
|
183 |
|
Add: Amortization of
intangible assets resulting from assets and business
acquisitions |
|
198 |
|
222 |
|
32 |
|
Add: Reconciling items on the
share of equity method investments(8) |
|
389 |
|
840 |
|
122 |
|
Add: Impairment of goodwill,
intangible assets, and investments |
|
— |
|
26 |
|
4 |
|
Add/(Reversal of): Loss/(Gain)
from fair value change of long-term investments |
|
1,234 |
|
(876 |
) |
(128 |
) |
Reversal of: Gain on sale of
development properties |
|
— |
|
(364 |
) |
(53 |
) |
Add/(Reversal of): Net
loss/(gain) on disposals/deemed disposals of investments and
others |
|
3,549 |
|
(21 |
) |
(3 |
) |
Add: Effects of business
cooperation arrangements and non-compete agreements |
|
123 |
|
110 |
|
16 |
|
(Reversal of)/Add: Tax effects
on non-GAAP adjustments |
|
(63 |
) |
137 |
|
20 |
|
Non-GAAP net income
attributable to the company's ordinary shareholders |
|
4,032 |
|
7,591 |
|
1,105 |
|
|
|
|
|
|
Total net revenues |
|
239,655 |
|
242,956 |
|
35,377 |
|
|
|
|
|
|
Non-GAAP net
margin |
|
1.7 |
% |
3.1 |
% |
3.1 |
% |
(8)To exclude the GAAP to non-GAAP reconciling items on the share
of equity method investments, and share of amortization of
intangibles not on their books. |
_______________________
1 The U.S. dollar (US$) amounts disclosed in
this announcement, except for those transaction amounts that were
actually settled in U.S. dollars, are presented solely for the
convenience of the readers. The conversion of Renminbi (RMB) into
US$ in this announcement 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 March 31, 2023, which was RMB6.8676 to
US$1.00. The percentages stated in this announcement are calculated
based on the RMB amounts.2 See the sections entitled “Non-GAAP
Measures” and “Unaudited Reconciliation of GAAP and Non-GAAP
Results” for more information about the non-GAAP measures referred
to in this announcement.3 The numbers also include warehouses
managed by Deppon Logistics Co., Ltd. (“Deppon”, Shanghai Stock
Exchange code: 603056) and its subsidiaries (collectively, “Deppon
Group”). In the third quarter of 2022, JD Logistics completed the
acquisition of the controlling interest in Deppon and began to
consolidate its financial results.
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