JD.com, Inc. (NASDAQ: JD), China’s leading technology driven
e-commerce company transforming to become the leading supply
chain-based technology and service provider, today announced its
unaudited financial results for the quarter ended March 31, 2020.
First Quarter 2020
Highlights
- Net revenues for
the first quarter of 2020 were RMB146.2 billion (US$120.6 billion),
an increase of 20.7% from the first quarter of 2019. Net revenues
from the sales of general merchandise products for the first
quarter of 2020 were RMB52.5 billion (US$7.4 billion), an increase
of 38.2% from the first quarter of 2019. Net service revenues for
the first quarter of 2020 were RMB16.1 billion (US$2.3 billion), an
increase of 29.6% from the first quarter of 2019.
- Income from
operations for the first quarter of 2020 was RMB2.3
billion (US$0.3 billion), compared to RMB1.2 billion for the same
period last year. Non-GAAP2 income from
operations for the first quarter of 2020 was RMB3.3
billion (US$0.5 billion) with a non-GAAP operating margin of 2.2%,
as compared to non-GAAP income from operations of RMB2.0 billion
for the first quarter of 2019 with a non-GAAP operating margin of
1.6%.
- Net income
attributable to ordinary shareholders for the
first quarter of 2020 was RMB1.1 billion (US$0.2 billion), compared
to RMB7.3 billion for the same period last year. Non-GAAP
net income attributable to ordinary
shareholders for the first quarter of 2020 was RMB3.0
billion (US$0.4 billion), compared to RMB3.3 billion for the same
period last year.
- Diluted net income per
ADS for the first quarter of 2020 was RMB0.72 (US$0.10),
compared to RMB4.96 for the first quarter of 2019. Non-GAAP
diluted net income per ADS for the first quarter of 2020
was RMB1.98 (US$0.28), compared to RMB2.23 for the same period last
year.
- Annual active customer
accounts3 increased by 24.8% to 387.4 million in the
twelve months ended March 31, 2020 from 310.5 million in the twelve
months ended March 31, 2019. Mobile daily active users4 in March
2020 increased by 46% as compared to March 2019.
“We are proud that JD.com has been able to
remain fully operational throughout the COVID-19 outbreak, and our
employees are proud of the contributions JD continues to make
towards building a more productive and sustainable society,”
said Richard Liu, Chairman and Chief Executive Officer
of JD.com. “Strong user growth during the first quarter
reflects consumers’ increasing reliance on JD.com to support every
aspect of their lives, and confidence in our commitment to
providing a broad selection of quality products and best-in-class
services.”
“JD’s resilient business model helped drive
solid top and bottom-line results for the quarter that exceeded our
expectations,” said Sidney Huang, Chief Financial Officer
of JD.com. “We are also pleased to see an accelerating
increase in user engagement, demonstrating our strengthened brand
image and expanded consumer mindshare. Throughout the COVID-19
outbreak, JD has implemented disciplined financial control policies
while providing undisrupted and timely services to consumers. We
will continue to invest in technology and customer experience to
support our future growth.”
Business Highlights
Environment, Social and
Governance
- JD Wuhan Asia No. 1 fulfillment
center’s cargo fleet was granted this year’s prestigious China
Youth Award, thanks to its significant contribution during the
COVID-19 outbreak to support the transportation of daily
necessities and supplies to needy areas. From the beginning of the
outbreak to March 1, the cargo fleet transported over 7,000 tons of
medical supplies and over 6,000 tons of daily staples from places
throughout China.
- To support the global fight against
COVID-19, JD.com and its Chairman and Chief Executive Officer,
Richard Liu, have donated nearly ten million pieces of medical
supplies including face masks, ventilators, protection suits and
protective goggles to a number of overseas countries around the
world.
JD Retail
- In February, JD.com rolled out a
series of measures to support agricultural producers who had been
significantly impacted due to transportation disruptions amid the
COVID-19 outbreak. Leveraging JD’s strong capabilities in supply
chain and logistics, together with its marketing resources
including themed live streaming events and high-traffic “lightening
sales channels”, JD provided one-stop solutions to connect
agricultural merchants with its expansive customer base. In April,
JD also launched a promotion to drive sales of specialty products
from Hubei province, the epicenter of the outbreak, including
crawfish, rice and lotus root.
- In the first quarter, in response
to the COVID-19 outbreak, JD Retail hosted creative online product
launch events for leading cellphone brands including Huawei, Xiaomi
and Samsung. To further support the phone manufacturing industry
amid the outbreak, JD Retail has provided comprehensive online
consultations for nearly one million customers who are unable to
visit physical stores for phone purchases and repairs.
- As China’s most trusted retailer
for high quality products, JD.com continued to attract premium
brands to its e-commerce platform welcoming around 20 luxury brands
on JD since the beginning of January. The world’s oldest fine
leather goods house Delvaux, Italian fashion brand MSGM, Canadian
prestigious contemporary outerwear brand MACKAGE, as well as
Canadian backpack brand Herschel Supply all launched flagship
stores on JD in the first quarter.
- On April 24, 2020, the company
entered into definitive agreements for the non-redeemable series A
preferred share financing of JD MRO with investors including GGV
Capital, Sequoia Capital China and CPE, among others. The total
amount expected to be raised is US$230 million, representing 10.7%
of equity interest of JD MRO on a fully diluted basis, subject to
closing conditions. JD MRO, a subsidiary of JD.com and a
sub-division of JD Business service unit, operates an e-commerce
platform that specialized in industrial maintenance, repair and
operations (“MRO”) products and services, and provides intelligent
purchasing platform and supply chain solutions for corporate
customers.
JD Health
- JD Health launched Android and iOS
versions of its flagship app in March, offering pharmaceutical and
healthcare products and services, including online sales of
medicines and medical devices, online medical and psychological
consultations, healthcare management services and special channels
for purchasing COVID-19 control and prevention supplies. Since
launching in late January, JD Health’s free online medical
consultation services had handled over 11 million requests as of
April 30. JD Health continues to explore opportunities to meet the
needs of users and support medical institutions amid the outbreak,
launching a Chronic Disease Medical Information Sharing Platform
for Hubei province to help respond to medicine shortages,
partnering with Peking University Sixth Hospital, the nation’s
leading mental health institution, to launch an online
psychological consultation platform, and helping facilitate the
digital transformation of virus prevention systems for various
institutions, hospitals and enterprises.
JD Logistics
- In the first quarter, JD Logistics
quickly adapted its logistics services to serve consumers
quarantined due to COVID-19, providing a range of intra-city
delivery services. It launched its “Mobile Fresh Basket” community
initiative in nearly one hundred cities in China to provide users
with fresh produce from local agricultural producers. JD Logistics
also expanded its on-demand service to deliver a wide range of
medical products including medicines and insulin, as well as
traditional Chinese herbal medicine through partnerships with
leading traditional Chinese medicine companies, pharmaceutical
corporations, and hospitals, and teamed up with local primary and
middle schools and other training institutions to distribute
educational books and learning materials to students studying at
home due to school closures.
- As of March 31, 2020, JD Logistics
operated over 730 warehouses, which covered an aggregate gross
floor area of approximately 17 million square meters, including
warehouse space managed under the JD Logistics Open Warehouse
Platform.
JD Property
- After the successful completion of
the first logistics properties fund (“Core Fund”), in January 2020,
JD Property Management Group (“JD Property”) established its second
logistics properties fund (“Core Fund II”) with GIC, the Singapore
sovereign wealth fund, and entered into an agreement to dispose of
certain logistics facilities to Core Fund II for a total gross
asset value of RMB4.6 billion. The majority of the proceeds are
expected to be received in the second half of 2020.
Equity Investees Update
- JD.com’s joint venture, Dada Group
("Dada"), a leading platform of local on-demand retail and delivery
in China, operates Dada Now, a leading local on-demand delivery
platform, and JD-Daojia, one of China’s largest local on-demand
retail platforms. In the first quarter of 2020, Dada continuously
expanded its offerings and optimized operational efficiencies. As
of March 31, 2020, Dada Now covered more than 2,400 cities and
counties in China, and JD-Daojia covered more than 700 cities and
counties in China. JD-Daojia partners with almost all the leading
supermarket chains in China, including Walmart, Yonghui and CR
Vanguard, delivering top-notch services to retailers and brand
owners and offering high-quality on-demand retail experience for
consumers. As of March 31, 2020, JD-Daojia’s CRM tools had been
adopted by 181 retailers covering over 24,000 stores, empowering
retailers to target and communicate with their members and
potential consumers for effective marketing.
Operational Metrics Update
- As of March 31, 2020, JD.com had approximately 220,000
employees excluding part-time and interns.
First Quarter 2020 Financial
Results
Net Revenues. For the
first quarter of 2020, JD.com reported net revenues of RMB146.2
billion (US$20.6 billion), representing a 20.7% increase from the
same period in 2019. Net product revenues increased by 19.7%, while
net service revenues increased by 29.6% for the first quarter of
2020, as compared to the same period of 2019.
Cost of
Revenues. Cost of
revenues increased by 20.2% to RMB123.7 billion (US$17.5 billion)
for the first quarter of 2020 from RMB102.9 billion for the first
quarter of 2019. This increase was primarily due to the growth of
the company’s online retail business and the logistics services
provided to third parties.
Fulfillment
Expenses. Fulfillment expenses,
which primarily include procurement, warehousing, delivery,
customer service and payment processing expenses, increased by
29.0% to RMB10.4 billion (US$1.5 billion) for the first quarter of
2020 from RMB8.1 billion for the first quarter of 2019. Fulfillment
expenses as a percentage of net revenues was 7.1% for the first
quarter of 2020, compared to 6.7% in the same period last year, as
the spread of COVID-19 caused a shift in product mix and
incremental costs.
Fulfilled Gross
Margin5. Fulfilled gross margin for
the first quarter of 2020 was 8.3%, as compared to 8.4% for the
first quarter of 2019.
Marketing
Expenses. Marketing expenses
increased by 13.4% to RMB4.5 billion (US$0.6 billion) for the first
quarter of 2020 from RMB3.9 billion for the first quarter of
2019.
Research and Development
Expenses. Research and development
expenses increased to RMB3.9 billion (US$0.6 billion) for the first
quarter of 2020 from RMB3.7 billion for the first quarter of
2019.
General and Administrative
Expenses. General and
administrative expenses kept relatively stable, amounting to RMB1.4
billion (US$0.2 billion) and RMB1.3 billion for the first quarter
of 2020 and 2019, respectively.
Income from Operations and Non-GAAP
Income from Operations. Income from operations for
the first quarter of 2020 was RMB2.3 billion (US$0.3 billion),
compared to RMB1.2 billion for the same period last year. Non-GAAP
income from operations for the first quarter of 2020 was RMB3.3
billion (US$0.5 billion) with a non-GAAP operating margin of 2.2%,
as compared to non-GAAP income from operations of RMB2.0 billion
for the first quarter of 2019 with a non-GAAP operating margin of
1.6%. Operating margin of JD Retail before unallocated items for
the first quarter of 2020 was 3.2%, compared to 2.7% for the first
quarter of 2019.
Non-GAAP EBITDA for the first
quarter of 2020 was RMB4.5 billion (US$0.6 billion) with a non-GAAP
EBITDA margin of 3.1%, compared to RMB3.2 billion with a non-GAAP
EBITDA margin of 2.6% for the first quarter of 2019.
Others, net. Others are
other non-operating income/(loss) including gains/(losses) from
fair value change of long-term investments, gains from business and
investment disposals, impairment of investments, government
incentives, foreign exchange gains/(losses) and others. In the
first quarter of 2020, other non-operating loss was RMB132.6
million (US$18.7 million), as compared to other non-operating
income of RMB6,886.0 million for the first quarter of 2019. The
substantial decrease was primarily due to the fair value change of
investment securities, which had a loss of RMB669.7 million
(US$94.6 million) for the first quarter of 2020, as compared to a
gain of RMB5,750.5 million for the same period of last year.
Net Income
Attributable to Ordinary Shareholders and
Non-GAAP Net Income Attributable to Ordinary
Shareholders. Net income
attributable to ordinary shareholders for the first quarter of 2020
was RMB1.1 billion (US$0.2 billion), compared to RMB7.3 billion for
the same period last year. Non-GAAP net income attributable to
ordinary shareholders for the first quarter of 2020 was RMB3.0
billion (US$0.4 billion), compared to RMB3.3 billion for the same
period last year.
Diluted EPS and Non-GAAP Diluted
EPS. Diluted net income per ADS for the first
quarter of 2020 was RMB0.72 (US$0.10), compared to RMB4.96 for the
first quarter of 2019. Non-GAAP diluted net income per ADS for the
first quarter of 2020 was RMB1.98 (US$0.28), compared to RMB2.23
for the first quarter of 2019.
Cash Flow and Working
Capital
As of March 31, 2020, the company’s cash and
cash equivalents, restricted cash and short-term investments
totaled RMB75.1 billion (US$10.6 billion), compared to RMB64.5
billion as of December 31, 2019. For the first quarter of 2020,
free cash flow of the company was as follows:
|
|
For the three months ended |
|
|
March 31,
2019 |
March 31,
2020 |
March 31,
2020 |
|
|
RMB |
RMB |
US$ |
|
|
(In thousands) |
|
|
|
Net cash provided by/(used in) operating activities |
|
3,323,251 |
|
(1,542,477 |
) |
(217,839 |
) |
Add/(less): Impact from JD Baitiao receivables included in the
operating cash flow |
|
(2,161,118 |
) |
575,728 |
|
81,308 |
|
Add/(less): Capital expenditures |
|
|
|
|
Capital expenditures for development properties, net of related
sales proceeds* |
|
1,090,678 |
|
(1,431,545 |
) |
(202,173 |
) |
Other capital expenditures** |
|
(972,721 |
) |
(576,183 |
) |
(81,373 |
) |
Free cash
flow |
|
1,280,090 |
|
(2,974,477 |
) |
(420,077 |
) |
|
|
|
|
|
|
|
|
* Including logistics facilities and other real
estate properties developed by JD Property, which may be sold under
various equity structures. In the first quarter of 2020,
approximately RMB0.2 billion proceeds from the sale of development
properties were included in this line, compared to RMB2.5 billion
in the first quarter of 2019. ** Including capital expenditures
related to the company’s headquarters in Beijing and all other
CAPEX.
Net cash used in investing activities was RMB8.2
billion (US$1.2 billion) for the first quarter of 2020, consisting
primarily of increase in short-term investments of RMB4.7 billion,
cash paid for investments in equity investees and purchases of
investment securities of RMB1.7 billion, and cash paid for capital
expenditures of RMB2.2 billion, partially offset by the proceeds
from sale of development properties to the Core Fund of RMB0.2
billion and the loans settled by JD Digits of RMB0.4 billion.
Net cash provided by financing activities was
RMB15.1 billion (US$2.1 billion) for the first quarter of 2020,
consisting primarily of proceeds from short-term debts of RMB8.6
billion and fixed rate unsecured senior notes issued in January
2020 with two maturity dates for an aggregate principal amount of
US$1.0 billion, consisting of US$0.7 billion of 3.375% notes due
2030 and US$0.3 billion of 4.125% notes due 2050.
For working capital turnover days, see table
under “Supplemental Financial Information and Business
Metrics.”
For the twelve months ended March 31, 2020, free
cash flow of the company was as follows:
|
|
For the twelve months ended |
|
|
March 31,
2019 |
March 31,
2020 |
March 31,
2020 |
|
|
RMB |
RMB |
US$ |
|
|
(In thousands) |
|
|
|
Net cash
provided by operating activities |
|
27,977,598 |
|
19,915,492 |
|
2,812,603 |
|
Add/(less): Impact from JD Baitiao receivables included in the
operating cash flow |
|
(8,251,085 |
) |
(1,497,038 |
) |
(211,422 |
) |
Less:
Capital expenditures |
|
|
|
|
Capital expenditures for development properties, net of related
sales proceeds |
|
(6,581,180 |
) |
(101,822 |
) |
(14,380 |
) |
Other capital expenditures |
|
(10,904,299 |
) |
(3,118,203 |
) |
(440,374 |
) |
Free cash
flow |
|
2,241,034 |
|
15,198,429 |
|
2,146,427 |
|
|
|
|
|
|
|
|
|
Supplemental Information
The table below sets forth the three months segment operating
results:
|
|
For the three months ended |
|
|
March 31, 2019 |
March 31,2020 |
March
31,2020 |
|
|
RMB |
RMB |
US$ |
|
|
(In thousands) |
Net revenues: |
|
|
|
|
JD Retail |
|
116,151,096 |
|
139,419,443 |
|
19,689,787 |
|
New businesses* |
|
4,940,518 |
|
6,588,393 |
|
930,458 |
|
Inter-segment |
|
(242,661 |
) |
(125,609 |
) |
(17,739 |
) |
Total segment net revenues |
|
120,848,953 |
|
145,882,227 |
|
20,602,506 |
|
Unallocated items** |
|
232,106 |
|
322,982 |
|
45,614 |
|
Total consolidated net revenues |
|
121,081,059 |
|
146,205,209 |
|
20,648,120 |
|
|
|
|
|
|
Operating income/(loss): |
|
|
|
|
JD Retail |
|
3,193,875 |
|
4,452,534 |
|
628,818 |
|
New businesses* |
|
(1,138,725 |
) |
(1,196,651 |
) |
(169,000 |
) |
Including: gain on sale of development properties |
|
83,218 |
|
- |
|
- |
|
Total segment operating income |
|
2,055,150 |
|
3,255,883 |
|
459,818 |
|
Unallocated items** |
|
(829,576 |
) |
(935,434 |
) |
(132,109 |
) |
Total consolidated operating income |
|
1,225,574 |
|
2,320,449 |
|
327,709 |
|
|
|
|
|
|
|
|
|
* New businesses of the company include
logistics services provided to third parties, overseas business,
technology initiatives, as well as asset management services to
logistics property investors and sale of development properties by
JD Property.
JD Property develops and manages logistics
facilities and other real estate properties. By leveraging its fund
management platform, JD Property can realize development profits
and recycle capital from mature properties to fund new developments
and scale the business.
** 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 first quarter of 2020:
|
|
For the three months ended |
|
|
March
31,2019 |
March 31,2020 |
March
31,2020 |
|
|
RMB |
RMB |
US$ |
|
|
(In thousands) |
|
|
|
Electronics and home appliance revenues |
|
70,701,598 |
77,630,952 |
10,963,585 |
General merchandise revenues |
|
37,949,672 |
52,462,186 |
7,409,076 |
Net product revenues |
|
108,651,270 |
130,093,138 |
18,372,661 |
|
|
|
|
|
Marketplace and advertising revenues |
|
8,143,717 |
9,526,815 |
1,345,443 |
Logistics and other service revenues |
|
4,286,072 |
6,585,256 |
930,016 |
Net service revenues |
|
12,429,789 |
16,112,071 |
2,275,459 |
|
|
|
|
|
Total net revenues |
|
121,081,059 |
146,205,209 |
20,648,120 |
|
|
|
|
|
Second Quarter 2020
Guidance
Net revenues for the second quarter of 2020 are
expected to be between RMB180 billion and RMB195 billion,
representing a growth rate between 20% and 30% compared with the
second quarter of 2019. This forecast reflects JD.com’s current and
preliminary expectation, which assumes the COVID-19 situation would
not have any significant unexpected disruption to our operations in
the remainder of the second quarter.
Conference Call
JD.com’s management will hold a conference call
at 7:30 am, Eastern Time on May 15, 2020 (7:30 pm, Beijing/Hong
Kong Time on May 15, 2020) to discuss the first quarter 2020
financial results.
Please register in advance of the conference
using the link provided below and dial in 10 minutes prior to the
call, using participant dial-in numbers, Direct Event passcode and
unique registrant ID 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:
http://apac.directeventreg.com/registration/event/8153108
CONFERENCE ID: 8153108
A telephone replay will be available from 10:30
am, Eastern Time on May 15, 2020 through 9:59 am, Eastern Time on
May 23, 2020. 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: |
8153108 |
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 transforming to become the 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. 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 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 ordinary shareholders as net income/(loss) attributable to
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, 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 and foreign exchange impact 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 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.
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 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 RelationsRuiyu
LiSenior Director of Investor Relations+86 (10)
8912-6804IR@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, except per share data and otherwise noted) |
|
|
|
|
|
As of |
|
|
December 31,2019 |
March 31,2020 |
March 31,2020 |
|
|
RMB |
RMB |
US$ |
ASSETS |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
36,971,420 |
43,529,407 |
6,147,527 |
Restricted cash |
|
2,940,859 |
2,246,361 |
317,247 |
Short-term investments |
|
24,602,777 |
29,364,492 |
4,147,059 |
Accounts receivable, net (including JD Baitiao of RMB1.0 billion
and RMB3.4 billion as of December 31, 2019 and March 31, 2020,
respectively)(1) |
|
6,190,588 |
8,264,122 |
1,167,117 |
Advance to suppliers |
|
593,130 |
1,565,622 |
221,108 |
Inventories, net |
|
57,932,156 |
50,584,695 |
7,143,924 |
Prepayments and other current assets |
|
5,629,561 |
6,302,939 |
890,145 |
Amount due from related parties |
|
4,234,067 |
2,528,439 |
357,084 |
Assets held for sale(2) |
|
- |
165,994 |
23,443 |
Total current
assets |
|
139,094,558 |
144,552,071 |
20,414,654 |
Non-current assets |
|
|
|
|
Property, equipment and software, net |
|
20,654,071 |
17,487,942 |
2,469,769 |
Construction in progress |
|
5,806,308 |
6,264,929 |
884,777 |
Intangible assets, net |
|
4,110,034 |
3,960,438 |
559,321 |
Land use rights, net |
|
10,891,742 |
10,432,470 |
1,473,346 |
Operating lease right-of-use assets |
|
8,643,597 |
8,444,918 |
1,192,650 |
Goodwill |
|
6,643,669 |
6,643,669 |
938,265 |
Investment in equity investees |
|
35,575,807 |
36,772,791 |
5,193,310 |
Investment securities |
|
21,417,104 |
20,780,630 |
2,934,786 |
Deferred tax assets |
|
80,556 |
80,556 |
11,377 |
Other non-current assets (including JD Baitiao of RMB0.4 billion
and RMB0.5 billion as of December 31, 2019 and March 31, 2020,
respectively)(1) |
|
6,806,258 |
7,292,783 |
1,029,937 |
Assets held for sale(2) |
|
- |
2,982,545 |
421,216 |
Total non-current assets |
|
120,629,146 |
121,143,671 |
17,108,754 |
Total assets |
|
259,723,704 |
265,695,742 |
37,523,408 |
|
|
|
|
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Balance Sheets |
(In thousands, except per share data and otherwise noted) |
|
|
|
|
|
As of |
|
|
December 31,2019 |
March 31,2020 |
March 31,2020 |
|
|
RMB |
RMB |
US$ |
LIABILITIES |
|
|
|
|
Current liabilities |
|
|
|
|
Short-term debts |
|
- |
8,601,811 |
1,214,808 |
Accounts payable |
|
90,428,382 |
76,485,078 |
10,801,757 |
Advances from customers |
|
16,078,619 |
16,150,898 |
2,280,943 |
Deferred revenues |
|
3,326,594 |
4,115,192 |
581,176 |
Taxes payable |
|
2,015,788 |
1,180,931 |
166,779 |
Amount due to related parties |
|
317,978 |
1,265,959 |
178,788 |
Accrued expenses and other current liabilities |
|
24,656,180 |
25,375,911 |
3,583,765 |
Operating lease liability |
|
3,193,480 |
3,406,984 |
481,158 |
Liabilities held for sale(2) |
|
- |
14,736 |
2,081 |
Total current liabilities |
|
140,017,021 |
136,597,500 |
19,291,255 |
Non-current liabilities |
|
|
|
|
Deferred revenues |
|
1,942,635 |
1,912,741 |
270,131 |
Unsecured senior notes |
|
6,912,492 |
13,943,189 |
1,969,154 |
Deferred tax liabilities |
|
1,338,988 |
1,277,404 |
180,404 |
Long-term borrowings |
|
3,139,290 |
3,188,295 |
450,273 |
Operating lease liabilities |
|
5,523,164 |
5,325,542 |
752,110 |
Other non-current liabilities |
|
225,883 |
206,812 |
29,207 |
Total non-current liabilities |
|
19,082,452 |
25,853,983 |
3,651,279 |
Total liabilities |
|
159,099,473 |
162,451,483 |
22,942,534 |
(1) JD
Digits performs credit risk assessment services for JD Baitiao
business and absorbs the credit risk of the underlying Baitiao
receivables. Facilitated by JD Digits, the Company periodically
securitizes Baitiao receivables through the transfer of those
assets to asset-backed securitization plans and derecognizes the
related Baitiao receivables through sales type arrangements. |
(2) As of
March 31, 2020, the company entered into definitive agreements to
transfer certain logistic facilities and real estate properties to
JD Logistics Properties Core Fund II, L.P. (the “Core Fund II”),
and classified the related assets and liabilities as assets and
liabilities held for sale under ASC 360, which included cash of
RMB93.5 million. |
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Balance Sheets |
(In thousands, except per share data and otherwise noted) |
|
|
|
|
|
|
|
As of |
|
|
December 31,2019 |
March 31,2020 |
March 31,2020 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
MEZZANINE EQUITY |
|
|
|
|
Convertible redeemable non-controlling
interests |
|
15,964,384 |
15,965,166 |
2,254,712 |
|
|
|
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
Total JD.com, Inc. shareholders’ equity (US$0.00002 par value,
100,000,000 shares authorized, 2,973,943 shares issued and
2,926,331 shares outstanding as of March 31, 2020) |
|
81,855,970 |
84,289,867 |
11,904,003 |
Non-controlling interests |
|
2,803,877 |
2,989,226 |
422,159 |
Total shareholders’ equity |
|
84,659,847 |
87,279,093 |
12,326,162 |
Total liabilities, mezzanine equity and shareholders’
equity |
|
259,723,704 |
265,695,742 |
37,523,408 |
|
|
|
|
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Operations |
(In thousands, except per share data and otherwise noted) |
|
|
For the three months ended |
|
March 31,2019 |
March 31,2020 |
March 31,2020 |
|
RMB |
RMB |
US$ |
Net
revenues |
|
|
|
Net product revenues |
108,651,270 |
|
130,093,138 |
|
18,372,661 |
|
Net service revenues |
12,429,789 |
|
16,112,071 |
|
2,275,459 |
|
Total net
revenues |
121,081,059 |
|
146,205,209 |
|
20,648,120 |
|
Cost of revenues |
(102,897,352 |
) |
(123,669,699 |
) |
(17,465,498 |
) |
Fulfillment |
(8,063,332 |
) |
(10,399,790 |
) |
(1,468,731 |
) |
Marketing |
(3,940,399 |
) |
(4,468,316 |
) |
(631,047 |
) |
Research and development |
(3,716,545 |
) |
(3,935,159 |
) |
(555,751 |
) |
General and administrative |
(1,321,075 |
) |
(1,411,796 |
) |
(199,384 |
) |
Gain on sale of development properties |
83,218 |
|
- |
|
- |
|
Income from
operations(3)(4) |
1,225,574 |
|
2,320,449 |
|
327,709 |
|
Other
income/(expenses) |
|
|
|
Share of results of equity investees |
(717,422 |
) |
(1,120,220 |
) |
(158,205 |
) |
Interest income |
312,575 |
|
523,054 |
|
73,869 |
|
Interest expense |
(187,445 |
) |
(207,100 |
) |
(29,248 |
) |
Others, net |
6,886,036 |
|
(132,556 |
) |
(18,720 |
) |
Income before
tax |
7,519,318 |
|
1,383,627 |
|
195,405 |
|
Income tax expenses |
(279,640 |
) |
(326,444 |
) |
(46,103 |
) |
Net
income |
7,239,678 |
|
1,057,183 |
|
149,302 |
|
Net loss attributable to
non-controlling interests shareholders |
(80,203 |
) |
(16,420 |
) |
(2,319 |
) |
Net income attributable to
mezzanine equity classified as non-controlling interests
shareholders |
748 |
|
782 |
|
110 |
|
Net income
attributable to ordinary shareholders |
7,319,133 |
|
1,072,821 |
|
151,511 |
|
|
|
|
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of
Operations |
(In thousands, except per share data and otherwise noted) |
|
|
|
|
|
|
|
For the three months ended |
|
|
March 31,2019 |
March 31,2020 |
March 31,2020 |
|
|
RMB |
RMB |
US$ |
(3) Includes
share-based compensation expenses as follows: |
Cost of revenues |
|
(13,029 |
) |
(20,860 |
) |
(2,946 |
) |
Fulfillment |
|
(57,538 |
) |
(131,878 |
) |
(18,625 |
) |
Marketing |
|
(39,183 |
) |
(77,072 |
) |
(10,885 |
) |
Research and development |
|
(226,955 |
) |
(360,599 |
) |
(50,926 |
) |
General and administrative |
|
(281,341 |
) |
(386,105 |
) |
(54,528 |
) |
(4) Includes
amortization of business cooperation arrangement and intangible
assets resulting from assets and business acquisitions as
follows: |
Fulfillment |
|
(41,887 |
) |
(41,433 |
) |
(5,851 |
) |
Marketing |
|
(300,482 |
) |
(138,949 |
) |
(19,625 |
) |
Research and development |
|
(24,940 |
) |
(24,700 |
) |
(3,488 |
) |
General and administrative |
|
(76,327 |
) |
(76,820 |
) |
(10,849 |
) |
|
|
|
|
|
Net income per
share: |
|
|
|
|
Basic |
|
2.53 |
|
0.37 |
|
0.05 |
|
Diluted |
|
2.48 |
|
0.36 |
|
0.05 |
|
|
|
|
|
|
Net income per
ADS: |
|
|
|
|
Basic |
|
5.06 |
|
0.73 |
|
0.10 |
|
Diluted |
|
4.96 |
|
0.72 |
|
0.10 |
|
|
|
|
|
|
JD.com, Inc. |
Unaudited Non-GAAP Net Income Per Share and Per ADS |
(In thousands, except per share data and otherwise noted) |
|
|
|
|
|
|
|
For the three months ended |
|
|
March 31,2019 |
March 31,2020 |
March 31,2020 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
Non-GAAP net income
attributable to ordinary shareholders |
|
3,294,365 |
2,972,206 |
419,755 |
|
|
|
|
|
Weighted average
number of shares: |
|
|
|
|
Basic |
|
2,893,977 |
2,926,685 |
2,926,685 |
Diluted |
|
2,952,051 |
2,998,786 |
2,998,786 |
|
|
|
|
|
Non-GAAP net income per
share: |
|
|
|
|
Basic |
|
1.14 |
1.02 |
0.14 |
Diluted |
|
1.12 |
0.99 |
0.14 |
|
|
|
|
|
Non-GAAP net income
per ADS: |
|
|
|
|
Basic |
|
2.28 |
2.03 |
0.29 |
Diluted |
|
2.23 |
1.98 |
0.28 |
|
|
|
|
|
JD.com, Inc. |
Unaudited Interim Condensed Consolidated Statements of Cash Flows
and Free Cash Flow |
(In thousands) |
|
|
|
For the three months ended |
|
|
March 31,2019 |
March 31,2020 |
March 31,2020 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
Net cash provided by/(used in) operating activities |
|
3,323,251 |
|
(1,542,477 |
) |
(217,839 |
) |
Net cash used in investing
activities |
|
(1,102,985 |
) |
(8,196,352 |
) |
(1,157,546 |
) |
Net cash provided by/(used in)
financing activities |
|
(2,555,951 |
) |
15,086,410 |
|
2,130,608 |
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
(423,213 |
) |
609,365 |
|
86,058 |
|
Net increase/(decrease) in
cash, cash equivalents and restricted cash |
|
(758,898 |
) |
5,956,946 |
|
841,281 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
37,502,058 |
|
39,912,279 |
|
5,636,691 |
|
Cash, cash equivalents and
restricted cash at end of period(5) |
|
36,743,160 |
|
45,869,225 |
|
6,477,972 |
|
|
|
|
|
|
Net cash provided by/(used in) operating activities |
|
3,323,251 |
|
(1,542,477 |
) |
(217,839 |
) |
Add/(Less): Impact from JD Baitiao receivables included in the
operating cash flow |
|
(2,161,118 |
) |
575,728 |
|
81,308 |
|
Add/(Less): Capital expenditures |
|
|
|
|
Capital expenditures for development properties, net of related
sales proceeds |
|
1,090,678 |
|
(1,431,545 |
) |
(202,173 |
) |
Other capital expenditures |
|
(972,721 |
) |
(576,183 |
) |
(81,373 |
) |
Free cash flow |
|
1,280,090 |
|
(2,974,477 |
) |
(420,077 |
) |
|
|
|
|
|
|
|
|
(5) Including cash, cash equivalents and restricted cash
classified as assets held for sale.
JD.com, Inc. |
Supplemental Financial Information and Business Metrics |
|
|
Q1 2019 |
Q2 2019 |
Q3 2019 |
Q4 2019 |
Q1 2020 |
|
|
|
|
|
|
|
Free cash flow (in RMB billions) – trailing twelve months
(“TTM”) |
|
2.2 |
7.4 |
15.6 |
19.5 |
15.2 |
Inventory turnover days(6) – TTM |
|
36.5 |
36.3 |
35.1 |
35.8 |
35.4 |
Accounts payable turnover days(7) – TTM |
|
57.4 |
59.4 |
56.6 |
54.5 |
51.7 |
Accounts receivable turnover days(8) – TTM |
|
3.0 |
3.3 |
3.2 |
3.2 |
3.1 |
Annual active customer accounts (in millions) |
|
310.5 |
321.3 |
334.4 |
362.0 |
387.4 |
(6) 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. (7) 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. (8) 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 annual 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 thousands, except percentage data) |
|
|
|
|
|
|
|
For the three months ended |
|
|
March 31,2019 |
March 31,2020 |
March 31,2020 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
Income from operations |
|
1,225,574 |
|
2,320,449 |
|
327,709 |
|
Add: Share-based
compensation |
|
618,046 |
|
976,514 |
|
137,910 |
|
Add: Amortization of
intangible assets resulting from assets and business
acquisitions |
|
443,636 |
|
147,161 |
|
20,782 |
|
Reversal of: Effects of
business cooperation arrangements |
|
(232,106 |
) |
(188,241 |
) |
(26,583 |
) |
Reversal of: Gain on sale of
development properties |
|
(83,218 |
) |
- |
|
- |
|
Non-GAAP income from
operations |
|
1,971,932 |
|
3,255,883 |
|
459,818 |
|
Add: Depreciation and other
amortization |
|
1,229,432 |
|
1,258,464 |
|
177,730 |
|
Non-GAAP
EBITDA |
|
3,201,364 |
|
4,514,347 |
|
637,548 |
|
|
|
|
|
|
Total net revenues |
|
121,081,059 |
|
146,205,209 |
|
20,648,120 |
|
|
|
|
|
|
Non-GAAP operating
margin |
|
1.6 |
% |
2.2 |
% |
2.2 |
% |
|
|
|
|
|
Non-GAAP EBITDA
margin |
|
2.6 |
% |
3.1 |
% |
3.1 |
% |
|
|
|
|
|
|
|
|
JD.com, Inc. |
Unaudited Reconciliation of GAAP and Non-GAAP Results |
(In thousands, except percentage data) |
|
|
|
|
|
|
|
For the three months ended |
|
|
March 31,2019 |
March 31,2020 |
March 31,2020 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
Net income attributable to ordinary shareholders |
|
7,319,133 |
|
1,072,821 |
|
151,511 |
|
Add: Share-based
compensation |
|
618,046 |
|
976,514 |
|
137,910 |
|
Add: Amortization of
intangible assets resulting from assets and business
acquisitions |
|
443,636 |
|
147,161 |
|
20,782 |
|
Add/(Reversal of): Reconciling items on the share of equity
method investments(9) |
|
162,538 |
|
(74,487 |
) |
(10,520 |
) |
Add: Impairment of goodwill, intangible assets, and
investments |
|
817,581 |
|
421,749 |
|
59,562 |
|
Add/(Reversal of): Loss/(Gain) from fair value change of
long-term investments |
|
(5,750,537 |
) |
669,703 |
|
94,580 |
|
Reversal of: Gain and foreign exchange impact in relation to
sale of development properties |
|
(83,218 |
) |
- |
|
- |
|
Reversal of: Gain on disposals/deemed disposals of
investments |
|
(2,638 |
) |
(15,000 |
) |
(2,118 |
) |
Reversal of: Effects of business cooperation arrangements and
non-compete agreements |
|
(252,196 |
) |
(209,022 |
) |
(29,518 |
) |
Add/(Reversal of): Tax effects on non-GAAP adjustments |
|
22,020 |
|
(17,233 |
) |
(2,434 |
) |
Non-GAAP net income attributable to ordinary
shareholders |
|
3,294,365 |
|
2,972,206 |
|
419,755 |
|
|
|
|
|
|
Total net revenues |
|
121,081,059 |
|
146,205,209 |
|
20,648,120 |
|
|
|
|
|
|
Non-GAAP net
margin |
|
2.7 |
% |
2.0 |
% |
2.0 |
% |
|
|
|
|
|
(9) To exclude the non-GAAP to 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$) amounts disclosed in
this press release, except for those transaction amounts that were
actually settled in U.S. dollars, are presented solely for the
convenience of the readers. The conversion of Renminbi (RMB) into
US$ 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 March 31, 2020, which was RMB7.0808 to
US$1.00. The percentages stated in this press release 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 press release.3 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.4 Mobile daily active users
refer to the daily average number of users who used JD mobile app
on a given day during a calendar month.5 Fulfilled gross margin is
calculated by dividing fulfilled gross profit by net revenues.
Fulfilled gross profit is defined as the difference between net
revenues and the total amount of cost of revenues and fulfillment
expenses.
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