JD.com Q2: Retail and Logistics Gains As Price Cuts Pay Off, Margin Boost, Cash Flow Growth

JD.com, Inc. (NASDAQ: JD) reported fiscal second-quarter 2024 revenue growth of 1.2% year over year to $40.098 billion, beating the analyst consensus estimate of $40.830 billion.

JD posted an adjusted net income per ADS of $1.29, beating the analyst consensus estimate of $0.83. The stock price gained after the print.

Ian Su Shan, Chief Financial Officer of JD.com, said, “We continued to enhance price competitiveness during the promotional season through our supply chain and disciplined approach, as opposed to reliance on subsidies.”

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JD Segment Performance: JD.com’s net product revenue remained firm year over year at $32.19 billion. Net service revenues rose 6.3% year over year to $7.91 billion. 

JD Retail revenue climbed 1.5% year over year to $35.37 billion, Logistics revenue gained 7.7% year over year to $6.08 billion, and the new business revenues fell to $638 million.

JD.com’s marketing expenses rose 7.3% in the quarter to $1.60 billion, forming 4.1% of revenues. The rise was mainly due to the increased spending in promotion activities.

Margin: Operating margin was 3.6% for the quarter, compared to 2.9% year over year. Adjusted operating margin improved 100 bps year over year to 4.0%. JD Retail’s operating margin was 3.9%, versus 3.2% year over year. 

Adjusted EBITDA increased 30.1% year over year to $1.90 billion, with a 4.6% margin.

JD.com generated $6.82 billion in free cash flow for the quarter, $6.98 billion in operating cash flow, and held $28.8 billion in cash and equivalents as of June-end.

CEO Sandy Xu: “Our steadfast efforts to strengthen supply chain capabilities and user experience continue to distinguish JD in China’s e-commerce industry, as we leverage our growing economies of scale and procurement efficiencies to bring users everyday low prices without sacrificing quality.”

Price Action: JD shares traded higher by 4.17% at $26.98 in the premarket session at the last check Thursday.