Investors Are Reacting Positively To JD.com's Q2 Earnings: Key Takeaways

JD.com Inc JD reported second-quarter FY21 revenue growth of 26.2% year-on-year to $39.3 billion beating the analyst consensus of $38.3 billion.

In contrast, peers Amazon.com Inc's AMZN and Alibaba Group Holding Ltd's BABA missed the analyst consensus on revenue.

Amazon's Q2 revenue of $113.0 billion, up 27% Y/Y, missed the consensus of $115.2 billion, pointing towards slower e-commerce growth with ease in lockdown. Amazon's Q3 guidance was well below the consensus, which too took a sharp drop. Alibaba's first-quarter FY22 revenue growth of 34% Y/Y to $31.87 billion missed the analyst consensus of $32.54 billion.

The Chinese tech stocks remain jittery over the country's growing crackdown on the sector.

JD Segment Performance: JD.com's net product revenue grew 23.3% Y/Y to $34 billion. Net service revenues rose 49.2% Y/Y to $5.3 billion.

JD Retail revenue grew 22.7% Y/Y to $36 billion.

Margins: The non-GAAP operating margin contracted 180 bps to 1% as the costs expanded 28.8% Y/Y. The operating margin of JD Retail remained stable at 2.6%.

Non-GAAP diluted net income per ADS of $0.45 beat the analyst consensus of $0.41. JD.com generated $4.5 billion in operating cash flow and held $27.6 billion in cash and equivalents.

JD.com's annual active customer accounts increased by 27.4% Y/Y to 531.9 million in the twelve months ended June 30. The successful 618 Grand Promotion helped add over 32 million new users in Q2, the most significant single quarter increase in JD.com's history further supported by diversification of revenue stream.

Price Action: JD shares traded higher by 2.17% at $65 in the premarket session on the last check Monday.

Photo by N509FZ via Wikimedia