JD-SW (89618) Q2 2026 Earnings Call Transcript

Hello, and thank you for standing by for JD.com's second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sean Zhang, Head of Investor Relations.

Thank you, Operator. Good day, everyone. Welcome to JD.com's second quarter 2026 earnings conference call. With us today are CEO of JD.com, Ms. Sandy Xu, NCFO, Mr. Ian Shan. Sandy will kick off the call with her opening remarks, and Ian will discuss the financial results. Then we'll open the call to questions from analysts. Please note, unless otherwise As stated, all comparisons in this call will be against our results from the comparable period of 2025. Before turning the call over to Sandy, let me quickly cover the safe harbor. Please be reminded that during this call, our comments and responses to your questions reflect management's view as of today only. We'll include forward-looking statements. Please refer to our latest safe harbor statement in the earnings press release on the IR website, which applies to this call. We'll discuss certain non-GAAP financial measures. Please refer to the reconciliation of non-GAAP measures to the comparable GAAP measures also in the earnings press release. Please also note that all figures mentioned in this call are in R&D unless otherwise stated. With that, let me turn the call over to our CEO Sandy. Sandy, please.

Thank you, Sean. Hello, everyone. Thank you for joining our second quarter 2026 earnings conference call. We close the second quarter with steady performance in line with our expectations, maintaining strong operational resilience amid macro and industry hedging. We are navigating a high trade in comparison base, upstream price pressure in consumer electronics, and evolved macro dynamics. Our commitment to high quality development translated to robust profitability. Most notably, Q2 marked a definitive turning point for our profitability trajectory. Our non-GAP net income attributable to ordinary shareholders surged by 21% year on year to 8.9 billion RMD. driven by both J.D. Retail's healthy margin expansion and J.D. Food Delivery's loss reduction. In particular, both J.D. Retail gross margin and operating margin hit historic highs for peak promotional seasons, and J.D. Food Delivery narrowed its losses by over 50% year on year in the quarter. This performance underscores the unique strength of our business model. Even in a complex external environment, it continuously enables us to deepen our supply chain capabilities, unlock operational efficiencies across our business ecosystem, and drive sustained profit expansion. Moving to our operational highlights, I would like to share three key developments for the quarter. First, we maintained healthy user momentum while dramatically improving marketing efficiency in the quarter. Across key metrics, including MAU quarterly active customers and PLUS members, we sustained double-digit year-on-year growth. Our June 18th grand promotion also set a new record for purchasing users. Crucially, we achieved this user expansion while streamlining group-level marketing expenses, supported by enhanced operational efficiency and marketing optimization across JD food delivery and JD retail. We maintained high quality user momentum in Q2, primarily driven by deeper engagement among existing users. Notably, our efforts to provide diversified services catering to our users' life needs, such as healthcare, home services, and auto or aftermarket services. Resonated strongly with our users, contributing to deeper user engagement and stiffness. In healthcare, we provide users with a foot-side online and offline services from consultation to pharmacy and on-site care. In home services, revenues increased exponentially year-on-year in Q2. And in auto aftermarket services, our JD Auto Service offline stores have covered over 1,000 districts and counties across China as of Q2. Overall, this reflects our strategic shift from rapid user acquisition toward elevating user quality and lifetime value. Through disciplined lifecycle management, we are successfully converting new users into highly sticky, loyal customers. Second, Core JD Retail delivered a resilient top-line performance in Q2, while continuing to unlock profitability upside. Heading into Q3, we expect JD Retail to hit a turning point, re-accelerating into positive top-line expansion while sustaining healthy bottom line. Looking at category performance, while revenues from electronics and home appliances were moderated by a high comparison base and upstream price increase in Q2, but momentum picked up in June, our market position and user main share remain firmly intact amid these market dynamics. Looking into the second half of the year, we expect top-line growth for this category to accelerate from the first half, as the high comparison base from the trading program states and our strong supply chain strength allow us to navigate consumer electronics price cycles more effectively. General merchandise maintained healthy growth in the second quarter. In particular, our supermarket category remained a key standout, delivering near double-digit year-on-year revenue growth with a proven multi-year track record. GD Supermarket has established itself as the most trusted platform for both users and suppliers. This success is a powerful example demonstrating how our core philosophy, the relentless pursuit of superior user experience, cost optimization, and operational efficiency, translates into sustainable market leadership. Other general merchandise categories, such as healthcare and industrial products, also delivered solid double digit growth in the quarter as we further tap into massive time supported by our supply chain efficiency and strong user man share we remain confident in our execution for the remainder of the year and beyond in addition to delivering resilient top performance, JD Retail achieved further profitability improvement in the second quarter. Its growth margin expanded by 1.3 percentage points year-on-year to 18.5%, mainly attributable to tool drivers, deepening supply chain scale benefits, and a favorable revenue mix supported by high-margin marketplace and marketing revenues, particularly the rapid growth in advertising revenues. City Retail's operating margin increased by seven business points to 4.6%, setting a new record for a peak promotional quarter. Beyond the growth margin expansion, this performance also reflects our or ROI-driven marketing spend. This allowed us to direct more resources toward R&D capabilities, which is fully aligned with our long-term business strategies. Moving on to new businesses, through our focus on operational efficiency, we substantially reduced losses in new businesses, particularly in JD food delivery, while maintaining disciplined execution against our strategic roadmap. During the second quarter, JD food delivery maintained healthy order volume momentum while narrowing total losses by over 50% year on year. Within just one year of execution, JD food delivery has achieved a dramatic, fast-paced improvement in unit economics driven by our relentless focus to drive operational efficiency and revenue diversification moving forward we see substantial runway for further UE optimization in our food delivery business well we continue to unlock its cross-segment synergies with our core retail business operations at our joy by an agency businesses advanced steadily along their strategic path with strict ROI discipline during the quarter joy by sharpened its competitive edge in Europe through its fast reliable fulfillment and premium localized services such as integrated delivery and installation service for home appliances. By directly addressing local consumers' pain points, Joybuy is building increasing user retention and has doubled its revenues within two quarters. Cincy continued to deepen its penetration in lower-tier markets with QAC increasing over 40% young year and contributing 40% of new active customers in Q2, unlocking valuable incremental user pools for our ecosystem. While both businesses saw a sequential step up in strategic investment, all spend was executed with rigorous discipline and strictly within our expectations. Beyond operational execution, we accelerated the integration of AI and physical automation deeper into our core value chain in the second quarter, spanning demand forecasting, product sourcing, intelligent customer services, and full-stack logistics automation. Next generation shopping and conversion, we are proactively upgrading our search, recommendation, ad targeting engine along with our proprietary AI shopping agents by leveraging AI to sharpen precision in user intent, matching and traffic allocation. We have driven tangible improvements in user engagement, conversion, and ROI for our brand partners. On enterprise productivity and efficiency, internally, we are seamlessly integrating generative AI into automated customer service and cross-departmental workflows. This deep integration is delivering measurable progress, enhancing customer satisfaction while structurally refining our cost structure and driving long-term operational efficiency. On the logistics automation, our progress in physical logistics automation gives us substantial headroom to further optimize our cost structure and operating efficiency. In warehousing and sorting, JD through JD Logistics expanded deployment of our proprietary Lanzhou tech goods to prison solution across more warehouses and product categories. In autonomous delivery, JDL scaled thousands of airmen ground vehicles across more than 20 provinces as of Q2, we are launching our first 24-7 overnight autonomous delivery route in Shenzhen. Powering this automation is our Jingdong Logistics MetaBrain LLM, which drives real-time intelligent decision-making within our our exclusive automated operating framework. In summary, our teams executed with strategic consistency and resilience throughout the second quarter. Looking ahead to the second half of 2026, we remain fully committed to our strategic priorities while responding with agility to evolving micro trends. Our core JG retail business will continue to drive efficiency gains across every link along the supply chain, and new businesses will unlock strategic potential while maintaining strict financial discipline. Combined with our integrated AI capabilities, we are confident in building a resilient business that delivers high-quality, sustainable development through all market cycles. With that, let me turn the call over to Ian.

Thank you, Sandy. Hello, everyone. Thanks for joining the call today. In the second quarter, we delivered a high-quality financial performance anchored by robust bottom-line expansion, while electronics and home appliances' performance was temporarily tempered by a high comparison base, leading total revenues to decrease slightly by 2.9% year-on-year. I will call secular growth drivers, including general merchandise categories, and marketplace and marketing revenues, maintain healthy momentum, meanwhile facing external challenges. We sharpened our focus on supply chain capabilities and operational efficiency, and this move paid off clearly on our bottom line. Our non-GAAP net income rose 20.8% year-on-year to R&B $8.9 billion in Q2, with net margin expanding by 0.5 percentage point to 2.6%, backed by robust profitability of JD retail and the ongoing financial optimization of JD food delivery. As we headed into the second half of the year, we're confident to return to positive growth on the top line while unlocking further profitability through our supply chain strength and robust execution. Alongside our resilient financial performance, we remain committed to shareholder return. During the first half of the year, we repurchased a total of approximately 69.9 million Class A ordinary shares, equivalent to 34.9 million ADS, for a total of US $1 billion. This represents around 2.5% of our ordinary shares, outstanding as of December 31st, 2025. Now, let's go through our Q2 financial performance. Total revenues were R&B $346 billion in Q2, reflecting a 2.9% year-on-year decline as we navigated near-term category dynamics. Breaking down the mix, our product revenues reflected divergent performance across categories. Electronics and home appliances managed through the combined headwinds of a high trading base and upstream component price increase. General merchandise remained a resilient group anchor led by supermarket category, which sustained rapid near double-digit revenue growth for the quarter. This performance highlights the strength of our multi-engine growth model across different market cycles. Looking into Q2, second half, we expect growth momentum to accelerate across categories as we continue to elevate user experience through our superior product selection price competitiveness, and service quality. Service revenues grow by 6.8% year-on-year in Q2. Within this line, marketplace and marketing revenues were up 8.3%, primarily driven by higher growth in advertising revenues. Although growth moderated relatively to previous quarters against a high user traffic base, marketplace and marketing revenues consistently outpace the product sales. We expect this structural diversion to continue, serving as an important driver for our margin expansion over time. Logistics and other service revenues increased by 5.9% year-on-year in the quarter. The pace normalized as our food delivery business left its initial launch and entered a full comparable year-on-year period, starting this quarter. Now let's turn to our segment performance. JD retail revenues came in at R&B 295 billion in Q2, down 4.7% year-on-year in the second quarter in line with expectations as we navigated category specific space effects and market dynamics. Notably, as our continuous efforts in supply chain and user experience gained traction, momentum picked up in June. We expect this recovery trajectory to build further into Q3, making a pivot back to positive revenue growth for JD Retail. In terms of profitability, JD Retail delivered exceptional results in the second quarter. Growth margin expanded by 1.3 percentage points year-on-year to 18.5 percent. This marks JD Retail's 17 consecutive quarter of year-on-year growth margin expansion. A strong testament to our ability to consistently unlock profit potential across market cycles. In addition, JD Retail's non-GAAP operating profit reached RMB 13.5 billion in Q2, with operating margin up seven business points to 4.6%, a record high for promotional seasons. We achieved this milestone amid increased investments in research and development capabilities. Thanks to gross margin expansion and improved marketing efficiency, which provided us great financial flexibility to steadily reinvent for long-term growth. In particular, JD Retail's marketing expense ratio dropped year on year for the fourth consecutive quarter. Overall, this set of results is a clear proof of our business model resilience. Our deepening supply chain capabilities and the favorable revenue mix can effectively cushion short-term top-line fluctuations, driving better profitability through operational quality, rather than simple scale expansion. Moving on to JD Logistics, its revenues grow by 24.3% year-on-year to RMB 68.1 billion in Q2, primarily driven by incremental contribution from on-demand delivery service. JD Logistics non-GAAP operating income reached RMB 2.3 billion, up 15.6% year-on-year, representing an operating margin of 3.5%. JD Logistics near-term margin fluctuations were mainly attributable to DePont, while the rest of JD Logistics business maintained a healthy profitability trajectory. Turning to our new business, revenues came in at R&B 7.3 billion in Q2. The year-on-year decline was driven by the shifting of recognition of on-demand delivery revenue from new business to JD Logistics, which took effect in Q1 2026. Profitability in this segment improved notably. with operating loss narrowing significantly year-on-year to R&B 9.9 billion. This was primarily driven by a more than 50% loss reduction in JD food delivery, highlighting our strong execution in optimizing its unique economics through streamlined operations, revenue diversification, and strict ROI discipline as market competition normalized. We are confident that our food delivery business will continue to see meaningful year-on-year loss reduction throughout the rest of the year. Meanwhile, investments in Joybuy and Jinxi progress in line with our strategic roadmap. notably JoyBite delivered encouraging sequential revenue growth in Q2 as our overseas supply chain strength and the differentiated service offerings continue to gain traction among European consumers while absolute operating loss expanded as JoyBite entered a rapid scaling phase its loss margin narrowed sequentially, demonstrating our disciplined approach to business expansion and continuous operational refinement. Turning to our consolidated profit performance, host-level gross margin expanded meaningfully by 1.2 percentage points year-on-year to 17.1% in Q2, reaching a near all-time high. This expansion was primarily driven by JD Retail's remarkable margin performance. Operating expense, total operating expense decreased by 4.4% a on-year in the quarter, with the expense ratio decreasing by 0.3% point. This operating leverage was largely driven by optimized marketing spend, which was partially offset by stepped-up R&D investments, particularly scalable AI applications. This linear OPEC structure reflects our strategic focus on operational efficiency and bottom-line quality over low ROI volume expansion. As a result, our consolidated non-GAAP net income attributable to ordinary shareholders expanded by 20.8% year-on-year to RMB 8.9 billion in Q2, lifting non-GAAP net margin by 0.5 percentage point to 2.6%. Q2 marks a definitive turning point for our consolidated profitability, and we are confident in sustaining this expanding profit trajectory as we move forward. Turning to our liquidity, last 12 months free cash flow as of the end of Q2 reached R&B 31 billion, representing a significant improvement compared to R&B 10 billion in the prior year period. This was primarily driven by disciplined working capital management, specifically a healthy acceleration in account receivable collection, and the normalized cash outflows associated with the trading program. By the end of Q2, our cash and cash equivalents, restricted cash, and short-term investment totaled R&B 235 billion. In summary, the second quarter once again demonstrated this fundamental mental resilience of our business, and the discipline of our strategic execution. Despite the top line headwinds, we unlock further margin upside in JD retail, while maintaining disciplined ROI-driven investments in new business. Looking ahead to the second half of 2026, we believe we have reached a clear inflection point. Top-line growth is re-accelerating. Profitability continues on an upward trajectory, and deep AI integration is actively redefining both user experience and enterprise efficiency. With solid operational momentum and a strong balance sheet, we remain fully committed to delivering sustainable long term value to our shareholders. through high-quality growth, expanding profitability, a disciplined approach to capital allocation, and consistent shareholder returns. With that I will turn it back to Sean. Thank you.

Thank you Sandy and Ian. For the Q&A session you're welcome to ask questions in Chinese or English and our management will answer your question in Chinese and will provide English translation for convenience purpose only. In case of any discrepancy, please refer to our management statement in original language. Operator, we are opening the call for Q&A session now.

Thank you. The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take two questions at a time from each caller. If you have more than two questions, please request to join the question queue again after your first two questions have been addressed. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Kenneth Fong with UBS. Please go ahead.

Hey, thank you for your question. Thank you for your question for my question. I have two questions. 第一个是在二季度高技术的压力以下,其实我们看到GD Retail营严实现了非常超预期的表现,在宏观不确定,大店品类的需求,前置,还有提供的环境以下,管理层可否替我们展望一下下半年,这个大店品类的增长趋势呢? 第二个问题是关于日白的 我们看到日白在二季度的增速有放缓 想请教一下背后的核心的原因是什么 管理层也可以为我们展望一下未来几个季度 日白的增长趋势吗 我自己翻译一下 Thanks management for taking my questions Despite the high base in seven quarter JD Retail still achieved an outperforming performance given the macro uncertainties the front-loaded demand for free see electronics and home appliances categories and continued price hike could management share the outlook for this category for the growth trend in the second half of the year and my second question is about a general merchandise growth rate which have experienced slowdown in the second quarter what were the core factor driving this and can management share your view for the growth trend for these general merchandise categories over the upcoming quarter, please.

Thank you. 多重影响那么代电品类在二季度有短期承压那么但是凭借这个京东的深厚的供应链能力和我们在这个品类坚实的用户心智 那我们看到就京东的代电品类也继续巩固了我们的市场地位那尤其是家电各个品类的市占率都在实现稳步提升 同时呢 我们也看到就是我们全局道布局的效果显现 那线下的业务也保持更快的增长 所以整体表现相对行业更加稳健 那大家也看到我们其实在香港和上海 也都陆续新开了我们的JD Mall的店 也欢迎投资人分析师有机会可以去看一看 那然后下半年呢 虽然电子产品涨价的问题仍然会继续 那在一定程度上会抑制消费的需求 但是我们也有信心看到带电品类的增速在会明显改善 那么一个呢是基数会逐步回归正常 那从三季度开始起国附高基数的影响将逐步被消化 那么我们也预期带电品类在基数回归常态化 它的增速会回升 那另外第二个呢就是供应链的能力也会在一定程度上 环节涨价的压力 那这也是京东比较擅长的 我们也在不断加强我们自己的供应链能力 能够通过前瞻性的布局和相对灵活的备货调整 能够更有效的去应对和缓冲电子品类的价格上涨 那在保持经营韧性的同时 持续为用户提供有价格竞争力的商品 那第三点呢来自于产品创新 那AI技术的快速发展 其实也带来了产品和品类的创新机遇 那我们也和很多品牌一起在快速的反应开发新的商品 或快速的应用新的技术来满足用户不断变化的需求 甚至创造新的需求 那目前呢我们的Joyinsight也已经与将近200家品牌达成了合作 为家居家电机器人等硬件提供了智能交互能力 用京东的AI能力为用户打造更智慧和便捷的体验 那长期来看我们对代电品类的市场地位非常有信心 虽然在短期销售出现了波动 但越是在不确定性的周期 那么京东对品牌的价值就会越发凸显 我们也将继续发挥我们自营供应链的效率优势 为消费者提供更有竞争力的价格和服务 Let me translate the first answer to the first question.

Thank you. Hi Kenny, thank you for your question. As you said, in the second quarter, JD Retail once again showed strong operating resilience. The performance of our electronic home appliance revenue was in line with our previous expectation. Despite the category phase, some short-term pressure in the quarter, mainly due to last year's high base and the price hikes in electronics driven by the higher raw material cost. Even so, backed by our strong supply chain capabilities and solid user mindshare, we continue to strengthen our market position. Notably, our market share across all major home appliance categories grew steadily in the second quarter. Especially our omni-channel effort also paid off with our offline business growing at a much faster pace. As a result, our overall performance remained more resilient in home appliance and electronics category than the industry. As you already know, we open JD mall in Shanghai and Hong Kong and we welcome analysts and investors to to pay a visit looking into the second half well the ongoing rising consumer electronic price may continue to weigh on consumer demand we remain confident that this category will grow growth will improve meaningfully in the second half for three reasons. Number one, the base effect start to gradually normalize. Starting from Q3, the drag from last year high trading base will gradually ease. Growth in electronics and home appliance is expected to reaccelerate as comparison base normalized. Second, supply chain capabilities mitigate. We are using our supply chain capabilities to mitigate the price pressures we continue to strengthen our supply chain capabilities which is our strong competitive advantage through proactively planning and agile inventory management we can effectively cushion the impact of rising consumer electronics prices this helps us maintain robust operating resilience while delivering competitive price to our users. Third is our product innovation. Rapid AI growth is unlocking opportunities for our product and category innovation. We work closely with brands to co-develop new products using these new technologies. Our Joy Insight has partnered with nearly 200 brands leveraging JD's AI capability to enable smarter interaction across home appliance and robots, delivering a smarter and more convenient user experience. So over the long term we remain highly confident in our leadership in the electronics and home appliance category while sales may fluctuate in the short turn JD's unique value to brands become even clearer in certain times. We will continue to leverage our 1P supply chain efficiency to deliver more competitive prices and services to our customers while providing brands with a highly predictable and efficient sales channel.

那我来接下来回答第二个问题 关于日白品类 同样也在一定程度上受到了去年二季度高低数的影响 那一方面呢 当时的国股直接拉动了家居家装等品类的销售 另外国股还和外卖业务也一起拉动了平台的流量和一部分的交叉购买 那么今年二季度日白增速虽然有所回落 but we are also increasing in 100 products in the market. In order to look at the biggest product in the market, the product of the product of the product of the product of the product is more stable, and the growth of the product of the product of the product.

To your second question, yes, our general merchandise category was also impacted by the high base in last Q3. At the same time, not only did the trading program directly boost the sales of home goods, it also joined force with our food delivery business to drive notable traffic to our platform and drive cross-sell to a certain extent. So, while general merchandise growth moderated somewhat in Q2 this year, in fact, we continue to steadily gain market share across all general merchandise subcategories. Notably, supermarkets, our largest category within general merchandise, deliver a near double-digit resilience performance, while healthcare and industrial products maintain solid double-digit growth. 和优化价格力建设服务水平的提升来不断的提升我们的用户体验加强用户对京东日白品类的新制那第二点呢是用户的持续增长在用户对京东日白品类新制加强的同时京东整体的用户规模也保持着健康的增长势头那外卖经济这些新业务也带来了增量的流量和新用户那接下来我们会加强用户的运营能力

提高转化和交叉购买 那这部分用户在日白品类还有释放的空间 那第三呢是平台生态的不断加强 我们继续引入优质商家培养精锐品牌 在这个环节帮助商家做好经济化运营 将商家和品牌在京东平台实现确定性的增长的同时 也为我们带来销售增量 嗯 那零售的3p的销售增速过去三个季度也超过了自营的品类 那么在二季度的占比也会环比提升 那这也是我们平台生态在持续优化的一个体现 那综合来看 我们预计京东零售下半年将足迹加速增长 一方面在电品类的增长势头将逐步恢复 同时日白品类效率的提升 我们的广告业务也有较大的

okay looking ahead we are confident that general merchandise category will maintain healthy growth backed by several key drivers number one category operational excellence is enhancing user experience we are seeing further upside you know one key supply chain capability for general merchandise category, especially in supermarkets. By expanding product selection, building price competitiveness, and elevating service quality will enhance user experience and solidify JD's user mindshare in general merchandise category. Second, we see sustained user growth momentum. As user mindshare for our general merchandise category deepens, our user base continues to grow healthily. New business including Food Delivery and Jingxi are bringing notable incremental traffic and new users. Moving forward we will enhance our user operation to boost conversion and drive process and we see meaningful upside in general merchandise category sales. Third is our improving platform ecosystem. We continue to onboard high-quality merchants and incubate emerging brands while helping them optimize end-to-end operations. This allows merchants and brands to achieve more certain growth on JD while also bringing incremental sales to our platform at the same time. JD Retail's 3P GND growth has outpaced 1P for the past three consecutive quarters with its contribution to total GND extending Q on Q in Q2. So overall we expect GD retail growth to to accelerate quarter by quarter in the second half of the year. Our electronic to home appliance should steadily recover while general merchandise category maintain healthy growth we also see as conversion efficiency improves our advertising revenue has meaningful room to pick up speed thank you for your question kenny we can go to the next analyst thank you your next question comes from ronald kyung with goldman sachs Please go ahead.

Thank you. So two questions. One is on your free cash flow. We're seeing you're entering into a much healthier free cash flow cycle in contrast to other mega caps in Internet, which are seeing CapEx exceeding operating cash flow for all of the mega caps. So with this unique positioning of JD, yet I see some incremental investments, including some real estate. So will management consider setting a more official percentage of annual profits for shareholder returns? Second is on Joybuy, seeing very fast growth there, and a still pending acquisition of the German retailer. So how do you differentiate or plan to differentiate your price, users' experience or logistic experience further? And what is your investment budget for the second half and next year? Thank you.

Okay, Ronald, thank you. In terms of the number of sales returns, we will continue to start by selling the value of sales. And then continue to participate in the market management system and customers. In order to increase the market's長期 competitiveness and value, and through the development of sales healthy, and to continue to grow as an innovator, to continue to return the sales and revenue, and continue to follow the sales and energy at the end. Third, you can also see the股东回报 track record. I believe you can see that in the past, since the past 23 years, we have spent $1,000 and $1,000 and $1,000 and $1,000. For the past, we have made a long-term payment from 2022.

In the first half of this year, we purchased around 69.9% of the stock market. million ordinary shares for total amount of 1 billion US dollar this represented a 2.5% of our ordinary shares outstanding as of December 31st 2025 under the previously announced three year 5 billion USD share repurchase program the remaining amount is around the 1 billion USD we are expected on the program as planned. Our shareholder return ratio will remain firmly committed to creating value for our shareholders. We will continue to invest in business operations and supply chain capabilities to enhance JD's long-term competitiveness and value. We will return value to shareholders through multiple forms, including healthy and sustainable business development, dividends, and share repurchases. Our goal is to maximize long-term total shareholder returns. Our third, our track record also shows our strong commitment to shareholder returns. Since 2023, we have returned around the 13 billion USD to shareholders through dividends and share repurchases. On dividends, we have maintained annual dividend payments since 2022 and capped dividend per share stable even when profits fluctuated in 2025, providing shareholders with steady cash returns. On buybacks, we have repurchased around the 17% of our outstanding shares since 2023. So going forward, we will remain committed to shareholder return.

That's also why Joybuy in the European Union has not only led to a stable rate of users, it has also led to an increase of revenue in two stages.

Hi Ronald, let me answer your second question. So Joybuy's core strength lies in taking JD's long-standing supply chain capabilities overseas and localizing them in Europe, particularly in home appliance electronics where we have a clear edge. Driven by our efficient 1P retail and logistic fulfillment capabilities, we offer a highly differentiated user experience including integrated delivery and installation services. This has helped Joybuy gradually win stronger user recognition and mindshare across Europe, increasing user retention and doubling Joybuy's revenue within two quarters. First, Joy-Buy is starting to establish a clear edge in user experience and retention. Powered by our own warehouse network in Europe, Joy-Buy now offers same day and next day delivery across major European cities. bring in place order in the morning, receive in the afternoon hyperfast delivery services to over 40 million customers in Europe.

6月刚过去的夏季黑舞的活动时间, 211现实大与送装一体的服务带动了家电与科技产品的热销, 那尤其是欧洲的高温也推动了空调销量的激增, 而我们送装一体的服务也为欧洲当地消费者提供了极具差异化的用户体验, 提升了周一拜在欧洲市场的口碑和用户满意度。

You can see unlike other so-called traditional cross-border e-commerce platforms, JD leverages our supply chain to build a localized e-commerce model. We are strengthening our product offering, proactively partnering up with top-tier brands and suppliers, and delivering high-quality products to our local customers in Europe. During Joybuy's recent summer Black Friday sale in June, our 2-1-1 same-day delivery and one-stop delivery and installation service drove strong electronic home appliance sales. Notably, during the heatwave in Europe, we saw strong sales of air conditions where our one-stop delivery and installation service truly deliver a differentiated experience. further boosting Joybuy's brand reputation and customer satisfaction in Europe. of course we buy still in very early stage of capability building so as we fortify our core supply chain strength across product selection and logistic fulfillment. In Q2, our investment in Joy-Buy grew modestly Q on Q, but its loss or loss margin improved sequentially. Over the coming quarters, as the older volume of Joy-Buy continues to grow quickly and logistic fulfillment efficiency improves and service coverage expands, investment in JoyBuy is expected to increase accordingly. However, our investment will remain very disciplined and manageable. In addition, JoyBuy's business model is consistent with JD's core model with supply chain at the center. So as JoyBuy's scale expands, economic scale will kick in and drive a continuous improvement in joy-based uni economics. Thank you. We can take the next question.

Thank you. Your next question comes from Alicia Yap with Citigroup. Please go ahead.

Hello. Good evening. Thank you. 管理层晚上好 谢谢接受我的提问 两个问题 第一个问题是关于外卖的竞争格局 现状已经趋于稳定 然后京东在外卖业务上的市场份额 用户增长 还有交叉销售协同方面 还有哪些规划和目标 接下来 然后第二个问题是 针对这个佣金和广告收入 在行业竞争加剧,然后消费整体走落的这个背景下, 京东如何维持更高增速? 然后管理层如何看待这方面的收入在下半年的这个增速预期? 我自己翻译一下。 So for questions, first is related to food delivery. So with the landscape stabilizing, what is JDE's latest plan for your market share user growth and also the cross-sell synergy target? Second question is for marketplace and also marketing revenues. How can JDE sustain faster growth rates amid the competition and also the slower consumption? What is your view on the growth expectation for these line items into the second half? Thank you.

So, the supply chain will be significantly reduced, and the supply chain will be significantly increased, and the supply chain will be significantly increased, and the supply chain will be significantly increased.

Thank you, Alicia. Let me answer the first question regarding GDFood Delivery. GDFood delivery has made solid progress in the second quarter order volume maintained healthy growth while narrowing total loss by over 50% year on year. So within just one year of execution, the union economics improved meaningfully for this business driven by refined operations and higher subsidy efficiency. We saw subsidy per order notably decreased year-on-year, enhanced bidder efficiency at scale, and growing contribution from commissions and advertising revenues.

In terms of the cooperation of the company, the company has been growing up in京都整体 of the business of the company. The company has been providing the cooperation of the company of the company. This includes the company and the company in the company of the company. The company of the company and the company of the company has continued to increase the growth of the company. In terms of synergy with our core business, as a deeply embedded business within GD ecosystem, JD Food Delivery is delivering clear synergies.

First, it creates strong synergy with our core retail business across user acquisition and cross-sell. Our quarterly active customer maintains solid double-digit young-year growth in the quarter. Second, it enriches our location-based supply and merchant ecosystem. And third, we are integrating the underlying fulfillment capabilities between food delivery and logistics, which we believe will boost our on-demand delivery capabilities and efficiency. In terms of the long-term goal, we aim to maintain healthy scale growth in food delivery and continue to boost operating efficiency and union economics. More importantly, we'll deepen integration between food delivery and our core business to further unlock ecosystem synergy to drive sustainable user and revenue growth while lifting overall efficiency and profitability. to continue to keep the growth faster than a large number of companies, especially the

global revenue.

For your second question, Alicia, JD remains committed to enhancing user experience without compromising this focus. We will gradually drive monetization through improved efficiency.

In the second quarter, our marketplace and marketing revenue sustained growth that outpaced our total revenues while advertising revenue showing faster momentum. 优化推荐效果带动广告转化率的提升,也推动广告收入的加速增长,在品类结构优化上,广告的变现率更高,日白品类的增速更快,占比也在持续提升,在结构上支撑广告的增长,流量池也在持续扩大,外卖等新业务为平台带来了更多的流量,

整体广告投放的流量实在扩大 同时外卖自身的广告业务也在不断完善 贡献了增量的广告收入 Looking ahead to the second half of the year As our overall sales recover We are confident in accelerating our advertising revenue growth Meanwhile, we expect tech-driven efficiency gains Catalyst mix optimization and traffic pool expansion to help you sustain the momentum in our advertising business. On tech-driven efficiency, we've been driving ad distribution efficiency by integrating AI into our algorithms. This optimizes recommendation accuracy, boosting conversion rates, and accelerating ad revenue growth. On category mix optimization, general merchandise categories, which have higher ad monetization rates are growing faster and taking a larger share of our total sales this makeshift structurally supports our advertising growth our traffic pool expansion new businesses such as food delivery have a brought incremental traffic to our platform expanding our overall traffic pool for advertising. In addition to that, food delivery's own advertising capabilities continue to mature, contributing incremental ad revenue. Over the long term, as our platform ecosystem continues to improve and grow, and as technology drives further efficiency gains, We expect our advertising revenue to maintain steady growth, serving as one of the core drivers of our revenue and profit growth. Okay, we can go to the next question.

Thank you. Your next question comes from Thomas Chong with Jefferies.

Please go ahead. 另外的话,我们应该怎么去看新业务的一个投入,然后我们怎么去看待今一年从集团层面来看今一年的盈利还有利润率? 谢谢,我来翻译一下 Good evening, thanks management for taking my questions. My first question is, can management comment about second half JD retail margin outlook? And my second question is about how we should think about the investment in new business. And on that one, how should we think about the group level profitability and net margin? Thank you.

Thank you, Thomas. I'll take your questions. In Q2, JD Retail's operating margin improved steadily. This was mainly attributable to first, growth margin, so sustained improvement. This is supported by product sales growth margin expansion as a result of enhanced operational and supply chain efficiency, alongside an increase in contribution from high margin commission and advertising revenue. Second, JD Retail's marketing expense and expense ratio have been improving year-on-year, a trend we have seen for four consecutive quarters. While at the same time, we continued to place strong emphasis on R&D capabilities, especially related to AI applications.

JD Retail's R&D expenses increased notably in Q2. 展望下半年我们预计京东零售的供应源效率将持续提升 拉动零售毛利率的提升 那同时我们也坚信为了长期投入 尤其是在AI相关的研发投入 那预计未来一段时间内研发费用将保持增长态势 但我们相信这些投入会逐步转化为运营的红利 that will lead to the expansion of the long-term supply chain and the improvement of the supply chain.

Looking into the second half of the year, we expect improved supply chain efficiency to continue to drive higher growth margins for daily retail. At the same time, we remain committed to long-term investments, particularly in R&D for AI applications. We expect R&D expenses to maintain a growth trajectory for the near term, but we believe these investments are gradually translating into operational benefits, lifting long-term efficiency and optimizing the overall expense structure for JD Retail.

Thank you very much.

Over the long term, we remain confident in achieving our high single digit margin target. The key drivers include first 1P capabilities. With stronger 1P supply chain capabilities and skill benefits, we expect product sales growth margin to improve steadily. Second, category upside. Categories such as supermarkets still have meaningful potential to improve its profitability. In addition, as we further refine product mix, electronics and home appliances categories also have room for margin expansion over time. Lastly, platform ecosystem. As high margin service revenues such as commissions and advertising grow at a rapid pace, we We expect our revenue mix to further optimize, serving as a structural driver for margin expansion. In terms of investment in new businesses and JD Group's consolidated profitability, first, our efforts and investments in new businesses are long-term initiatives with a focus on leveraging and enhancing our supply chain strength. These areas include international business, lower-tier markets, and on-demand retail, and so on. As these new businesses gradually mature, synergies across our business ecosystem will continue to unfold, supporting long-term healthy growth and profit contribution.

目前各项新业务的发展阶段和投入周期各不相同 我们会遵守财务纪律 关注投入产出的效率 动态平衡不同新业务之间的资源投入 总体上会确保集团整体利润的趋势保持健康增长 具体来看外卖二季度亏损同比减半 未来会持续优化优异 预计下半年继续保持投入的效率的改善和同比亏损的明显收窄 那国际呢就是现在处于业务的布局的早期 目前发展势头很快也很健康 优异也在逐步改善 那但是业务规模在快速扩张 所以投入有所逐步增长 那未来我们会按照节奏投入 那保持整体投入规模的稳健可控 惊喜凭借差异化的供给高效的渗透了下沉市场 那给我们带来了大量的新用户 提升了用户活跃 那预计惊喜也会在单量的快速增长的同时保持优异的改善

At present, our new businesses are at different stages of development and investment cycles We remain committed to strict financial discipline, focusing on ROI efficiency and will dynamically balance resource allocation across the new initiatives. Overall, we will ensure our profitability trend at the group level remains healthy. Specifically, in Q2, JD food delivery narrowed its losses by 50% year on year. Looking ahead, we remain focused on optimizing its unit economics, and we expect further efficiency gains and a substantial narrowing of year-on-year losses in the second half of the year. For international business, while in its early stage, it's showing fast-paced and healthy momentum, with unit economics gradually improving. Given its rapid development, our investment has scaled up accordingly. Going forward, we will invest at a measured pace and keep total investment for the business steady and within our control. As for Jinxi, as it effectively penetrates lower-tier markets with differentiated supply, It has brought in a large amount of new users and enhanced user engagement for our platform. Moving forward, we expect Jinxi to drive rapid-order growth while continuously improving its unit economics. On JT Group's profitability, Q2, market, and Q2, a clear inflection in its trajectory, returning to healthy year-on-year expansion. Looking ahead to the second half of the year, supported by core business health and investment discipline, we are confident in driving accelerated profit growth at the group level. Over the long term, as our core retail business has further room to enhance profitability and new businesses continue to optimize ROI efficiency, unlock synergies, and gradually become new growth engines. We are well positioned to drive steady long-term profit expansion for the group.

Oh, I think that's all the time we have for Q&A. Back to operator.

Thank you. We are now approaching the end of the conference call. I will now turn the call over to JD.com's Sean Zhang for closing remarks.

Okay, thank you. Thank you for joining us today on the call, and thank you for your questions. As always, if you have further questions, please feel free to contact me and our team. We appreciate your interest and support in JD.com and really looking forward to talking with you again next quarter. Thank you very much. Have a good day.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect.