JD.com, Inc. Q3 FY2025 earnings call

• User base and engagement: Quarterly active customer number was up over 40% year-on-year in Q3, annual active customers exceeded 700 million in October, user shopping frequency on the platform increased by over 40% year-on-year in Q3. - Core retail business: Retail revenues increased by 11% year-on-year in Q3, general merchandise and marketplace and marketing revenue growth accelerated. JD Retail's gross margin and operating margin further expanded. - New businesses: JD Food Delivery made healthy progress, GMV had double-digit quarter-on-quarter growth, operating loss narrowed, and generated synergies with retail business. Other new businesses like Jingxi and international business progressed as planned. - AI roadmap: Launched new AI products, introduced industry-specific AI applications across 4 sectors, upgraded retail technology infrastructure such as JD Streamer.

JD Retail: Revenues were up 11% year-on-year in Q3 to RMB 251 billion. Gross margin sustained year-on-year expansion for 14 quarters in a row and was up 1.3 percentage points to 19.3% in Q3. Non-GAAP operating income was up 28% year-on-year to RMB 14.8 billion, and operating margin was up 76 bps to 5.9%. JD Logistics: Logistics revenues were up 24% year-on-year in Q3. Non-GAAP operating income was compressed 39% year-on-year to RMB 1.3 billion in the quarter as it continued to invest in customer experience, etc. New business: Net new business generated RMB 15.6 billion in revenues. Non-GAAP operating loss of new business slightly widened sequentially to RMB 15.7 billion. JD Food Delivery saw GMV achieve double-digit quarter-on-quarter growth, and operating loss narrowed sequentially in Q3.

• Marketplace and marketing revenues are expected to continue healthy growth in Q4. - New businesses will continue to scale up and unlock synergies, focusing on UE performance and long-term sustainable bottom line growth.

• Electronics and home appliances category faced high base effect leading to growth challenges. - New business investments may bring short-term profit pressure.

Q: On government trading subsidies and overseas development.

A: Since last year's trading program, it created a high base, JD actively supported policy implementation, enhanced market share and supply chain capability, and for overseas, JD's international strategy is a gradual process, with Joybuy in test phase in some countries, and CECONOMY transaction subject to regulatory approval.

Q: On food delivery investment duration and general merchandise competitive edge.

A: Food delivery is a long-term strategy, goal is to establish user mind share and market share in quality food delivery sector, general merchandise category focuses on improving user mind share and penetration through promotions, collaborating with brands to refine operations.

Q: On general merchandise and food delivery synergies and AI strategy.

A: Food delivery drives user growth and engagement, boosts user conversion and cross-category purchases, JD has a solid AI capability framework, unveiled AI strategy roadmap, launched flagship AI products and introduced industry-specific AI applications.

Q: On ecosystem development and profitability outlook.

A: Active merchant number grew by over 200% year-on-year in Q3, platform ecosystem has potential, JD Retail continued steady profit growth, long-term high single-digit margin target remains unchanged.