JD.com, Inc. (NASDAQ: JD) reported strong second-quarter 2024 results, exceeding analyst expectations for both revenue and earnings. The company’s revenue grew by 1.2% year-over-year to $40.098 billion, surpassing the analyst consensus estimate of $40.830 billion. JD also posted an adjusted net income per ADS of $1.29, comfortably beating the analyst consensus estimate of $0.83. The stock price surged following the release of these positive results.
Ian Su Shan, Chief Financial Officer of JD.com, attributed the company’s success to its commitment to enhancing price competitiveness during promotional periods. JD’s strategy focused on leveraging its robust supply chain and disciplined approach, rather than relying heavily on subsidies.
JD.com’s core business segments continued to perform well. Net product revenue remained steady year over year at $32.19 billion, while net service revenues saw a 6.3% year-over-year increase to $7.91 billion. JD Retail revenue climbed 1.5% year over year to $35.37 billion, driven by the company’s strong retail operations. Logistics revenue also exhibited strong growth, rising 7.7% year over year to $6.08 billion, reflecting the increasing importance of JD’s logistics network. New business revenues, however, declined to $638 million.
While JD.com’s marketing expenses rose by 7.3% in the quarter to $1.60 billion, representing 4.1% of revenues, the company attributed this increase to higher spending on promotional activities.
On the profitability front, JD.com’s operating margin reached 3.6% for the quarter, up from 2.9% a year ago. Adjusted operating margin saw an even more significant improvement, rising by 100 basis points year over year to 4.0%. JD Retail’s operating margin also exhibited positive growth, reaching 3.9% compared to 3.2% in the previous year. Adjusted EBITDA surged by 30.1% year over year to $1.90 billion, representing a margin of 4.6%.
JD.com generated a robust $6.82 billion in free cash flow for the quarter and $6.98 billion in operating cash flow. The company held a strong cash position of $28.8 billion as of June-end.
CEO Sandy Xu highlighted the company’s unwavering focus on strengthening supply chain capabilities and user experience, differentiating JD in China’s competitive e-commerce landscape. He emphasized that JD leverages its growing economies of scale and procurement efficiencies to offer users everyday low prices without compromising on quality.
In premarket trading on Thursday, JD shares climbed by 4.17% to $26.98, reflecting investor confidence in the company’s strong performance and future prospects.
