Here’s our initial take on JD.com‘s (JD 6.53%) fiscal 2025 first-quarter financial report.
Key Metrics
| Metric | Q1 2024 | Q1 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue (RMB) | 260.0 billion | 301.1 billion | 16% | Beat |
| Adjusted EPS (RMB) | 5.65 | 8.41 | 49% | Beat |
| Retail operating margin | 4.1% | 4.9% | 80 bps | n/a |
| New business revenue (RMB) | 4.87 billion | 5.75 billion | 18% | n/a |
Solid Numbers All Around for JD.com
Chinese e-commerce company JD.com reported generally strong results for the first quarter of 2025. Revenue climbed by 16% (in the local currency) to 301.1 billion Chinese yuan, or about $41.5 billion, and there was solid year-over-year growth in both product revenue (16.2%) and service revenue (14%). Overall, revenue was significantly greater than analysts had expected.
When it comes to profitability, the numbers were rather strong as well. On a per-share basis, earnings surpassed analyst expectations. Operating income jumped by about 38% year over year, and JD’s retail operating margin improved by 80 basis points. On an adjusted basis, JD.com’s net income was 12.8 billion RMB (about $1.8 billion).
JD.com continues to buy back its own stock aggressively, repurchasing 2.8% of its total outstanding shares from the start of the year through the date of its earnings report (May 13). The company has $3.5 billion remaining on its share-repurchase program it can use through August 2027.
Not all of the news was great. Free cash flow declined by 26% on a trailing-12-month basis, and inventory turnover days increased from 29 to 32.8 year over year. However, this was a solid quarter for the company, and the business appears to be performing quite well.
Immediate Market Reaction
As of 8 a.m. EDT on the day of the announcement, JD.com stock was trading higher by about 3.5%. It’s worth noting, however, that this follows a 6.5% rally the day before after the U.S. and China announced a temporary trade deal.
What to Watch
JD is expanding fairly aggressively beyond its core retail business. For example, JD Food Delivery launched in February, and it aims to capitalize on opportunities available in on-demand retail and food delivery.
In addition, JD Logistics (JDL) is expanding quickly and just opened its operations center in Hong Kong near the end of the quarter. Logistics makes up a relatively small part of the company’s total revenue, while Food Delivery is a mostly untapped revenue opportunity today, so it will be interesting to watch both over the next few quarters.
