【9618 Performance】JD.com ADRs drop nearly 3% before the market open; Q4 adjusted net profit down 90%, new business operating losses expand to 14.8 billion RMB; CEO: Delivery investments will be lower than last year (Second Edition)

JD.com (09618) Announces Q4 2025 Results, Revenue of 352.3 billion RMB, up 1.5% Year-over-Year, Beating Expectations of 349.89 billion RMB. Quarterly profit turned into a loss, recorded a net loss of 2.7 billion RMB, compared to a profit of 9.854 billion RMB in the same period last year; adjusted net profit was 1.1 billion RMB, down 90.3% YoY, beating expectations of 547 million RMB. JD.com declared a final dividend of $0.50 per share, unchanged from last year.

JD ADR (US: JD) fell 2.7% in pre-market trading, trading at $24.73.

New Business Losses Widened to 14.8 Billion RMB in Q4 Last Year

Following the central government’s push for an “anti-inflation” policy last year, ongoing discussions with food delivery platforms since the second half have significantly cooled competition. However, JD’s new businesses (JD Food Delivery, JD Industrial Development, JX, and overseas operations) still recorded nearly 15 billion RMB in losses, becoming the main factor eroding profitability.

Revenue from new businesses doubled to 14.085 billion RMB, but operating losses expanded to 14.8 billion RMB, a sharp increase from 890 million RMB in the same period last year. For the full year, operating losses reached 46.6 billion RMB, remaining the core factor impacting profits.

CEO Xu Ran: Food Delivery Investment Will Be Lower Than Last Year

JD CEO Xu Ran revealed during an analyst meeting that total investments this year are expected to be lower than in 2025, though actual results will still be influenced by market competition. JD stated that total investment in food delivery in Q4 narrowed sequentially, mainly due to a focus on improving user experience and brand awareness, operational efficiency, and rational responses to industry competition.

She pointed out that in 2025, the food delivery business is still in its early stages, with significant investments in operations and R&D. In 2026, JD will continue to strengthen capacity building, enrich high-quality merchants and product offerings, and enhance user experience. JD CFO Dan Su added that losses in food delivery in Q4 narrowed by nearly 20%, and with improved operational efficiency and revenue growth, overall loss rates continue to decline significantly.

He also believes that food delivery and instant retail are long-term strategic priorities for JD. Food delivery not only attracts new users and optimizes the existing user base but also expands cross-selling and advertising revenue. JD also noted that increased regulation of the food delivery industry helps curb malicious competition and promotes high-quality industry development and innovative models.

European Online Retail Business Joybuy Officially Launched This Month

JD continues to expand overseas markets. The European online retail platform Joybuy has begun trial operations in the UK, Germany, the Netherlands, France, and other countries, with plans for official launch this month. Dan Su stated that building an overseas supply chain takes time, but initial trial operations have shown outstanding user and logistics experiences, with clear competitive advantages.

JD Retail’s Q4 Operating Profit Declined 2% Year-over-Year, Continues to Improve Gross Margin on Self-Operated Goods

In core retail, JD Retail’s Q4 operating profit was 9.8 billion RMB, down 2% YoY, with an operating margin of 3.2%, a slight decrease of 0.1 percentage points. Including other businesses, JD’s total revenue was 352.3 billion RMB, up 1.5% YoY, beating expectations of 349.89 billion RMB.

However, due to high base effects and rising raw material costs, product revenue in Q4 last year fell 2.8%, while service revenue grew 20.1%. Dan Su stated that with improved profitability across categories and a higher proportion of high-margin businesses like advertising, he is confident in seeing more diversified profit sources.

Xu Ran also mentioned that the growth rate of the electronics category in the first half remains under pressure from high base effects but is expected to improve significantly in Q4 2025, with a recovery in the second half and stable market share. She added that rising storage chip costs have increased electronic product prices, but AI innovations bring new product opportunities. She believes that in the short term, innovative products will not significantly contribute to retail scale.

Regarding profit guidance, Dan Su said that JD’s long-term target of high single-digit profit margins remains unchanged, with healthy growth expected in core retail profits by 2026. The company will continue to improve gross margins on self-operated goods, strengthen high-margin advertising revenue growth, optimize retail category margins, and unlock retail scale effects.

JD.com: Confident in More Diversified Profit Sources

For the full year, JD recorded a net profit of 19.6 billion RMB, down 53% YoY; adjusted net profit was 27 billion RMB, down 43.5%. Revenue increased 13% YoY to 1.3091 trillion RMB, with product revenue up 10.3% and service revenue up 23.6%.

JD CEO Xu Ran stated that performance in 2025 remains steady, with strong growth in user numbers and shopping frequency throughout Q4 and the full year. Despite fierce industry competition, JD’s core retail business demonstrated resilience, achieving double-digit growth in both revenue and operating profit.

She also said that new businesses are progressing according to strategic plans. Since establishment, JD Food Delivery has steadily expanded, with losses narrowing each quarter. JX and international businesses are opening new opportunities for long-term growth. She added that AI has been fully integrated into internal operations and used to provide smarter user experiences.

JD CFO Dan Su noted that although electronics categories are affected by high base effects, daily necessities, platform, and advertising revenues remain strong, and revenue structure is becoming more diversified. With improved profitability across categories and higher proportions of high-margin businesses like advertising, he is confident in seeing more diversified profit sources. Despite short-term fluctuations in Q4, the financial position remains solid, and the full-year outlook for 2025 remains on track.

(Second edition includes analyst conference)