China's e-commerce giant JD.com, Inc. (NASDAQ: JD) reported mixed second-quarter 2026 results on Thursday, as earnings topped expectations but revenue fell short.
Earnings Snapshot
JD.com reported revenue of $51.05 billion, down 2.9% year over year and below the analyst consensus estimate of $51.55 billion.
The decline marked JD.com's first quarterly revenue contraction since its 2014 listing, as softer Chinese consumer spending and a difficult year-earlier comparison weighed on sales, Bloomberg reported Thursday.
The year-earlier period benefited from government-backed subsidies for cars, electronics and other big-ticket purchases. China's prolonged economic slowdown has since pressured online retailers, while retail sales recorded their first monthly decline since the pandemic in May.
Adjusted net income per ADS came in at 93 cents, beating the analyst estimate of 81 cents. Net income rose 15% to 7.1 billion yuan.
Net product revenue fell 5.4% year over year to $39.37 billion, while net service revenue increased 6.8% to $11.69 billion.
JD Retail revenue declined 4.7% to $43.53 billion. Logistics revenue jumped 24.3% to $9.45 billion, while New Businesses revenue fell 47.6% to $1.07 billion.
Margins Improve As Marketing Costs Fall
The company's marketing expenses fell 24.8% to $3.0 billion, accounting for 5.9% of revenue, down 170 basis points from a year earlier. The decline primarily reflected optimized promotional spending on new business initiatives.
Operating margin improved to 1.3% from negative 0.2% a year earlier. Adjusted operating margin rose to 1.6% from 0.3%.
JD Retail's operating margin increased to 4.6% from 4.5% in the prior-year quarter.
JD.com Pulls Back From Food-Delivery Battle
JD.com has scaled back aggressive spending on food delivery after Beijing warned internet companies against excessive price competition and regulators scrutinized major industry participants.
The company had invested heavily in instant delivery and aimed to capture a 30% market share this year, roughly double its level around February.
However, intense competition among JD.com, Alibaba Group Holding Limited (NYSE: BABA) and Meituan (OTC: MPNGY) pressured industry profitability. The spending contributed to JD.com posting its first quarterly loss in nearly four years in the three months ended December.
CEO Sandy Xu warned of "near-term revenue headwinds" while pointing to narrower food-delivery losses and solid profitability at the core JD Retail business.
Overseas Expansion Offers Growth Route
JD.com is expanding outside mainland China as it seeks growth in potentially higher-margin markets.
The company launched its Joybuy retail platform and JoyExpress delivery service in Europe and partnered with brands in Hong Kong. Its proposed acquisition of Germany's Ceconomy faces an in-depth subsidy investigation by the European Commission.
On artificial intelligence, the company has yet to announce investments on the scale of some Chinese internet peers. The company has partnered with Tencent Holdings Limited (OTC: TCEHY) and uses Tencent's Yuanbao chatbot to support agentic shopping services.
Cash Flow And Liquidity
Adjusted EBITDA totaled $1.17 billion, with margin improving to 2.3% from 0.8% a year earlier.
JD.com generated $5.56 billion in operating cash flow and $4.69 billion in free cash flow during the quarter.
As of June 30, JD.com held $34.6 billion in cash, cash equivalents, restricted cash and short-term investments.
JD.com Continues Share Buybacks
Under its share repurchase program authorized in August 2024, the company repurchased about 69.9 million Class A ordinary shares, equivalent to 34.9 million ADSs, for approximately $1.0 billion during the six months ended June 30.
The repurchases represented about 2.5% of the company's outstanding ordinary shares as of Dec. 31, 2025.
JD Price Action: JD.com shares fell 3.42% to $30.53 in Thursday's premarket trading, according to Benzinga Pro data.