On August 13, JD.com released its second-quarter and mid-year results for 2026. The financial report showed that revenue for the quarter was 346.4 billion yuan, a slight decline of 2.9% year-on-year, but above the Bloomberg consensus estimate of 342.1 billion yuan. While revenue faced pressure, the overall performance still exceeded market expectations.

Compared to revenue performance, the improvement in profitability was more pronounced. Operating profit for the second quarter turned from a loss of 900 million yuan in the same period last year to a profit of 4.5 billion yuan. Under non-GAAP accounting standards, operating profit also increased from 900 million yuan to 5.5 billion yuan, significantly repairing profitability. At the same time, cash flow improved concurrently, with the dual improvement in profit and cash becoming the core highlight of this quarter's earnings report.

The profit improvement was primarily driven by two factors: the steady profitability of the core retail business and the continued reduction in losses from new businesses, including JD's fresh food delivery service. Additionally, service revenue growth continued to outpace merchandise revenue, coupled with a notable contraction in marketing expenses. This optimization of the revenue structure further boosted the overall profit margin.

JD.com's CEO stated: "The second-quarter results reflect our stable and high-quality operations. Despite short-term headwinds on revenue, we achieved strong net profit growth, marking a clear inflection point in our earnings trajectory. This improvement is primarily attributed to the steady profitability of JD's core retail business and the continued narrowing of losses in JD's fresh food delivery service."

Revenue Under Pressure, Service Revenue Continues to Outpace Merchandise Revenue

In the second quarter, JD.com achieved revenue of 346.4 billion yuan, a year-on-year decrease of 2.9%.

Among this, merchandise revenue was 267.1 billion yuan, down 5.4% year-on-year. Revenue from electronics and home appliances was 157.9 billion yuan, a year-on-year decline of 11.8%, becoming the main drag due to a notable high base effect. In contrast, revenue from general merchandise, including daily necessities, was 109.2 billion yuan, up 5.6% year-on-year, with non-standard categories continuing to grow.

Service revenue showed more resilience, growing 6.8% year-on-year to 79.3 billion yuan in the second quarter. Among this, platform and advertising service revenue was 30.9 billion yuan, up 8.3% year-on-year, while logistics and other service revenue was 48.4 billion yuan, up 5.9% year-on-year.

For the first half of the year, service revenue grew 12.9% year-on-year, significantly faster than merchandise revenue. The increasing share of high-margin service businesses remains a key driver for JD.com to improve revenue quality and profitability.

Retail Profit Margin Hits New High for Promotional Season

JD Retail's second-quarter revenue was 295.4 billion yuan, down 4.7% year-on-year, but operating profit reached 13.5 billion yuan, with the operating profit margin rising from 4.5% to 4.6%, a record high for the promotional season.

Management stated that the margin improvement was primarily driven by higher gross margins in key categories and faster growth in platform and advertising revenue. During the 618 shopping festival, about 2,000 fashion brands saw their transaction volumes double year-on-year, and the opening of a Chanel flagship store on JD.com further expanded the company's presence in the fashion and luxury goods sector.

JD Logistics maintained rapid growth, with second-quarter revenue of 64.1 billion yuan, up 24.3% year-on-year, and operating profit of 2.26 billion yuan, with an operating profit margin of 3.5%. The shift of on-demand delivery services to directly serve external third-party merchants since the first quarter of this year has also changed the revenue structure of the logistics business.

Marketing Expenses Drop Sharply, R&D Investment Increases Against the Trend

Changes in expenses were also evident.

In the second quarter, JD.com's marketing expenses were 20.3 billion yuan, down 24.8% year-on-year, with their share of revenue falling from 7.6% to 5.9%. As new businesses like fresh food delivery entered a phase of efficiency optimization, the company significantly reduced related marketing investments, which was a key source of the profit improvement.

General and administrative expenses were 3.1 billion yuan, down 4.7% year-on-year.

In contrast, R&D expenses increased by 37.7% year-on-year to 7.3 billion yuan, with their share of revenue rising from 1.5% to 2.1%. AI remains a key direction for R&D investment, with products like the JoyAI large model, JD Industrial's JoyIndustrial, and JD Health's "Jingyi Qianxun" continuing to advance in implementation.

Fulfillment expenses rose 10.4% year-on-year to 24.5 billion yuan, increasing their share of revenue to 7.1%, mainly due to optimization of fulfillment capabilities and increased labor investment.

Fresh Food Delivery Losses Continue to Narrow, New Businesses Pass the Most Capital-Intensive Phase

New business revenue in the second quarter was 7.26 billion yuan, a year-on-year decline of 47.6%. Operating loss was 9.85 billion yuan, a significant narrowing of nearly 5 billion yuan from the 14.8 billion yuan loss in the same period last year.

Due to the shrinking revenue base, the operating loss margin for new businesses rose to 135.7%, higher than the 106.7% in the same period last year, but this is primarily a ratio effect from revenue contraction, not a deterioration in operational efficiency. More notably, the absolute loss amount is declining rapidly, with a clear trend of loss reduction.

Among this, JD's fresh food delivery service is the main contributor to the loss reduction. With shrinking investment scale, improved operational efficiency, and diversified revenue sources, the fresh food delivery business has gradually shifted from a phase of high-investment expansion to a stage focusing on efficiency improvement and structural optimization. Businesses like Joybuy and Jingxi are steadily progressing with their planned investments.

According to JD.com's announcement, in the second quarter of 2026, JD's fresh food delivery maintained high-quality development, with a significantly narrower investment scale year-on-year. Operational efficiency improvements and revenue diversification jointly drove progress. During the same period, other new businesses also made steady progress. The European online retail business Joybuy launched a "Summer Black Friday" promotional event in the second quarter, during which the "211 Limited-Time Delivery" and "Delivery and Installation" services effectively boosted sales of quality home appliances and tech products.

Management's core judgment on new businesses is undergoing a shift: the strategic focus is gradually moving from scale growth to a greater emphasis on input-output ratio and clarity of the profit path. This shift is reshaping the resource allocation and development logic of new businesses.

Dual Improvement in Profit and Cash Flow

The improvement in profit exceeded that in revenue.

Net profit attributable to ordinary shareholders in the second quarter increased by approximately 15% year-on-year to 7.1 billion yuan, while non-GAAP net profit reached 8.9 billion yuan. The net profit margin rose to 2.6%, and non-GAAP diluted earnings per ADS were 6.29 yuan, up 26.5% year-on-year.

Cash flow performance was also strong. Net cash flow from operating activities in the second quarter was 37.8 billion yuan, a year-on-year increase of 54.5%, while free cash flow was 31.8 billion yuan, up 44.6% year-on-year. Over the past 12 months, rolling free cash flow reached 31.4 billion yuan, a significant increase from 10.1 billion yuan in the same period last year.

As of the end of June, JD.com held a total of 235.1 billion yuan in cash and cash equivalents, restricted cash, and short-term investments, up from 225.4 billion yuan at the beginning of the year.

While cash-rich, the company continued to return capital to shareholders through buybacks. In the first half of the year, it repurchased approximately 69.9 million Class A ordinary shares, equivalent to about 34.9 million ADSs, spending about $1 billion, representing approximately 2.5% of outstanding shares. The existing buyback plan still has about $1 billion in remaining capacity.

AI Transitions from 'Tool' to 'Expert'

AI is becoming a key lever for JD.com to improve business efficiency in the next phase.

JD Industrial upgraded JoyIndustrial from an 'AI tool' to an 'AI expert.' In the first half of the year, it deployed over 70 AI agents covering procurement, fulfillment, and other processes, and launched an 'AI Intelligent Procurement Manager' to serve small and medium-sized enterprises.

JD Health upgraded its AI doctor 'Dawei,' which served nearly four times as many users during the 618 period compared to the previous year, while the number of devices connected to JoyInside grew more than three times compared to last year's Double 11 event.

Meanwhile, Costco reached an agreement with JD.com as its exclusive official e-commerce partner in China, leveraging JD.com's supply chain system for delivery services.

From the earnings report, JD.com's core change is not a return to high revenue growth, but rather, while revenue faces pressure, it is driving profit and cash flow release through improvements in retail business profitability, narrowing losses in new businesses, cost control, and an increased share of service revenue.

On this basis, AI is further penetrating into supply chain, logistics, industrial, and healthcare businesses. For JD.com, whether it can convert its existing supply chain and fulfillment capabilities into a competitive advantage in the AI era will become a key focus for the market in the next phase.