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JD.COM, INC.[JD]

Date Filed : Nov 18, 2021

Click here be alerted whenever JD.COM, INC. [JD] files 6-K

EX-99.12d211103dex991.htmEX-99.1EX-99.1

Exhibit 99.1

 

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JD.com Announces Third Quarter 2021 Results

Beijing, China—-November 18, 2021—JD.com, Inc. (NASDAQ: JD and HKEX: 9618), a leading supply chain-based technology and service provider, todayannounced its unaudited financial results for the three months ended September 30, 2021.

Third Quarter 2021 Highlights

 

  

Net revenues for the third quarter of 2021 were RMB218.7 billion (US$133.9 billion), an increase of 25.5% from the third quarter of 2020. Net service revenues for the third quarter of 2021 were RMB32.7 billion (US$5.1 billion), an increase of 43.3% from the thirdquarter of 2020.

 

  

Income from operations for the third quarter of 2021 was RMB2.6 billion (US$0.4 billion), compared toRMB4.4 billion for the same period last year. Non-GAAP2 income from operations for the third quarter of 2021 was RMB4.6 billion(US$0.7 billion), compared to RMB5.3 billion for the third quarter of 2020. Operating margin of JD Retail before unallocated items for the third quarter of 2021 was 4.0%, compared to 4.2% for the third quarter of 20203.

 

  

Net loss attributable to ordinary shareholders for the third quarter of 2021 wasRMB2.8 billion (US$0.4 billion), compared to a net income of RMB7.6 billion for the same period last year. Non-GAAP net income attributable to ordinary shareholders for the third quarter of2021 was RMB5.0 billion (US$0.8 billion), compared to RMB5.6 billion for the same period last year.

 

  

Diluted net loss per ADS for the third quarter of 2021 was RMB1.81 (US$0.28), compared to an income perADS of RMB4.70 for the third quarter of 2020. Non-GAAP diluted net income per ADS for the third quarter of 2021 was RMB3.16 (US$0.49), compared to RMB3.42 for the same period last year.

 

  

Operating cash flow for the twelve months ended September 30, 2021 increased to RMB41.0 billion(US$6.4 billion) from RMB37.3 billion for the twelve months ended September 30, 2020. Free cash flow, which excludes the impact from JD Baitiao receivables included in the operating cash flow, for the twelve months ended September 30,2021 was RMB28.5 billion (US$4.4 billion), compared to RMB30.2 billion for the twelve months ended September 30, 2020.

 

  

Annual active customer accounts4 increased by25.0% to 552.2 million in the twelve months ended September 30, 2021 from 441.6 million in the twelve months ended September 30, 2020.

 

 

1 

The U.S. dollar (US$) amounts disclosed in this announcement, except for those transaction amounts that wereactually settled in U.S. dollars, are presented solely for the convenience of the readers. The conversion of Renminbi (RMB) into US$ in this announcement is based on the exchange rate set forth in the H.10 statistical release of the Board ofGovernors of the Federal Reserve System as of September 30, 2021, which was RMB6.4434 to US$1.00. The percentages stated in this announcement are calculated based on the RMB amounts.

2 

See the sections entitled “Non-GAAP Measures” and“Unaudited Reconciliation of GAAP and Non-GAAP Results” for more information about the non-GAAP measures referred to in this announcement.

3 

Operating margin of JD Retail before unallocated items for the third quarter of 2020 was retrospectivelyadjusted to conform to current period presentation of segment information.

4 

Annual active customer accounts are customer accounts that made at least one purchase during the twelve monthsended on the respective dates, whether through online retail or online marketplace.

 

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“With resilient business operations and core competences in technology and supply chain, JD has built a unique business model, enabling us to have bettercontrol across the entire business process,” said Lei Xu, President of JD.com. “This powerful competitive advantage allows us to navigate through economic cycles and increases our ability to create value as a new type of real economy basedenterprise. As a result, consumers and business partners increasingly trust and rely on JD, and we were able to outpace the industry growth in China in the third quarter. JD will continue to create value for our users and business partners,especially the millions of SMEs in the real economy that we work with every day.”

“Our growing consumer mindshare helped drive the strongresults for the quarter with more new and existing users purchasing high-frequency products such as supermarket categories on JD,” said Sandy Xu, Chief Financial Officer of JD.com. “We were also pleased to see our key strategic initiativesincluding the third-party marketplace and omni-channel strategies begin to generate positive results. Going forward, we will continue to focus on building high-quality businesses and investing in technologies and core capabilities to ensureJD’s sustainable growth in the long term.”

Business Highlights

Environment, Social and Governance

 

In August, Jingxi, a platform for everyday shopping under JD.com, donated over 100,000 prevention supply kits,including facemasks and hand sanitizers to local residents in Nanjing in response to the COVID-19 outbreak. Nanjing residents can apply to receive kits free of charge through Jingxi’s multiple onlineplatforms.

 

During the 4th Chinese Farmers’ Harvest Festival in September, JD.com announced that in 2021, thecompany’s supportive measures for agriculture in rural areas have promoted the development of local brands from scratch, such as Suqian King Crabs in Jiangsu Province, and increased the transaction volume of local agricultural products by morethan 200%. In continuing its commitment to rural rejuvenation, JD.com has constructed logistics infrastructure in production regions, and built an agricultural product marketing ecosystem which integrates JD’s sales channels.

JD Retail

 

In September, JD.com opened its first “JD MALL” offline store in Xi’an offering consumers animmersive omni-channel shopping experience. In addition to traditional electronic categories offered by JD Super Experience Store, JD MALL provides over 200,000 items from more than 150 brands, in categories including home, furniture, kids, smarthealthcare products and auto accessories. Through its partnership with furniture maker Shangpin Home Collection, JD MALL meets the demand among younger consumers for bespoke one-stop-shop home design servicesthat incorporate furniture and home appliances categories.

 

In the third quarter, over 20 domestic and international household and home decor brands launched officialstores on JD.com, including Camerich, Lost & Found, QEEBOO, and Lattoflex, bringing a variety of high-quality and stylish home goods to address consumers’ increasingly diverse lifestyle preferences.

 

Sephora, a high-end beauty retailer owned by LVMH, recently joinedJD.com’s omni-channel service network. Products ordered through the Sephora store on JD.com can be delivered to consumers’ doorsteps within one hour from nearby Sephora offline stores. Chinese beauty brand Perfect Diary also joinedJD.com’s omni-channel service network to offer delivery from its 120 offline stores in 84 cities.

 

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During the quarter, JD.com and Dada Group formed a strategic partnership with ASUS, a global technology leader,launching more than 150 ASUS stores on JD Daojia (JDDJ) and “Shop Now”, JD.com’s new on-demand consumer retail section. The three parties will further accelerate the digital transformation ofphysical stores in the second half of 2021 to improve the offline shopping experience for computer and digital products, including the extension of “one-hour delivery” service to all ASUS offlinestores in China.

JD Health

 

In July, JD Health and Allianz JD, JD.com’s joint venture with Allianz, one of the world’s leadinginsurers and asset managers, jointly launched a comprehensive online clinical insurance service offering a one-stop platform for healthcare, medicine purchasing and insurance services. By connecting usersdirectly with doctors, pharmacies and insurance companies, JD Health improves the experience of insured users through its full cycle service that provide online health consultations, prescriptions, direct claims and reimbursements as well asmedicine purchasing and door-to-door delivery.

 

In September, over 200 institutional exhibitors and participants attended JD Health’s third OnlinePharmaceutical Expo under the theme “Intelligent Digital Empowerment and Ecosystem Interconnection”. JD Health helped to facilitate transactions between up and downstream players among the participating companies to create a“Intelligent Digital Pharmaceutical Circulation Supply Chain Ecosystem” to support digital transformation and optimize user experience in the health care industry.

JD Logistics

 

In September, JD Logistics launched an air cargo route between East China and London marking JDLogistics’s first regular cargo charter flight between China and Europe. Further expanding JD Logistics’s international transportation network, the route will deliver products from China’s major manufacturing regions with same day port-to-port delivery and product arrival within one week.

 

In the third quarter, JD Logistics established a strategic partnership with Volvo Cars to build integratedsupply chain services for the mid and high-end auto aftermarket. The two parties will cooperate in areas such as supply chain warehouse networks planning, inventory management and store delivery.

 

As of September 30, 2021, JD Logistics operated approximately 1,300 warehouses, which covered an aggregategross floor area of over 23 million square meters, including space in cloud warehouses managed under the JD Logistics Open Warehouse Platform.

 

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Third Quarter 2021 Financial Results

Net Revenues.For the third quarter of 2021, JD.com reported net revenues of RMB218.7 billion (US$33.9 billion), representing a 25.5% increase from the same period of 2020. Net product revenues increased by 22.9%, while net service revenues increasedby 43.3% for the third quarter of 2021, as compared to the same period of 2020.

Cost of Revenues. Cost of revenuesincreased by 27.3% to RMB187.6 billion (US$29.1 billion) for the third quarter of 2021 from RMB147.4 billion for the third quarter of 2020.

Fulfillment Expenses. Fulfillment expenses, which primarily include procurement, warehousing, delivery, customer service and paymentprocessing expenses, increased by 23.2% to RMB14.3 billion (US$2.2 billion) for the third quarter of 2021 from RMB11.6 billion for the third quarter of 2020. Fulfillment expenses as a percentage of net revenues was 6.5% for the thirdquarter of 2021, compared to 6.7% for the same period last year.

Marketing Expenses. Marketing expenses increased by 42.3% toRMB7.8 billion (US$1.2 billion) for the third quarter of 2021 from RMB5.5 billion for the third quarter of 2020.

Research and DevelopmentExpenses. Research and development expenses was RMB4.0 billion (US$0.6 billion) for the third quarter of 2021, as compared to RMB4.1 billion for the third quarter of 2020.

General and Administrative Expenses. General and administrative expenses increased by 91.1% to RMB3.1 billion (US$0.5 billion) forthe third quarter of 2021 from RMB1.6 billion for the third quarter of 2020. The increase was primarily due to the increase in share-based compensation expenses.

Income from Operations and Non-GAAP Income from Operations. Income from operations for the third quarterof 2021 was RMB2.6 billion (US$0.4 billion), compared to RMB4.4 billion for the same period last year. Non-GAAP income from operations for the third quarter of 2021 was RMB4.6 billion (US$0.7billion), compared to RMB5.3 billion for the third quarter of 2020. Operating margin of JD Retail before unallocated items for the third quarter of 2021 was 4.0%, compared to 4.2% for the third quarter of 2020.

Non-GAAP EBITDA. Non-GAAP EBITDA for the third quarter of 2021was RMB5.9 billion (US$0.9 billion), compared to RMB6.6 billion for the third quarter of 2020.

Share of Results of Equity Investees.Share of results of equity investees was a loss of RMB1.9 billion (US$0.3 billion) for the third quarter of 2021, as compared to a loss of RMB0.3 billion for the third quarter of 2020. The loss for the third quarter of 2021 wasprimarily due to non-cash impairment in certain equity investees.

Others, net. Other non-operating loss was RMB3.1 billion (US$0.5 billion) for the third quarter of 2021, as compared to other non-operating income of RMB4.5 billion for the thirdquarter of 2020. The decrease was primarily due to fair value change of investment securities, which resulting from decreases in the market prices of equity investments in publicly-traded companies.

Net Income/(Loss) Attributable to Ordinary Shareholders and Non-GAAP Net Income Attributable to Ordinary Shareholders. Net loss attributable to ordinary shareholders for the third quarter of 2021 was RMB2.8 billion(US$0.4 billion), compared to a net income of RMB7.6 billion for the same period last year. Non-GAAP net income attributable to ordinary shareholders for the third quarter of 2021 was RMB5.0 billion(US$0.8 billion), compared to RMB5.6 billion for the same period last year.

Diluted EPS and Non-GAAPDiluted EPS. Diluted net loss per ADS for the third quarter of 2021 was RMB1.81 (US$0.28), compared to a diluted net income per ADS of RMB4.70 for the third quarter of 2020. Non-GAAPdiluted net income per ADS for the third quarter of 2021 was RMB3.16 (US$0.49), compared to RMB3.42 for the third quarter of 2020.

 

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Cash Flow and Working Capital

As ofSeptember 30, 2021, the company’s cash and cash equivalents, restricted cash and short-term investments totaled RMB196.2 billion (US$30.5 billion), compared to RMB151.1 billion as of December 31, 2020. For the third quarter of2021, free cash flow of the company was as follows:

 

   For the three months ended 
   September 30,
2020
   September 30,
2021
   September 30,
2021
 
   RMB   RMB   US$ 
   (In thousands) 

Net cash provided by operating activities

   12,255,678    14,447,587    2,242,230 

Less: Impact from JD Baitiao receivables included in the operating cash flow

   (2,785,606   (3,324,823   (516,004

Less: Capital expenditures, net of related sales proceeds

      

Capital expenditures for development properties

   (1,111,723   (5,147,087   (798,815

Other capital expenditures*

   (839,706   (1,819,254   (282,344
  

 

 

   

 

 

   

 

 

 

Free cash flow

   7,518,643    4,156,423    645,067 
  

 

 

   

 

 

   

 

 

 

 

*

Including capital expenditures related to the company’s headquarters in Beijing and all other CAPEX.

Net cash used in investing activities was RMB29.8 billion (US$4.6 billion) for the third quarter of 2021, consisting primarily ofincrease in short-term investments and cash paid for capital expenditures.

Net cash provided by financing activities was RMB6.1 billion (US$0.9billion) for the third quarter of 2021, consisting primarily of proceeds from short-term debts.

For the twelve months ended September 30, 2021, freecash flow of the company was as follows:

 

   For the twelve months ended 
   September 30,
2020
   September 30,
2021
   September 30,
2021
 
   RMB   RMB   US$ 
   (In thousands) 

Net cash provided by operating activities

   37,334,450    41,042,537    6,369,702 

(Less)/Add: Impact from JD Baitiao receivables included in the operating cash flow

   (470,882   1,398,385    217,026 

Less: Capital expenditures, net of related sales proceeds

      

Capital expenditures for development properties

   (3,604,204   (8,517,968   (1,321,968

Other capital expenditures

   (3,068,413   (5,411,875   (839,910
  

 

 

   

 

 

   

 

 

 

Free cash flow

   30,190,951    28,511,079    4,424,850 
  

 

 

   

 

 

   

 

 

 

 

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Supplemental Information

The company reports threesegments, JD Retail, JD Logistics and New businesses. JD Retail mainly consists of online retail, online marketplace and marketing services in China. JD Logistics includes both internal and external logistics businesses. New businesses mainlyinclude JD Property, Jingxi, overseas businesses and technology initiatives.

The table below sets forth the segment operating results, with prior periodsegment information retrospectively recast to conform to current period presentation:

 

   For the three months ended 
   September 30,
2020
   September 30,
2021
   September 30,
2021
 
   RMB   RMB   US$ 
   (In thousands) 

Net revenues:

      

JD Retail

   161,081,245    198,080,245    30,741,572 

JD Logistics

   17,964,350    25,749,276    3,996,225 

New businesses

   4,302,067    5,732,810    889,718 

Inter-segment*

   (9,291,697   (11,003,427   (1,707,705
  

 

 

   

 

 

   

 

 

 

Total segment net revenues

   174,055,965    218,558,904    33,919,810 

Unallocated items**

   158,499    149,454    23,195 
  

 

 

   

 

 

   

 

 

 

Total consolidated net revenues

   174,214,464    218,708,358    33,943,005 
  

 

 

   

 

 

   

 

 

 

Operating income/(loss):

      

JD Retail

   6,734,811    7,942,242    1,232,617 

JD Logistics

   83,549    (726,612   (112,768

New businesses

   (1,200,492   (2,073,450   (321,796

Including: gain on sale of development properties

   343,982    578,701    89,813 
  

 

 

   

 

 

   

 

 

 

Total segment operating income

   5,617,868    5,142,180    798,053 

Unallocated items**

   (1,234,519   (2,569,743   (398,817
  

 

 

   

 

 

   

 

 

 

Total consolidated operating income

   4,383,349    2,572,437    399,236 
  

 

 

   

 

 

   

 

 

 

 

*

The inter-segment eliminations mainly consist of revenues from supply chain solutions and logistics servicesprovided by JD Logistics to JD Retail, and property leasing services provided by JD Property to JD Logistics.

**

Unallocated items include share-based compensation, amortization of intangible assets resulting from assets andbusiness acquisitions, effects of business cooperation arrangements, and impairment of goodwill and intangible assets, which are not allocated to segments.

 

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The table below sets forth the revenue information:

 

   For the three months ended 
   September 30,
2020
   September 30,
2021
   September 30,
2021
 
   RMB   RMB   US$ 
   (In thousands) 

Electronics and home appliances revenues

   93,329,728    110,881,046    17,208,469 

General merchandise revenues

   58,069,531    75,127,319    11,659,577 
  

 

 

   

 

 

   

 

 

 

Net product revenues

   151,399,259    186,008,365    28,868,046 

Marketplace and marketing revenues

   12,412,342    16,774,786    2,603,406 

Logistics and other service revenues

   10,402,863    15,925,207    2,471,553 
  

 

 

   

 

 

   

 

 

 

Net service revenues

   22,815,205    32,699,993    5,074,959 
  

 

 

   

 

 

   

 

 

 

Total net revenues

   174,214,464    218,708,358    33,943,005 
  

 

 

   

 

 

   

 

 

 

Conference Call

JD.com’s management will hold a conference call at 7:00 am, Eastern Time on November 18, 2021, (8:00 pm, Beijing/Hong Kong Time on November 18,2021) to discuss financial results for the three months ended September 30, 2021.

Please register in advance of the conference using the linkprovided below and dial in 10 minutes prior to the call, using participant dial-in numbers, Direct Event passcode and unique registrant ID which would be provided upon registering. You will be automaticallylinked to the live call after completion of this process, unless required to provide the conference ID below due to regional restrictions.

PRE-REGISTER LINK: http://apac.directeventreg.com/registration/event/2385515

CONFERENCE ID: 2385515

A telephone replay will be available from 10:00 am, Eastern Time on November 18, 2021 through 7:59 am, Eastern Time on November 26, 2021. The dial-in details are as follows:

 

    US Toll Free:  +1-855-452-5696 or +1-646-254-3697
    International:  +61-2-8199-0299
    Passcode:  2385515

Additionally, a live and archived webcast of the conference call will also be available on the company’s investorrelations website at http://ir.jd.com.

About JD.com

JD.com is a leading supply chain-based technology and service provider. The company’s cutting-edge retail infrastructure seeks to enable consumers to buywhatever they want, whenever and wherever they want it. The company has opened its technology and infrastructure to partners, brands and other sectors, as part of its Retail as a Service offering to help drive productivity and innovation across arange of industries.

 

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Non-GAAP Measures

In evaluating the business, the company considers and uses non-GAAP measures, such as non-GAAP income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss) attributable to ordinary shareholders, non-GAAP net margin, free cash flow, non-GAAP EBITDA, non-GAAP EBITDA margin, non-GAAP netincome/(loss) per share and non-GAAP net income/(loss) per ADS, as supplemental measures to review and assess operating performance. The presentation of these non-GAAPfinancial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S.GAAP”). The company defines non-GAAP income/(loss) from operations as income/(loss) from operations excluding share-based compensation, amortization of intangible assets resulting from assets and businessacquisitions, effects of business cooperation arrangements, gain on sale of development properties and impairment of goodwill and intangible assets. The company defines non-GAAP net income/(loss) attributableto ordinary shareholders as net income/(loss) attributable to ordinary shareholders excluding share-based compensation, amortization of intangible assets resulting from assets and business acquisitions, effects of business cooperation arrangementsand non-compete agreements, gain/(loss) on disposals/deemed disposals of investments, reconciling items on the share of equity method investments, loss/(gain) from fair value change of long-term investments,impairment of goodwill, intangible assets and investments, gain and foreign exchange impact in relation to sale of development properties and tax effects on non-GAAP adjustments. The company defines free cashflow as operating cash flow adjusting the impact from JD Baitiao receivables included in the operating cash flow and capital expenditures, net of the proceeds from sale of development properties. Capital expenditures include purchase of property,equipment and software, cash paid for construction in progress, purchase of intangible assets and land use rights. The company defines non-GAAP EBITDA as non-GAAPincome/(loss) from operations plus depreciation and amortization excluding amortization of intangible assets resulting from assets and business acquisitions. Non-GAAP basic net income/(loss) per share iscalculated by dividing non-GAAP net income/(loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods.Non-GAAP diluted net income/(loss) per share is calculated by dividing non-GAAP net income/(loss) attributable to ordinary shareholders by the weighted average number ofordinary shares and dilutive potential ordinary shares outstanding during the periods, including the dilutive effect of share-based awards as determined under the treasury stock method. Non-GAAP netincome/(loss) per ADS is equal to non-GAAP net income/(loss) per share multiplied by two.

The company presentsthese non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. Non-GAAP income/(loss) from operations,non-GAAP net income/(loss) attributable to ordinary shareholders and non-GAAP EBITDA reflect the company’s ongoing business operations in a manner that allows moremeaningful period-to-period comparisons. Free cash flow enables management to assess liquidity and cash flow while taking into account the impact from JD Baitiaoreceivables included in the operating cash flow and the demands that the expansion of fulfillment infrastructure and technology platform has placed on financial resources. The company believes that the use of thenon-GAAP financial measures facilitates investors to understand and evaluate the company’s current operating performance and future prospects in the same manner as management does, if they so choose. Thecompany also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items that are not expected to resultin future cash payments or that are non-recurring in nature or may not be indicative of the company’s core operating results and business outlook.

 

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The non-GAAP financial measures have limitations as analytical tools. The company’snon-GAAP financial measures do not reflect all items of income and expense that affect the company’s operations or not represent the residual cash flow available for discretionary expenditures. Further,these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. Thecompany compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. The companyencourages you to review the company’s financial information in its entirety and not rely on a single financial measure.

CONTACTS:

Investor Relations

Ruiyu Li

Senior Director of Investor Relations

+86 (10) 8912-6804

IR@JD.com

Media Relations

+86 (10) 8911-6155

Press@JD.com

Safe Harbor Statement

This announcement containsforward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as“will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the businessoutlook and quotations from management in this announcement, as well as JD.com’s strategic and operational plans, contain forward-looking statements. JD.com may also make written or oral forward-looking statements in its periodic reports to theU.S. Securities and Exchange Commission (the “SEC”), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in its annual report to shareholders, in press releases andother written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about JD.com’s beliefs and expectations, are forward-lookingstatements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following:JD.com’s growth strategies; its future business development, results of operations and financial condition; its ability to attract and retain new customers and to increase revenues generated from repeat customers; its expectations regardingdemand for and market acceptance of its products and services; trends and competition in China’s e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of theChinese e-commerce market; laws, regulations and governmental policies relating to the industries in which JD.com or its business partners operate; potential changes in laws, regulations and governmentalpolicies or changes in the interpretation and implementation of laws, regulations and governmental policies that could adversely affect the industries in which JD.com or its business partners operate, including, among others, initiatives to enhancesupervision of companies listed on an overseas exchange and tighten scrutiny over data privacy and data security; risks associated with JD.com’s acquisitions, investments and alliances, including fluctuation in the market value of JD.com’sinvestment portfolio; impact of the COVID-19 pandemic; natural disasters and geopolitical events; change in tax rates and financial risks; intensity of competition; and general market and economic conditionsin China and globally. Further information regarding these and other risks is included in JD.com’s filings with the SEC and the announcements on the website of the Hong Kong Stock Exchange. All information provided herein is as of the date ofthis announcement, and JD.com undertakes no obligation to update any forward-looking statement, except as required under applicable law.

 

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JD.com, Inc.

Unaudited InterimCondensed Consolidated Balance Sheets

(In thousands, except otherwise noted)

 

   As of 
   December 31,
2020
   September 30,
2021
   September 30,
2021
 
   RMB   RMB   US$ 

ASSETS

      

Current assets

      

Cash and cash equivalents

   86,084,857    87,997,670    13,657,024 

Restricted cash

   4,434,448    5,872,018    911,323 

Short-term investments

   60,577,110    102,346,912    15,883,992 

Accounts receivable, net (including JDBaitiao of RMB0.8 billion and RMB2.2 billion as of December 31, 2020 and September 30, 2021, respectively)(1)

   7,111,947    10,951,303    1,699,616 

Advance to suppliers

   3,767,933    4,751,219    737,378 

Inventories, net

   58,932,519    60,043,995    9,318,682 

Prepayments and other current assets

   7,076,590    10,471,299    1,625,120 

Amount due from related parties

   6,667,262    6,366,529    988,070 

Assets held for sale(2)

   148,592    —      —   
  

 

 

   

 

 

   

 

 

 

Total current assets

   234,801,258    288,800,945    44,821,205 

Non-current assets

      

Property, equipment and software, net

   22,596,570    27,884,937    4,327,674 

Construction in progress

   7,906,406    6,847,557    1,062,724 

Intangible assets, net

   6,462,888    6,079,799    943,570 

Land use rights, net

   11,124,913    13,321,660    2,067,489 

Operating leaseright-of-use assets

   15,484,082    17,693,478    2,745,985 

Goodwill

   10,904,409    12,395,299    1,923,720 

Investment in equity investees

   58,501,329    67,128,486    10,418,178 

Investment securities

   39,085,150    21,898,941    3,398,662 

Deferred tax assets

   532,746    853,053    132,392 

Other non-current assets

   13,315,844    19,885,003    3,086,104 

Amount due from related parties

   242,527    257,776    40,006 

Assets held for sale(2)

   1,329,672    —      —   
  

 

 

   

 

 

   

 

 

 

Total non-current assets

   187,486,536    194,245,989    30,146,504 
  

 

 

   

 

 

   

 

 

 

Total assets

   422,287,794    483,046,934    74,967,709 
  

 

 

   

 

 

   

 

 

 

 

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JD.com, Inc.

Unaudited InterimCondensed Consolidated Balance Sheets

(In thousands, except otherwise noted)

 

   As of 
   December 31,
2020
   September 30,
2021
   September 30,
2021
 
   RMB   RMB   US$ 

LIABILITIES

      

Current liabilities

      

Short-term debts

   —      7,027,897    1,090,713 

Accounts payable

   106,818,425    126,442,308    19,623,539 

Advance from customers

   20,998,001    26,276,260    4,078,012 

Deferred revenues

   3,417,313    3,813,161    591,793 

Taxes payable

   3,029,416    2,318,572    359,837 

Amount due to related parties

   585,324    426,585    66,205 

Accrued expenses and other current liabilities

   30,034,571    31,460,175    4,882,542 

Operating lease liabilities

   5,513,534    6,404,137    993,906 

Unsecured senior notes

   3,259,882    —      —   

Liabilities held for sale(2)

   360,196    —      —   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

   174,016,662    204,169,095    31,686,547 

Non-current liabilities

      

Deferred revenues

   1,617,844    1,355,767    210,412 

Unsecured senior notes

   9,594,556    9,544,666    1,481,309 

Deferred tax liabilities

   1,921,831    1,949,525    302,562 

Long-term borrowings

   2,936,205    2,947,910    457,508 

Operating lease liabilities

   10,249,957    11,683,031    1,813,178 

Other non-current liabilities

   331,623    2,250,938    349,340 
  

 

 

   

 

 

   

 

 

 

Total non-current liabilities

   26,652,016    29,731,837    4,614,309 
  

 

 

   

 

 

   

 

 

 

Total liabilities

   200,668,678    233,900,932    36,300,856 
  

 

 

   

 

 

   

 

 

 

 

(1)

JD Technology performs credit risk assessment services for JD Baitiao business and absorbs the credit risk ofthe underlying Baitiao receivables. Facilitated by JD Technology, the company periodically securitizes Baitiao receivables through the transfer of those assets to asset-backed securitization plans and derecognizes the related Baitiao receivablesthrough sales type arrangements.

(2)

The company entered into definitive agreements to transfer certain logistic facilities and real estateproperties to third parties through the infrastructure asset management and integrated service platform of JD Property. The company classified the related undisposed assets and liabilities as assets and liabilities held for sale under ASC 360.

 

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JD.com, Inc.

Unaudited InterimCondensed Consolidated Balance Sheets

(In thousands, except otherwise noted)

 

   As of 
   December 31,
2020
   September 30,
2021
   September 30,
2021
 
   RMB   RMB   US$ 

MEZZANINE EQUITY

      

Convertible redeemable non-controllinginterests

   17,133,208    1,207,213    187,357 

SHAREHOLDERS’ EQUITY

      

Total JD.com, Inc. shareholders’ equity (US$0.00002 par value, 100,000,000 shares authorized,3,156,709 shares issued and 3,106,539 shares outstanding as of September 30, 2021)

   187,543,295    215,314,346    33,416,262 

Non-controlling interests

   16,942,613    32,624,443    5,063,234 
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

   204,485,908    247,938,789    38,479,496 
  

 

 

   

 

 

   

 

 

 

Total liabilities, mezzanine equity and shareholders’ equity

   422,287,794    483,046,934    74,967,709 
  

 

 

   

 

 

   

 

 

 

 

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JD.com, Inc.

Unaudited InterimCondensed Consolidated Statements of Operations

(In thousands, except per share data and otherwise noted)

 

   For the three months ended  For the nine months ended 
   September 30,
2020
  September 30,
2021
  September 30,
2021
  September 30,
2020
  September 30,
2021
  September 30,
2021
 
   RMB  RMB  US$  RMB  RMB  US$ 

Net revenues

       

Net product revenues

   151,399,259   186,008,365   28,868,046   459,679,278   580,980,053   90,166,690 

Net service revenues

   22,815,205   32,699,993   5,074,959   61,794,453   94,704,944   14,697,977 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total net revenues

   174,214,464   218,708,358   33,943,005   521,473,731   675,684,997   104,864,667 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Cost of revenues

   (147,419,446  (187,615,621  (29,117,488  (443,507,716  (583,740,647  (90,595,128

Fulfillment

   (11,592,062  (14,275,651  (2,215,546  (33,948,204  (42,728,366  (6,631,338

Marketing

   (5,460,508  (7,769,166  (1,205,756  (16,732,743  (25,380,343  (3,938,967

Research and development

   (4,106,739  (4,004,001  (621,411  (11,645,498  (12,226,917  (1,897,588

General and administrative

   (1,596,342  (3,050,183  (473,381  (4,431,265  (7,824,587  (1,214,357

Gain on sale of development properties

   343,982   578,701   89,813   539,568   748,800   116,212 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Income fromoperations(3)(4)

   4,383,349   2,572,437   399,236   11,747,873   4,532,937   703,501 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Other income/(expenses)

       

Share of results of equity investees

   (272,313  (1,850,787  (287,238  2,611,631   (645,677  (100,207

Interest expense

   (297,802  (276,139  (42,856  (829,120  (766,285  (118,926

Others, net(5)

   4,462,624   (3,061,899  (475,199  13,338,674   (568,228  (88,188
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Income/(loss) before tax

   8,275,858   (2,616,388  (406,057  26,869,058   2,552,747   396,180 

Income tax expenses

   (690,373  (652,199  (101,220  (1,813,367  (1,701,312  (264,039
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income/(loss)

   7,585,485   (3,268,587  (507,277  25,055,691   851,435   132,141 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income/(loss) attributable to non-controllinginterests shareholders

   23,127   (466,736  (72,436  (27,677  (764,856  (118,704

Net income attributable to mezzanine equity classified asnon-controlling interests shareholders

   2,020   4,687   727   3,596   11,277   1,750 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income/(loss) attributable to ordinary shareholders

   7,560,338   (2,806,538  (435,568  25,079,772   1,605,014   249,095 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net income/(loss) per share:

       

Basic

   2.44   (0.90  (0.14  8.37   0.52   0.08 

Diluted

   2.35   (0.90  (0.14  8.02   0.50   0.08 

Net income/(loss) per ADS:

       

Basic

   4.88   (1.81  (0.28  16.75   1.03   0.16 

Diluted

   4.70   (1.81  (0.28  16.03   1.00   0.16 

 

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JD.com, Inc.

Unaudited InterimCondensed Consolidated Statements of Operations

(In thousands, except per share data and otherwise noted)

 

   For the three months ended  For the nine months ended 
   September 30,
2020
  September 30,
2021
  September 30,
2021
  September 30,
2020
  September 30,
2021
  September 30,
2021
 
   RMB  RMB  US$  RMB  RMB  US$ 

(3)   Includes share-based compensation expenses as follows:

 

Cost of revenues

   (31,120  (32,282  (5,010  (65,618  (68,693  (10,661

Fulfillment

   (153,662  (265,211  (41,160  (350,156  (606,570  (94,138

Marketing

   (87,099  (164,129  (25,472  (218,354  (412,976  (64,093

Research and development

   (384,400  (472,429  (73,320  (935,126  (1,350,536  (209,600

General and administrative

   (395,263  (1,409,379  (218,732  (1,092,028  (3,679,865  (571,106

(4)   Includes amortization of business cooperation arrangement andintangible assets resulting from assets and business acquisitions as follows:

 

Fulfillment

   (51,584  (55,957  (8,684  (141,217  (163,984  (25,450

Marketing

   (187,876  (216,246  (33,561  (473,534  (636,853  (98,838

Research and development

   (24,700  (26,250  (4,074  (74,100  (77,716  (12,061

General and administrative

   (77,314  (77,314  (11,999  (231,447  (231,448  (35,920

 

(5)

Others are other non-operating income/(loss), primarily consist ofgains/(losses) from fair value change of long-term investments, gains/(losses) from business and investment disposals, impairment of investments, government incentives, interest income and foreign exchange gains/(losses).

 

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JD.com, Inc.

Unaudited Non-GAAP Net Income Per Share and Per ADS

(In thousands, except per share data and otherwise noted)

 

   For the three months ended   For the nine months ended 
   September 30,
2020
   September 30,
2021
   September 30,
2021
   September 30,
2020
   September 30,
2021
   September 30,
2021
 
   RMB   RMB   US$   RMB   RMB   US$ 

Non-GAAP net income attributable to ordinaryshareholders

   5,558,054    5,047,992    783,435    14,441,408    13,642,150    2,117,228 

Weighted average number of shares:

            

Basic

   3,096,304    3,106,141    3,106,141    2,994,756    3,106,344    3,106,344 

Diluted

   3,191,159    3,186,702    3,186,702    3,077,063    3,194,877    3,194,877 

Non-GAAP net income per share:

            

Basic

   1.80    1.63    0.25    4.82    4.39    0.68 

Diluted

   1.71    1.58    0.25    4.50    4.26    0.66 

Non-GAAP net income per ADS:

            

Basic

   3.59    3.25    0.50    9.64    8.78    1.36 

Diluted

   3.42    3.16    0.49    9.00    8.53    1.32 

 

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JD.com, Inc.

Unaudited InterimCondensed Consolidated Statements of Cash Flows and Free Cash Flow

(In thousands)

 

   For the three months ended  For the nine months ended 
   September 30,
2020
  September 30,
2021
  September 30,
2021
  September 30,
2020
  September 30,
2021
  September 30,
2021
 
   RMB  RMB  US$  RMB  RMB  US$ 

Net cash provided by operating activities

   12,255,678   14,447,587   2,242,230   37,330,749   35,828,969   5,560,569 

Net cash used in investing activities

   (12,518,857  (29,757,109  (4,618,231  (44,105,163  (55,462,589  (8,607,659

Net cash provided by financing activities

   4,117,987   6,078,409   943,354   47,658,991   22,929,750   3,558,641 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

   (2,660,012  310,397   48,173   (2,110,679  (61,665  (9,570
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net increase/(decrease) in cash, cash equivalents and restricted cash

   1,194,796   (8,920,716  (1,384,474  38,773,898   3,234,465   501,981 

Cash, cash equivalents and restricted cash at beginning of period(6)

   77,491,381   102,790,404   15,952,821   39,912,279   90,635,223   14,066,366 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Cash, cash equivalents and restricted cash at end of period(6)

   78,686,177   93,869,688   14,568,347   78,686,177   93,869,688   14,568,347 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Net cash provided by operating activities

   12,255,678   14,447,587   2,242,230   37,330,749   35,828,969   5,560,569 

(Less)/Add: Impact from JD Baitiao receivables included in the operating cash flow

   (2,785,606  (3,324,823  (516,004  (159,164  1,191,283   184,884 

Less: Capital expenditures, net of related sales proceeds

       

Capital expenditures for development properties

   (1,111,723  (5,147,087  (798,815  (4,659,481  (9,643,783  (1,496,692

Other capital expenditures

   (839,706  (1,819,254  (282,344  (2,164,926  (3,440,457  (533,950
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Free cash flow

   7,518,643   4,156,423   645,067   30,347,178   23,936,012   3,714,811 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

(6)

Including cash, cash equivalents and restricted cash classified as assets held for sale ofRMB409.2 million, RMB115.9 million and nil as of September 30, 2020, December 31, 2020 and September 30, 2021, respectively.

 

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JD.com, Inc.

SupplementalFinancial Information and Business Metrics

 

   Q3 2020   Q4 2020   Q1 2021   Q2 2021   Q3 2021 

Free cash flow (in RMB billions) – trailing twelve months (“TTM”)

   30.2    34.9    28.2    31.9    28.5 

Inventory turnover days(7) –TTM

   34.3    33.3    31.2    31.0    30.1 

Accounts payable turnover days(8) –TTM

   49.2    47.1    44.2    45.8    45.5 

Accounts receivable turnover days(9) –TTM

   2.8    2.7    2.6    2.7    2.8 

Annual active customer accounts (in millions)

   441.6    471.9    499.8    531.9    552.2 

 

(7)

TTM inventory turnover days are the quotient of average inventory over the immediately preceding five quarters,up to and including the last quarter of the period, to cost of revenues of retail business for the last twelve months, and then multiplied by 360 days.

(8)

TTM accounts payable turnover days are the quotient of average accounts payable for retail business over theimmediately preceding five quarters, up to and including the last quarter of the period, to cost of revenues of retail business for the last twelve months, and then multiplied by 360 days.

(9)

TTM accounts receivable turnover days are the quotient of average accounts receivable over the immediatelypreceding five quarters, up to and including the last quarter of the period, to total net revenues for the last twelve months and then multiplied by 360 days. Presented are the accounts receivable turnover days excluding the impact from JD Baitiao.

 

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JD.com, Inc.

UnauditedReconciliation of GAAP and Non-GAAP Results

(In thousands, except percentage data)

 

   For the three months ended  For the nine months ended 
   September 30,
2020
  September 30,
2021
  September 30,
2021
  September 30,
2020
  September 30,
2021
  September 30,
2021
 
   RMB  RMB  US$  RMB  RMB  US$ 

Income from operations

   4,383,349   2,572,437   399,236   11,747,873   4,532,937   703,501 

Add: Share-based compensation

   1,051,544   2,343,430   363,694   2,661,282   6,118,640   949,598 

Add: Amortization of intangible assets resulting from assets and business acquisitions

   193,215   236,543   36,711   494,797   703,153   109,128 

Reversal of: Effects of business cooperation arrangements

   (10,240  (10,230  (1,588  (241,025  (17,690  (2,745

Reversal of: Gain on sale of development properties

   (343,982  (578,701  (89,813  (539,568  (748,800  (116,212
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Non-GAAP income from operations

   5,273,886   4,563,479   708,240   14,123,359   10,588,240   1,643,270 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Add: Depreciation and other amortization

   1,327,856   1,299,599   201,695   3,893,155   3,961,450   614,807 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Non-GAAP EBITDA

   6,601,742   5,863,078   909,935   18,016,514   14,549,690   2,258,077 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total net revenues

   174,214,464   218,708,358   33,943,005   521,473,731   675,684,997   104,864,667 

Non-GAAP operating margin

   3.0  2.1  2.1  2.7  1.6  1.6
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Non-GAAP EBITDA margin

   3.8  2.7  2.7  3.5  2.2  2.2
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

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JD.com, Inc.

UnauditedReconciliation of GAAP and Non-GAAP Results

(In thousands, except percentage data)

 

   For the three months ended  For the nine months ended 
   September 30,
2020
  September 30,
2021
  September 30,
2021
  September 30,
2020
  September 30,
2021
  September 30,
2021
 
   RMB  RMB  US$  RMB  RMB  US$ 

Net income/(loss) attributable to ordinary shareholders

   7,560,338   (2,806,538  (435,568  25,079,772   1,605,014   249,095 

Add: Share-based compensation

   1,051,544   1,954,097   303,271   2,661,282   5,729,307   889,175 

Add: Amortization of intangible assets resulting from assets and business acquisitions

   193,215   193,111   29,970   494,797   659,721   102,387 

Add/(Reversal of): Reconciling items on the share of equity method investments(10)

   55,687   (118,683  (18,419  172,156   (1,150,173  (178,504

Add: Impairment of goodwill, intangible assets, and investments

   —     1,813,473   281,447   661,735   2,121,821   329,301 

(Reversal of)/Add: (Gain)/Loss from fair value change of long-term investments

   (2,939,789  4,639,028   719,966   (9,007,791  5,405,193   838,873 

Reversal of: Gain and foreign exchange impact in relation to sale of developmentproperties

   (343,982  (510,701  (79,260  (539,568  (680,800  (105,659

Reversal of: Gain on disposals/deemed disposals of investments

   (12,724  (52,601  (8,164  (4,802,557  (68,601  (10,647

Reversal of: Effects of business cooperation arrangements andnon-compete agreements

   (30,847  (29,498  (4,578  (303,507  (75,502  (11,718

Add/(Reversal of): Tax effects on non-GAAPadjustments

   24,612   (33,696  (5,230  25,089   96,170   14,925 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Non-GAAP net income attributable to ordinaryshareholders

   5,558,054   5,047,992   783,435   14,441,408   13,642,150   2,117,228 
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Total net revenues

   174,214,464   218,708,358   33,943,005   521,473,731   675,684,997   104,864,667 

Non-GAAP net margin

   3.2  2.3  2.3  2.8  2.0  2.0
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

 

(10)

To exclude the GAAP to non-GAAP reconciling items on the share ofequity method investments, and share of amortization of intangibles not on their books.

 

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