JD.com, Inc.

Hello and thank you for standing by for JD.com's second quarter and interim 2025 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Sean Zhang, Director of Investor Relations. Please go ahead.

Thank you, operator. Good day, everyone. Welcome to JD.com's second quarter and interim 2025 earnings conference call. With us today, our CEO of JD.com, Ms. Sandy Xu, and our staffer, Ms. Ian Shen. Sandy will kick off the call with her open remarks, and Ian will discuss the financial results. After that, we'll open the call to questions from analysts. Before turning the call over to Sandy, let me quickly call Steve Hopper. Please be reminded that during this call, our comments and responses to your questions reflect management's view as of today's only, and will include forward-looking statements. Please refer to our latest Steve Hopper statement in earnings press release on IR website, which applies to this call. We'll discuss certain non-GAAP financial measures. Also refer to the reconciliation of non-GAAP measures to the comparable GAAP measures in the earnings press release. Please also note all figures mentioned today in this call are in RMB unless otherwise stated. With that, let me turn the call over to our CEO, Sandy.

Thank you, Sean. Hello, everyone. Thank you for joining our second quarter 2025 earnings conference call. In the second quarter, we stayed focused on providing the best user experience, lowering costs, and improving efficiency to drive healthy, sustainable growth. At the same time, we took some early exciting steps to further advance our long-term development. Looking at the overall performance, we are pleased to report a solid top-line growth of 22% year-on-year in the second quarter, with total revenues reaching 357 billion RMB in the quarter. This strong momentum was driven by encouraging acceleration across most of our business lines, including electronics and home appliances, general merchandise categories, as well as service revenues. Our non-GAAP net income attributable to ordinary shareholders in the quarter was 7.4 billion RMB compared to 14.5 billion RMB in the same period last year as a result of the investment and rapid growth in our new businesses, including our food delivery business. That said, our core business, J.D. Retail, continued to see healthy profitability improvement. JD Retail's non-GAAP operating profit increased by 38% year-on-year to 13.9 billion RMB in the second quarter, with an operating margin of 4.5%, up from 3.9% in the same period last year. Overall, we are confident in our core retail business. Well, our new businesses, including JD Food Delivery, are progressing well as planned, aligning seamlessly with our strategic roadmap to drive long-term sustainable growth. Behind these results, I'm particularly encouraged by the high morale and collaborative spirit across all the business teams at JD. Their collective effort forms a solid foundation that will continue to propel our upward momentum and effective execution of our strategic goals. I want to highlight three key progress we achieved that underpinned our strong performance in the quarter and will sustain our healthy growth going forward. User growth and engagement stand out as a key achievement for us in Q2, as we continue to center on users and spare no effort in delivering the best possible user experience. Growth of our quarterly active customers, or the QAC, accelerated notably to over 40% year-on-year in Q2, and total QAC base reached a new milestone. The strong user momentum in the quarter was driven by both the accelerated growth of JD Retail's organic user base, as well as incremental contributions from JD Food Delivery and Jingxi Business. In addition to user growth, we also see stronger user engagement. In particular, user shopping frequency on JD's platform rose by over 40% year-on-year in the second quarter, a notable improvement from previous quarters. For JD Plus members, their shopping frequency grew by an even faster pace of over 50% year-on-year in Q2. This is clear proof that our food delivery offerings resonate strongly with our highest quality user group. We also achieved record-breaking results on the user fronts during the June 18th grant promotion this year, with the total number of purchasing users more than doubled year on year, and total order volume surpassed 2.2 billion orders. The positive momentum in user growth and shopping behavior stands as a powerful testament to the synergies between our new business initiatives and core retail business. We will continue to deepen the synergies and unlock the greater value, which we expect will strengthen overall user stickiness to our platform and drive higher lifetime value across the JD ecosystem. Secondly, our core business JD Retail continued to gain steady traction on the back of our further strengthened supply chain capabilities. In Q2, JD Retail achieved robust momentum on both top and bottom lines. By category, electronics and home appliances maintained a strong momentum in the quarter, with revenues up 23% year on year. This reflects our ever-evolving supply chain strength. which enables us to further enhance procurement capabilities and offer users extensive product selections, competitive price, and superior services. These strengths have positioned us as a leader in the industry, both during periods of trade-in programs and throughout the day-to-day development. Our general merchandise business also delivered strong performance in the second quarter with revenues up 16% year-on-year. In particular, driven by our supply chain strengths, our supermarket category further extended its streak of double-digit revenue growth to six consecutive quarters. Meanwhile, our fashion business continued to maintain double-digit year-on-year growth in revenues in Q2. The strong top-line growth of JD Retail was coupled with an even stronger operating profit growth and margin expansion in the quarter, progressing well toward its long-term target. The continued improvement in JD Retail's profitability is primarily driven by our stronger supply chain capabilities, which ultimately translate to better user experience, lower cost, and greater operating efficiency. Thirdly, we are also encouraged by the healthy development of our new business initiatives. JD Food's delivery business has experienced rapid growth since its launch, with daily order volume increasingly exponentially in Q2 and several key milestones successfully achieved. We've made significant progress in onboarding high-quality merchants, and the number of full-time delivery riders has increased rapidly. More importantly, JD Food delivery has started to generate clear synergies with our core retail business. Beyond the user-related insights, I just shared, we are also proactively capitalizing on the cross-selling opportunities brought by food delivery business. We are pleased to see the progress so far, particularly the increasing cross-sale ratio of new users brought in by food delivery. Supermarket categories, lifestyle services, and electronic accessories have benefited the most from this trend. Additionally, as our food delivery business scales, we believe it will further enrich our local supply of merchants and drive user traffic and engagement to all of our 3P merchants, helping establish a more dynamic and comprehensive 3P ecosystem on our platform. For JD, the current priority for our food delivery business is to enhance core system capabilities, from optimizing order dispatching algorithms to refining route planning technologies, all to strengthen JD Food Delivery's ability to better serve users and drive traffic and user growth to merchants on our platform. Driven by these efforts, We are encouraged to see that despite industry dynamics, JD Food Delivery has maintained a healthy order volume growth, especially for meal orders in Q3 quarter to date. I want to reiterate that we do not view our food delivery as a standalone business, as it's deeply integrated with JD's broader ecosystem. We aim to further unlock synergies, not only between JD Food Delivery and JD Retail, but also with JD Logistics and other businesses across our ecosystem. This is where our strategic focus lies. Going forward, we will stay focused on our strategic priorities and invest with high efficiency at appropriate pace. amid the evolving dynamics in the food delivery market. In addition to our robust operations and rising market position in the domestic market, we've also been proactively looking at opportunities to grow globally and taking some early exciting steps. Going global is a long-term vision and holds strategic value for JD as we aim to leverage JD's unique advantages of supply chain know-how and technology. In recent years, JD Retail, JD Logistics, and JD Property all have taken steps to test and build out overseas retail formats, warehouse networks, transportation infrastructure, and local operational capabilities, especially in Europe and the Middle East. We will share more color of our international development as we progress. To conclude, Q2 was a very productive quarter. We delivered both short-term results and strengthened our long-term strategic positioning. Our core retail business achieved accelerated top-line growth alongside solid profit expansion, underscoring the resilience of our supply chain-based retail business model. Q2 also marked an important milestone in our long-term development as some of the key initiatives, both domestically and globally, steadily moved forward and started to show early tangible results. None of this happened overnight. These are the results of years of dedicated effort to strengthen our core supply chain capabilities, combined with extensive preparation to support our strategic expansion. We always have a clear vision. Everything we do is centered on supply chain, with our commitment to putting users first and elevating user experience. This will continue to drive every step of our long-term development and value creation for our users, business partners, and shareholders today and tomorrow in China and across the globe. With that, now let me turn the call over to our CFO, Ian.