JD.com, Inc.

Hello, and thank you for standing by for JD.com's third quarter 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, Head of Investor Relations. Please go ahead.

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

Thank you, Sean. Hello, everyone. Thank you for joining our third quarter 2025 earnings conference call. We achieved a set of solid results across our strategic priorities during the third quarter and further enhanced our capabilities to drive better user experience lower cost, and higher efficiency. Our total revenues were up 15% year-on-year, sustaining our double-digit growth momentum. We are delighted to see growth of our general merchandise categories and marketplace and marketing revenues continue to accelerate sequentially. Both are becoming our important growth drivers. Now Gap Net Profit, came in at 5.8 billion RMB in the quarter, with the core retail business margin continue to expand year on year. Our food delivery business also sustained healthy expansion, while its loss narrowed in Q3 from the prior quarter as we continue to optimize operating efficiency and improve unit economics. Overall, our business are making good progress. Along our long-term strategic roadmap, we are confident that our core retail business will steadily expand market share with healthy margin improvement, and new initiatives will create deeper synergies and drive healthier financial models, further strengthening our entire business ecosystem. Among all the encouraging developments, that underpinned these results. I would like to point three most notable highlights for this quarter, which I believe should be the key takeaways from today's call. First, strong momentum in our user base and engagement. Our quarterly active customer number was up over 40% year on year in Q3, sustaining the momentum built in the previous quarters. thanks to both organic growth of JD Retail, as well as contributions from our new businesses, such as JD Food Delivery and Zinzi. The consistent growth has led to our annual active customers exceeding 700 million in October, making a new milestone in our user expansion. In particular, the number of JD Plus members, our highest quality user group, also recorded healthy growth in the quarter. In addition to user scale, user shopping frequency on our platform also increased by over 40% year-on-year in Q3, a pace we've sustained for two consecutive quarters. Notably, we saw meaningful shopping frequency increase across all user groups, including new users, existing users, and JD Plus members. This user momentum is clear proof that we have stayed very focused on providing a better user experience amid evolving user demand. In return, our expanding and more active user pool further improves our engagement with users, deepens our user insights, and enables us to better address their demand. This virtuous cycle ultimately supports our sustainable growth in the long run. Second, our core retail business remained strong in Q3. Retail revenues increased by 11% year-on-year in the quarter to R251 billion. There were a mix of contributors to this. While the high base effect for electronics and home appliances category started to kick in, sales of general merchandise as well as marketplace and marketing revenues continued to accelerate growth this quarter. Profit-wise, both JD Retail's growth margin and operating margin further expanded at a solid pace, demonstrating the continued scale benefits and operating efficiency gains of the business. Looking at the main categories, the electronics and home appliances category has been faced with a high base since the second half of Q3, which has been weighing on its growth momentum. This is an industry-wide challenge, and we are working closely with brands and manufacturers to navigate through it. For example, We've been leveraging our market and user insights to support brands and manufacturers in developing new and customized product models. Meanwhile, we continue to lower the costs for brands and strive to secure the best prices for our customers, thanks to our supply chain capabilities. Although the high base effect is expected to linger the near term, it's clear that the advantages of our business model and market position in these categories remain intact. And we are confident in building on these strengths to unlock new growth potential in this market. General merchandise category recorded 19% year-on-year revenue growth in Q3, an impressive acceleration from a quarter ago. Within this category, Revenues from supermarket, fashion, and health categories maintained double-digit young year growth in the quarter. The strong tailwind is expected to sustain into Q4. This is a result of our efforts in enhancing our product portfolio, price competitiveness, and service quality, which eventually translates to better user experience and stronger user man-share. As we continue to tap into the huge market potential, we believe general merchandise will play a bigger role in supporting JD Retail's long-term growth. In addition to healthier category mix, another bright spot in our Q3 performance was marketplace and marketing revenues, which at the group level grew 24% year-on-year in the quarter It has remained on a double-digit growth trajectory for four consecutive quarters. In particular, growth of our advertising revenues has accelerated sequentially in every quarter this year and exceeded 20% year-on-year in Q3. This strong momentum mainly stems from the accelerated ad revenues generated by core JD retail business. Our improved ecosystem for both 1P business and 3P merchants, better AI-powered ad tools, and improved traffic allocation efficiency all have contributed to the strong trend. As we move into Q4, we expect marketplace and marketing revenues to continue the healthy growth. Our platform ecosystem is taking good shape and gaining positive traction with suppliers and merchants, large and small. The third highlight I want to share is on new businesses. Within the segment, JD Food Delivery continued to make healthy progress in Q3. Its GMV achieved double-digit quarter-on-quarter growth in the quarter, driven by both order volume growth and a healthier order mix with high value orders, contributing a vast majority of total orders. While scaling up, the food delivery business also narrowed operating loss sequentially in Q3, thanks to the improving UE performance. This encouraging progress is achieved through our enriched supplies, increased operating efficiency, disciplined investment amid a competitive market, and our efforts to expand food delivery's revenue streams. More importantly, food delivery continued to generate strong synergies with our retail business. In addition to user growth and engagement, the cohort cumulative cross-selling rate has been on an upward trend, Products from our supermarket, electronic accessories, and CNC categories remained the biggest beneficiaries of this trend. Going forward, we will focus on further growing the food delivery business scale, UE optimization, and unlocking stronger synergies with retail, logistics, and other businesses across our ecosystem. Other new businesses including both Zinzi and international business, are progressing well as planned. Zinzi further penetrated into the lower tier markets and grew its merchant and user base. Our international retail business is gradually establishing capabilities in the UK, France, Germany, and Benelux regions. paving the way for our global expansion. Both are making solid steps in executing on their long-term strategies. One more thing before I wrap up. We unveiled our AI roadmap during the 2025 JD Discovery Conference in September. I want to share a few exciting updates here. First, We launched a number of new AI products at the event, including Tatata, an all-purpose digital human assistant app, and JoyInside, an AI agent for robots, toys, devices, among others. Second, we introduced industry-specific AI applications across four sectors of retail, healthcare, logistics, and industrial. Third, we also made upgrades to a few of our retail technology infrastructure, such as JD Streamer, our new digital human technology that provides e-commerce live streaming and short video production solutions. JoyStreamer has served over 40,000 brands so far, with significantly lower cost and better sales performance compared to real human live streaming costs. In addition, we provide 24-7 nonstop AI customer service, which handled over 4.2 billion queries during our 2011 grant promotion. We are excited about the potential of these AI applications as we foster a comprehensive AI ecosystem spanning across various industries. To conclude, Q3 was a productive quarter with all our business lines moving ahead steadily on our strategic roadmap. The user momentum on our platform was strong. Our core retail business is in a solid shape with multiple complementary long-term growth drivers and great potential for long-term margin improvement. Beyond core retail, new businesses including food delivery, Jingxi, and our international retail business are on track for healthy development, both financially and operationally. Taken together, our businesses are operating in synergy, bolstering our conviction in the path ahead. We see great opportunities to further unlock the collaborative value of our business ecosystems and to position as well for sustainable, high-quality growth. With that, now let me turn the call over to Ian.