China's e-commerce giant JD.com (JD) reported fiscal first-quarter 2026 results on Tuesday that topped Wall Street estimates, but the numbers tell a story of a company spending aggressively to defend its turf in an increasingly competitive market.
Revenue came in at $45.77 billion, up 4.9% year over year and just above the analyst consensus of $45.57 billion. Adjusted earnings per ADS hit $0.74, easily beating the $0.50 analysts were expecting. That's the headline. But dig a little deeper, and you see the costs of that growth.
According to a Wall Street Journal report, JD.com returned to profitability in the first quarter, helped by improving performance in its food-delivery business. That's the same business that dragged on results last year after JD.com jumped into China's hyper-competitive food-delivery market in 2025, triggering a price war with rivals like Meituan (MPNGY) and Alibaba Group Holding Ltd. (BABA).
The revenue breakdown shows where the growth is coming from. Net product revenue, the core retail business, inched up just 1% to $35.49 billion. But net service revenue — which includes logistics, marketing, and marketplace services — jumped 20.6% to $10.28 billion. That's the higher-margin stuff that investors love to see.
By segment, JD Retail revenue rose 1.8% to $38.94 billion. Logistics revenue surged 29% to $8.78 billion, and New Businesses — which includes food delivery — grew 9.1% to $910 million.
Marketing Costs Rise Amid Competition
Here's where the margin story gets interesting. Marketing expenses exploded 45.8% to $2.23 billion, now representing 4.9% of revenue, up from 3.5% a year ago. The company blamed promotional spending tied to new business initiatives — code for the food-delivery war.
That spending hit the bottom line hard. Operating margin fell to 1.2% from 3.5% a year earlier. Adjusted operating margin dropped to 1.8% from 3.9%. But there's a silver lining: JD Retail's operating margin actually improved to 5.6% from 4.9%, suggesting the core business is getting more efficient even as the company invests elsewhere.
Profitability And Cash Flow
Adjusted EBITDA came in at $1.16 billion, with a margin of 2.5%, down from 4.6% a year ago. Free cash flow was negative $940 million for the quarter, after generating just $80 million in operating cash flow. That's a big swing, but JD.com still sits on a mountain of cash: $31.3 billion in cash, equivalents, restricted cash, and short-term investments as of March 31.
JD.com Continues Aggressive Share Repurchases
Even with the spending, JD.com hasn't stopped returning cash to shareholders. Under its buyback program authorized in August 2024, the company repurchased about 44.5 million Class A ordinary shares (equivalent to 22.3 million ADSs) for roughly $631 million during the quarter. That represents about 1.6% of outstanding shares as of Dec. 31, 2025.
Executive Commentary
CEO Sandy Xu said the company delivered a solid start to 2026, with user growth and shopping frequency continuing to improve, pushing annual active customers to a record high. She added that stronger integration across JD's business ecosystem supported performance, while JD Retail maintained resilience and achieved record profitability.
CFO Ian Su Shan Shan said results were driven by steady growth at JD Retail, improved performance in general merchandise, and higher-margin businesses like marketplace and marketing services, as well as narrowing losses in New Businesses led by JD Food Delivery. He also highlighted the shareholder return efforts, including the buyback and the completion of the annual dividend payment in April.
JD.com Stock Rises Following First-Quarter Results
Shares were up 0.66% at $30.73 in premarket trading Tuesday, according to market data. Not a huge pop, but a vote of confidence that the market sees the long-term value in JD's strategy — even if the short-term costs are real.
