The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this annual report. This report contains forward-looking statements. See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3.D. Key Information—Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. A. Operating Results Overview We are a leading supply chain-based technology and service provider. Our e-commerce business includes online retail and online marketplace. In the online retail business, we acquire products from suppliers and sell them directly to our customers primarily through our mobile apps and websites. In the online marketplace business, third-party merchants sell products to customers primarily through our mobile apps and websites. We also offer marketing, logistics and other value-added services. 133 Table of Contents We generated total net revenues of RMB1,084.7 billion, RMB1,158.8 billion and RMB1,309.1 billion (US$187.2 billion) in 2023, 2024 and 2025, respectively. Our online retail business generated net product revenues of RMB871.2 billion, RMB928.0 billion and RMB1,023.8 billion (US$146.4 billion) in 2023, 2024 and 2025, respectively. In addition, our marketplace and marketing, logistics and other services generated net service revenues of RMB213.4 billion, RMB230.8 billion and RMB285.3 billion (US$40.8 billion) in 2023, 2024 and 2025, respectively. Due to the PRC legal restrictions on foreign ownership of companies that engage in a value-added telecommunications service business and certain other businesses in China, we conduct the relevant parts of our operations through consolidated variable interest entities. We have contractual arrangements with these entities and their shareholders that enable us to effectively control and receive substantially all of the economic benefits from the entities. Accordingly, we consolidate the results of these entities in our financial statements. Major Factors Affecting Our Results of Operations Our results of operations and financial condition are affected by the general factors driving China’s retail industry, including levels of per capita disposable income and consumer spending in China. In addition, they are also affected by factors driving online retail in China, such as the growing number of online shoppers, the adoption of online sales strategies by manufacturers and service providers, the availability of improved delivery services and the increasing variety of payment options. Our results of operations are also affected by general economic conditions in China. In particular, we have experienced and expect to continue to experience upward pressure on our operating expenses. Our results of operations are also affected by PRC regulations and industry policies related to our business operations, licenses and permits and corporate structure. For example, the product quality and consumer protection laws require us to ensure the quality of the goods we sell and give customers the right to return goods within seven days of receipt with no questions asked, the labor contract law and related rules require employers to enter into written contracts with workers and to pay compensation to workers who are terminated under certain circumstances, regulations on foreign ownership and on transfer of funds into and out of China affect our corporate structure and financing, and regulations on business licenses affect our legal and compliance functions. For a summary of the principal PRC laws and regulations that affect us, see “Item 3.D. Key Information—Risk Factors” and “Item 4.B. Information on the Company—Business Overview—Regulation.” Although we have generally benefited from the Chinese government’s policies to encourage economic growth, we are also affected by the complexity, uncertainties and changes in PRC regulations governing various aspects of our operations. For a detailed description of the PRC regulations applicable to us, see “Item 4.B. Information on the Company—Business Overview—Regulation.” JD.com, Inc., the holding company that is listed on Nasdaq and Hong Kong Stock Exchange, has no material operations of its own. We conduct our operations primarily through our subsidiaries and the consolidated variable interest entities and their subsidiaries in China. As a result, JD.com, Inc.’s ability to pay dividends to our shareholders depends in part upon dividends paid by our PRC subsidiaries subject to compliance with applicable PRC regulations. Our wholly-owned PRC subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC regulations, each of our wholly-owned PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. As of December 31, 2025, the amount restricted, including paid-in capital and statutory reserve funds, as determined in accordance with PRC accounting standards and regulations, was approximately RMB78.2 billion (US$11.2 billion). While our business is influenced by general factors affecting our industry, our operating results are more directly affected by company specific factors, including the following major factors: • our ability to increase customer purchases; • our ability to manage our mix of product and service offerings; • our ability to further increase and leverage our scale of business; • our ability to effectively invest in our fulfillment infrastructure and technology platform; and • our ability to conduct and manage strategic investments and acquisitions. 134 Table of Contents Our Ability to Increase Customer Purchases Growth in customer purchases is a key driver of our revenue growth. We have a growing and loyal active customer base. Over the years, our customers have shown loyalty to us through their increased activity levels. Customer purchases are mainly driven by our success in generating repeat purchases from existing customer accounts. Our ability to attract new customer accounts and retain existing customer accounts depends on our ability to provide superior customer experience. To this end, we offer a wide selection of authentic products at competitive prices on our mobile apps and websites and provide speedy and reliable delivery, convenient online and in-person payment options and comprehensive customer services. We continued to improve and iterate system that enables us to increase our operating efficiency through enhanced product merchandising and supply chain management capabilities, and to drive more targeted and relevant product promotions and recommendations to our customers. We have benefited from word-of-mouth viral marketing in winning new customers, and we also conduct online and offline marketing and brand promotion activities to attract new customers. In addition, we encourage existing customers to place more orders with us through a variety of means, including granting coupons and loyalty points and holding special promotions. Our Ability to Manage Our Mix of Product and Service Offerings Our results of operations are also affected by the mix of products and services we offer. We acquire products from suppliers and sell them directly to customers in our online retail business, and we earn commissions and service fees from third-party merchants on our online marketplace. We also offer a wide range of products and services and aim to provide one-stop shopping solutions to maximize our wallet share. Our mix of products and services affects our gross margin. For example, the marketplace service revenues that we earn from third-party merchants and the other services that we offer generally have higher gross margins. The split between our online retail business and our online marketplace business thus has a major influence on our revenue growth and our gross margins. Our marketplace and marketing revenues, logistics and other service revenues increased from RMB213.4 billion in 2023 to RMB230.8 billion in 2024, and further to RMB285.3 billion (US$40.8 billion) in 2025. We intend to further (i) expand our selection of general merchandise products, such as supermarket, fashion, pharmaceutical and healthcare products, which are well received by customers and expected to have a potential for greater online penetration; (ii) attract more third-party merchants to our online marketplace; and (iii) provide more fulfillment and other value-added services to third-party merchants and others. Our Ability to Further Increase and Leverage our Scale of Business Our results of operations are directly affected by our ability to further increase and leverage our scale of business. We expect to leverage our scale to obtain more favorable terms from suppliers, including pricing terms and volume-based rebates. In addition, we aim to create value for our suppliers by providing an effective channel for selling large volumes of their products online and by offering them comprehensive information on customer preferences and market demand and ensuring the high quality of fulfillment services. We believe this value proposition also helps us obtain favorable terms from suppliers. As of December 31, 2025, our nationwide fulfillment infrastructure employed a total of 642,940 warehouse and delivery employees that manages this fulfillment infrastructure and the large number of orders we receive, process and fulfill each year. Our fulfillment expenses in absolute amount increased over 2023, 2024 and 2025, while the fulfillment expenses as a percentage of our total net revenues increased from 6.0% in 2023 to 6.7% in 2025. Our research and development professionals design, develop and operate the technology platform, develop and post content, and improve our AI, big data and cloud technologies and services. Personnel costs are the largest component of our fulfillment costs and of our research and development costs and are likely to remain the largest component for the foreseeable future as we continue to expand our operations. Labor costs are rising in China and we strive to continue improving efficiency and utilization of our fulfillment and other personnel to mitigate this effect. Our fulfillment expenses and thus operational efficiency are also affected by the average size of orders placed by our customers. 135 Table of Contents Our Ability to Effectively Invest in Our Fulfillment Infrastructure and Technology Platform Our results of operations depend in part on our ability to invest in our fulfillment infrastructure and technology platform to cost-effectively meet the demands of our business operations. Our nationwide fulfillment infrastructure covers almost all counties and districts across China, which, as of December 31, 2025, included a warehousing network of over 1,600 warehouses that are operated by us, and an aggregate gross floor area of over 34 million square meters, including warehouse space managed under the JD Logistics Open Warehouse Platform. As of December 31, 2025, we have developed, owned or managed Modern Infrastructure Assets across 29 provincial-level administrative regions in China and 12 countries and regions overseas, with a total gross floor area of over 27 million square meters. We plan to continue to build large scale warehouse facilities with optimized configurations on these sites to improve our fulfillment efficiency, minimize order splitting, accommodate greater product selection and fulfill the anticipated sales of our own products as well as sales by third-party merchants using our fulfillment services. In selecting locations for our pickup and delivery stations, order density, a parameter we use to measure the frequency and number of orders generated from a geographical area, is an important criterion. To efficiently deploy our delivery network, we have established delivery stations and pickup stations in areas where we expect order density to increase to the extent where operating our own delivery network will be more cost efficient than using third-party couriers. We also paid significant amounts for upgrading our technology platform. To enhance our technology platform, we intend to further invest in AI, big data analytics and cloud computing. We expect these technology initiatives to provide innovative features, solutions and services to customers and suppliers, while increasing our operational efficiency. Our Ability to Conduct and Manage Strategic Investments and Acquisitions We have made, and may continue to make, strategic investments and acquisitions to add assets or businesses that are complementary to our existing business. Our financial results could be adversely affected by our investments or acquisitions. The investments and acquired assets or businesses may not generate the financial results we expect. They could result in occurrence of significant investments and goodwill impairment charges, and amortization expenses for other intangible assets. Moreover, we share the results of the investments which we account for as equity method investments. We may incur impairment charges in connection with our investments or acquisitions and pick up gains or losses of our equity method investments, which could have a material impact on our financial results. Selected Statements of Operations Items Net Revenues Net revenues include net product revenues and net service revenues. Product sales is further divided into sales of electronics and home appliances products and sales of general merchandise products. Net revenues from electronics and home appliances products include revenues from sales of computer, communication and consumer electronics products as well as home appliances. Net revenues from general merchandise products mainly include revenues from sales of supermarket, fashion, pharmaceutical and healthcare products, furniture and household goods, industrial products, auto parts and books. Net service revenues are further divided into revenues from online marketplace and marketing and revenues from logistics and other services. The following table breaks down our total net revenues by these categories, by amounts and as percentages of total net revenues: For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (in millions, except for percentages) Electronics and home appliances revenues 538,799 49.7 564,982 48.8 605,131 86,533 46.2 General merchandise revenues 332,425 30.6 363,025 31.3 418,671 59,869 32.0 Net product revenues 871,224 80.3 928,007 80.1 1,023,802 146,402 78.2 Marketplace and marketing revenues 84,726 7.8 90,111 7.8 107,131 15,320 8.2 Logistics and other service revenues 128,712 11.9 140,701 12.1 178,152 25,475 13.6 Net service revenues 213,438 19.7 230,812 19.9 285,283 40,795 21.8 Total net revenues 1,084,662 100.0 1,158,819 100.0 1,309,085 187,197 100.0 136 Table of Contents Net service revenues primarily consist of fees earned from providing marketing and logistics services to our business partners, and commissions earned from third-party merchants for sales made through our online marketplace. Currently, we recognize revenues from the third-party merchants on a net basis as we are not the primary obligor, we do not have control over goods sold by third-party merchants and we do not have latitude to establish prices for them. We record revenue net of discounts, return allowances and value-added taxes, or VAT. Cost of revenues Cost of revenues primarily consists of our cost for acquiring the products that we sell directly and the related inbound shipping charges, inventory write-downs, traffic acquisition costs related to online marketing services, and cost related to logistics services provided to third parties. The rebates we receive from suppliers are treated as a reduction in the purchase price and will be recorded as a reduction in cost of revenues when the product is sold. Fulfillment expenses Our fulfillment expenses consist primarily of (i) expenses incurred in operating our fulfillment centers, customer service centers and physical stores, including personnel cost and expenses attributable to buying, receiving, inspecting and warehousing inventories, picking, packaging, and preparing customer orders for shipment, processing payment and related transaction costs, (ii) expenses charged by third-party couriers for dispatching and delivering our products, (iii) lease expenses of warehouses, delivery and pickup stations, and physical stores, and (iv) depreciation and amortization of logistics and electronic equipment. The costs related to logistics services provided to third parties are classified in cost of revenues. We expect our fulfillment expenses to increase in absolute amount on an annual basis in the near run, as we invest in new businesses, build and lease new warehouses and establish more delivery stations to penetrate lower tier cities and to meet the demands of our business operations. We plan to increase operation efficiency by strengthening our logistics network, improving overall utilization through economies of scale, increasing the level of integration across our logistics networks, and improving efficiencies through more intelligent decision-making. Marketing expenses Our marketing expenses consist primarily of advertising costs, public relations expenditures, and payroll and related expenses for employees involved in marketing and business development activities. We pay commissions to participants in the associates program when their customer referrals result in successful product sales. We plan to continue to conduct brand promotion and marketing activities to enhance our brand recognition and attract new purchases from new and existing customers. Research and development expenses Our research and development expenses consist primarily of payroll and related expenses for research and development professionals involved in designing, developing and maintaining our technology platform, and application of our AI, big data and cloud technologies and services, and technology infrastructure costs. Technology infrastructure costs include servers and other equipment depreciation, bandwidth and data center costs, rent, utilities and other expenses necessary to support our internal and external business. We plan to continue to invest in technology and innovation to enhance customer experience and provide value-added services to suppliers and third-party merchants. 137 Table of Contents General and administrative expenses Our general and administrative expenses consist primarily of employee related expenses for general corporate functions, including accounting, finance, tax, legal and human relations; costs associated with these functions include facilities and equipment depreciation expenses, rental and other general corporate related expenses. We plan to continue to hire additional qualified employees to support our business operations and high-quality growth. Gain on sale of development properties The gain on sale of development properties is mainly derived from sale of development properties to real estate investment trust and core funds (collectively, the “Property Funds”). JD Property develops and manages our logistics facilities and other real estate properties, to support JD Logistics and other third parties. By leveraging its fund management platform, JD Property can realize development profits and recycle capital from development properties to fund new developments and scale the business. Since 2019, JD Property established several Property Funds together with third parties, including GIC Private Limited (“GIC”) and Mubadala Investment Company (“MIC”). JD Property served as general partner and committed less than 50% of the total capital of each property fund as a limited partner, and cannot control the investment committee. JD Property also entered into definitive agreements with the Property Funds, pursuant to which JD Property sold certain of our completed and uncompleted modern logistics facilities, and would concurrently lease back such facilities for operational purposes when completed. For the logistics facilities that met closing conditions, we recorded disposal gain of RMB2.3 billion, RMB1.5 billion and RMB0.4 billion (US$0.1 billion) in 2023, 2024 and 2025, respectively. We derecognized the logistics facilities upon satisfaction of the hand-over condition. Share of results of equity investees Share of the post-acquisition profits or losses, impairment, and gains or losses from disposals and deemed disposals of the equity investments that are accounted for under the equity method are recorded in share of results of equity investees. Others, net “Others, net” consists of interest income; gains/(losses) related to long-term investments without significant influence, including fair value changes, acquisitions or disposals gains/(losses), and impairments; government incentives; foreign exchange gains/(losses); and other non-operating income/(losses). Taxation Cayman Islands The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation. Payments of dividends and capital in respect of shares are not subject to taxation in the Cayman Islands. There are no other taxes likely to be material to holders of our ADSs or ordinary shares levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands. Hong Kong Our subsidiaries incorporated in Hong Kong are eligible to elect a two-tiered income tax rate for taxable income generated from operations in Hong Kong, effective on April 1, 2018. If elected, the first HK$2 million of assessable profits by our subsidiaries in Hong Kong will be taxed at half the current tax rate (i.e., 8.25%) while the remaining assessable profits will continue to be taxed at the existing 16.5% tax rate. We analyze on the foreign-sourced income, mainly dividend and interest, accrued to its subsidiaries in Hong Kong, apply for Commissioner’s Opinion /Advance Ruling with the Inland Revenue Department of Hong Kong on fulfillment of exception requirements under Foreign-Sourced Income Exemption (“FSIE”) regime and pay tax for the income subject to Hong Kong Profits Tax, if any. In addition, payments of dividends from our subsidiaries in Hong Kong to us are not subject to any Hong Kong withholding tax. 138 Table of Contents Chinese Mainland Generally, our subsidiaries and the consolidated variable interest entities in the Chinese mainland are subject to enterprise income tax on their taxable income in the Chinese mainland at a rate of 25%, except that a few entities in our group benefit from a preferential tax rate of 15% as they conduct business in certain encouraged sectors or areas, and any entity that qualifies as a “software enterprise” is entitled to an exemption from income tax for the first two years and 50% reduction for the next three years from such entity’s first profitable year. Besides, from January 1, 2023 to December 31, 2027, subject to certain criteria, the portion of annual taxable income amount of a small profit enterprise shall be computed at a reduced rate of 25% as taxable income amount, and be subject to enterprise income tax at 20% tax rate. Furthermore, certain of our entities in the Chinese mainland engaging in research and development activities in the Chinese mainland were entitled to claim 175% of their research and development expenses from January 1, 2021 to September 30, 2022 according to the laws and regulations in the PRC. In September 2022, the PRC State Tax Administration further announced that for the enterprises entitled to the current pre-tax deduction ratio of 175% for research and development expenses, such ratio is raised to 200% during the period from October 1, 2022 to December 31, 2022. In March 2023, the State Tax Administration announced that 200% of the actual amount can be deducted before tax from January 1, 2023. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. We are subject to VAT at a rate of 9% on sales of audio and video products, at a rate of 13% on sales of other products, at a rate of 6% on express delivery services, at a rate of 9% on transportation services and at a rate of 6% on advertising and other services, in each case less any deductible VAT we have already paid or borne. Since January 1, 2014, we have been exempted from VAT on sales of books. We are also subject to surcharges on VAT payments in accordance with PRC law. Dividends paid by our wholly foreign-owned subsidiaries in the Chinese mainland to our intermediate holding companies in Hong Kong should qualify for the preferential withholding tax rate of 5% under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital, instead of the normal withholding tax rate of 10%. The Hong Kong entity is required to file an application package with the PRC tax authorities and settle the overdue taxes if the preferential 5% tax rate is denied based on the subsequent review of the application package by the tax authority. See “Item 3.D. Key Information—Risk Factors—Risks Related to Our Corporate Structure—We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” If our holding company in the Cayman Islands or any of our subsidiaries outside of the Chinese mainland were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3.D. Key Information—Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” Results of Operations The following table summarizes our consolidated results of operations in absolute amount and as a percentage of our total net revenues for the periods indicated. Period-to-period comparisons of historical results of operations should not be relied upon as indicative of future performance. 139 Table of Contents For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (in millions, except for percentages, shares and per share data) Net revenues Net product revenues 871,224 80.3 928,007 80.1 1,023,802 146,402 78.2 Net service revenues 213,438 19.7 230,812 19.9 285,283 40,795 21.8 Total net revenues 1,084,662 100.0 1,158,819 100.0 1,309,085 187,197 100.0 Cost of revenues (924,958 ) (85.3 ) (974,951 ) (84.1 ) (1,099,057 ) (157,163 ) (84.0 ) Fulfillment (64,558 ) (5.9 ) (70,426 ) (6.1 ) (88,176 ) (12,609 ) (6.7 ) Marketing (40,133 ) (3.7 ) (47,953 ) (4.1 ) (83,953 ) (12,005 ) (6.4 ) Research and development (16,393 ) (1.5 ) (17,031 ) (1.5 ) (22,229 ) (3,179 ) (1.7 ) General and administrative (9,710 ) (0.9 ) (8,888 ) (0.8 ) (11,980 ) (1,713 ) (0.9 ) Impairment of goodwill (3,143 ) (0.3 ) (799 ) (0.1 ) (1,303 ) (186 ) (0.1 ) Impairment of long-lived assets (2,025 ) (0.2 ) (1,562 ) (0.1 ) — — — Gain on sale of development properties 2,283 0.2 1,527 0.1 387 55 0.0 Income from operations(1)(2) 26,025 2.4 38,736 3.3 2,774 397 0.2 Other income/(expense) Share of results of equity investees 1,010 0.1 2,327 0.2 8,025 1,147 0.6 Interest expense (2,881 ) (0.3 ) (2,896 ) (0.3 ) (2,803 ) (401 ) (0.2 ) Others, net 7,496 0.7 13,371 1.2 17,327 2,478 1.3 Income before tax 31,650 2.9 51,538 4.4 25,323 3,621 1.9 Income tax expenses (8,393 ) (0.8 ) (6,878 ) (0.5 ) (2,181 ) (312 ) (0.1 ) Net income 23,257 2.1 44,660 3.9 23,142 3,309 1.8 Net income/(loss) attributable to non-controlling interests shareholders (910 ) (0.1 ) 3,301 0.3 3,511 502 0.3 Net income attributable to the Company’s ordinary shareholders 24,167 2.2 41,359 3.6 19,631 2,807 1.5 Net income per share Basic 7.69 13.83 6.89 0.99 Diluted 7.61 13.43 6.45 0.92 Net income per ADS(3) Basic 15.37 27.67 13.79 1.97 Diluted 15.23 26.86 12.90 1.84 Weighted average number of shares Basic 3,144,233,160 2,989,701,855 2,847,199,686 2,847,199,686 Diluted 3,170,542,396 3,076,061,616 2,978,037,127 2,978,037,127 (1) Includes share-based compensation expenses as follows: For the Year Ended December 31, 2023 2024 2025 RMB RMB RMB US$ (in millions) Cost of revenues (133 ) (80 ) (87 ) (12 ) Fulfillment (697 ) (424 ) (473 ) (68 ) Marketing (426 ) (273 ) (313 ) (45 ) Research and development (859 ) (599 ) (1,144 ) (164 ) General and administrative (2,689 ) (1,623 ) (2,709 ) (387 ) Total (4,804 ) (2,999 ) (4,726 ) (676 ) (2) Includes amortization of business cooperation arrangement and intangible assets resulting from assets and business acquisitions as follows: 140 Table of Contents For the Year Ended December 31, 2023 2024 2025 RMB RMB RMB US$ (in millions) Fulfillment (414 ) (288 ) (197 ) (28 ) Marketing (880 ) (903 ) (886 ) (126 ) Research and development (305 ) (205 ) (144 ) (21 ) General and administrative (128 ) (64 ) — — Total (1,727 ) (1,460 ) (1,227 ) (175 ) (3) Each ADS represents two Class A ordinary shares. Segment Information From the first quarter of 2024, we started to report three reportable segments, JD Retail, JD Logistics and New Businesses, to reflect changes made to the reporting structure whose financial information is reviewed by the chief operating decision maker of our company under the ongoing operating strategies. JD Retail, which includes JD Health and JD Industrials, mainly engages in online retail, online marketplace and marketing services in China. JD Logistics includes both internal and external logistics businesses. New Businesses mainly include JD Food Delivery, JD Property, Jingxi and overseas businesses. The tables below set out our net revenues and income/(loss) from operations by segment, with the segment information for the prior periods retrospectively recast to conform to the presentation for the current period: For the Year Ended December 31, 2023 2024 2025 RMB RMB RMB US$ (in millions) Net revenues: JD Retail 945,343 1,015,948 1,126,399 161,073 JD Logistics 166,625 182,837 217,146 31,052 New Businesses 26,617 19,157 49,282 7,047 Inter-segment eliminations* (53,923 ) (59,123 ) (83,742 ) (11,975 ) Total consolidated net revenues 1,084,662 1,158,819 1,309,085 187,197 * The inter-segment eliminations mainly consist of revenues from supply chain solutions and logistics services provided by JD Logistics to JD Retail and New Businesses, and property leasing services provided by JD Property to JD Logistics. 141 Table of Contents For the Year Ended December 31, 2023 2024 2025 RMB RMB RMB US$ (in millions) Income/(Loss) from operations: JD Retail 35,925 41,077 51,402 7,350 JD Logistics 1,005 6,317 5,269 754 New Businesses (329 ) (2,865 ) (46,641 ) (6,670 ) Including: gain on sale of development properties 2,283 1,527 387 55 Impairment of long-lived assets (1,123 ) (1,027 ) — — Total segment income from operations 36,601 44,529 10,030 1,434 Unallocated items** (10,576 ) (5,793 ) (7,256 ) (1,037 ) Total consolidated income from operations 26,025 38,736 2,774 397 ** Unallocated items include share-based compensation, amortization of intangible assets resulting from assets and business acquisitions, effects of business cooperation arrangements, and impairment of goodwill and intangible assets. Years Ended December 31, 2025 and 2024 Net Revenues Our total net revenues increased by 13.0% from RMB1,158,819 million in 2024 to RMB1,309,085 million (US$187,197 million) in 2025. Net revenues from JD Retail increased by 10.9% to RMB1,126,399 million (US$161,073 million) in 2025 from RMB1,015,948 million in 2024. The increase was primarily driven by the enhancement in our unique supply chain capabilities, investments in user experience and mindshare, and improved price competitiveness and platform ecosystem. Net revenues from JD Logistics increased by 18.8% to RMB217,146 million (US$31,052 million) in 2025 from RMB182,837 million in 2024. The increase was largely driven by the growth in logistics revenues from integrated supply chain customers, primarily fueled by the scaled-up delivery services to support JD Food Delivery under New Businesses through expanded rider capacity and the enhanced local delivery capabilities. Net revenues from New Businesses increased by 157.3% to RMB49,282 million (US$7,047 million) in 2025 from RMB19,157 million in 2024. The increase was largely due to the rapid scaling of JD Food Delivery and Jingxi. 142 Table of Contents Cost of revenues Our cost of revenues increased by 12.7% from RMB974,951 million in 2024 to RMB1,099,057 million (US$157,163 million) in 2025. This increase was primarily due to the growth of our online retail business and an increase in costs related to the logistics services provided to merchants and other partners. Fulfillment expenses Our fulfillment expenses increased by 25.2% from RMB70,426 million in 2024 to RMB88,176 million (US$12,609 million) in 2025. This increase was primarily due to continued upgrade in fulfillment capabilities and investment in human capital to enhance user experience. Marketing expenses Our marketing expenses increased by 75.1% from RMB47,953 million in 2024 to RMB83,953 million (US$12,005 million) in 2025. This increase was primarily due to the increased spending in promotional efforts for new business initiatives. Research and development expenses Our research and development expenses increased by 30.5% from RMB17,031 million in 2024 to RMB22,229 million (US$3,179 million) in 2025. Research and development expenses as a percentage of net revenues was 1.7% for the year of 2025, compared to 1.5% for the year of 2024 as we continue to invest in technology capabilities and talents. General and administrative expenses Our general and administrative expenses increased by 34.8% from RMB8,888 million in 2024 to RMB11,980 million (US$1,713 million) in 2025. This increase was primarily due to the increase in share-based compensation expenses and increase in staff cost. Impairment of goodwill We performed quantitative impairment test on goodwill arising from acquisitions on a reporting unit basis and recorded non-cash impairment losses of RMB799 million and RMB1,303 million (US$186 million) in 2024 and 2025, respectively. Gain on sale of development properties The gain on sale of development properties is mainly derived from sale of development properties to the Property Funds. See also “Item 5.A. Operating and Financial Review and Prospects—Operating Results—Selected Statements of Operations Items—Gain on sale of development properties.” For the logistics facilities that met closing conditions, we recorded disposal gain of RMB1,527 million in 2024 and RMB387 million (US$55 million) in 2025. 143 Table of Contents Income from Operations Income from operations was RMB38,736 million in 2024 and RMB2,774 million (US$397 million) in 2025. The declines were primarily attributable to increased strategic investment in new business initiatives. Share of results of equity investees Our share of results of equity investees was a gain of RMB2,327 million in 2024 and RMB8,025 million (US$1,147 million) in 2025, respectively. The increase of net gain was primarily due to higher profits from our equity investees. Others, Net “Others, net” recorded a gain of RMB13,371 million in 2024 and a gain of RMB17,327 million (US$2,478 million) in 2025, primarily due to decreased impairment losses related to equity investments. Net Income As a result of the foregoing, we had a net income of RMB23,142 million (US$3,309 million) in 2025, as compared to a net income of RMB44,660 million in 2024. Years Ended December 31, 2024 and 2023 For a detailed description of the comparison of our operating results for the years ended December 31, 2024 and 2023, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Results of Operations—Year Ended December 31, 2024 and 2023” of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 17, 2025. B. Liquidity and Capital Resources Our primary sources of liquidity have been proceeds from operating activities, equity and debt financing, and certain business or assets reorganizations. Our major financings Set forth below are our major financings in recent years: • In April 2016, we issued an aggregate of US$0.5 billion unsecured senior notes due 2021, with stated annual interest rate of 3.125%, and an aggregate of US$0.5 billion unsecured senior notes due 2026, with stated annual interest rate of 3.875%. The net proceeds from the sale of these notes were used for general corporate purposes. As of December 31, 2025, the notes due 2021 were paid off, and the carrying value and estimated fair value of the notes due 2026 were US$499.6 million and US$499.4 million, respectively. The estimated fair values were based on quoted prices for our publicly traded debt securities as of December 31, 2025. The unsecured senior notes contain covenants including, among others, limitation on liens, and restriction on consolidation, merger and sale of all or substantially all of our assets. We are in compliance with all the covenants. During 2025, we paid an aggregate of US$19.4 million in interest payments related to these notes. • In January 2020, we issued an aggregate of US$0.7 billion unsecured senior notes due 2030, with stated annual interest rate of 3.375%, and an aggregate of US$0.3 billion unsecured senior notes due 2050, with stated annual interest rate of 4.125%. The net proceeds from the sale of these notes are used for general corporate purposes and refinancing. As of December 31, 2025, the total carrying value and estimated fair value were US$692.6 million and US$676.4 million, respectively, with respect to the notes due 2030, and US$281.7 million and US$236.0 million, respectively, with respect to the notes due 2050. The estimated fair values were based on quoted prices for our publicly traded debt securities as of December 31, 2025. The unsecured senior notes contain covenants including, among others, limitation on liens, and restriction on consolidation, merger and sale of all or substantially all of our assets. We are in compliance with all the covenants. During 2025, we paid an aggregate of US$36.0 million in interest payments related to these notes. 144 Table of Contents • In June 2020, our Class A ordinary shares commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “9618.” We raised from our global offering in connection with the listing in Hong Kong approximately RMB31.3 billion in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses. • In December 2021, we entered into a five-year US$2.0 billion unsecured term and revolving loan facility with five lead arrangers. This loan facility is our first green loan facility. The term and revolving loans under this facility are priced at 85 basis points over LIBOR, which was amended to the Secured Overnight Financing Rate in September 2022. In the second quarter of 2022, we drew down US$1.0 billion under the facility commitment, which will be due in 2027 and was further extended to 2030 in January 2025. We used the proceeds from this loan facility to (i) finance or refinance in whole or in part, one or more of its new or existing eligible green projects and/or (ii) general corporate purposes. In March 2026, all outstanding balance of the borrowings was early repaid in full. • In May 2024, we issued convertible senior notes in an aggregate principal amount of US$2.0 billion due 2029, or the 2029 Notes. The 2029 Notes bear interest at a rate of 0.25% per year, payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2024. The 2029 Notes will mature on June 1, 2029, unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date. The initial conversion rate of the 2029 Notes is 21.8830 ADSs per US$1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately US$45.70 per ADS. As of December 31, 2025, an aggregate principal amount of US$2.0 billion of the 2029 Notes remained outstanding. We used and will use the net proceeds from the issuance (i) for repurchase of our ADSs, concurrently with the pricing of the 2029 Notes, from certain purchasers of the 2029 Notes in off-market privately negotiated transactions effected through one of the initial purchasers or its affiliates, as our agent, and repurchases on the open market, after the pricing of the 2029 Notes and from time to time, additional Class A ordinary shares and/or ADSs of ours pursuant to our share repurchase program(s), (ii) to expand our overseas business, (iii) to further improve our supply chain network, and (iv) for working capital needs. Holders of the Notes may require us to repurchase for cash all or part of their Notes for cash on June 1, 2027 or in the event of certain fundamental changes, at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the relevant repurchase date. In addition, on or after June 8, 2027, we may redeem all or part of the Notes for cash subject to certain conditions, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the relevant optional redemption date. Furthermore, we may redeem all but not part of the Notes in the event of certain changes in the tax laws or if less than 10% of the aggregate principal amount of the Notes originally issued remains outstanding at such time, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the related redemption date. • In 2025, we were granted with approval by China Securities Regulatory Commission of issuing public offering corporate bonds to professional investors with an aggregate registered principal amount of up to RMB10.0 billion. During the year ended December 31, 2025, RMB6.0 billion was issued in three tranches under the program, with coupon rates ranging from 1.55% to 1.87% per annum and tenors ranging from 1 to 5 years. • In April 2026, we completed the offering of RMB7.5 billion 2.05% notes due 2031 and RMB2.5 billion 2.75% notes due 2036 in reliance on Regulation S under the United States Securities Act of 1933, as amended. The proceeds have been received in full and was partially used to repay certain existing borrowings and related interest. 145 Table of Contents Major financings of our subsidiaries Set forth below are the major financings of our subsidiaries in the past three years: JD Property • In December 2023, JD Property entered into a RMB8,500 million term loan agreement with interest rate at 65 basis points below the Loan Prime Rate to refinance the loan and drew down RMB8,286 million, which was expected to be repaid through December 2028 in installments. The net proceeds from this loan facility are used for refinancing. JD Industrials • By March 2023, JD Industrials had raised an aggregate of approximately US$545 million through non-redeemable series A, series A-1 and series B preference share financing with a group of third-party investors. • On December 11, 2025, shares of JD Industrials commenced trading on the Main Board of the Hong Kong Stock Exchange under the stock code “7618.” JD Industrials raised from the global offering in connection with the listing in Hong Kong approximately RMB2.6 billion in net proceeds after deducting underwriting commissions, share issuance costs and the offering expenses. As of December 31, 2025, we had revolving lines of credit for an aggregate amount of RMB304.0 billion (US$43.5 billion) from several commercial banks, and RMB243.1 billion (US$34.8 billion) of which was unused. Taking into account cash and cash equivalents on hand, our operating cash flows, and the available bank facilities, we believe that we have sufficient working capital for our present requirements and for at least the next 12 months from the date of this annual report. We may, however, need additional cash resources in the future if we experience changes in business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue opportunities for investment, acquisition, capital expenditure or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand, we may seek to issue debt or equity securities or obtain additional credit facilities. 146 Table of Contents Our net inventories amounted to RMB68.1 billion, RMB89.3 billion and RMB95.4 billion (US$13.6 billion) as of December 31, 2023, 2024 and 2025, respectively. Our annual inventory turnover days were 30.3 days in 2023, 31.5 days in 2024 and 37.8 days in 2025. Annual inventory turnover days are the quotient of average inventory over the immediately preceding five quarters, up to and including the last quarter of the annual period, to cost of revenues of retail business for that annual period, and then multiplied by 360 days. Our inventory balances will fluctuate over time due to a number of factors, including expansion in our product selection and changes in our product mix. Our inventory balances typically increase when we prepare for special promotion events, such as the anniversary of the founding of our company on June 18 and China’s online shopping festival on November 11. Our accounts payable primarily include accounts payable to suppliers associated with our retail business. As of December 31, 2023, 2024 and 2025, our accounts payable amounted to RMB166.2 billion, RMB192.9 billion and RMB188.4 billion (US$26.9 billion), respectively. Our annual accounts payable turnover days for retail business were 53.2 days in 2023, 58.6 days in 2024 and 60.0 days in 2025. Annual accounts payable turnover days are the quotient of average accounts payable for retail business over the immediately preceding five quarters, up to and including the last quarter of the annual period to cost of revenues of retail business for that annual period, and then multiplied by 360 days. Our accounts receivable primarily include amounts due from customers and online payment channels. As of December 31, 2023, 2024 and 2025, our accounts receivable amounted to RMB20.3 billion, RMB25.6 billion and RMB27.3 billion (US$3.9 billion), respectively. JD Technology provides consumer financing to our customers. As of December 31, 2023, 2024 and 2025, the balances of current portion of financing provided to our customers that were included in accounts receivable balances amounted to RMB2.3 billion, RMB2.0 billion and RMB1.7 billion (US$0.2 billion), respectively. Our accounts receivable turnover days excluding the impact from consumer financing were 5.6 days in 2023, 5.9 days in 2024 and 8.7 days in 2025. Annual accounts receivable turnover days are the quotient of average accounts receivable over the immediately preceding five quarters, up to and including the last quarter of the annual period, to total net revenues for that annual period and then multiplied by 360 days. Although we consolidate the results of the consolidated variable interest entities, we only have access to cash balances or future earnings of the consolidated variable interest entities through our contractual arrangements with them. See “Item 4.C. Information on the Company—Organizational Structure.” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Holding Company Structure.” As a Cayman Islands exempted company and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our wholly foreign-owned subsidiaries in the Chinese mainland only through loans or capital contributions, subject to the approval of government authorities and limits on the amount of capital contributions and loans. In addition, our wholly foreign-owned subsidiaries in the Chinese mainland may provide RMB funding to their respective subsidiaries only through capital contributions and entrusted loans, and to the consolidated variable interest entities only through entrusted loans. See “Introduction—Summary of Risk Factors—Risks Related to Our Corporate Structure,” “Item 5.B. Operating and Financial Review and Prospects—Liquidity and Capital Resources” and “Item 3.D. Key Information—Risk Factors—Risks Related to Our Corporate Structure—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to our PRC subsidiaries and the consolidated variable interest entities or making additional capital contributions to our wholly foreign-owned subsidiaries in the Chinese mainland, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” RMB may be converted into foreign exchange for current account items, including interest and trade- and service-related transactions. As a result, our PRC subsidiaries and the consolidated variable interest entities in China may purchase foreign exchange for the payment of license, content or other royalty fees and expenses to offshore licensors and content partners, for example. 147 Table of Contents Our wholly foreign-owned subsidiaries may convert RMB amounts that they generate in their own business activities, including technical consulting and related service fees pursuant to their contracts with the consolidated variable interest entities, as well as dividends they receive from their own subsidiaries, into foreign exchange and pay them to their non-PRC parent companies in the form of dividends. However, current PRC regulations permit our wholly foreign-owned subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Each of our wholly foreign-owned subsidiaries is required to set aside at least 10% of its after-tax profits after making up previous years’ accumulated losses each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. These reserves are not distributable as cash dividends. Furthermore, capital account transactions, which include foreign direct investment and loans, must be approved by and/or registered with SAFE and its local branches. The following table sets forth a summary of our cash flows for the periods indicated: For the Year Ended December 31, 2023 2024 2025 RMB RMB RMB US$ (in millions) Summary Consolidated Cash Flows Data: Net cash provided by operating activities 59,521 58,095 18,991 2,716 Net cash (used in)/provided by investing activities (59,543 ) (871 ) 41,832 5,982 Net cash used in financing activities (5,808 ) (21,004 ) (26,728 ) (3,822 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 125 98 (186 ) (27 ) Net (decrease)/increase in cash, cash equivalents and restricted cash (5,705 ) 36,318 33,909 4,849 Cash, cash equivalents, and restricted cash at beginning of year, including cash and cash equivalents classified within assets held for sale 85,156 79,451 115,716 16,547 Less: cash, cash equivalents, and restricted cash classified within assets held for sale at beginning of year 41 53 — * — * Cash, cash equivalents, and restricted cash at beginning of year 85,115 79,398 115,716 16,547 Cash, cash equivalents and restricted cash at end of year, including cash and cash equivalents classified within assets held for sale 79,451 115,716 149,625 21,396 Less: cash, cash equivalents and restricted cash classified within assets held for sale at end of year 53 — * — * — * Cash, cash equivalents and restricted cash at end of year 79,398 115,716 149,625 21,396 * Absolute value is less than RMB1 million or US$1 million. Operating Activities Net cash provided by operating activities in 2025 was RMB18,991 million (US$2,716 million). In 2025, the principal items accounting for the difference between our net cash provided by operating activities and our net income were certain non-cash expenses, principally depreciation and amortization of RMB9,747 million (US$1,394 million), impairment of goodwill, long-lived assets and equity investments totaled RMB2,130 million (US$304 million), share-based compensation of RMB4,726 million (US$676 million), and changes in certain working capital accounts, principally an increase in inventories of RMB5,780 million (US$827 million), and a decrease in accounts payable of RMB4,909 million (US$702 million). The increase in inventories was mainly due to the growth of our business and preparation for the Chinese New Year Shopping Festival. The decrease in our accounts payable was due to a high base effect of 2024. 148 Table of Contents Net cash provided by operating activities in 2024 was RMB58,095 million. In 2024, the principal items accounting for the difference between our net cash provided by operating activities and our net income were certain non-cash expenses, principally depreciation and amortization of RMB8,904 million, impairment of goodwill, long-lived assets and equity investments totaled RMB5,660 million, share-based compensation of RMB2,999 million, and changes in certain working capital accounts, principally an increase in inventories of RMB20,154 million, and an increase in accounts payable of RMB27,844 million. The increase in inventories was mainly due to preparation for the Chinese New Year Shopping Festival and the trade-in program. The increase in our accounts payable was due to the growth of our business. Net cash provided by operating activities in 2023 was RMB59,521 million. In 2023, the principal items accounting for the difference between our net cash provided by operating activities and our net income were certain non-cash expenses, principally depreciation and amortization of RMB8,292 million, impairment of goodwill, long-lived assets and equity investments totaled RMB8,211 million, share-based compensation of RMB4,804 million, and changes in certain working capital accounts, principally an decrease in inventories of RMB9,891 million, and an increase in accounts payable of RMB4,614 million. The decrease in inventories was mainly due to seasonality, as inventories were pre-stocked at the end of 2022 for the 2023 Chinese New Year which was in January 2023, while the 2024 Chinese New Year was in February 2024 and thus fewer inventories was pre-stocked at the end of 2023. The increase in our accounts payable was due to the growth of our business. Investing Activities Net cash provided by investing activities in 2025 was RMB41,832 million (US$5,982 million), consisting primarily of the maturity of time deposits and wealth management products, cash received from sale of development properties and disposal of investment securities and equity investments, partially offset by the purchase of time deposits and wealth management products, purchase of property, equipment and software and intangible assets, cash paid for construction in progress and land use rights and cash paid for asset acquisitions and business combinations. Net cash used in investing activities in 2024 was RMB871 million, consisting primarily of the purchase of time deposits and wealth management products, cash paid for construction in progress and land use rights, purchases of property, equipment and software and intangible assets, cash paid for asset acquisitions and business combinations, partially offset by the maturity of time deposits and wealth management products, cash received from disposal of equity investments and investment securities and cash received from sale of development properties. Net cash used in investing activities in 2023 was RMB59,543 million, consisting primarily of the purchase of short-term investments and long-term time deposits and wealth management products, cash paid for construction in progress and land use rights, purchases of property, equipment and software and asset acquisitions, partially offset by the maturity of short-term investments, cash received from disposal of equity investments and investment securities and cash received from sale of development properties. Financing Activities Net cash used in financing activities in 2025 was RMB26,728 million (US$3,822 million), consisting primarily of cash paid for dividends, cash paid for repurchase of ordinary shares and ADSs of our company and acquisition of additional equity interests in non-wholly owned subsidiaries, partially offset by net proceeds from debts. Net cash used in financing activities in 2024 was RMB21,004 million, consisting primarily of cash paid for repurchase of ordinary shares and ADSs of our company and cash paid for dividends, partially offset by net proceeds from unsecured senior notes. Net cash used in financing activities in 2023 was RMB5,808 million, consisting primarily of cash paid for repurchase of ordinary shares and ADSs of our company and cash paid for dividends, partially offset by net proceeds from bank borrowings. 149 Table of Contents Material cash requirements Our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include our capital expenditures and contractual obligations. Capital Expenditures We made capital expenditures of RMB25.4 billion, RMB18.0 billion and RMB17.6 billion (US$2.5 billion) in 2023, 2024 and 2025, respectively. Our capital expenditures for 2023, 2024 and 2025 consisted primarily of expenditures related to the expansion of our fulfillment infrastructure, technology platform, logistics equipment as well as our office buildings. Our capital expenditures will continue to be significant in the foreseeable future as we expand and improve our fulfillment infrastructure and technology platform to meet the needs of our business operations. JD Property seeks to realize development profits and recycle capital from mature properties to fund new developments and scale the business. We sold certain of our development properties and received proceeds of RMB7.0 billion in 2023, RMB3.8 billion in 2024 and RMB4.9 billion (US$0.7 billion) in 2025. Contractual Obligations The following table sets forth our contractual obligations as of December 31, 2025: Payment Due by Period Total Less than 1 year 1-3 years 3-5 years More than 5 years (RMB in millions) Operating lease commitments for offices and fulfillment infrastructures 38,177 9,616 10,686 6,138 11,737 Capital commitments(1) 2,682 2,682 — — — Long-term debt obligations and interest payments(2) 78,515 8,278 17,166 32,657 20,414 Total 119,374 20,576 27,852 38,795 32,151 (1) Our capital commitments primarily relate to commitments on construction and purchase of office buildings and warehouses, and are expected to be paid in the following years according to the construction progress. (2) Our long-term debt obligations are mainly unsecured senior notes and long-term debts, including the portion due within one year. Our investment commitments contracted but without fixed payment schedule amounted to RMB1.5 billion (US$0.2 billion) as of December 31, 2025, which primarily related to capital contribution obligation for certain fund investments. Off-Balance Sheet Arrangements We have not entered into any material financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. 150 Table of Contents Holding Company Structure JD.com, Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries and the consolidated variable interest entities in China. As a result, JD.com, Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiaries. If our existing PRC subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiaries in China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of our subsidiaries and the consolidated variable interest entities in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. Each of our PRC subsidiaries and the consolidated variable interest entities may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by SAFE. As of December 31, 2025, the amount restricted, including paid-in capital and statutory reserve funds, as determined in accordance with PRC accounting standards and regulations, was approximately RMB78.2 billion (US$11.2 billion). C. Research and Development, Patents, and Licenses, etc. We have built our technology platform relying primarily on software and systems that we have developed in-house and to a lesser extent on third-party software that we have modified and incorporated. Our research and development professionals design, develop and operate our technology platform and to improve our AI, big data and cloud technologies and services. In 2023, 2024 and 2025, our research and development expenses, including share-based compensation expenses for research and development staff, were RMB16,393 million, RMB17,031 million and RMB22,229 million (US$3,179 million), respectively. Our research and development expenses consist primarily of payroll and related expenses for research and development professionals involved in designing, developing and operating our technology platform, and improving our AI, big data and cloud technologies and services, and technology infrastructure costs. Technology infrastructure costs include servers and other equipment depreciation, bandwidth and data center costs, rent, utilities and other expenses necessary to support our internal and external business. We expect spending in research and development continue to be significant over time as we plan to continue to invest in our technology and innovation to enhance customer experience and provide value-added services to our business partners. D. Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2026 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions. E. Critical Accounting Estimates An accounting estimate is considered critical if it requires to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates. The following descriptions of critical accounting estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report. For further information, see Note 2 to our consolidated financial statements in this annual report. 151 Table of Contents Business Combinations We account for business acquisitions under the acquisition method of accounting. We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. We primarily establish fair value using the income approach based upon a discounted cash flow model. The income approach requires management to make significant estimates and assumptions. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows and discount rates. Our management’s estimates of fair value are based on available information as of the acquisition date and upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, the actual results may differ from estimates. Changes in these estimates and assumptions could materially affect the determination of the fair value. Revenues We recognize revenues net of discounts and return allowances when the products are delivered and title is passed to customers. Significant judgment is required to estimate return allowances. For online retail business with return conditions, we reasonably estimate the possibility of return based on the historical experience, changes in judgments on these assumptions and estimates could materially impact the amount of net revenues recognized. Inventories Inventories, consisting of products available for sale, are stated at the lower of cost and net realizable value. Cost of inventories is mainly determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as inventory aging, historical and forecasted consumer demand, and market conditions that impact pricing. We take ownership, risks and rewards of the products purchased, but have arrangements to return unsold goods with certain vendors. Write-downs are recorded in cost of revenues in our consolidated statements of operations and comprehensive income/(loss). As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of December 31, 2025, we would have recorded an additional cost of sales of approximately RMB1,002 million (US$143 million). 152 Table of Contents Goodwill Impairment Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired in a business combination. Goodwill is not depreciated or amortized but is tested for impairment on an annual basis as of December 31, and in between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In accordance with ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment issued by the Financial Accounting Standards Board (“FASB”) guidance on testing of goodwill for impairment, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If as a result of the qualitative assessment, it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value of each reporting unit with its carrying amount, including goodwill. If the carrying amount of each reporting unit exceeds its fair value, an impairment loss equal to the difference between the fair value of the reporting unit and its carrying amount will be recorded. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. During the years ended December 31, 2023, 2024 and 2025, management monitored the actual performance of the business and conducted goodwill impairment test. For the year ended December 31, 2023, considered the duration and severity of the decline of Dada’s stock price, we assessed that it is more likely than not that the fair value of Dada reporting unit is less than its carrying amount and performed a quantitative impairment test on the Dada reporting unit and recognized an impairment loss of RMB3,143 million. For the year ended December 31, 2024, we concluded the carrying amounts of certain reporting units exceeded their respective fair values and recorded impairment losses of RMB799 million. For the year ended December 31, 2025, we concluded the carrying amounts of certain reporting units exceeded their respective fair values and recorded impairment losses of RMB1,303 million. The fair value of reporting units was determined based on the discounted cash flow analysis using the assumptions including internal cash flows forecasts, long-term future growth rates and discount rates, among others. 153 Table of Contents Income Taxes We are mainly subject to income tax in the Chinese mainland, but are also subject to taxation on profit arising in or derived from the tax jurisdiction where our subsidiaries are domiciled and operate in countries or regions other than the Chinese mainland. Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the tax jurisdictions. We follow the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statements carrying amounts and tax bases of existing assets and liabilities by applying enacted statutory tax rates that will be in effect in the period in which the temporary differences are expected to reverse. We record a valuation allowance to reduce the amount of deferred tax assets if based on the weight of available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. We considered all the available positive and negative evidence at each legal entity level to determine whether a valuation allowance for deferred tax assets is needed. The valuation allowance of RMB13 billion and RMB15 billion as of December 31, 2024 and 2025, respectively, is based on management’s estimates of future taxable income and application of relevant tax income laws. Our valuation allowance mainly arises from loss-making entities under the logistics business and certain new businesses that have suffered cumulative losses in recent years. We released approximately RMB8 billion of our valuation allowances in 2025 as certain entities turned profitable. For the remaining entities under the logistics business and certain new businesses, we continue to project losses in future periods due to the expected future earning volatility. Based on that, management believes that it is not more likely than not that the related deferred tax assets for those entities will be released as the related net operating loss carry forwards will not be utilized to offset taxable income in the foreseeable future. We will continue to monitor the need for a valuation allowance against our deferred tax assets in the future. The effect on deferred taxes of a change in tax rate is recognized in our consolidated statements of operations and comprehensive income/(loss) in the period of change. Deferred tax assets and liabilities are classified as non-current in the consolidated balance sheets. We recognize in our consolidated financial statements the benefit of a tax position if the tax position is more-likely-than-not to prevail based on the facts and technical merits of the position. Tax positions that meet the more-likely-than-not recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. We estimate our liability for unrecognized tax benefits which are periodically assessed and may be affected by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of limitations. The ultimate outcome for a particular tax position may not be determined with certainty prior to the conclusion of a tax audit and, in some cases, appeal or litigation process. The actual benefits ultimately realized may differ from our estimates. As each audit is concluded, adjustments, if any, are recorded in our consolidated financial statements in the period in which the audit is concluded. Additionally, in future periods, changes in facts, circumstances and new information may require us to adjust the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in which the changes occur. As of December 31, 2024 and 2025, we did not have any significant unrecognized uncertain tax positions.