Company Performance - PDD Holdings Inc. reported quarterly earnings of $1.56 per share, missing the Zacks Consensus Estimate of $2.49 per share, and down from $2.83 per share a year ago, representing an earnings surprise of -37.35% [1] - The company posted revenues of $13.18 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 6.93%, compared to $12.02 billion in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2] Stock Performance - PDD Holdings Inc. shares have increased by approximately 22.9% since the beginning of the year, while the S&P 500 has declined by -1.3% [3] - The current consensus EPS estimate for the upcoming quarter is $2.85 on revenues of $15.62 billion, and for the current fiscal year, it is $11.99 on revenues of $64.94 billion [7] Industry Outlook - The Internet - Commerce industry, to which PDD Holdings belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]

[PDD Holdings First Quarter 2025 Financial Results](index=1&type=section&id=PDD%20Holdings%20First%20Quarter%202025%20Financial%20Results) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management emphasized strategic ecosystem investments to support merchants and consumers, impacting short-term profitability but fostering long-term growth - The company made substantial investments in its platform ecosystem, weighing on short-term profitability but strengthening long-term platform health[3](index=3&type=chunk) - A slowdown in growth rate is anticipated as the business scales and faces external challenges[3](index=3&type=chunk) - Ecosystem investments were strategically increased to drive sales and reduce costs for SME merchants amid growing uncertainties[3](index=3&type=chunk) [Q1 2025 Financial Performance](index=1&type=section&id=Q1%202025%20Financial%20Performance) Q1 2025 revenue grew 10% to RMB 95.7 billion, but profitability declined due to increased costs and expenses [Key Financial Metrics (Consolidated)](index=1&type=section&id=Key%20Financial%20Metrics%20%28Consolidated%29) | Financial Metric | Q1 2025 (RMB Million) | Q1 2024 (RMB Million) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | 95,672.2 | 86,812.1 | +10% | | **Operating Profit** | 16,085.6 | 25,973.7 | -38% | | **Net Income** | 14,741.8 | 27,997.8 | -47% | | **Non-GAAP Operating Profit** | 18,259.7 | 28,552.2 | -36% | | **Non-GAAP Net Income** | 16,916.0 | 30,601.8 | -45% | [Revenue Breakdown](index=1&type=section&id=Revenue%20Breakdown) | Revenue Source | Q1 2025 (RMB Million) | Q1 2024 (RMB Million) | YoY Change | | :--- | :--- | :--- | :--- | | Online marketing services and others | 48,722.2 | 42,456.2 | +15% | | Transaction services | 46,950.0 | 44,355.8 | +6% | [Costs and Expenses](index=1&type=section&id=Costs%20and%20Expenses) - Total costs of revenues increased **25%** year-over-year to **RMB 40.9 billion**, primarily due to higher fulfillment and payment processing fees[6](index=6&type=chunk) - Total operating expenses rose **37%** year-over-year to **RMB 38.6 billion**, driven by a **43% increase in sales and marketing expenses** to **RMB 33.4 billion** for promotion and advertising[6](index=6&type=chunk)[8](index=8&type=chunk) - Research and development expenses increased to **RMB 3.6 billion** from **RMB 2.9 billion** in the prior year period[8](index=8&type=chunk) [Profitability and Earnings per Share (EPS)](index=2&type=section&id=Profitability%20and%20Earnings%20per%20Share%20%28EPS%29) | EPS Metric | Q1 2025 (US$) | Q1 2024 (RMB) | | :--- | :--- | :--- | | **Diluted Earnings per ADS (GAAP)** | 1.37 | 18.96 | | **Non-GAAP Diluted Earnings per ADS** | 1.56 | 20.72 | [Financial Position and Cash Flow](index=2&type=section&id=Financial%20Position%20and%20Cash%20Flow) PDD Holdings maintained a robust financial position with strong assets and liquidity, despite decreased operating cash flow [Balance Sheet Summary](index=2&type=section&id=Balance%20Sheet%20Summary) - Cash, cash equivalents, and short-term investments totaled **RMB 364.5 billion** as of March 31, 2025, up from **RMB 331.6 billion** at December 31, 2024[12](index=12&type=chunk) - Total assets grew to **RMB 530.5 billion** from **RMB 505.0 billion** at the end of 2024[21](index=21&type=chunk) - Total liabilities were **RMB 200.8 billion**, and total shareholders' equity was **RMB 329.7 billion** as of March 31, 2025[24](index=24&type=chunk) [Cash Flow Summary](index=2&type=section&id=Cash%20Flow%20Summary) | Cash Flow Item (RMB Million) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash generated from operating activities | 15,516.9 | 21,067.2 | | Net cash used in investing activities | (6,384.0) | (28,290.1) | [Detailed Financial Statements](index=3&type=section&id=Detailed%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2025, details the company's financial position, including assets, equity, and liabilities - Detailed unaudited condensed consolidated balance sheets for March 31, 2025, and December 31, 2024, are provided[21](index=21&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The income statement for Q1 2025 presents detailed financial performance, including revenues, profit, and net income - Detailed unaudited condensed consolidated statements of income for the three months ended March 31, 2025, and March 31, 2024, are provided[26](index=26&type=chunk)[28](index=28&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statement for Q1 2025 details net cash from operating and investing activities and period-end cash - Detailed unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2025, and March 31, 2024, are provided[35](index=35&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=6&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles GAAP to non-GAAP financial measures, detailing adjustments for share-based compensation Reconciliation of GAAP to Non-GAAP Measures (RMB Million) | Reconciliation (RMB Million) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Operating profit (GAAP)** | 16,085.6 | 25,973.7 | | Add: Share-based compensation | 2,174.1 | 2,578.5 | | **Non-GAAP operating profit** | 18,259.7 | 28,552.2 | | **Net income (GAAP)** | 14,741.8 | 27,997.8 | | Add: Share-based compensation | 2,174.1 | 2,578.5 | | **Non-GAAP net income** | 16,916.0 | 30,601.8 |

PDD Holdings (PDD) Q1 2025 Earnings Call May 27, 2025 07:30 AM ET Company Participants None - ExecutiveLei Chen - Chairman and Co-Chief Executive OfficerKenneth Fong - Managing Director Conference Call Participants Alicia Yap - AnalystJoyce Ju - Analyst Operator Ladies and gentlemen, thank you for standing by, and welcome to PDD Holdings Inc. First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. There will be a presentation followed by a questio ...

Financial Data and Key Metrics Changes - In Q1 2025, total revenues increased by 10% year over year to RMB 95.7 billion, driven by growth in online marketing services and transaction services [23] - Total cost of revenues rose by 25% to RMB 40.9 billion, primarily due to increased fulfillment and payment processing fees [24] - GAAP operating profit decreased to RMB 16.1 billion from RMB 26 billion in the same quarter last year, while non-GAAP operating profit fell to RMB 18.3 billion from RMB 28.6 billion [26] - Net income attributable to ordinary shareholders was RMB 14.7 billion, down from RMB 28 billion in the same quarter last year [27] Business Line Data and Key Metrics Changes - Revenues from online marketing services were RMB 48.7 billion, up 15% year over year, while transaction services revenues were RMB 47 billion, up 6% [23] - Non-GAAP sales and marketing expenses increased by 44% to RMB 32.8 billion, reflecting increased promotional programs and marketing support for merchants [25] Market Data and Key Metrics Changes - The company noted intensified competition in the Chinese e-commerce sector, impacting merchant performance and profitability [10] - The external policy environment, including tariffs, has created significant pressure for merchants, affecting their ability to adapt [11] Company Strategy and Development Direction - The company is focusing on a high-quality development strategy, emphasizing ecosystem investments and merchant support programs, including a RMB 100 billion support initiative [8][17] - The strategy aims to enhance support for small and medium-sized merchants, driving broader supply chain upgrades and improving product offerings [18][46] - The company is committed to long-term intrinsic value over short-term financial results, prioritizing merchant and consumer needs [14][40] Management Comments on Operating Environment and Future Outlook - Management acknowledged that the slowdown in revenue growth and profit decline are due to external uncertainties and the mismatch between investment and return cycles [10][38] - The company expects continued challenges to profitability in the near term but remains focused on long-term investments in the ecosystem [40][41] Other Important Information - The company has launched initiatives to support agricultural products and enhance digital systems for local merchants, aiming to modernize the agriculture supply chain [19][20] - The company is enhancing consumer initiatives, including coupon programs and direct discounts, to stimulate demand and support merchants [21][48] Q&A Session Summary Question: What preparations has the platform made in response to macro policy changes and the decline in net profit margins? - Management emphasized proactive actions and increased support for merchants through the RMB 100 billion support program to help them navigate external uncertainties [34][36] Question: What is the long-term impact of the RMB 100 billion support program on financial performance? - Management believes that investments in the merchant ecosystem will lead to higher quality products and services, fostering long-term healthy development [46][49] Question: How does management view competition in the current market environment? - Management acknowledged the challenges faced by merchants due to competition and the need for the platform to support them to ensure collective success [56] Question: What updates can be provided on overall consumption momentum during the June promotion? - Management highlighted efforts to simplify mechanisms and provide real savings to consumers, enhancing the shopping experience during promotional events [60]

Financial Data and Key Metrics Changes - In Q1 2025, total revenues increased by 10% year over year to RMB 95.7 billion, driven by online marketing services and transaction services [23][28] - Total cost of revenues rose by 25% to RMB 40.9 billion, primarily due to increased fulfillment and payment processing fees [24] - GAAP operating profit decreased to RMB 16.1 billion from RMB 26 billion in the same quarter last year, while non-GAAP operating profit fell to RMB 18.3 billion from RMB 28.6 billion [27][28] - Net income attributable to ordinary shareholders was RMB 14.7 billion, down from RMB 28 billion in the same quarter last year [28] Business Line Data and Key Metrics Changes - Revenues from online marketing services were RMB 48.7 billion, up 15% year over year [23] - Revenues from transaction services increased to RMB 47 billion, a 6% rise from the previous year [23] - Non-GAAP sales and marketing expenses surged by 44% to RMB 32.8 billion, reflecting increased promotional efforts [26] Market Data and Key Metrics Changes - The e-commerce sector in China is experiencing intensified competition, impacting profit margins and growth rates [9][39] - The company is facing challenges in passing on policy incentives to consumers, putting merchants at a disadvantage compared to first-party businesses [10][50] Company Strategy and Development Direction - The company is focusing on a high-quality development strategy, emphasizing merchant support and ecosystem investments [7][8] - A new RMB 100 billion support program has been launched to enhance merchant support, particularly for small and medium-sized businesses [16][49] - The company aims to build a win-win ecosystem that benefits both merchants and consumers, prioritizing long-term intrinsic value over short-term financial results [12][42] Management Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by external policy changes and competition, emphasizing the need for increased support for merchants [36][38] - The company expects profitability to face challenges in the near term due to ongoing investments in the ecosystem [42] - Long-term growth is prioritized, with a focus on building a robust merchant ecosystem to ensure sustainable development [59] Other Important Information - The company has launched initiatives to support agricultural products and enhance supply chain transformation [19][20] - A digital system for agricultural product operations has been developed to modernize traditional supply chains [20] Q&A Session Summary Question: What preparations has the platform made in response to macro policy changes? - Management emphasized proactive actions and increased support for merchants through the RMB 100 billion support program to help them navigate external uncertainties [36][38] Question: What factors contributed to the decline in net profit margins this quarter? - The decline is attributed to a slowdown in revenue growth and increased ecosystem investments, leading to a mismatch between investment and return cycles [39][41] Question: How will the RMB 100 billion support program be delivered to merchants? - The program will extend support to more small and medium-sized merchants, enhancing operational efficiency and reducing costs [48][49] Question: How does the company respond to the National Subsidy Program? - The company has launched a dedicated page for the national subsidy program and is enhancing promotional efforts to provide additional savings to consumers [51]

Core Insights - Pinduoduo's Q1 2025 financial report shows significant underperformance, with total revenue of 95.7 billion yuan, a 10% year-on-year increase, but adjusted net profit of 16.9 billion yuan, down 45% from the previous year, falling short of market expectations by 11 billion yuan [1][2] Revenue Structure - Online marketing services and other revenues accounted for 48.7 billion yuan, up 15% year-on-year, while transaction service revenue was 47 billion yuan, up 6% year-on-year [1] - The growth rate of Pinduoduo's revenue is slowing, particularly in transaction service revenue, which has decreased from a 33% growth rate in the previous quarter [1][4] Cost and Profitability - Sales and marketing expenses surged to 33.4 billion yuan, a 43% increase from 23.4 billion yuan in the same quarter last year, contributing to a significant decline in profits [1][2] - Total operating expenses reached 38.6 billion yuan, a 37% increase, outpacing revenue growth [2] Strategic Initiatives - Pinduoduo has launched initiatives like the "100 Billion Support" plan to improve the business environment, which includes reducing store security deposits for various categories [4][5] - The company aims to explore further commission reduction measures to alleviate costs for merchants, focusing on small and medium-sized businesses [5] Regulatory Environment - Recent regulatory proposals from the market supervision authority may impact Pinduoduo's revenue, as they emphasize reducing fees for platform operators, particularly benefiting small merchants [5] Competitive Landscape - Pinduoduo is facing increased profit costs to compensate for competitive disadvantages, particularly in response to national subsidy policies [5] - The management has indicated a willingness to sacrifice short-term performance to support merchants through market fluctuations [5]

Core Viewpoint - Pinduoduo reported a revenue of 95.7 billion yuan for Q1 2025, reflecting a 10% year-on-year growth, but the growth rate has been slowing for several consecutive quarters [1] Group 1: Business Strategy - The company has increased its investment in high-quality development strategies, upgrading its "100 billion subsidy" initiatives to a "1 trillion support" program to enhance the e-commerce ecosystem [1] - Pinduoduo's management emphasizes the importance of supporting merchants during challenging market conditions, prioritizing their interests to ensure long-term platform health [1][2] Group 2: Merchant Support - The platform is exploring more commission reduction measures to lower costs for merchants, expanding support from top and mid-tier merchants to include small and medium-sized businesses [2] - The company aims to maximize the potential of small and medium-sized merchants, focusing on high-quality development and driving overall industry upgrades [2] Group 3: Consumer Initiatives - The "1 trillion support" initiative has led to various subsidy policies benefiting consumers, including a new "100 billion merchant feedback plan" and 100 billion yuan in consumer vouchers [2] - Pinduoduo is also exploring an innovative "platform direct subsidy" model to enhance consumer purchasing power while ensuring merchant rights, thereby stimulating demand and market competitiveness [2]

"过去这个季度，外部环境的变化给商家带来了新挑战。在这个关键时刻，我们发挥平台企业的社会效 能和责任担当，推出了'千亿扶持'惠商新战略，坚定护航商家穿越周期。"拼多多集团执行董事、联席 CEO赵佳臻表示，我们要求公司上下力出一孔，全面投入这一新战略，优先保证用户和商家的利益，努 力为商家提供更多确定性，助推产业平稳转型。 拼多多发布截至3月31日的2025年第一季度财报。受外部环境变化影响，以及高质量发展的持续投入， 拼多多本季度营收957亿元，同比增长10%，增速有所放缓。 ...

智通财经APP获悉，5月27日，拼多多(PDD.US)发布截至3月31日的2025年第一季度财报。受外部环境变化影响，以及高质量发展的持续 投入，拼多多本季度营收957亿元，同比增长10%，增速有所放缓。 今年以来，拼多多持续加码高质量发展战略，在"百亿减免"等惠商举措的基础上，重磅推出了"千亿扶持"新战略，真金白银反哺供需两 侧，继续为商家降本减佣，加快推动产业新质转型，引领电商行业进入"全面惠商"的新阶段。 赵佳臻表示，一方面，平台将继续探索更多的降佣举措，持续为商家降本减负，创造更多的成本空间、经营空间和创新空间；另一方 面，平台对商家的帮扶范畴将从头部腰部拓展到中小商家，要将功夫着重花在中小商家身上，敢于啃高质量发展中的硬骨头，最大化释 放中小商家的潜力，推动产业带实现更大规模、更高质量的整体升级。 "过去这个季度，外部环境的变化给商家带来了新挑战。在这个关键时刻，我们发挥平台企业的社会效能和责任担当，推出了'千亿扶 持'惠商新战略，坚定护航商家穿越周期。"拼多多集团执行董事、联席CEO赵佳臻表示，我们要求公司上下力出一孔，全面投入这一新 战略，优先保证用户和商家的利益，努力为商家提供更多确定性，助推 ...

Core Viewpoint - PDD Holdings is focusing on substantial investments in its platform ecosystem to support merchants and consumers, which has impacted short-term profitability but aims to strengthen long-term growth and sustainability [3]. Financial Performance - Total revenues for Q1 2025 were RMB 95,672.2 million (US$ 13,184.0 million), representing a 10% increase from RMB 86,812.1 million in Q1 2024 [5]. - Revenues from online marketing services increased by 15% to RMB 48,722.2 million (US$ 6,714.1 million) compared to RMB 42,456.2 million in Q1 2024 [8]. - Revenues from transaction services rose by 6% to RMB 46,950.0 million (US$ 6,469.9 million) from RMB 44,355.8 million in the same quarter of 2024 [8]. Cost and Profitability - Total costs of revenues increased by 25% to RMB 40,947.1 million (US$ 5,642.7 million) from RMB 32,694.7 million in Q1 2024, primarily due to higher fulfillment and payment processing fees [6]. - Operating profit decreased by 38% to RMB 16,085.6 million (US$ 2,216.7 million) from RMB 25,973.7 million in Q1 2024 [10]. - Net income attributable to ordinary shareholders fell by 47% to RMB 14,741.8 million (US$ 2,031.5 million) from RMB 27,997.8 million in the same quarter of 2024 [11]. Operating Expenses - Total operating expenses rose by 37% to RMB 38,639.5 million (US$ 5,324.7 million) from RMB 28,143.7 million in Q1 2024, mainly due to increased sales and marketing expenses [9]. - Sales and marketing expenses increased by 43% to RMB 33,402.7 million (US$ 4,603.0 million) from RMB 23,410.7 million in Q1 2024 [16]. Cash Flow and Assets - Net cash generated from operating activities was RMB 15,516.9 million (US$ 2,138.3 million), down from RMB 21,067.2 million in Q1 2024 [12]. - As of March 31, 2025, cash, cash equivalents, and short-term investments totaled RMB 364.5 billion (US$ 50.2 billion), an increase from RMB 331.6 billion as of December 31, 2024 [13]. Shareholder Metrics - Basic earnings per ADS were RMB 10.59 (US$ 1.46) and diluted earnings per ADS were RMB 9.94 (US$ 1.37), compared to RMB 20.33 and RMB 18.96 in Q1 2024 [12]. - Non-GAAP diluted earnings per ADS were RMB 11.41 (US$ 1.56), down from RMB 20.72 in the same quarter of 2024 [31].