PDD(US:PDD)2025-05-27 12:32PDD Holdings First Quarter 2025 Financial Results Management Commentary 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 health3 - A slowdown in growth rate is anticipated as the business scales and faces external challenges3 - Ecosystem investments were strategically increased to drive sales and reduce costs for SME merchants amid growing uncertainties3 Q1 2025 Financial Performance Q1 2025 revenue grew 10% to RMB 95.7 billion, but profitability declined due to increased costs and expenses Key Financial Metrics (Consolidated) | 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 | 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 - Total costs of revenues increased 25% year-over-year to RMB 40.9 billion, primarily due to higher fulfillment and payment processing fees6 - 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 advertising68 - Research and development expenses increased to RMB 3.6 billion from RMB 2.9 billion in the prior year period8 Profitability and Earnings per Share (EPS) | 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 PDD Holdings maintained a robust financial position with strong assets and liquidity, despite decreased operating cash flow Balance Sheet Summary - 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, 202412 - Total assets grew to RMB 530.5 billion from RMB 505.0 billion at the end of 202421 - Total liabilities were RMB 200.8 billion, and total shareholders' equity was RMB 329.7 billion as of March 31, 202524 Cash Flow Summary | 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 Condensed Consolidated Balance Sheets 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 provided212324 Condensed Consolidated Statements of Income 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 provided2628 Condensed Consolidated Statements of Cash Flows 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 provided35 Reconciliation of GAAP to Non-GAAP Measures 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 |