PDD Holdings Q3 Earnings Beat Estimates, Revenues Increase Y/Y

Core Insights - PDD Holdings Inc. reported Q3 2025 non-GAAP earnings of $2.96 per ADS, exceeding the Zacks Consensus Estimate by 33.94% and reflecting an 11.7% year-over-year increase [1] - Total revenues reached $15.21 billion, a 7.4% year-over-year rise, although slightly missing the Zacks Consensus Estimate by 0.01% [2] - The company experienced growth in both online marketing services and transaction services, with respective revenue increases of 8% and 10% year-over-year [3][7] Revenue Breakdown - Online marketing services and other revenues accounted for 49.3% of total revenues, amounting to RMB 53.35 billion ($7.49 billion) [3] - Transaction services revenues made up 50.7% of total revenues, totaling RMB 54.93 billion ($7.72 billion) [3] Operating Expenses - Sales and marketing expenses decreased to RMB 30.32 billion ($4.26 billion) from RMB 30.48 billion year-over-year [4] - General and administrative expenses also saw a decline to RMB 1.76 billion ($246.6 million) from RMB 1.81 billion [4] - Research and development expenses increased to RMB 4.33 billion ($608.5 million), primarily due to higher staff-related costs and bandwidth/server expenses [5] Profitability Metrics - Non-GAAP operating profit was RMB 27.08 billion ($3.8 billion), down 1.2% year-over-year, with a margin contraction to 25% from 26.9% [5] Balance Sheet & Cash Flow - As of September 30, 2025, cash, cash equivalents, and short-term investments rose to RMB 423.8 billion ($59.5 billion) from RMB 387.1 billion [6] - Net cash generated from operating activities increased significantly to RMB 45.66 billion ($6.41 billion) from RMB 21.64 billion in the prior quarter [6] Market Position - PDD currently holds a Zacks Rank 3 (Hold), with other notable stocks in the sector, such as Macy's, Dollar General, and Stitch Fix, holding higher ranks [7]