- Revenue: RMB95.7 billion, a 10% increase year over year.
- Online Marketing Services Revenue: RMB48.7 billion, up 15% from the same quarter of 2024.
- Transaction Services Revenue: RMB47 billion, up 6% from the same quarter last year.
- Total Cost of Revenues: RMB40.9 billion, a 25% increase from Q1 2024.
- GAAP Operating Expenses: RMB38.6 billion, a 37% increase from the same quarter of 2024.
- Non-GAAP Operating Expenses: RMB36.5 billion, up from RMB25.6 billion in Q1 2024.
- Non-GAAP Sales and Marketing Expenses: RMB32.8 billion, up 44% year over year.
- Non-GAAP Operating Profit: RMB18.3 billion, down from RMB28.6 billion in the same quarter last year.
- Non-GAAP Operating Profit Margin: 19%, down from 33% for the same quarter last year.
- Net Income Attributable to Ordinary Shareholders: RMB14.7 billion, compared to RMB28 billion in the same quarter last year.
- Basic Earnings per ADS: RMB10.59, compared to RMB20.33 in the same quarter of 2024.
- Diluted Earnings per ADS: RMB9.94, versus RMB18.96 in the same quarter of 2024.
- Non-GAAP Net Income Attributable to Ordinary Shareholders: RMB16.9 billion, compared to RMB30.6 billion in the same quarter last year.
- Non-GAAP Diluted Earnings per ADS: RMB11.41, versus RMB20.72 in the same quarter of 2024.
- Net Cash Generated from Operating Activities: RMB15.5 billion, compared with RMB21.1 billion in the same quarter last year.
- Cash, Cash Equivalents, and Short-term Investments: RMB364.5 billion as of March 31, 2025.
Release Date: May 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- PDD Holdings Inc (PDD, Financial) has launched a substantial RMB100 billion support program to assist merchants, aiming to lower fees and drive sales.
- The company reported a 10% year-over-year increase in total revenues to RMB95.7 billion, driven by growth in online marketing and transaction services.
- PDD Holdings Inc (PDD) is committed to long-term investments in its platform ecosystem, focusing on high-quality development strategies.
- The company has expanded its support to small and medium-sized merchants, enhancing their operational efficiency and reducing costs.
- PDD Holdings Inc (PDD) has introduced consumer-focused initiatives, such as the RMB10 billion merchant giveback program and direct discount programs, to stimulate demand and support merchants.
Negative Points
- The company's profit margins have significantly declined, with a notable drop in net income attributable to ordinary shareholders compared to the previous year.
- PDD Holdings Inc (PDD) faces intensified competition in the Chinese e-commerce sector, particularly from first-party online retailers.
- The company's third-party marketplace model has inherent limitations in benefiting from certain policy incentives, affecting price competitiveness.
- External policy changes, such as tariffs, have created significant pressure on merchants, impacting their ability to adapt quickly.
- The company's substantial investments in merchant support initiatives have led to a mismatch between business investment and return cycles, weighing on short-term profitability.
Q & A Highlights
Q: How is PDD Holdings responding to macro policy changes and external pressures on merchants?
A: Lei Chen, Chairman and Co-CEO, explained that PDD Holdings is taking proactive actions to support merchants amid macro policy changes and external pressures. The company has launched the RMB100 billion support program to stabilize sales and lower costs for small and medium-sized merchants, helping them manage risks and pursue sustained growth. PDD is also exploring new business models and expanding into new product categories to build a robust platform ecosystem.
Q: What factors contributed to the significant decline in net profit margins this quarter, and what is the outlook for the future?
A: Jun Liu, VP of Finance, noted that the decline in net profit margins is due to a slowdown in revenue growth and increased ecosystem investments. The mismatch between business investment and return cycles has impacted profitability. The company is prioritizing long-term intrinsic value over short-term financial performance and will continue to support merchants and consumers through uncertain times, which may weigh on profitability in the near term.
Q: How will the RMB100 billion support program be delivered to merchants, and what is its long-term impact?
A: Jiazhen Zhao, Co-CEO, stated that the RMB100 billion support program will extend support to more small and medium-sized merchants, enhancing operational efficiency and reducing costs. The program includes initiatives like fee reductions and direct discount programs, aiming to foster a healthier operating environment and drive high-quality supply chain upgrades. The long-term impact is expected to be a more robust merchant ecosystem and sustainable growth.
Q: How does PDD Holdings view competition in the current e-commerce market, and what are the strengths and limitations of its third-party platform model?
A: Lei Chen highlighted that PDD's third-party platform model faces challenges due to policy incentives favoring first-party retailers. However, the company is committed to supporting merchants through investments in technology and operations, enabling them to innovate and expand market reach. The RMB100 billion support program aims to strengthen the merchant ecosystem, which is fundamental to delivering high-quality products and services to consumers.
Q: Can you provide an update on the overall consumption momentum and platform performance during the June promotion?
A: Jiazhen Zhao shared that the June 16 shopping festival focuses on providing real savings and high-quality products to consumers. The campaign is integrated with the RMB10 billion program to drive sales for merchants. New services like price drop protection have been introduced to enhance the shopping experience, aiming to build consumer trust and drive sustainable sales growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
