DUBLIN and SHANGHAI, Nov. 21, 2024 (GLOBE NEWSWIRE) -- PDD Holdings Inc. (“PDD Holdings” or the “Company”) (NASDAQ: PDD), today announced its unaudited financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Highlights

  • Total revenues in the quarter were RMB99,354.4 million (US$ 1 14,157.9 million), an increase of 44% from RMB68,840.4 million in the same quarter of 2023.
  • Operating profit in the quarter was RMB24,292.5 million (US$3,461.6 million), an increase of 46% from RMB16,656.0 million in the same quarter of 2023. Non-GAAP 2 operating profit in the quarter was RMB26,770.5 million (US$3,814.8 million), an increase of 48% from RMB18,125.8 million in the same quarter of 2023.
  • Net income attributable to ordinary shareholders in the quarter was RMB24,980.7 million (US$3,559.7 million), an increase of 61% from RMB15,537.1 million in the same quarter of 2023. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB27,458.7 million (US$3,912.8 million), an increase of 61% from RMB17,027.1 million in the same quarter of 2023.

“Over the past quarter, our focus remained on driving the high-quality development of the platforms,” said Mr. Lei Chen, Chairman and Co-Chief Executive Officer of PDD Holdings. “We are committed to investing consistently and patiently in our platform ecosystem to deliver impactful results over the long run.”

“In the third quarter, we stepped up the investments in our platform ecosystem through merchant support policies and trust and safety updates,” said Mr. Jiazhen Zhao, Executive Director and Co-Chief Executive Officer of PDD Holdings. “High-quality merchants are encouraged to further strengthen their product and service offerings, thereby fostering a virtuous cycle.”

“Our topline growth further moderated quarter-on-quarter amid intensified competition and ongoing external challenges,” said Ms. Jun Liu, VP of Finance of PDD Holdings. “In our pursuit of high-quality development, we will continue to invest resolutely in building a healthy and sustainable ecosystem, which will be reflected in our results.”

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1 This announcement contains translations of certain Renminbi (“RMB”) amounts into U.S. dollars (“US$”) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB7.0176 to US$1.00, the noon buying rate in effect on September 30, 2024 as set forth in the H.10 Statistical Release of the Federal Reserve Board.
2 The Company’s non-GAAP financial measures exclude share-based compensation expenses, fair value change of certain investments, and interest expenses related to the convertible bonds’ amortization to face value. See “Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measures” set forth at the end of this press release.

Third Quarter 2024 Unaudited Financial Results

Total revenues were RMB99,354.4 million (US$14,157.9 million), an increase of 44% from RMB68,840.4 million in the same quarter of 2023. The increase was primarily due to the increase in revenues from online marketing services and transaction services.

  • Revenues from online marketing services and others were RMB49,351.0 million (US$7,032.5 million), an increase of 24% from RMB39,687.7 million in the same quarter of 2023.
  • Revenues from transaction services were RMB50,003.4 million (US$7,125.4 million), an increase of 72% from RMB29,152.7 million in the same quarter of 2023.

Total costs of revenues were RMB39,709.2 million (US$5,658.5 million), an increase of 48% from RMB26,830.2 million in the same quarter of 2023. The increase mainly came from the increased fulfilment fees and payment processing fees.

Total operating expenses were RMB35,352.7 million (US$5,037.7 million), an increase of 39% from RMB25,354.1 million in the same quarter of 2023. The increase was primarily due to the increase in sales and marketing expenses.

  • Sales and marketing expenses were RMB30,483.8 million (US$4,343.9 million), an increase of 40% from RMB21,748.5 million in the same quarter of 2023, mainly due to the increased spending in promotion and advertising activities.
  • General and administrative expenses were RMB1,805.6 million (US$257.3 million), an increase of 138% from RMB758.3 million in the same quarter of 2023, primarily due to the increase in staff related costs.
  • Research and development expenses were RMB3,063.4 million (US$436.5 million), compared with RMB2,847.3 million in the same quarter of 2023.

Operating profit in the quarter was RMB24,292.5 million (US$3,461.6 million), an increase of 46% from RMB16,656.0 million in the same quarter of 2023. Non-GAAP operating profit in the quarter was RMB26,770.5 million (US$3,814.8 million), an increase of 48% from RMB18,125.8 million in the same quarter of 2023.

Net income attributable to ordinary shareholders in the quarter was RMB24,980.7 million (US$3,559.7 million), an increase of 61% from RMB15,537.1 million in the same quarter of 2023. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB27,458.7 million (US$3,912.8 million), an increase of 61% from RMB17,027.1 million in the same quarter of 2023.

Basic earnings per ADS was RMB18.02 (US$2.57) and diluted earnings per ADS was RMB16.91 (US$2.41), compared with basic earnings per ADS of RMB11.38 and diluted earnings per ADS of RMB10.60 in the same quarter of 2023. Non-GAAP diluted earnings per ADS was RMB18.59 (US$2.65), compared with RMB11.61 in the same quarter of 2023.

Net cash generated from operating activities was RMB27,522.3 million (US$3,921.9 million), compared with RMB32,537.9 million in the same quarter of 2023.

Cash, cash equivalents and short-term investments were RMB308.5 billion (US$44.0 billion) as of September 30, 2024, compared with RMB217.2 billion as of December 31, 2023.

Other non-current assets were RMB74.0 billion (US$10.5 billion) as of September 30, 2024, compared with RMB48.0 billion as of December 31, 2023, which mainly included time deposits, held-to-maturity debt securities, and available-for-sale debt securities.

Conference Call

The Company’s management will hold an earnings conference call at 7:30 AM ET on November 21, 2024 (12:30 PM IST and 8:30 PM HKT on the same day).

The conference call will be webcast live at https://investor.pddholdings.com/investor-events . The webcast will be available for replay at the same website following the conclusion of the call.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP operating profit, non-GAAP net income attributable to ordinary shareholders, non-GAAP diluted earnings per ordinary share, and non-GAAP diluted earnings per ADS, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s non-GAAP financial measures exclude the impact of share-based compensation expenses, fair value change of certain investments, and interest expenses related to the convertible bonds’ amortization to face value.

The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, fair value change of certain investments, and interest expenses related to the convertible bonds’ amortization to face value, which are non-cash charges. The Company also believes that the non-GAAP financial measures may provide further information about the Company’s results of operations, and enhance the overall understanding of the Company’s past performance and future prospects.

The Company’s non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. These non-GAAP financial measures do not reflect all items of income and expenses that affect the Company’s operations and do not represent the residual cash flow available for discretionary expenditures. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. The Company encourages you to review the Company’s financial information in its entirety and not rely on a single financial measure.

For more information on the non-GAAP financial measures, please see the table captioned “Reconciliation of Non-GAAP Measures to the Most Directly Comparable GAAP Measures” set forth at the end of this press release.

Safe Harbor Statements

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the business outlook and quotations from management in this announcement, as well as the Company’s strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company’s growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in the e-commerce markets globally and in the countries or regions where the Company has operations; changes in its revenues and certain cost or expense items; the expected growth of e-commerce markets globally and in the countries or regions where the Company has operations; developments in the relevant governmental policies and regulations relating to the Company’s industry; and general economic and business conditions globally and in the countries or regions where the Company has operations; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

About PDD Holdings

PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses. PDD Holdings aims to bring more businesses and people into the digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities.

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
As of
December
31, 2023 		September 30, 2024
RMB RMB US$
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents 59,794,469 65,295,431 9,304,524
Restricted cash 61,985,436 60,393,064 8,605,943
Receivables from online payment platforms 3,914,117 4,633,683 660,295
Short-term investments 157,415,365 243,166,321 34,650,924
Amounts due from related parties 7,428,070 9,288,981 1,323,669
Prepayments and other current assets 4,213,015 4,053,807 577,662
Total current assets 294,750,472 386,831,287 55,123,017
Non-current assets
Property, equipment and software, net 979,597 875,513 124,760
Intangible assets 21,148 20,088 2,863
Right-of-use assets 4,104,889 4,820,181 686,870
Deferred tax assets 270,738 272,699 38,859
Other non-current assets 47,951,276 73,974,101 10,541,225
Total non-current assets 53,327,648 79,962,582 11,394,577
Total Assets 348,078,120 466,793,869 66,517,594


PDD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
As of
December
31, 2023 		September 30, 2024
RMB RMB US$
(Unaudited) (Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Amounts due to related parties 1,238,776 1,075,858 153,309
Customer advances and deferred revenues 2,144,610 2,951,591 420,598
Payable to merchants 74,997,252 82,780,215 11,796,086
Accrued expenses and other liabilities 55,351,399 74,404,296 10,602,527
Merchant deposits 16,878,746 16,769,864 2,389,687
Convertible bonds, current portion 648,570 - -
Lease liabilities 1,641,548 2,015,098 287,149
Total current liabilities 152,900,901 179,996,922 25,649,356
Non-current liabilities
Convertible bonds 5,231,523 5,175,904 737,560
Lease liabilities 2,644,260 3,045,829 434,027
Deferred tax liabilities 59,829 70,294 10,017
Total non-current liabilities 7,935,612 8,292,027 1,181,604
Total Liabilities 160,836,513 188,288,949 26,830,960
Shareholders’ equity
Ordinary shares 177 179 26
Additional paid-in capital 107,293,091 115,424,865 16,447,912
Statutory reserves 105,982 105,982 15,102
Accumulated other comprehensive income 4,723,760 2,867,422 408,604
Retained earnings 75,118,597 160,106,472 22,814,990
Total Shareholders’ Equity 187,241,607 278,504,920 39,686,634
Total Liabilities and Shareholders’ Equity 348,078,120 466,793,869 66,517,594


PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands of RMB and US$)
For the three months ended September 30, For the nine months ended September 30,
2023 2024
2023 2024
RMB RMB US$ RMB RMB US$
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues 68,840,371 99,354,401 14,157,889 158,758,169 283,225,991 40,359,381
Costs of revenues (26,830,233 ) (39,709,214 ) (5,658,518 ) (56,645,305 ) (106,101,998 ) (15,119,414 )
Sales and marketing expenses (21,748,449 ) (30,483,800 ) (4,343,907 ) (55,550,346 ) (79,943,592 ) (11,391,871 )
General and administrative expenses (758,345 ) (1,805,576 ) (257,293 ) (2,170,780 ) (5,467,571 ) (779,123 )
Research and development expenses (2,847,323 ) (3,063,353 ) (436,524 ) (8,087,944 ) (8,882,183 ) (1,265,701 )
Total operating expenses (25,354,117 ) (35,352,729 ) (5,037,724 ) (65,809,070 ) (94,293,346 ) (13,436,695 )
Operating profit 16,656,021 24,292,458 3,461,647 36,303,794 82,830,647 11,803,272
Interest and investment income, net 2,127,356 5,416,080 771,785 5,878,696 15,320,261 2,183,120
Interest expenses (12,208 ) - - (35,832 ) - -
Foreign exchange gain/(loss) 94,860 (547,343 ) (77,996 ) 234,540 (272,660 ) (38,854 )
Other income, net 290,384 18,606 2,651 2,624,375 2,393,112 341,016
Profit before income tax and share of results of equity investees 19,156,413 29,179,801 4,158,087 45,005,573 100,271,360 14,288,554
Share of results of equity investees (105,811 ) 2,513 358 10,359 (99,500 ) (14,179 )
Income tax expenses (3,513,480 ) (4,201,620 ) (598,726 ) (8,269,697 ) (15,183,985 ) (2,163,701 )
Net income 15,537,122 24,980,694 3,559,719 36,746,235 84,987,875 12,110,674


PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands of RMB and US$, except for per share data)
For the three months ended September 30, For the nine months ended September 30,
2023 2024 2023 2024
RMB RMB US$ RMB RMB US$
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net income 15,537,122 24,980,694 3,559,719 36,746,235 84,987,875 12,110,674
Net income attributable to ordinary shareholders 15,537,122 24,980,694 3,559,719 36,746,235 84,987,875 12,110,674

Earnings per ordinary share:
-Basic 2.84 4.51 0.64 6.81 15.37 2.19
-Diluted 2.65 4.23 0.60 6.28 14.37 2.05
Earnings per ADS (4 ordinary shares equals 1 ADS):
-Basic 11.38 18.02 2.57 27.24 61.48 8.76
-Diluted 10.60 16.91 2.41 25.13 57.49 8.19
Weighted-average number of outstanding ordinary shares (in thousands):
-Basic 5,462,542 5,543,633 5,543,633 5,395,211 5,529,090 5,529,090
-Diluted 5,865,102 5,909,793 5,909,793 5,853,748 5,913,666 5,913,666


PDD HOLDINGS INC.
NOTES TO FINANCIAL INFORMATION
(Amounts in thousands of RMB and US$)
For the three months ended September 30, For the nine months ended September 30,
2023 2024 2023 2024
RMB RMB US$ RMB RMB US$
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
- Online marketing services and others 39,687,678 49,351,022 7,032,465 104,864,935 140,923,131 20,081,386
- Transaction services 29,152,693 50,003,379 7,125,424 53,893,234 142,302,860 20,277,995
Total 68,840,371 99,354,401 14,157,889 158,758,169 283,225,991 40,359,381


PDD HOLDINGS INC.
NOTES TO FINANCIAL INFORMATION
(Amounts in thousands of RMB and US$)
For the three months ended September 30, For the nine months ended September 30,
2023 2024 2023 2024
RMB RMB US$ RMB RMB US$
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Share-based compensation expenses included in:
Costs of revenues 20,422 44,725 6,373 86,066 99,945 14,242
Sales and marketing expenses 464,950 650,106 92,639 1,943,049 1,960,478 279,366
General and administrative expenses 355,053 1,158,615 165,102 1,058,914 3,655,344 520,882
Research and development expenses 629,394 624,559 88,999 1,805,821 1,763,542 251,303
Total 1,469,819 2,478,005 353,113 4,893,850 7,479,309 1,065,793


PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of RMB and US$)
For the three months ended September 30, For the nine months ended September 30,
2023 2024
2023 2024
RMB RMB US$ RMB RMB US$
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net cash generated from operating activities 32,537,857 27,522,313 3,921,898 57,271,860 92,382,132 13,164,348
Net cash used in investing activities (4,820,500 ) (16,898,558 ) (2,408,025 ) (38,960,607 ) (87,810,779 ) (12,512,936 )
Net cash generated from financing activities 385 132 19 7,671 890 127
Effect of exchange rate changes on cash, cash equivalents and restricted cash 201,058 (1,052,321 ) (149,955 ) 733,918 (663,653 ) (94,570 )
Increase in cash, cash equivalents and restricted cash 27,918,800 9,571,566 1,363,937 19,052,842 3,908,590 556,969
Cash, cash equivalents and restricted cash at beginning of period 83,434,459 116,116,929 16,546,530 92,300,417 121,779,905 17,353,498
Cash, cash equivalents and restricted cash at end of period 111,353,259 125,688,495 17,910,467 111,353,259 125,688,495 17,910,467


PDD HOLDINGS INC.
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES
(Amounts in thousands of RMB and US$, except for per share data)
For the three months ended September 30, For the nine months ended September 30,
2023 2024 2023 2024
RMB RMB US$ RMB RMB US$
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating profit 16,656,021 24,292,458 3,461,647 36,303,794 82,830,647 11,803,272
Add: Share-based compensation expenses 1,469,819 2,478,005 353,113 4,893,850 7,479,309 1,065,793
Non-GAAP operating profit 18,125,840 26,770,463 3,814,760 41,197,644 90,309,956 12,869,065
Net income attributable to ordinary shareholders 15,537,122 24,980,694 3,559,719 36,746,235 84,987,875 12,110,674
Add: Share-based compensation expenses 1,469,819 2,478,005 353,113 4,893,850 7,479,309 1,065,793
Add: Interest expenses related to convertible bonds’ amortization to face value 12,208 - - 35,832 - -
Add: Loss from fair value change of certain investments 7,935 2 - 746,915 25,456 3,627
Non-GAAP net income attributable to ordinary shareholders 17,027,084 27,458,701 3,912,832 42,422,832 92,492,640 13,180,094
Non-GAAP diluted weighted-average number of ordinary shares outstanding (in thousands) 5,865,102 5,909,793 5,909,793 5,853,748 5,913,666 5,913,666
Diluted earnings per ordinary share 2.65 4.23 0.60 6.28 14.37 2.05
Add: Non-GAAP adjustments to earnings per ordinary share 0.25 0.42 0.06 0.97 1.27 0.18
Non-GAAP diluted earnings per ordinary share 2.90 4.65 0.66 7.25 15.64 2.23
Non-GAAP diluted earnings per ADS 11.61 18.59 2.65 28.99 62.56 8.92