PDD Holdings Announces Second Quarter 2024 Unaudited Financial Results

DUBLIN and SHANGHAI, Aug. 26, 2024 (GLOBE NEWSWIRE) -- PDD Holdings Inc. ("PDD Holdings" or the "Company") PDD, today announced its unaudited financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights

  • Total revenues in the quarter were RMB97,059.5 million (US$113,355.8 million), an increase of 86% from RMB52,280.7 million in the same quarter of 2023.

  • Operating profit in the quarter was RMB32,564.5 million (US$4,481.0 million), an increase of 156% from RMB12,718.8 million in the same quarter of 2023. Non-GAAP2 operating profit in the quarter was RMB34,987.3 million (US$4,814.4 million), an increase of 139% from RMB14,609.4 million in the same quarter of 2023.

  • Net income attributable to ordinary shareholders in the quarter was RMB32,009.4 million (US$4,404.6 million), an increase of 144% from RMB13,108.1 million in the same quarter of 2023. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB34,432.1 million (US$4,738.0 million), an increase of 125% from RMB15,269.4 million in the same quarter of 2023.

"While encouraged by the solid progress we made in the past few quarters, we see many challenges ahead," said Mr. Lei Chen, Chairman and Co-Chief Executive Officer of PDD Holdings. "We are committed to transitioning toward high-quality development and fostering sustainable ecosystem. We will invest heavily in the platform's trust and safety, support high-quality merchants, and relentlessly improve the merchant ecosystem. We are prepared to accept short-term sacrifices and potential decline in profitability."

"We are committed to nurturing a healthy and sustainable ecosystem where high-quality merchants thrive," said Mr. Jiazhen Zhao, Executive Director and Co-Chief Executive Officer of PDD Holdings. "We will vigorously support high-quality merchants while firmly tackling low-quality ones, continuously building a healthy and sustainable ecosystem."

"In the past quarter, our revenue growth rate slowed quarter-on-quarter. Looking ahead, revenue growth will inevitably face pressure due to intensified competition and external challenges," said Ms. Jun Liu, VP of Finance of PDD Holdings. "Profitability will also likely to be impacted as we continue to invest resolutely."

_________

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 RMB7.2672 to US$1.00, the noon buying rate in effect on June 28, 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.

Second Quarter 2024 Unaudited Financial Results

Total revenues were RMB97,059.5 million (US$13,355.8 million), an increase of 86% from RMB52,280.7 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 RMB49,115.9 million (US$6,758.6 million), an increase of 29% from RMB37,932.8 million in the same quarter of 2023.
  • Revenues from transaction services were RMB47,943.7 million (US$6,597.3 million), an increase of 234% from RMB14,347.9 million in the same quarter of 2023.

Total costs of revenues were RMB33,698.1 million (US$4,637.0 million), an increase of 80% from RMB18,689.8 million in the same quarter of 2023. The increase mainly came from the increased fulfilment fees and payment processing fees.

Total operating expenses were RMB30,796.9 million (US$4,237.8 million), an increase of 48% from RMB20,872.2 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 RMB26,049.1 million (US$3,584.5 million), an increase of 48% from RMB17,542.2 million in the same quarter of 2023, mainly due to the increased spending in promotion and advertising activities.

  • General and administrative expenses were RMB1,838.6 million (US$253.0 million), an increase of 208% from RMB596.0 million in the same quarter of 2023, primarily due to the increase in staff related costs.

  • Research and development expenses were RMB2,909.2 million (US$400.3 million), compared with RMB2,734.0 million in the same quarter of 2023.

Operating profit in the quarter was RMB32,564.5 million (US$4,481.0 million), an increase of 156% from RMB12,718.8 million in the same quarter of 2023. Non-GAAP operating profit in the quarter was RMB34,987.3 million (US$4,814.4 million), an increase of 139% from RMB14,609.4 million in the same quarter of 2023.

Net income attributable to ordinary shareholders in the quarter was RMB32,009.4 million (US$4,404.6 million), an increase of 144% from RMB13,108.1 million in the same quarter of 2023. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB34,432.1 million (US$4,738.0 million), an increase of 125% from RMB15,269.4 million in the same quarter of 2023.

Basic earnings per ADS was RMB23.14 (US$3.18) and diluted earnings per ADS was RMB21.61 (US$2.97), compared with basic earnings per ADS of RMB9.64 and diluted earnings per ADS of RMB9.00 in the same quarter of 2023. Non-GAAP diluted earnings per ADS was RMB23.24 (US$3.20), compared with RMB10.47 in the same quarter of 2023.

Net cash generated from operating activities was RMB43,792.6 million (US$6,026.1 million), compared with RMB23,396.0 million in the same quarter of 2023, mainly due to the increase in net income.

Cash, cash equivalents and short-term investments were RMB284.9 billion (US$39.2 billion) as of June 30, 2024, compared with RMB217.2 billion as of December 31, 2023.

Other non-current assets were RMB67.8 billion (US$9.3 billion) as of June 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 August 26, 2024 (12:30 PM IST and 7:30 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
 June 30, 2024
  RMB RMB US$
    (Unaudited) (Unaudited)
ASSETS      
Current assets      
Cash and cash equivalents 59,794,469 56,756,329 7,809,931
Restricted cash 61,985,436 59,360,600 8,168,290
Receivables from online payment platforms 3,914,117 5,491,131 755,605
Short-term investments 157,415,365 228,170,850 31,397,354
Amounts due from related parties 7,428,070 5,989,411 824,170
Prepayments and other current assets 4,213,015 3,957,931 544,629
Total current assets 294,750,472 359,726,252 49,499,979
       
Non-current assets      
Property, equipment and software, net 979,597 863,494 118,821
Intangible assets 21,148 21,056 2,897
Right-of-use assets 4,104,889 4,237,670 583,123
Deferred tax assets 270,738 76,625 10,544
Other non-current assets 47,951,276 67,819,245 9,332,239
Total non-current assets 53,327,648 73,018,090 10,047,624
       
Total Assets 348,078,120 432,744,342 59,547,603



 
PDD HOLDINGS INC.

 CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$"))
 
  As of
  December

31, 2023
 June 30, 2024
  RMB RMB US$
    (Unaudited) (Unaudited)
     
LIABILITIES AND SHAREHOLDERS' EQUITY   
Current liabilities      
Amounts due to related parties 1,238,776 1,152,007 158,521
Customer advances and deferred revenues 2,144,610 2,413,577 332,119
Payable to merchants 74,997,252 78,707,764 10,830,549
Accrued expenses and other liabilities 55,351,399 68,735,001 9,458,252
Merchant deposits 16,878,746 17,958,628 2,471,189
Convertible bonds, current portion 648,570 249 34
Lease liabilities 1,641,548 1,865,878 256,753
Total current liabilities 152,900,901 170,833,104 23,507,417
       
Non-current liabilities      
Convertible bonds 5,231,523 5,264,097 724,364
Lease liabilities 2,644,260 2,634,862 362,569
Deferred tax liabilities 59,829 34,061 4,687
Total non-current liabilities 7,935,612 7,933,020 1,091,620
       
Total Liabilities 160,836,513 178,766,124 24,599,037
       
       
Shareholders' equity      
Ordinary shares 177 179 25
Additional paid-in capital 107,293,091 112,946,397 15,541,941
Statutory reserves 105,982 105,982 14,584
Accumulated other comprehensive income 4,723,760 5,799,882 798,090
Retained earnings 75,118,597 135,125,778 18,593,926
Total Shareholders' Equity 187,241,607 253,978,218 34,948,566
       
Total Liabilities and Shareholders' Equity 348,078,120 432,744,342 59,547,603
       



PDD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME 

 (Amounts in thousands of RMB and US$)
 
  For the three months ended June 30, For the six months ended June 30,
  2023  2024  2023  2024 
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues 52,280,748  97,059,531  13,355,836  89,917,798  183,871,590  25,301,573 
Costs of revenues (18,689,787) (33,698,098) (4,637,013) (29,815,072) (66,392,784) (9,135,951)
             
Sales and marketing expenses (17,542,209) (26,049,137) (3,584,481) (33,801,897) (49,459,792) (6,805,894)
General and administrative expenses (596,033) (1,838,550) (252,993) (1,412,435) (3,661,995) (503,907)
Research and development expenses (2,733,964) (2,909,210) (400,321) (5,240,621) (5,818,830) (800,698)
Total operating expenses (20,872,206) (30,796,897) (4,237,795) (40,454,953) (58,940,617) (8,110,499)
             
Operating profit 12,718,755  32,564,536  4,481,028  19,647,773  58,538,189  8,055,123 
             
Interest and investment income, net 2,287,741  4,855,592  668,152  3,751,340  9,904,181  1,362,861 
Interest expenses (11,937) -  -  (23,624) -  - 
Foreign exchange gain 155,717  60,165  8,279  139,680  274,683  37,798 
Other income, net 1,106,471  493,258  67,875  2,333,991  2,374,506  326,742 
             
Profit before income tax and share of results of equity investees 16,256,747  37,973,551  5,225,334  25,849,160  71,091,559  9,782,524 
Share of results of equity investees 9,781  (49,583) (6,823) 116,170  (102,013) (14,037)
Income tax expenses (3,158,442) (5,914,613) (813,878) (4,756,217) (10,982,365) (1,511,224)
Net income 13,108,086  32,009,355  4,404,633  21,209,113  60,007,181  8,257,263 



 
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 June 30, For the six months ended June 30,
  2023 2024 2023 2024
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
             
Net income 13,108,086 32,009,355 4,404,633 21,209,113 60,007,181 8,257,263
Net income attributable to ordinary shareholders 13,108,086 32,009,355 4,404,633 21,209,113 60,007,181 8,257,263
             


Earnings per ordinary share:
            
-Basic 2.41 5.78 0.80 3.96 10.87 1.50
-Diluted 2.25 5.40 0.74 3.63 10.14 1.40
             
Earnings per ADS (4 ordinary shares equals 1 ADS):            
-Basic 9.64 23.14 3.18 15.82 43.47 5.98
-Diluted 9.00 21.61 2.97 14.53 40.57 5.58
             
Weighted-average number of outstanding ordinary shares (in thousands):            
-Basic 5,438,394 5,533,796 5,533,796 5,360,987 5,521,739 5,521,739
-Diluted 5,833,348 5,925,659 5,925,659 5,845,398 5,916,670 5,916,670
             



PDD HOLDINGS INC.

NOTES TO FINANCIAL INFORMATION

(Amounts in thousands of RMB and US$)
 
  For the three months ended June 30, For the six months ended June 30,
  2023 2024 2023 2024
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues            
- Online marketing services and others 37,932,831 49,115,866 6,758,568 65,177,257 91,572,109 12,600,742
- Transaction services 14,347,917 47,943,665 6,597,268 24,740,541 92,299,481 12,700,831
Total 52,280,748 97,059,531 13,355,836 89,917,798 183,871,590 25,301,573
             



PDD HOLDINGS INC.

NOTES TO FINANCIAL INFORMATION

(Amounts in thousands of RMB and US$)
 
  For the three months ended June 30, For the six months ended June 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 28,276 37,706 5,189 65,644 55,220 7,599
Sales and marketing expenses 989,326 637,997 87,791 1,478,099 1,310,372 180,313
General and administrative expenses 225,799 1,244,961 171,312 703,861 2,496,729 343,561
Research and development expenses 647,228 502,098 69,091 1,176,427 1,138,983 156,729
Total 1,890,629 2,422,762 333,383 3,424,031 5,001,304 688,202

        

 
PDD HOLDINGS INC.

  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands of RMB and US$)
 
  For the three months ended June 30, For the six months ended June 30,
  2023 2024 2023 2024
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net cash generated from operating activities 23,395,981  43,792,640  6,026,068  24,734,003  64,859,819  8,925,008 
Net cash used in investing activities (11,519,860) (42,622,100) (5,864,996) (34,140,107) (70,912,221) (9,757,846)
Net cash generated from financing activities 7,233  728  100  7,286  758  104 
Effect of exchange rate changes on cash, cash equivalents and restricted cash 881,105  240,744  33,127  532,860  388,668  53,482 
             
Increase/(decrease) in cash, cash equivalents and restricted cash 12,764,459  1,412,012  194,299  (8,865,958) (5,662,976) (779,252)
Cash, cash equivalents and restricted cash at beginning of period 70,670,000  114,704,917  15,783,922  92,300,417  121,779,905  16,757,473 
Cash, cash equivalents and restricted cash at end of period 83,434,459  116,116,929  15,978,221  83,434,459  116,116,929  15,978,221 



     
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 June 30, For the six months ended June 30,
  2023 2024 2023 2024
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating profit 12,718,755 32,564,536 4,481,028 19,647,773 58,538,189 8,055,123
Add: Share-based compensation expenses 1,890,629 2,422,762 333,383 3,424,031 5,001,304 688,202
Non-GAAP operating profit 14,609,384 34,987,298 4,814,411 23,071,804 63,539,493 8,743,325
             
Net income attributable to ordinary shareholders 13,108,086 32,009,355 4,404,633 21,209,113 60,007,181 8,257,263
Add: Share-based compensation expenses 1,890,629 2,422,762 333,383 3,424,031 5,001,304 688,202
Add: Interest expenses related to convertible bonds' amortization to face value 11,937 - - 23,624 - -
Add: Loss from fair value change of certain investments 258,704 17 2 738,980 25,454 3,503
Non-GAAP net income attributable to ordinary shareholders 15,269,356 34,432,134 4,738,018 25,395,748 65,033,939 8,948,968
             
Non-GAAP diluted weighted-average number of ordinary shares outstanding (in thousands) 5,833,348 5,925,659 5,925,659 5,845,398 5,916,670 5,916,670
             
Diluted earnings per ordinary share 2.25 5.40 0.74 3.63 10.14 1.40
Add: Non-GAAP adjustments to earnings per ordinary share 0.37 0.41 0.06 0.71 0.85 0.11
Non-GAAP diluted earnings per ordinary share 2.62 5.81 0.80 4.34 10.99 1.51
Non-GAAP diluted earnings per ADS 10.47 23.24 3.20 17.38 43.97 6.04


For investor and media inquiries, please contact:

investor@pddholdings.com
media@pddholdings.com
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