Temu Parent PDD Stock Tumbles After Q3 Profit Miss, Company Cites Intensified Competition and External Challenges

On Thursday, Temu parent PDD Holdings Inc PDD reported fiscal third-quarter 2024 revenue growth of 44% year-on-year to $14.16 billion (68.84 billion Chinese yuan), missing the analyst consensus estimate of $14.47 billion.

The Chinese online retailer's adjusted earnings per ADS of $2.65 (18.59 Chinese yuan) increased from 11.61 Chinese yuan Y/Y, missing the analyst consensus estimate of $2.82. The stock plunged after the print.

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Revenues from online marketing services and others rose 24% Y/Y to $7.03 billion. Revenues from transaction services jumped 72% Y/Y to $7.13 billion.

Adjusted operating profit grew by 48% Y/Y to $3.81 billion.

PDD Holdings held $44.0 billion in cash and equivalents as of September 30, 2024. The company generated $3.92 billion in operating cash flow.

Over the past quarter, PDD Holdings focused on advancing the high-quality development of its platforms, prioritizing consistent and strategic investments in its ecosystem for long-term impact.

Co-CEO Jiazhen Zhao said that during the third quarter, the company increased investments in its platform ecosystem by introducing merchant support initiatives and enhancing trust and safety measures.

This approach encouraged high-quality merchants to elevate their product and service offerings, creating a positive cycle of growth and improvement.

VP of Finance Jun Liu said that topline growth moderated quarter-on-quarter due to intensified competition and external challenges.

PDD Holdings stock plunged over 20% year-to-date.

Price Action: At the last check on Thursday, PDD stock traded lower by 11.20% to $103.50 premarket.

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