PDD Holdings Q2 Revenue Edges Past Expectations Amid Regulatory and Competitive Challenges

PDD Holdings' Q2 revenue grew 7% YoY to 104 billion yuan ($14.5 billion), beating forecasts, but net income slipped 4%. The company faces challenges from intensifying competition, softer consumer demand, and regulatory headwinds, particularly in the US with the removal of the de minimis tax loophole. However, PDD's adjusted operating profit topped projections for the first time in four quarters, aided by lower marketing expenses. Management emphasized long-term value creation and continued investment. Bloomberg Intelligence analysts suggest PDD's profitability profile may be more resilient than expected.

PDD Holdings Inc. (NASDAQ: PDD), the parent company of Pinduoduo and Temu, announced its second-quarter 2025 financial results, revealing a mixed performance. The company reported a 7% year-over-year (YoY) increase in revenue to RMB103.98 billion ($14.5 billion), surpassing analyst expectations [1]. However, net income attributable to shareholders declined by 4% to RMB32.71 billion ($4.57 billion) [1].

The company's adjusted operating profit also exceeded projections for the first time in four quarters, falling by 21% YoY to RMB27.75 billion ($3.87 billion) [1]. This improvement was attributed to lower marketing expenses. Despite the revenue beat, PDD Holdings' non-GAAP operating profit decreased by 21% YoY, while non-GAAP net income attributable to shareholders fell by 5% [1].

PDD Holdings attributed its slower revenue growth to intensifying competition in the e-commerce sector and softer consumer demand in China. "Revenues growth further moderated this quarter amid intense competition," noted Ms. Jun Liu, VP of Finance [1]. The company emphasized its focus on long-term value creation, continuing to invest in merchant support initiatives to foster a healthier platform ecosystem.

The company's cash and equivalents stood at RMB387.1 billion ($54.0 billion) at the end of June 2025, marking a rise from the previous year [3]. This indicates improved liquidity and financial stability, despite the decrease in operational efficiency.

Investors and analysts are closely watching PDD Holdings' performance, with Bloomberg Intelligence suggesting that the company's profitability profile may be more resilient than expected. The company's adjusted operating profit topped projections for the first time in four quarters, signaling potential long-term value creation.

References:
[1] https://www.investing.com/news/stock-market-news/pdd-holdings-soars-as-q2-earnings-smash-expectations-4208583
[2] https://www.proactiveinvestors.com/companies/news/1077262/temu-owner-pdd-holdings-q2-financial-results-top-estimates-as-profit-falls-1077262.html
[3] https://www.quiverquant.com/news/PDD+Holdings+Inc.+Reports+Second+Quarter+2025+Financial+Results+with+Increased+Revenues+and+Decreased+Operating+Profit