PDD Holdings Inc. reported second-quarter results that exceeded analyst expectations for adjusted earnings per American Depositary Share (ADS) while falling slightly below revenue forecasts, as elevated spending on ecosystem investments pressured profitability.
Adjusted earnings per ADS reached RMB19.33 ($2.85), surpassing the consensus estimate of RMB18.35 by RMB0.98. Revenue totaled RMB112.4 billion ($16.6 billion), missing the analyst projection of RMB113.9 billion and representing an 8% increase from RMB104.0 billion in the same period last year.
Adjusted operating profit rose 5% year-over-year to RMB29.1 billion ($4.3 billion), while adjusted net income attributable to ordinary shareholders declined 13% to RMB28.5 billion ($4.2 billion). The company attributed the profit decline to higher operating expenses, which increased 13% to RMB36.6 billion ($5.4 billion), driven primarily by a 9% rise in sales and marketing spending to RMB29.7 billion.
Transaction services revenue grew 13% year-over-year to RMB54.7 billion ($8.1 billion), while online marketing services and other revenues rose to RMB57.6 billion ($8.5 billion) from RMB55.7 billion. Operating cash flow strengthened to RMB25.7 billion ($3.8 billion), up from RMB21.6 billion in the prior-year quarter.
As of June 30, PDD Holdings held RMB456.4 billion ($67.3 billion) in cash, cash equivalents, and short-term investments. Jun Liu, Vice President of Finance, stated the company remains focused on ecosystem investments to support merchant growth and industry development.
