PDD Holdings Inc. reported third‑quarter 2025 results that showed total revenue of RMB108.3 billion (US$15.2 billion), a 9% year‑over‑year increase, but a miss against consensus estimates of roughly RMB145 billion (US$15.3 billion). The shortfall reflects intensified competition in the domestic e‑commerce market and a slowdown in high‑margin core categories, which limited the company’s ability to capture additional market share. The revenue decline was offset by a 4% rise in online marketing and transaction services revenue, which helped cushion the top‑line impact.
The company’s adjusted earnings per share reached RMB21.08 (US$2.96), beating the consensus estimate of RMB23.50 (US$2.63) by 10.3% and surpassing the Zacks consensus of $2.21 by 33.9%. The earnings beat was driven by disciplined cost management, including a 41% increase in R&D that was offset by a 25% reduction in fulfillment fees, and a favorable shift in the mix toward higher‑margin services. Management highlighted that the company’s investment in merchant support and supply‑chain initiatives has begun to generate incremental profitability, even as it continues to allocate capital to long‑term ecosystem development.
Operating profit rose to RMB25.0 billion (US$3.5 billion) from RMB24.3 billion a year earlier, but the operating margin contracted from 27% to 25%. The compression was largely due to higher fulfillment and server costs, which grew by 18%, and a 41% jump in R&D expenses. Despite the margin squeeze, the company’s cash reserves remained robust at RMB423.8 billion (US$59.5 billion) as of September 30, 2025, providing ample liquidity for future strategic investments.
Management emphasized the company’s long‑term focus during the earnings call. Chairman Lei Chen noted that the tenth anniversary of the company’s founding underscores its commitment to social responsibility and ecosystem growth. Executive Director Jiazhen Zhao added that the firm will continue to invest in merchant support initiatives to drive industry upgrades, while CFO Jun Liu acknowledged that revenue growth has moderated due to competitive pressures and external uncertainties. The company did not provide new guidance for the fourth quarter or full year, but the statements suggest a cautious outlook amid a challenging competitive environment.
Investors reacted cautiously to the results, with the revenue miss weighing more heavily than the EPS beat. The market’s focus on top‑line growth concerns reflects the broader competitive pressures facing the e‑commerce sector, while the company’s strong profitability and cash position signal resilience and a capacity to sustain long‑term investments.
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