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PDD's Rising Profits Fail to Compensate for E-Commerce Expansion Challenges

PDD's Rising Profits Fail to Compensate for E-Commerce Expansion Challenges

Bitget-RWA2025/11/18 13:44
By:Bitget-RWA

- PDD Holdings reported mixed Q3 2025 results: $15.21B revenue missed forecasts by $90M despite $2.96 non-GAAP EPS beating estimates by $0.63. - E-commerce growth slowed amid intensified competition in China and U.S. regulatory shifts impacting Temu's operations. - Profitability showed resilience with 14% YoY net income growth to $4.41B, driven by cost discipline and 41% R&D spending increase. - $59.5B cash reserves highlight financial strength, but Q4 revenue projections face risks from pricing wars and g

PDD Holdings Inc. (PDD), which owns China's Pinduoduo and the U.S.-oriented Temu, posted a mixed set of results for the third quarter of 2025. Despite outperforming profit forecasts, its shares slipped 3.6% in premarket trading. The company reported non-GAAP earnings per American depositary share (EPADS) of $2.96, exceeding analyst predictions by $0.63, while total revenue reached $15.21 billion

, signaling slower growth as competition intensifies and external pressures mount.

The revenue miss, which

but failed to reach the consensus forecast of $15.32 billion, highlighted the broader challenges confronting the e-commerce powerhouse. In its home market, Pinduoduo from companies such as Alibaba Group and JD.com, both of which have boosted discounts to win over consumers amid sluggish spending. On the global stage, Temu is adjusting its strategy after the U.S. revoked the de minimis tariff break for small parcels, while new international rivals are entering the market.

Nonetheless, the company demonstrated solid profitability.

year-over-year to 21.08 yuan, surpassing projections by 23%. Non-GAAP net profit attributable to shareholders to $4.41 billion, supported by strict cost controls and improved operational efficiency. Operating income , marking a 17% annual rise in net profit attributable to ordinary shareholders.

PDD's Rising Profits Fail to Compensate for E-Commerce Expansion Challenges image 0
The financials, while underscoring strong profitability, also revealed the company's strategic balancing act. Jun Liu, PDD's Vice President of Finance, commented that "revenue growth continued to moderate, reflecting the ongoing evolution of the competitive landscape and external uncertainties," as the company channels investment into merchant support and ecosystem enhancement. year-over-year to $608.5 million, mainly due to increased staffing and server-related expenses.

Cash holdings

, with the company reporting $59.5 billion in cash, cash equivalents, and short-term investments as of September 30, 2025, up from $47.1 billion at the close of 2024. Company leaders reiterated their dedication to long-term platform sustainability, with Co-CEO Lei Chen stating, "As we grow in scale, we are prepared to take on greater social responsibility" .

Looking forward, PDD's growth outlook remains uncertain due to macroeconomic challenges. While revenue growth

in Q3, it still trails the rapid expansion rates of 24% to 86% recorded in 2023 and 2024. of $17.4 billion, but PDD's ability to achieve these goals will hinge on how it manages regulatory changes, pricing battles, and global supply chain shifts.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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