PDD (PDD) Q2 2025 earnings summary

Executive summary

• Total revenues for Q2 2025 reached RMB 104 billion, up 7% year-over-year, driven by growth in online marketing and transaction services.

• Operating profit declined 21% year-over-year to RMB 25.8 billion, reflecting increased investments in merchant support and higher costs.

• Net income attributable to shareholders was RMB 30.8 billion, a 4% decrease year-over-year; basic earnings per ADS was RMB 22.01.

• Management emphasized a focus on long-term ecosystem health and merchant support, despite short-term profitability pressures.

• Merchant support initiatives, including fee reductions and logistics improvements, drove order growth in remote regions and supported both SMEs and branded merchants.

Financial highlights

• Revenues from online marketing services rose 13% year-over-year to RMB 55.7 billion; transaction services revenue was RMB 48.3 billion, up 1%.

• Cost of revenues increased 36% to RMB 45.9 billion, mainly from higher fulfillment, bandwidth, and payment processing fees.

• GAAP operating profit was RMB 25.8 billion, down from RMB 32.6 billion; non-GAAP operating profit was RMB 27.7 billion, down from RMB 35 billion.

• Net cash from operating activities was RMB 21.6 billion, compared to RMB 43.8 billion a year ago.

• Cash, cash equivalents, and short-term investments totaled RMB 387.1 billion as of June 30, 2025.

Outlook and guidance

• Management expects continued fluctuations in profitability as investments in merchant support and ecosystem health persist.

• The company will continue to ramp up investments in supply chain, service, and compliance capabilities, especially for global business expansion.

• No specific quantitative guidance provided, but long-term value creation remains the strategic focus.