PDD Holdings reported fourth‑quarter 2025 revenue of RMB 123.912 billion, a 12% year‑over‑year increase, driven by a 5% rise in online marketing services revenue to RMB 60.0 billion and a 19% rise in transaction services revenue to RMB 63.9 billion.
Net income attributable to ordinary shareholders fell 11% YoY to RMB 24.541 billion. Non‑GAAP diluted earnings per share were RMB 17.69, missing the consensus estimate of RMB 20.71 by 14.58%. Revenue also missed expectations, coming in at RMB 123.9 billion versus an estimate of RMB 124.7 billion, a 0.64% shortfall.
Operating profit increased to RMB 27.720 billion from RMB 25.592 billion in the prior year, but the non‑GAAP operating margin contracted to 24% from 25%. The compression reflects a 15% rise in cost of revenues to RMB 55.2 billion and a 10% rise in operating expenses to RMB 41.037 billion, largely driven by higher fulfillment, bandwidth, server, and marketing costs.
Cash, cash equivalents and short‑term investments stood at RMB 422.3 billion as of December 31, 2025, providing a robust liquidity cushion for ongoing merchant‑support and supply‑chain investments.
Co‑Chairman and Co‑CEO Jiazhen Zhao said the company’s 10th anniversary “marked the year in which we made our largest investment in high‑quality development,” highlighting the launch of the “Hundred Billion Support Program” for merchants. He added that investors should “not overly focus on quarterly profit margins but instead pay more attention to the high‑quality development of our platform ecosystem,” noting that “fluctuations in profit margins in future quarters will become the ‘new normal.’”
The heavy merchant‑support and supply‑chain initiatives have increased costs, creating short‑term margin pressure. Nevertheless, revenue growth remains positive, and the company’s strategic pivot toward high‑quality brand‑oriented growth signals a long‑term focus that investors may view as a catalyst for future profitability, even as margin compression is expected to persist in the near term.
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