What is management's view on the current state of China's e-commerce market, and where will the next phase of growth come from?

Zhao Jiazhen stated the industry faces intensified competition and slowing growth. PDD's strategy is deep investment in the supply chain, moving beyond a simple transaction platform to create value for all participants. Examples include "free delivery to villages" and "new quality supply" programs, which are foundational for sustainable growth. “Our deep investments in the supply chain covers multiple aspects and initiatives recently such as Duo Duo local specialties and logistics support for remote regions are all projects empowering the supply chain to be more inclusive.”

What are management's thoughts on the current external environment (regulatory inquiries, trade policy changes) and the strategic focus for the global business?

Chen Lei acknowledged regulatory scrutiny and evolving trade policies, viewing them as foundational for future growth. PDD's global business will continue to focus on deep investment in supply chain capabilities to adapt to regulatory changes, ensure compliance, and deliver reliable services. “However, our management believes that the current regulatory scrutiny will lay a solid foundation for our next stage of growth and will also provide direction for iterating our model amid the rapidly evolving international political and regulatory landscape.”

How do new business models impact profitability, and what is the long-term profit margin outlook?

Zhao Jiazhen reiterated that PDD is in a strategic investment phase, committing substantial resources to new models and supply chain initiatives. This will cause short-term profit margin fluctuations. The company prioritizes long-term ecosystem value over short-term financial performance and advises against focusing on single-quarter profitability. “As we have communicated on multiple occasions, between short-term financial performance and the long-term value of the platform ecosystem, we will resolutely choose the latter.”

PDD

PDD Holdings (PDD) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Industrials· Mar 25, 2026

Source: earnings call transcript

Executive summary

PDD Holdings Inc. Q4 FY25 — Sustained Investments in Supply Chain Drive Steady Growth

PDD Holdings delivered steady Q4 FY25 results, with revenue growth driven by strong transaction services, reflecting its strategic focus on deep, long-term investments in supply chain capabilities. Despite short-term profitability pressures from these investments and a complex global environment, the company remains committed to high-quality development and ecosystem transformation, aiming to build "another Pinduoduo" over the next three years.

Highlights

Group revenue reached RMB 123.9 billion in Q4 FY25, growing 12% year-on-year.
Full year revenue reached RMB 431.8 billion, up 10% year-on-year.
Transaction services revenues grew 19% year-over-year to RMB 63.9 billion in Q4 FY25.
Non-GAAP operating profit increased to RMB 29.5 billion in Q4 FY25 from RMB 28 billion in Q4 FY24.
Net cash flow from operating activities was RMB 24.1 billion in Q4 FY25 and RMB 106.9 billion for full year FY25.

Concerns

Q4 FY25 net income and annual net income decreased year-on-year due to sustained investments on both supply and demand sides.
Non-GAAP operating profit margin decreased to 24% in Q4 FY25 from 25% in Q4 FY24.
Non-GAAP diluted EPS decreased to RMB 17.69 in Q4 FY25 from RMB 20.15 in Q4 FY24.
Global geopolitical landscape and evolving trade/regulatory policies introduce greater uncertainty and will impact/reshape the global business model.
Intensified e-commerce competition and complex global environment will bring challenges and pressure short-term profitability.

Guidance & targets

Category	Target	Timeline	Confidence
Strategic Focus	Concentrating on high-quality development of the supply chain high materiality	Next phase of journey	High
Long-term Vision	Build another Pinduoduo high materiality	Next 3 years · FY26-FY28	High

Risks & headwinds

Sustained investments impacting short-term profitability Q4 FY25 and annual

Net income decreased year-on-year

Mitigation:Prioritizing long-term value generation by nurturing ecosystem.

Complex global geopolitical landscape and evolving trade/regulatory policies Past year and future

Greater uncertainty, impact and reshape development model

Mitigation:Relying on collective capabilities of supply chain ecosystem, investing deeply in supply chain capabilities, active learning and adapting to changes, enhancing compliance.

Intensified e-commerce competition Since the start of 2026

Continued to intensify

Mitigation:Upholding long-term philosophy, investing deeply in supply chain, dedicating resources to industry and society.

Increased uncertainty in economic, trade, and regulatory climate Future performance, short term

Pressures on our profitability in short term

Mitigation:Upholding long-term philosophy, investing deeply in supply chain, dedicating resources to industry and society.

Corporate governance and talent development lagging business growth Past few years

Difficult to keep up in many areas

Mitigation:Undertaking systemic and structural transformation of organization, culture, and corporate governance; appointment of new leaders.

Timing difference between strategic investment and return Certain stages, quarter-to-quarter

Fluctuations in our profit margins from quarter-to-quarter

Mitigation:Prioritizing long-term value of platform ecosystem, focusing on high-quality development.

Q&A highlights

How does PDD maintain flexibility and execution quality given organizational changes, operating in 90+ markets, and complex regulatory environments?

Zhao Jiazhen explained that rapid global business growth outpaced corporate governance and talent development, necessitating a systemic transformation. The co-chair structure and strategic focus on supply chain are part of this. The evolving geopolitical landscape and regulatory changes demand continuous adaptation and compliance.

“We believe there is both an opportunity and a necessity to undertake a systemic and structural transformation of our organization, culture and corporate governance.”

asked by Alicia Yap · answered by Jiazhen Zhao

2 min read 6 chapters

Detailed narrative

Strategic Shift and Governance

PDD Holdings celebrated its 10th anniversary in 2025, marking a year of significant investment in high-quality development. The company launched a RMB 100 billion support program for merchants and improved its corporate governance structure by introducing a co-chair structure. This shift aims to sharpen the strategic focus on deep supply chain investments and brand-oriented growth, moving the entire supply ecosystem up the value chain.

Supply Chain Investments

The company's deep investments in the supply chain include initiatives like Duo Duo Local Specialties and logistics support for remote regions. These projects empower the supply chain to be more inclusive, supporting farmers, SMEs, and industrial belts. Efforts include customized "One Product One Plan" programs for agricultural regions and fee reductions/support for manufacturing clusters to transition from commoditized competition to brand building.

Logistics Expansion

PDD is expanding its logistics support program to unlock consumption potential in remote regions. In Q4 FY25, they tackled the "last mile" of parcel delivery into villages across multiple provinces, building country-level transfer warehouses and village-level pickup points. The platform covers transshipping fees for orders to villages, bringing more remote rural areas into free shipping zones and improving shopping experiences.

Global Business Adaptation

Despite rapid changes in the global geopolitical landscape and evolving trade/regulatory policies, PDD's global e-commerce business delivered steady growth, reaching meaningful scale in nearly 100 markets. Management views regulatory scrutiny as foundational for future growth and is actively adapting business models to ensure compliance and deliver reliable services to consumers, maintaining a long-term focus on supply chain capabilities.

Profitability and Long-Term View

The company acknowledges that sustained investments in new business models and supply chain initiatives, coupled with a volatile macro environment, will lead to fluctuations in profit margins in the short term. Management prioritizes long-term value generation and ecosystem nurturing over short-term financial results, urging focus on the high-quality development of the platform ecosystem for sustainable growth.

E-commerce Market Dynamics

The e-commerce industry is entering a new phase of intensified competition and slowing growth. PDD believes future performance depends on creating incremental value across the entire supply chain, not just traffic acquisition. They are proactively channeling resources into building a high-quality supply chain, providing tailored industry solutions to merchants for product differentiation and transformation.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.