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    PDD
    Earnings call· Dec 2025(Q4 FY25)

    PDD Holdings Q4 FY25 earnings call PDD

    Mar 25, 2026 Source

    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

    5

    • 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

    5

    • 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

    2
    CategoryTargetConfidence
    Strategic Focus
    Concentrating on high-quality development of the supply chain
    high materiality
    High
    Long-term Vision
    Build another Pinduoduo
    high materiality
    High

    Operational metrics

    18
    Total cost of revenues
    RMB 55.2 billionup 15% YoY from RMB 47.8 billion
    Q4 FY25

    Mainly due to increased fulfillment fees, bandwidth and server costs and payment processing fees.

    Total cost of revenues
    RMB 188.8 billionup 23% YoY
    FY25

    Mainly due to increased fulfillment fees, bandwidth and server costs and payment processing fees.

    Total operating expenses
    RMB 41 billionup 10% YoY from RMB 37.2 billion
    Q4 FY25
    Total operating expenses
    RMB 39.3 billionup from RMB 35.1 billion in Q4 FY24
    Q4 FY25
    Total operating expenses as % of revenue
    32%
    Q4 FY25
    Total operating expenses
    RMB 140.7 billionup from RMB 122 billion in FY24
    FY25
    Sales and marketing expenses
    RMB 34 billionup 9% YoY
    Q4 FY25
    Sales and marketing expenses as % of revenue
    27%down from 28% in Q4 FY24
    Q4 FY25
    Sales and marketing expenses
    RMB 123.3 billionup from RMB 109.1 billion in FY24
    FY25
    G&A expense
    RMB 907 milliondown from RMB 998 million in Q4 FY24
    Q4 FY25
    G&A expense
    RMB 3.2 billionup from RMB 2.8 billion in FY24
    FY25
    R&D expenses
    RMB 4.4 billion
    Q4 FY25
    R&D expenses
    RMB 5 billion
    Q4 FY25
    Operating profit margin
    24%down from 25% in Q4 FY24
    Q4 FY25
    Net income attributable to ordinary shareholders
    RMB 26.3 billion
    Q4 FY25
    Net income attributable to ordinary shareholders
    RMB 107.3 billion
    FY25
    Diluted EPS
    RMB 17.69down from RMB 20.15 in Q4 FY24
    Q4 FY25
    Cash, cash equivalents and short-term investments
    RMB 422.3 billion
    as of 2025-12-31

    Industry KPIs

    4
    MetricValueDetails
    Segment revenue mixOnline marketing services: RMB 60 billion; Transaction services: RMB 63.9 billionRMB
    Regional market performanceNearly 100 marketsmarkets
    Fulfillment shipping cost economicsTotal cost of revenues increased 15% to RMB 55.2 billion%
    Operating income EBIT and adjusted EBITDARMB 29.5 billion (non-GAAP operating profit)RMB

    Risks & headwinds

    6
    Sustained investments impacting short-term profitabilityQ4 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 policiesPast 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 competitionSince 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 climateFuture 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 growthPast 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 returnCertain 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

    6

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.