PDD Holdings misses estimates, stock tumbles on revenue growth concerns

PDD Holdings (PDD) reported second-quarter revenue that fell short of analyst expectations, sending its shares plummeting over 13% as the company warned of slowing growth ahead.

The Chinese e-commerce giant posted revenue of RMB97.06 billion ($13.36 billion) for the quarter ended June 30, up 86% YoY but below the consensus estimate of RMB99.42 billion. Adjusted earnings per share came in at RMB23.24 ($3.20), beating expectations of RMB20.43.

Despite the earnings beat, investors focused on the company's cautious outlook. PDD Holdings warned that revenue growth would "inevitably face pressure due to intensified competition and external challenges."

"In the past quarter, our revenue growth rate slowed quarter-on-quarter," said Jun Liu, VP of Finance. "Profitability will also likely be impacted as we continue to invest resolutely."

The company's operating profit surged 156% YoY to RMB32.56 billion ($4.48 billion), while net income attributable to shareholders jumped 144% to RMB32.01 billion ($4.40 billion).

PDD Holdings' Chairman and Co-CEO Lei Chen emphasized the company's commitment to high-quality development, stating, "We are prepared to accept short-term sacrifices and potential decline in profitability."

The e-commerce firm ended the quarter with RMB284.9 billion ($39.2 billion) in cash, cash equivalents, and short-term investments, up from RMB217.2 billion at the end of 2023.

Source: Investing.com