PDD Holdings Inc – ADR (NASDAQ:PDD) stock fell 4.14% (As on November 22, 11:59:45 AM UTC-4, Source: Google Finance) after the company reported third quarter earnings that fell short of analyst expectations. Non-GAAP operating profit in the quarter was RMB26,770.5 million (US$3,814.8 million), an increase of 48% from RMB18,125.8 million in the same quarter of 2023. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB27,458.7 million (US$3,912.8 million), an increase of 61% from RMB17,027.1 million in the same quarter of 2023. Revenues from online marketing services and others were RMB49,351.0 million (US$7,032.5 million), an increase of 24% from RMB39,687.7 million in the same quarter of 2023. Revenues from transaction services were RMB50,003.4 million (US$7,125.4 million), an increase of 72% from RMB29,152.7 million in the same quarter of 2023.
Moreover, Total costs of revenues were RMB39,709.2 million (US$5,658.5 million), an increase of 48% from RMB26,830.2 million in the same quarter of 2023. The increase mainly came from the increased fulfilment fees and payment processing fees. Total operating expenses were RMB35,352.7 million (US$5,037.7 million), an increase of 39% from RMB25,354.1 million in the same quarter of 2023. The increase was primarily due to the increase in sales and marketing expenses.
PDD in the third quarter of FY 24 has reported the adjusted earnings per ADS of RMB18.59 ($2.65), missing the analysts’ estimates for the adjusted earnings per ADS of RMB19.58. The company had reported the adjusted revenue growth of 44 percent to RMB99.35 billion ($14.16 billion) in the third quarter of FY 24, missing the analysts’ estimates for revenue of RMB102.87 billion. The r topline growth further moderated quarter-on-quarter amid intensified competition and ongoing external challenges
Additionally, Net cash generated from operating activities was RMB27,522.3 million (US$3,921.9 million), compared with RMB32,537.9 million in the same quarter of 2023. Cash, cash equivalents and short-term investments were RMB308.5 billion (US$44.0 billion) as of September 30, 2024, compared with RMB217.2 billion as of December 31, 2023. Other non-current assets were RMB74.0 billion (US$10.5 billion) as of September 30, 2024, compared with RMB48.0 billion as of December 31, 2023, which mainly included time deposits, held-to-maturity debt securities, and available-for-sale debt securities.
For the fourth quarter, PDD Holdings provided cautious commentary, noting it will “continue to invest resolutely in building a healthy and sustainable ecosystem, which will be reflected in the results.”