PDD Holdings Inc (NASDAQ:PDD) stock fell 14.71% (As on May 27, 11:33:36 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the first quarter of FY25. For the first quarter, profit fell by 47% to RMB14.74 billion (US$2.03 billion), down from RMB28 billion in the year-ago quarter, as its domestic platform suffered from intense local competition and its international business was hit by global trade uncertainty. PDD Holdings co-CEO Lei Chen attributed the decline in profit to strategic investments in its platform amid “rapid changes in the external environment,” indirectly referring to global tariffs. Online marketing services and other revenue grew 15%, ahead of the consensus 13.5%, while transaction services grew 6%, far below the 26% growth expected. Non-GAAP operating profit in the quarter was RMB18,259.7 million (US$2,516.3 million), a decrease of 36% from RMB28,552.2 million in the same quarter of 2024. Net cash generated from operating activities was RMB15,516.9 million (US$2,138.3 million), compared with RMB21,067.2 million in the same quarter of 2024. Cash, cash equivalents and short-term investments were RMB364.5 billion (US$50.2 billion) as of March 31, 2025, compared with RMB331.6 billion as of December 31, 2024. Other non-current assets were RMB76.2 billion (US$10.5 billion) as of March 31, 2025, compared with RMB83.4 billion as of December 31, 2024, which mainly included time deposits, held-to-maturity debt securities, and available-for-sale debt securities.

Moreover, total operating expenses were RMB38,639.5 million (US$5,324.7 million), an increase of 37% from RMB28,143.7 million in the same quarter of 2024. The increase was primarily due to the increase in sales and marketing expenses. Sales and marketing expenses were RMB33,402.7 million (US$4,603.0 million), an increase of 43% from RMB23,410.7 million in the same quarter of 2024, mainly due to the increased spending in promotion and advertising activities. General and administrative expenses were RMB1,658.9 million (US$228.6 million), compared with RMB1,823.4 million in the same quarter of 2024. Research and development expenses were RMB3,577.8 million (US$493.0 million), compared with RMB2,909.6 million in the same quarter of 2024.

PDD in the first quarter of FY25 has reported the adjusted earnings per share of $1.56, missing the analysts’ estimates for the adjusted earnings per share of $2.49, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 10 percent to $13.18 billion in the first quarter of FY25, missing the analysts’ estimates for revenue by 6.93%.