Fiscal Performance Overview

Temu parent PDD Holdings Inc reported fiscal second-quarter 2024 revenue growth of 86%, reaching $13.36 billion (97.06 billion Chinese yuan), although missing analyst estimates.

Market Response

The company’s adjusted earnings per ADS saw significant growth, rising to $3.20 (23.24 Chinese yuan) from 10.47 Chinese yuan year-on-year. Despite this, the stock experienced a sharp decline following the announcement.

Revenue Streams

Revenues from online marketing services and other sources increased by 29% year-on-year to $6.76 billion, while transaction services revenue surged by 234% to $6.6 billion.

Financial Health

With $39.2 billion in cash and equivalents as of June 30, 2024, and $6.03 billion generated in operating cash flow, PDD Holdings showed stability in its financial position.

Challenges Ahead

“While encouraged by the solid progress we made in the past few quarters, we see many challenges ahead,” noted Mr. Lei Chen, Chair and Co-CEO of PDD Holdings. Ms. Jun Liu, VP of Finance, highlighted that revenue growth may face pressure due to increased competition and external challenges, impacting profitability as the company continues to invest.

Market Performance

Despite recent challenges, PDD Holdings stock has seen significant growth, rising over 73% in the last 12 months. However, the latest announcement led to a 14.70% premarket drop to $119.35.

Also Read: Amazon Boosts Recruitment Efforts In China, Targets Rivalry With Temu: Report

Also Read: Photo via Shutterstock