PDD
$54.44
Pinduoduo Inc ADR
($4.84)
(8.16%)
Earnings Details
3rd Quarter September 2021
Friday, November 26, 2021 6:33:00 AM
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Summary

Pinduoduo Inc ADR Beats

Pinduoduo Inc ADR (PDD) reported 3rd Quarter September 2021 earnings of $0.22 per share on revenue of $3.3 billion. The consensus earnings estimate was $0.02 per share on revenue of $4.1 billion. The Earnings Whisper number was $0.02 per share. Revenue grew 59.5% on a year-over-year basis.

Pinduoduo is a mobile-only marketplace that connects millions of agricultural producers with consumers across China.

Results
Reported Earnings
$0.22
Earnings Whisper
$0.02
Consensus Estimate
$0.02
Reported Revenue
$3.34 Bil
Revenue Estimate
$4.10 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Pinduoduo Announces Third Quarter 2021 Unaudited Financial Results

SHANGHAI, China, Nov. 26, 2021 (GLOBE NEWSWIRE) -- Pinduoduo Inc. (“Pinduoduo” or the “Company”) (NASDAQ: PDD), China’s largest agriculture and interactive commerce platform, today announced its unaudited financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Highlights

  • Total revenues in the quarter were RMB21,505.8 million (US$13,337.6 million), an increase of 51% from RMB14,209.8 million in the same quarter of 2020.

  • Average monthly active users2 in the quarter was 741.5 million, an increase of 15% from 643.4 million in the same quarter of 2020.

  • Active buyers3 in the twelve-month period ended September 30, 2021 was 867.3 million, an increase of 19% from 731.3 million in the twelve-month period ended September 30, 2020.

  • Operating profit in the quarter was RMB2,139.3 million (US$332.0 million), compared with operating loss of RMB1,295.7 million in the same quarter of 2020. Non-GAAP4 operating profit in the quarter was RMB3,260.7 million (US$506.1 million), compared with non-GAAP operating loss of RMB339.8 million in the same quarter of 2020.

  • Net income attributable to ordinary shareholders in the quarter was RMB1,640.0 million (US$254.5 million), compared with net loss of RMB784.7 million in the same quarter of 2020. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB3,150.2 million (US$488.9 million), compared with RMB466.4 million in the same quarter of 2020.

"We are placing more focus on investments in R&D, away from the previous emphasis on sales and marketing in our first five years," said Mr. Lei Chen, Chairman and CEO of Pinduoduo. "We want to leverage our strength in technology to deepen our digital inclusion efforts in agriculture, and will allocate all profits from the third quarter to the '10 Billion Agriculture Initiative'."

"Meanwhile, we are seeing the younger generation maturing quickly and will promote more young leaders to critical roles in the next six to 12 months," Mr. Chen added.

"Our total revenues, excluding contribution from merchandise sales, grew by 55% on a year-over-year basis, to RMB21.4 billion in Q3 2021," said Mr. Tony Ma, Vice President of Finance. "To lay the foundation for future sustainable growth, we are committed to expanding our investments in R&D and will invest patiently in agricultural technology."

_________________________
1 This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB6.4434 to US$1.00, the noon buying rate in effect on September 30, 2021 as set forth in the H.10 Statistical Release of the Federal Reserve Board.
2 “Monthly active users” refers to the number of user accounts that visited the Pinduoduo mobile app during a given month, which does not include those that accessed the platform through social networks and access points.
3 “Active buyers” in a given period refers to the number of user accounts that placed one or more orders (i) on the Pinduoduo mobile app, and (ii) through social networks and access points in that period, regardless of whether the products and services are actually sold, delivered or returned.
4 The Company’s non-GAAP financial measures exclude share-based compensation expenses, fair value change of long-term investments, and interest expenses related to the convertible bonds’ amortization to face value and gain or loss on extinguishment. See “Reconciliation of Non-GAAP Measures to The Most Directly Comparable GAAP Measures” set forth at the end of this press release.

Third Quarter 2021 Unaudited Financial Results

Total revenues were RMB21,505.8 million (US$3,337.6 million), an increase of 51% from RMB14,209.8 million in the same quarter of 2020. The increase was primarily due to an increase in revenues from online marketing services.

  • Revenues from online marketing services and others were RMB17,946.5 million (US$2,785.3 million), an increase of 44% from RMB12,484.8 million in the same quarter of 2020.

  • Revenues from transaction services were RMB3,477.1 million (US$539.6 million), an increase of 161% from RMB1,332.1 million in the same quarter of 2020.

  • Revenues from merchandise sales were RMB82.1 million (US$12.7 million), a decrease of 79% from RMB392.8 million in the same quarter of 2020.

Total costs of revenues were RMB6,558.6 million (US$1,017.9 million), an increase of 101% from RMB3,260.2 million in the same quarter of 2020. The increase was mainly due to higher cost of payment processing fees, cloud services fees, and delivery and storage fees.

Total operating expenses were RMB12,807.8 million (US$1,987.7 million), compared with RMB12,245.4 million in the same quarter of 2020.

  • Sales and marketing expenses were RMB10,050.6 million (US$1,559.8 million), slightly decreased compared to RMB10,071.9 million in the same quarter of 2020.

  • General and administrative expenses were RMB334.8 million (US$52.0 million), a decrease of 9% from RMB368.6 million in the same quarter of 2020.

  • Research and development expenses were RMB2,422.4 million (US$376.0 million), an increase of 34% from RMB1,804.9 million in the same quarter of 2020. The increase was primarily due to an increase in headcount and the recruitment of more experienced R&D personnel.

Operating profit in the quarter was RMB2,139.3 million (US$332.0 million), compared with operating loss of RMB1,295.7 million in the same quarter of 2020. Non-GAAP operating profit in the quarter was RMB3,260.7 million (US$506.1 million), compared with non-GAAP operating loss of RMB339.8 million in the same quarter of 2020.

Net income attributable to ordinary shareholders in the quarter was RMB1,640.0 million (US$254.5 million), compared with net loss of RMB784.7 million in the same quarter of 2020. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB3,150.2 million (US$488.9 million), compared with RMB466.4 million in the same quarter of 2020.

Basic earnings per ADS was RMB1.31 (US$0.20) and the diluted earnings per ADS was RMB1.15 (US$0.18), compared with basic and diluted net loss per ADS of RMB0.66 in the same quarter of 2020. Non-GAAP diluted earnings per ADS was RMB2.18 (US$0.34), compared with RMB0.33 in the same quarter of 2020.

Net cash flow provided by operating activities was RMB8,736.6 million (US$1,355.9 million), compared with RMB8,321.8 million in the same quarter of 2020.

Cash, cash equivalents and short-term investments were RMB97.9 billion (US$15.2 billion) as of September 30, 2021, compared with RMB87.0 billion as of December 31, 2020.

Conference Call

The Company will host a conference call to discuss the earnings at 7:30 AM U.S. Eastern Time on Friday, Nov. 26, 2021 (8:30 PM Beijing/Hong Kong Time on Friday, Nov. 26, 2021).

The conference call will be webcast live at https://investor.pinduoduo.com/investor-events. The webcast will be available for replay at the same website following the conclusion of the call.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP operating profit or loss and non-GAAP net income or loss attributable to ordinary shareholders, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s non-GAAP financial measures exclude share-based compensation expenses, fair value change of long-term investments, and interest expenses related to the convertible bonds’ amortization to face value and gain or loss on extinguishment.

The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, fair value change of long-term investments, and interest expenses related to the convertible bonds’ amortization to face value and gain or loss on extinguishment, which are non-cash charges. The Company also believes that the non-GAAP financial measures could provide further information about the Company’s results of operations, and enhance the overall understanding of the Company’s past performance and future prospects.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. The Company’s non-GAAP financial measures do not reflect all items of income and expenses that affect the Company’s operations and do not represent the residual cash flow available for discretionary expenditures. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. The Company encourages you to review the Company’s financial information in its entirety and not rely on a single financial measure.

For more information on the non-GAAP financial measures, please see the table captioned “Reconciliation of Non-GAAP Measures to The Most Directly Comparable GAAP Measures” set forth at the end of this press release.

Safe Harbor Statements

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the business outlook and quotations from management in this announcement, as well as Pinduoduo’s strategic and operational plans, contain forward-looking statements. Pinduoduo may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Statements that are not historical facts, including but not limited to statements about Pinduoduo’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Pinduoduo’s growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and fourth-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in China’s e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of China’s e-commerce market; PRC governmental policies and regulations relating to Pinduoduo’s industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Pinduoduo’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Pinduoduo undertakes no obligation to update any forward-looking statement, except as required under applicable law.

About Pinduoduo Inc.

Pinduoduo is a mobile-only marketplace that connects millions of agricultural producers with consumers across China. Pinduoduo aims to bring more businesses and people into the digital economy so that local communities can benefit from the increased productivity and convenience through new market opportunities.

For more information on Pinduoduo news and industry trends, please visit the content hub at https://stories.pinduoduo-global.com/.


PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))

  As of
  December
31, 2020
 September 30, 2021
   RMB  RMB  US$
     (Unaudited)
     
ASSETS      
Current assets      
Cash and cash equivalents 22,421,189 11,132,801 1,727,784
Restricted cash 52,422,447 51,230,161 7,950,796
Receivables from online payment platforms 729,548 667,623 103,613
Short-term investments 64,551,094 86,785,027 13,468,825
Amounts due from related parties 4,240,069 3,896,753 604,767
Prepayments and other current assets 5,159,531 3,380,921 524,710
Total current assets  149,523,878   157,093,286   24,380,495
       
Non-current assets      
Property, equipment and software, net 202,853 2,219,997 344,538
Intangible assets 1,276,751 860,610 133,565
Right-of-use assets 629,827 747,171 115,959
Deferred tax assets - 14,224 2,208
Other non-current assets 7,275,305 5,593,471 868,093
Total non-current assets 9,384,736  9,435,473  1,464,363
       
Total Assets 158,908,614 166,528,759  25,844,858
       

PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))

  As of
  December
31, 2020
 September 30, 2021
   RMB  RMB  US$
     (Unaudited)
     
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current liabilities      
Amounts due to related parties 3,385,863  7,240,428  1,123,697 
Customer advances and deferred revenues 2,423,190  1,144,073  177,557 
Payable to merchants 53,833,981  53,201,246  8,256,704 
Accrued expenses and other liabilities 11,193,372  11,406,089  1,770,197 
Merchant deposits 10,926,319  12,966,330  2,012,343 
Short-term borrowings 1,866,316  -  - 
Lease liabilities 253,036  338,709  52,567 
Total current liabilities 83,882,077    86,296,875    13,393,065  
       
Non-current liabilities      
Convertible bonds 14,432,792  11,684,597  1,813,421 
Lease liabilities 414,939  437,828  67,950 
Other non-current liabilities 2,918  1,489  231 
Total non-current liabilities 14,850,649  12,123,914   1,881,602  
       
Total Liabilities 98,732,726   98,420,789   15,274,667 
       
       
Shareholders’ equity      
Ordinary shares 159  161  25 
Additional paid-in capital 86,698,660  93,847,981  14,564,978 
Accumulated other comprehensive loss (1,047,728) (1,414,093) (219,464)
Accumulated deficits (25,475,203) (24,326,079) (3,775,348)
Total Shareholders’ Equity 60,175,888   68,107,970    10,570,191  
       
Total Liabilities and Shareholders’ Equity 158,908,614   166,528,759   25,844,858  
       


PINDUODUO INC.
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME/ (LOSS)
 (Amounts in thousands of RMB and US$)

  For the three months ended September 30, For the nine months ended September 30,
  2020  2021  2020  2021 
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues 14,209,782  21,505,758  3,337,641  32,944,156  66,719,077  10,354,638 
Costs of revenues (3,260,155) (6,558,648) (1,017,886) (7,752,517) (25,202,584) (3,911,380)
Gross profit 10,949,627  14,947,110   2,319,755   25,191,639  41,516,493   6,443,258  
             
Sales and marketing expenses (10,071,868) (10,050,611) (1,559,830) (26,482,073) (33,435,891) (5,189,169)
General and administrative expenses (368,611) (334,806) (51,961) (1,101,727) (1,120,812) (173,947)
Research and development expenses (1,804,886) (2,422,421) (375,954) (4,940,392) (6,969,995) (1,081,726)
Total operating expenses (12,245,365 ) (12,807,838) (1,987,745) (32,524,192 ) (41,526,698) (6,444,842)
             
Operating (loss)/ profit (1,295,738 ) 2,139,272   332,010   (7,332,553 ) (10,205 ) (1,584 )
             
Interest and investment income, net 485,413  631,913  98,071  1,783,971  2,147,019  333,212 
Interest expenses (165,638) (298,431) (46,316) (479,190) (927,886) (144,006)
Foreign exchange gain/ (loss) 97,861  (10,433) (1,619) 76,191  23,645  3,670 
Other income/ (loss), net 57,936  (52,606) (8,164) 112,553  541,169  83,989 
             
(Loss)/ profit before income tax and share of results of equity investees  

(820,166


)
 

2,409,715
  

373,982
  

(5,839,028


)
 

1,773,742
  

275,281
 
Share of results of equity investees 35,458  85,011  13,194  35,642  230,148  35,718 
Income tax expenses -  (854,766) (132,658) -  (854,766) (132,658)
Net (loss)/ income (784,708 ) 1,639,960   254,518   (5,803,386) 1,149,124   178,341  
                   

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/ (LOSS)
(Amounts in thousands of RMB and US$, except for per share data)

  For the three months ended September 30, For the nine months ended September 30,
  2020  2021 2020  2021
   RMB   RMB   US$  RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
             
Net (loss)/ income (784,708 ) 1,639,960  254,518  (5,803,386) 1,149,124  178,341
Net (loss)/ income attributable to ordinary shareholders (784,708 ) 1,639,960 254,518  (5,803,386) 1,149,124  178,341
             

(Loss)/ earnings per ordinary share:
            
-Basic (0.16) 0.33 0.05 (1.22) 0.23 0.04
-Diluted (0.16) 0.29 0.04 (1.22) 0.20 0.03
             
(Loss)/ earnings per ADS (4 ordinary shares equals 1 ADS):            
-Basic (0.66) 1.31 0.20 (4.90) 0.92 0.14
-Diluted (0.66) 1.15 0.18 (4.90) 0.80 0.12
             
Weighted average number of outstanding ordinary shares (in thousands):            
-Basic 4,786,276  5,021,164 5,021,164 4,739,382  5,006,285 5,006,285
-Diluted 4,786,276  5,703,986 5,703,986 4,739,382  5,715,932 5,715,932
               

PINDUODUO INC.
NOTES TO FINANCIAL INFORMATION
(Amounts in thousands of RMB and US$)

  For the three months ended September 30, For the nine months ended September 30,
  2020 2021 2020 2021
   RMB   RMB   US$  RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues            
- Online marketing services and others 12,484,836 17,946,496 2,785,252 29,031,804 50,138,401 7,781,357
- Transaction services 1,332,124 3,477,147 539,645 3,519,530 9,416,260 1,461,381
- Merchandise sales 392,822 82,115 12,744 392,822 7,164,416 1,111,900
Total 14,209,782  21,505,758 3,337,641  32,944,156 66,719,077  10,354,638
             

PINDUODUO INC.
NOTES TO FINANCIAL INFORMATION
(Amounts in thousands of RMB and US$)

  For the three months ended September 30, For the nine months ended September 30,
  2020 2021 2020 2021
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Share-based compensation costs included in:            
Costs of revenues 4,424 9,089 1,411 22,368 20,895 3,243
Sales and marketing expenses 335,331 384,704 59,705 816,672 1,067,727 165,709
General and administrative expenses 236,011 156,731 24,324 714,515 568,266 88,194
Research and development expenses 380,163 570,929 88,607 1,126,258 1,625,137 252,216
Total  955,929 1,121,453 174,047  2,679,813 3,282,025 509,362
             


PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of RMB and US$)

  For the three months ended September 30, For the nine months ended September 30,
  2020  2021  2020  2021 
  RMB RMB US$ RMB RMB US$
  (Unaudited)  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net cash provided by operating activities 8,321,792  8,736,568  1,355,894  13,250,058  12,383,236  1,921,848 
Net cash used in investing activities (455,054) (13,764,757) (2,136,257) (11,735,064) (22,869,860) (3,549,347)
Net cash provided by/ (used in) financing activities -  146  23  9,624,213  (1,875,347) (291,049)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (15,868) 22,160  3,439  43,696  (118,703) (18,422)
             
Increase/ (decrease) in cash, cash equivalents and restricted cash 7,850,870  (5,005,883) (776,901) 11,182,903  (12,480,674) (1,936,970)
Cash, cash equivalents and restricted cash at beginning of period  36,677,890   67,368,845    10,455,481   33,345,857  74,843,636  11,615,550 
Cash, cash equivalents and restricted cash at end of period  44,528,760   62,362,962    9,678,580    44,528,760  62,362,962  9,678,580 
                   


PINDUODUO INC.
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES
(Amounts in thousands of RMB and US$, except for per share data))

  For the three months ended September 30, For the nine months ended September 30,
  2020  2021 2020  2021 
  RMB RMB US$ RMB RMB US$
  (Unaudited)  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating (loss)/ profit (1,295,738) 2,139,272 332,010 (7,332,553) (10,205) (1,584)
Add: Share-based compensation 955,929  1,121,453 174,047 2,679,813  3,282,025  509,362 
Non-GAAP operating (loss)/ profit  (339,809) 3,260,725  506,057   (4,652,740) 3,271,820   507,778  
             
Net (loss)/ income attributable to ordinary shareholders (784,708) 1,639,960 254,518 (5,803,386) 1,149,124  178,341 
Add: Share-based compensation 955,929  1,121,453 174,047 2,679,813  3,282,025  509,362 
Add: Interest expense related to convertible bonds’ amortization to face value and gain or loss on extinguishment, net 147,081  298,443 46,318 433,838  915,917  142,148 
Less: Loss/ (gain) from fair value changes of long-term investments 148,093  90,300 14,014 (90,755) 38,064  5,907 
Non-GAAP net income/ (loss) attributable to ordinary shareholders  466,395  3,150,156  488,897   (2,780,490) 5,385,130   835,758  
             
Non-GAAP diluted weighted-average number of ordinary shares outstanding (in thousands) 5,576,093  5,767,207 5,767,207 4,739,382  5,789,157  5,789,157 
             
Diluted (loss)/ earnings per ordinary share (0.16) 0.29 0.04 (1.22) 0.20  0.03 
Add: Non-GAAP adjustments to (loss)/ earnings per ordinary share 0.24  0.26 0.04 0.63  0.73  0.11 
Non-GAAP diluted earnings/ (loss) per ordinary share 0.08  0.55 0.08 (0.59) 0.93  0.14 
Non-GAAP diluted earnings/ (loss) per ADS 0.33  2.18 0.34 (2.35) 3.72  0.58 
                 

For investor and media inquiries, please contact:Pinduoduo Inc.investor@pinduoduo.cominternationalmedia@pinduoduo.com

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