PDD
$82.04
Pinduoduo Inc ADR
$3.61
4.60%
Earnings Details
3rd Quarter September 2022
Monday, November 28, 2022 6:30:00 AM
Tweet Share Watch
Summary

Pinduoduo Inc ADR Beats

Pinduoduo Inc ADR (PDD) reported 3rd Quarter September 2022 earnings of $1.15 per share on revenue of $5.0 billion. The consensus earnings estimate was $0.66 per share on revenue of $4.3 billion. The Earnings Whisper number was $0.72 per share. Revenue grew 49.5% 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
$1.15
Earnings Whisper
$0.72
Consensus Estimate
$0.66
Reported Revenue
$4.99 Bil
Revenue Estimate
$4.28 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

PDD Announces Third Quarter 2022 Unaudited Financial Results

SHANGHAI, Nov. 28, 2022 (GLOBE NEWSWIRE) -- PDD (the “Company”) (NASDAQ: PDD), today announced its unaudited financial results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights

  • Total revenues in the quarter were RMB35,504.3 million (US$4,991.1 million), an increase of 65% from RMB21,505.8 million in the same quarter of 2021.

  • Operating profit in the quarter was RMB10,436.6 million (US$1,467.2 million), an increase of 388% from RMB2,139.3 million in the same quarter of 2021. Non-GAAP2 operating profit in the quarter was RMB12,301.5 million (US$1,729.3 million), an increase of 277% from RMB3,260.7 million in the same quarter of 2021.

  • Net income attributable to ordinary shareholders in the quarter was RMB10,588.6 million (US$1,488.5 million), an increase of 546% from RMB1,640.0 million in the same quarter of 2021. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB12,447.2 million (US$1,749.8 million), an increase of 295% from RMB3,150.2 million in the same quarter of 2021.

“We continued to deepen our value creation in the third quarter,” said Mr. Lei Chen, Chairman and Chief Executive Officer of PDD. “We will increase our R&D investment to further enhance the supply chain efficiency and agricultural digital inclusion.”

“Investment in certain projects was affected in the third quarter,” said Ms. Jun Liu, VP of Finance of PDD. “We will continue to step up our investment in R&D and create long-term value through innovations.”

___________________________

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 RMB7.1135 to US$1.00, the noon buying rate in effect on September 30, 2022 as set forth in the H.10 Statistical Release of the Federal Reserve Board.
2 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 2022 Unaudited Financial Results

Total revenues were RMB35,504.3 million (US$4,991.1 million), an increase of 65% from RMB21,505.8 million in the same quarter of 2021. The increase was primarily due to an increase in revenues from online marketing services and transaction services, offset by the decrease of revenues from merchandise sales.

  • Revenues from online marketing services and others were RMB28,425.6 million (US$3,996.0 million), an increase of 58% from RMB17,946.5 million in the same quarter of 2021.

  • Revenues from transaction services were RMB7,022.3 million (US$987.2 million), an increase of 102% from RMB3,477.1 million in the same quarter of 2021.

  • Revenues from merchandise sales were RMB56.4 million (US$7.9 million), a decrease of 31% from RMB82.1 million in the same quarter of 2021.

Total costs of revenues were RMB7,414.1 million (US$1,042.3 million), an increase of 13% from RMB6,558.6 million in the same quarter of 2021. The increase mainly came from increased fulfillment fees and payment processing fees.

Total operating expenses were RMB17,653.6 million (US$2,481.7 million), an increase of 38% from RMB12,807.8 million in the same quarter of 2021.

  • Sales and marketing expenses were RMB14,048.8 million (US$1,975.0 million), an increase of 40% from RMB10,050.6 million in the same quarter of 2021, mainly due to increased spending in promotion and advertising activities.

  • General and administrative expenses were RMB906.6 million (US$127.4 million), an increase of 171% from RMB334.8 million in the same quarter of 2021, primarily due to an increase in staff related costs.

  • Research and development expenses were RMB2,698.2 million (US$379.3 million), an increase of 11% from RMB2,422.4 million in the same quarter of 2021. 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 RMB10,436.6 million (US$1,467.2 million), an increase of 388% from RMB2,139.3 million in the same quarter of 2021. Non-GAAP operating profit in the quarter was RMB12,301.5 million (US$1,729.3 million), an increase of 277% from RMB3,260.7 million in the same quarter of 2021.

Net income attributable to ordinary shareholders in the quarter was RMB10,588.6 million (US$1,488.5 million), an increase of 546% from RMB1,640.0 million in the same quarter of 2021. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB12,447.2 million (US$1,749.8 million), an increase of 295% from RMB3,150.2 million in the same quarter of 2021.

Basic earnings per ADS was RMB8.38 (US$1.18) and diluted earnings per ADS was RMB7.34 (US$1.03), compared with basic earnings per ADS of RMB1.31 and diluted earnings per ADS of RMB1.15 in the same quarter of 2021. Non-GAAP diluted earnings per ADS was RMB8.62 (US$1.21), compared with RMB2.18 in the same quarter of 2021.

Net cash flow provided by operating activities was RMB11,651.8 million (US$1,638.0 million), compared with RMB8,736.6 million in the same quarter of 2021, mainly due to the increase in net income and the changes in working capitals.

Cash, cash equivalents and short-term investments were RMB137.8 billion (US$19.4 billion) as of September 30, 2022, compared with RMB92.9 billion as of December 31, 2021.

Conference Call

The Company will host a conference call to discuss the earnings at 7:30 AM U.S. Eastern Time on Monday, November 28, 2022 (8:30 PM Beijing/Hong Kong Time on Monday, November 28, 2022).

The conference call will be webcast live at https://investor.pddholdings.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 and non-GAAP net income 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 the Company’s strategic and operational plans, contain forward-looking statements. The Company 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 third parties. Statements that are not historical facts, including but not limited to statements about the Company’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: the Company’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 third-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 and global e-commerce markets; changes in its revenues and certain cost or expense items; the expected growth of China’s and global e-commerce markets; PRC governmental policies and regulations relating to the Company’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 the Company’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 the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

About PDD

PDD is a multinational commerce group that owns and operates a portfolio of businesses. PDD aims to bring more businesses and people into the digital economy so that local communities and small businesses can benefit from the increased productivity and convenience through new opportunities.

For more information, please visit www.pddholdings.com.



PDD
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
 
 As of
 December
31, 2021
 September 30, 2022
 RMB RMB US$
   (Unaudited)
    
ASSETS     
Current assets     
Cash and cash equivalents6,426,715 25,601,547 3,599,009
Restricted cash59,617,256 48,808,388 6,861,375
Receivables from online payment platforms673,737 476,329 66,961
Short-term investments86,516,618 112,207,949 15,773,944
Amounts due from related parties4,250,155 4,680,281 657,943
Prepayments and other current assets3,424,687 1,795,802 252,448
Total current assets 160,909,168 193,570,296 27,211,680
      
Non-current assets     
Property, equipment and software, net2,203,323 1,148,010 161,385
Intangible assets701,220 297,856 41,872
Right-of-use assets938,537 1,235,435 173,675
Deferred tax assets31,504 27,707 3,895
Other non-current assets16,425,966 12,828,680 1,803,427
Total non-current assets20,300,550 15,537,688 2,184,254
      
Total Assets181,209,718 209,107,984 29,395,934



PDD
 CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
 
 As of
 December
31, 2021
 September 30, 2022
  RMB  RMB  US$
    (Unaudited)
    
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current liabilities     
Amounts due to related parties1,963,007  2,600,563 365,581
Customer advances and deferred revenues1,166,764  1,391,560 195,622
Payable to merchants62,509,714  51,562,514 7,248,543
Accrued expenses and other liabilities14,085,513  14,242,036 2,002,114
Merchant deposits13,577,552  15,122,695 2,125,915
Lease liabilities427,164  512,838 72,094
Total current liabilities93,729,714  85,432,206 12,009,869
      
Non-current liabilities     
Convertible bonds311,788,907  15,749,603 2,214,044
Lease liabilities544,263  750,257 105,469
Deferred tax liabilities31,291  46,047 6,473
Other non-current liabilities996  - -
Total non-current liabilities12,365,457  16,545,907 2,325,986
      
Total Liabilities106,095,171  101,978,113 14,335,855
      
      
Shareholders’ equity     
Ordinary shares161  162 23
Additional paid-in capital395,340,819  96,754,398 13,601,518
Accumulated other comprehensive (loss)/ income3(2,519,900) 4,630,973 651,012
Accumulated (deficits)/ surplus3(17,706,533) 5,744,338 807,526
Total Shareholders’ Equity75,114,547  107,129,871 15,060,079
      
Total Liabilities and Shareholders’ Equity181,209,718  209,107,984 29,395,934
      

___________________________

3 The Company adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) on January 1, 2022, using the modified retrospective method with a cumulative-effect adjustment to the opening balance of convertible bonds, additional paid-in capital, accumulated other comprehensive income/ (loss) and accumulated surplus/ (deficits).


PDD
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Amounts in thousands of RMB and US$)
 
  For the three months ended September 30, For the nine months ended September 30,
  2021 2022
 2021 2022
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues 21,505,758  35,504,304  4,991,116  66,719,077  90,737,561  12,755,684 
Costs of revenues (6,558,648) (7,414,132) (1,042,262) (25,202,584) (22,535,593) (3,168,004)
Gross profit 14,947,110  28,090,172  3,948,854  41,516,493  68,201,968  9,587,680 
             
Sales and marketing expenses (10,050,611) (14,048,820) (1,974,952) (33,435,891) (36,611,335) (5,146,740)
General and administrative expenses (334,806) (906,573) (127,444) (1,120,812) (2,324,408) (326,760)
Research and development expenses (2,422,421) (2,698,166) (379,302) (6,969,995) (7,978,039) (1,121,534)
Total operating expenses (12,807,838) (17,653,559) (2,481,698) (41,526,698) (46,913,782) (6,595,034)
             
Operating profit/ (loss) 2,139,272  10,436,613  1,467,156  (10,205) 21,288,186  2,992,646 
             
Interest and investment income, net 631,913  1,092,150  153,532  2,147,019  2,645,402  371,885 
Interest expenses (298,431) (13,646) (1,918) (927,886) (39,434) (5,544)
Foreign exchange (loss)/ gain (10,433) 53,374  7,503  23,645  (125,891) (17,697)
Other (loss)/ income, net (52,606) 546,528  76,829  541,169  2,052,533  288,540 
             
Profit before income tax and share of results of equity investees  

2,409,715
  12,115,019  1,703,102  

1,773,742
  25,820,796  3,629,830 
Share of results of equity investees 85,011  10,732  1,509  230,148  (76,377) (10,737)
Income tax expenses (854,766) (1,537,177) (216,093) (854,766) (3,660,054) (514,522)
Net income 1,639,960  10,588,574  1,488,518  1,149,124  22,084,365  3,104,571 
                   



PDD
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(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,
  2021 2022 2021 2022
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
             
Net income 1,639,960 10,588,574 1,488,518 1,149,124 22,084,365 3,104,571
Net income attributable to ordinary shareholders 1,639,960 10,588,574 1,488,518 1,149,124 22,084,365 3,104,571
             
Earnings per ordinary share:            
-Basic 0.33 2.10 0.29 0.23 4.38 0.62
-Diluted 0.29 1.84 0.26 0.20 3.86 0.54
             
Earnings per ADS (4 ordinary shares equals 1 ADS ):            
-Basic 1.31 8.38 1.18 0.92 17.52 2.46
-Diluted 1.15 7.34 1.03 0.80 15.43 2.17
             
Weighted average number of outstanding ordinary shares (in thousands):            
-Basic 5,021,164 5,051,256 5,051,256 5,006,285 5,043,522 5,043,522
-Diluted 5,703,986 5,776,165 5,776,165 5,715,932 5,733,453 5,733,453



PDD
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,
  2021 2022 2021 2022
   RMB   RMB   US$  RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues            
- Online marketing services and others 17,946,496 28,425,645 3,996,014 50,138,401 71,756,721 10,087,399
- Transaction services 3,477,147 7,022,252 987,173 9,416,260 18,829,866 2,647,061
- Merchandise sales 82,115 56,407 7,929 7,164,416 150,974 21,224
Total 21,505,758 35,504,304 4,991,116 66,719,077  90,737,561 12,755,684
             



PDD
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,
  2021 2022 2021 2022
  RMB RMB US$ RMB RMB US$
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Share-based compensation costs included in:            
Costs of revenues 9,089 5,841 821 20,895 22,011 3,094
Sales and marketing expenses 384,704 608,462 85,536 1,067,727 1,623,126 228,175
General and administrative expenses 156,731 680,252 95,628 568,266 1,724,567 242,436
Research and development expenses 570,929 570,327 80,176 1,625,137 1,862,276 261,795
Total 1,121,453 1,864,882 262,161 3,282,025 5,231,980 735,500
             



PDD
 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,
  2021 2022
 2021 2022
  RMB RMB US$ RMB RMB US$
  (Unaudited)  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net cash generated from operating activities 8,736,568  11,651,823  1,637,990  12,383,236  21,957,598  3,086,752 
Net cash used in investing activities (13,764,757) (356,394) (50,102) (22,869,860) (13,801,754) (1,940,220)
Net cash generated from/ (used in) financing activities 146  258  36  (1,875,347) 569  80 
Effect of exchange rate changes on cash, cash equivalents and restricted cash 22,160  250,227  35,176  (118,703) 209,551  29,458 
             
(Decrease)/ increase in cash, cash equivalents and restricted cash (5,005,883) 11,545,914  1,623,100  (12,480,674) 8,365,964  1,176,070 
Cash, cash equivalents and restricted cash at beginning of period  67,368,845   62,864,021  8,837,284  74,843,636  66,043,971  9,284,314 
Cash, cash equivalents and restricted cash at end of period  62,362,962   74,409,935  10,460,384  62,362,962  74,409,935  10,460,384 
                   



PDD
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,
  2021 2022
 2021 2022
  RMB RMB US$ RMB RMB US$
  (Unaudited)  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Operating profit/ (loss) 2,139,272 10,436,613  1,467,156  (10,205) 21,288,186 2,992,646
Add: Share-based compensation 1,121,453 1,864,882  262,161  3,282,025  5,231,980 735,500
Non-GAAP operating profit 3,260,725 12,301,495  1,729,317  3,271,820  26,520,166 3,728,146
             
Net income attributable to ordinary shareholders 1,639,960 10,588,574  1,488,518  1,149,124  22,084,365 3,104,571
Add: Share-based compensation 1,121,453 1,864,882  262,161  3,282,025  5,231,980 735,500
Add: Interest expense related to convertible bonds’ amortization to face value and gain or loss on extinguishment, net 298,443 13,646  1,918  915,917  39,434 5,544
Add: Loss/ (gain) from fair value changes of long-term investments 90,300 (19,886) (2,796) 38,064  68,173 9,584
Non-GAAP net income attributable to ordinary shareholders 3,150,156  12,447,216  1,749,801  5,385,130  27,423,952 3,855,199
             
Non-GAAP diluted weighted-average number of ordinary shares outstanding (in thousands) 5,767,207 5,776,165  5,776,165  5,789,157  5,733,453 5,733,453
             
Diluted earnings per ordinary share 0.29 1.84  0.26  0.20  3.86 0.54
Add: Non-GAAP adjustments to earnings per ordinary share 0.26 0.31  0.04  0.73  0.92 0.13
Non-GAAP diluted earnings per ordinary share 0.55 2.15  0.30  0.93  4.78 0.67
Non-GAAP diluted earnings per ADS 2.18 8.62  1.21  3.72  19.13 2.69
                

For investor and media inquiries, please contact:investor@pddholdings.commedia@pddholdings.com
Source: PD