PDD Holdings Inc. (NASDAQ:PDD) shares gained 1% in pre-market trading after the e-commerce group reported second-quarter earnings that topped analyst expectations, although revenue came in slightly below forecasts.
The company posted adjusted earnings per ADS of RMB19.33 ($2.85), ahead of the RMB18.35 consensus estimate. Revenue increased 8% year on year to RMB112.4 billion ($16.6 billion), compared with RMB104.0 billion in the second quarter of 2025, but fell short of analysts’ expectations of RMB113.9 billion.
Transaction Services Drive Revenue Growth
PDD Holdings’ top-line growth was primarily supported by its transaction services business, where revenue climbed 13% from the same period last year to RMB54.7 billion.
Adjusted operating profit also improved, increasing 5% year on year to RMB29.1 billion ($4.3 billion), compared with RMB27.7 billion in the corresponding quarter of 2025.
However, adjusted net income attributable to ordinary shareholders declined to RMB28.5 billion ($4.2 billion), down 13% from RMB32.7 billion a year earlier.
PDD Increases Investment in Its Merchant Ecosystem
Management highlighted increased spending on strengthening the company’s platform and supporting merchants during the quarter.
“We stepped up our ecosystem investments in the second quarter,” said Jun Liu, VP of Finance. “At this stage, our priority is helping merchants thrive and strengthening the broader industry ecosystem. We will continue to focus on these fundamentals to drive the platform’s sustainable development over the long term.”
The investment push contributed to higher costs, with total operating expenses rising 13% to RMB36.6 billion. Sales and marketing expenses increased to RMB29.7 billion from RMB27.2 billion in the year-earlier period.
Operating Cash Flow Strengthens
Despite higher expenditure and the decline in adjusted net income, PDD Holdings delivered stronger cash generation during the quarter.
Operating cash flow increased to RMB25.7 billion, compared with RMB21.6 billion in the second quarter of 2025.
The combination of better-than-expected adjusted earnings, continued revenue growth and stronger operating cash flow helped support NASDAQ:PDD shares in pre-market trading, although the modest revenue miss and higher investment spending provided some counterbalance to the results.
PDD Holdings stock price
