Pinduoduo’s Q1 net profit soared 202% year-on-year, with revenue up 131%

In the earnings call, they stated they are not overly focused on performance fluctuations and welcome healthy competition, emphasizing compliance capabilities for overseas operations.

This marks the fifth consecutive quarter where Pinduoduo has outperformed market expectations. Q1 saw transaction services revenue surge 327% to $44.36 billion, surpassing online marketing to become the largest revenue source. Pinduoduo indicated they are still in a growth phase and would make friendly investments if they see good value creation opportunities, which may introduce volatility but aid long-term growth.

Their global business will focus on supply chain, services, and compliance improvements. The company is committed to long-term intrinsic value growth rather than short-term financial metrics.

Analysts noted that Pinduoduo’s impressive performance was driven by reduced losses in the Temu business and improved overall operational efficiency and profitability. Q1 advertising revenue reached 42.5 billion yuan, up 56% year-on-year, exceeding market expectations of 40%+. Main site revenue is nearing 76% of Alibaba's CMR. Temu’s commission revenue surpassed advertising income for the first time, exceeding market expectations by 6 billion yuan. Despite a higher proportion of Temu business, Pinduoduo’s gross margin improved, and R&D and administrative expenses were well-controlled.