PDD Holdings Announces Fourth Quarter 2022 and Fiscal Year 2022 Unaudited Financial Results


DUBLIN and SHANGHAI, March 20, 2023 (GLOBE NEWSWIRE) -- PDD Holdings Inc. (“PDD Holdings” or the “Company”) (NASDAQ: PDD), today announced its unaudited financial results for the fourth quarter and the fiscal year ended December 31, 2022.

Fourth Quarter 2022 Highlights

  • Total revenues in the quarter were RMB39,820.0 million (US$15,773.4 million), an increase of 46% from RMB27,230.9 million in the same quarter of 2021.
  • Operating profit in the quarter was RMB9,113.7 million (US$1,321.4 million), an increase of 32% from RMB6,907.0 million in the same quarter of 2021. Non-GAAP2 operating profit in the quarter was RMB11,600.1 million (US$1,681.9 million), an increase of 38% from RMB8,399.7 million in the same quarter of 2021.
  • Net income attributable to ordinary shareholders in the quarter was RMB9,453.7 million (US$1,370.7 million), an increase of 43% from RMB6,619.5 million in the same quarter of 2021. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB12,105.8 million (US$1,755.2 million), an increase of 43% from RMB8,444.4 million in the same quarter of 2021.

“In 2022, we focused on strengthening our core capabilities to improve our technological know-how and bring the benefits of digitalization to society,” said Mr. Lei Chen, Chairman and Chief Executive Officer of PDD Holdings. “As we enter the new year, we remain dedicated to creating value for all stakeholders through innovation.”

“We continued our technology focus with our annual R&D spending exceeding RMB 10 billion,” said Ms. Jun Liu, VP of Finance of PDD Holdings. “We will further step up our investments in technology to drive sustainable growth of our company.”

_______________________________

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 RMB6.8972 to US$1.00, the noon buying rate in effect on December 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 certain 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.

Fourth Quarter 2022 Financial Results

Total revenues were RMB39,820.0 million (US$5,773.4 million), an increase of 46% from RMB27,230.9 million in the same quarter of 2021. The increase was primarily due to an increase in revenues from online marketing services and transaction services, partially offset by the decrease of revenues from merchandise sales.

  • Revenues from online marketing services and others were RMB30,965.2 million (US$4,489.5 million), an increase of 38% from RMB22,425.0 million in the same quarter of 2021.
  • Revenues from transaction services were RMB8,796.6 million (US$1,275.4 million), an increase of 86% from RMB4,724.2 million in the same quarter of 2021.
  • Revenues from merchandise sales were RMB58.2 million (US$8.4 million), a decrease of 29% from RMB81.7 million in the same quarter of 2021.

Total costs of revenues were RMB8,926.7 million (US$1,294.3 million), an increase of 37% from RMB6,515.5 million in the same quarter of 2021. The increase mainly came from the increased server cost due to a one-off rebate in the fourth quarter of 2021 and increased fulfilment fees.

Total operating expenses were RMB21,779.6 million (US$3,157.7 million), compared with RMB13,808.4 million in the same quarter of 2021.

  • Sales and marketing expenses were RMB17,732.4 million (US$2,571.0 million), an increase of 56% from RMB11,365.8 million in the same quarter of 2021, mainly due to the increased spending in promotion and advertising activities.
  • General and administrative expenses were RMB1,640.5 million (US$237.9 million), an increase of 291% from RMB420.0 million in the same quarter of 2021, primarily due to an increase in staff related costs.
  • Research and development expenses were RMB2,406.7 million (US$348.9 million), an increase of 19% from RMB2,022.6 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 and server cost.

Operating profit in the quarter was RMB9,113.7 million (US$1,321.4 million), an increase of 32% from RMB6,907.0 million in the same quarter of 2021. Non-GAAP operating profit in the quarter was RMB11,600.1 million (US$1,681.9 million), an increase of 38% from RMB8,399.7 million in the same quarter of 2021.

Net income attributable to ordinary shareholders in the quarter was RMB9,453.7 million (US$1,370.7 million), an increase of 43% from RMB6,619.5 million in the same quarter of 2021. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB12,105.8 million (US$1,755.2 million), an increase of 43% from RMB8,444.4 million in the same quarter of 2021.

Basic earnings per ADS was RMB7.42 (US$1.08) and the diluted earnings per ADS was RMB6.52 (US$0.95), compared with basic earnings per ADS of RMB5.26 and diluted earnings per ADS of RMB4.66 in the same quarter of 2021. Non-GAAP diluted earnings per ADS was RMB8.34 (US$1.21), compared with RMB5.88 in the same quarter of 2021.

Net cash generated from operating activities was RMB26,550.3 million (US$3,849.4 million), compared with RMB16,399.8 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 RMB149.4 billion (US$21.7 billion) as of December 31, 2022, compared with RMB92.9 billion as of December 31, 2021.

Fiscal Year 2022 Financial Results

Total revenues were RMB130,557.6 million (US$18,929.1 million), representing an increase of 39% from RMB93,949.9 million in 2021. The increase was primarily due to an increase in revenues from online marketing services and revenues from transaction services, partially offset by the decrease of revenues from merchandise sales.

  • Revenues from online marketing services and others were RMB102,721.9 million (US$14,893.3 million), representing an increase of 42% from RMB72,563.4 million in 2021.
  • Revenues from transaction services were RMB27,626.5 million (US$4,005.5 million), representing an increase of 95% from RMB14,140.4 million in 2021.
  • Revenues from merchandise sales were RMB209.2 million (US$30.3 million), a decrease of 97% from RMB7,246.1 million in 2021.

Total costs of revenues were RMB31,462.3 million (US$4,561.6 million), a slight decrease of 1% from RMB31,718.1 million in 2021.

Total operating expenses were RMB68,693.4 million (US$9,959.6 million), compared with RMB55,335.1 million in 2021.

  • Sales and marketing expenses were RMB54,343.7 million (US$7,879.1 million), an increase of 21% from RMB44,801.7 million in 2021, mainly due to the increased spending in promotion and advertising activities.
  • General and administrative expenses were RMB3,964.9 million (US$574.9 million), an increase of 157% from RMB1,540.8 million in 2021, primarily due to an increase in staff related costs.
  • Research and development expenses were RMB10,384.7 million (US$1,505.6 million), an increase of 15% from RMB8,992.6 million in 2021. The increase was primarily due to an increase in headcount and the recruitment of more experienced R&D personnel.

Operating profit was RMB30,401.9 million (US$4,407.9 million), an increase of 341% from RMB6,896.8 million in 2021. Non-GAAP operating profit was RMB38,120.3 million (US$5,526.9 million), an increase of 227% from RMB11,671.5 million in 2021.

Net income attributable to ordinary shareholders was RMB31,538.1 million (US$4,572.6 million), an increase of 306% from RMB7,768.7 million in 2021. Non-GAAP net income attributable to ordinary shareholders was RMB39,529.7 million (US$5,731.3 million), an increase of 186% from RMB13,829.5 million in 2021.        

Basic earnings per ADS was RMB24.94 (US$3.62) and the diluted earnings per ADS was RMB21.93 (US$3.18), compared with basic earnings per ADS of RMB6.20 and diluted earnings per ADS of RMB5.44 in 2021. Non-GAAP diluted earnings per ADS was RMB27.45 (US$3.98), compared with RMB9.56 in 2021.

Net cash generated from operating activities was RMB48,507.9 million (US$7,033.0 million), compared with RMB28,783.0 million in 2021, mainly due to the increase in net income and the changes in working capitals.

Conference Call

The Company will host a conference call to discuss the earnings at 7:30 AM ET on Monday, March 20, 2023 (11:30 AM GMT and 7:30 PM HKT on the same day).

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 certain 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 certain 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 Holdings

PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses, including Pinduoduo and Temu. PDD Holdings 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 new opportunities.

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

 
PDD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
 
 As of
 December
31, 2021
 December 31, 2022
 RMB RMB US$
   (Unaudited)
    
ASSETS     
Current assets     
Cash and cash equivalents6,426,715 34,326,192 4,976,830
Restricted cash59,617,256 57,974,225 8,405,473
Receivables from online payment platforms673,737 587,696 85,208
Short-term investments86,516,618 115,112,554 16,689,751
Amounts due from related parties4,250,155 6,318,830 916,144
Prepayments and other current assets3,424,687 2,298,379 333,235
Total current assets 160,909,168 216,617,876 31,406,641
      
Non-current assets     
Property, equipment and software, net2,203,323 1,044,847 151,489
Intangible assets701,220 134,002 19,428
Right-of-use assets938,537 1,416,081 205,312
Deferred tax assets31,504 1,045,030 151,515
Other non-current assets16,425,966 16,862,117 2,444,777
Total non-current assets20,300,550 20,502,077 2,972,521
      
Total Assets181,209,718 237,119,953 34,379,162
      

 

 
PDD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
 
 As of
 December
31, 2021
 December 31, 2022
 RMB RMB US$
   (Unaudited)
    
    
LIABILITIES AND SHAREHOLDERS’ EQUITY
   
Current liabilities     
Amounts due to related parties1,963,007  1,676,391 243,054
Customer advances and deferred revenues1,166,764  1,389,655 201,481
Payable to merchants62,509,714  63,316,695 9,180,058
Accrued expenses and other liabilities14,085,513  20,960,723 3,039,019
Merchant deposits13,577,552  15,058,229 2,183,238
Convertible bonds, current portion3-  13,885,751 2,013,245
Lease liabilities427,164  602,036 87,287
Total current liabilities93,729,714  116,889,480 16,947,382
      
Non-current liabilities     
Convertible bonds311,788,907  1,575,755 228,463
Lease liabilities544,263  870,782 126,252
Deferred tax liabilities31,291  13,025 1,888
Other non-current liabilities996  - -
Total non-current liabilities12,365,457  2,459,562 356,603
      
Total Liabilities106,095,171  119,349,042 17,303,985
      
      
Shareholders’ equity     
Ordinary shares161  170 25
Additional paid-in capital395,340,819  99,250,468 14,389,965
Statutory reserves-  5,000 725
Accumulated other comprehensive (loss)/
income3
(2,519,900) 3,322,238 481,679
Accumulated (deficits)/ surplus3(17,706,533) 15,193,035 2,202,783
Total Shareholders’ Equity75,114,547  117,770,911 17,075,177
      
Total Liabilities and Shareholders’ Equity181,209,718  237,119,953 34,379,162
 

______________________________

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 HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands of RMB and US$)
    
 For the three months ended December 31, For the year ended December 31,
 2021
 2022
 2021
 2022
 RMB RMB US$ RMB RMB US$
 (Unaudited) (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Revenues27,230,862  39,820,028  5,773,361  93,949,939  130,557,589  18,929,071 
Costs of revenues(6,515,509) (8,926,705) (1,294,251) (31,718,093) (31,462,298) (4,561,604)
Gross profit20,715,353  30,893,323  4,479,110  62,231,846  99,095,291  14,367,467 
            
Sales and marketing expenses(11,365,829) (17,732,384) (2,570,954) (44,801,720) (54,343,719) (7,879,099)
General and administrative expenses(419,962) (1,640,527) (237,854) (1,540,774) (3,964,935) (574,862)
Research and development expenses(2,022,595) (2,406,677) (348,935) (8,992,590) (10,384,716) (1,505,642)
Total operating expenses(13,808,386) (21,779,588) (3,157,743) (55,335,084) (68,693,370) (9,959,603)
            
Operating profit6,906,967  9,113,735  1,321,367  6,896,762  30,401,921  4,407,864 
            
Interest and investment income, net914,643  1,351,698  195,978  3,061,662  3,997,100  579,525 
Interest expenses(303,116) (12,221) (1,772) (1,231,002) (51,655) (7,489)
Foreign exchange gain/ (loss)48,105  (23,819) (3,453) 71,750  (149,710) (21,706)
Other income, net115,086  168,825  24,477  656,255  2,221,358  322,066 
            
Profit before income tax and share of             results of equity investees7,681,685  10,598,218  
1,536,597
  9,455,427  36,419,014  5,280,260 
Share of results of equity investees16,680  (78,908) (11,441) 246,828  (155,285) (22,514)
Income tax expenses(1,078,819) (1,065,613) (154,499) (1,933,585) (4,725,667) (685,157)
Net income6,619,546  9,453,697  1,370,657  7,768,670  31,538,062  4,572,589 
                  


 
PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands of RMB and US$, except for per share data)
 
 For the three months ended December 31, For the year ended December 31,
 2021 2022 2021 2022
  RMB   RMB   US$  RMB RMB US$
 (Unaudited) (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
            
Net income6,619,546  9,453,697 1,370,657 7,768,670  31,538,062  4,572,589
Net income attributable to ordinary
    shareholders
6,619,546  9,453,697 1,370,657 7,768,670  31,538,062  4,572,589
            
Earnings per ordinary share:           
-Basic1.32 1.85 0.27 1.55 6.24 0.90
-Diluted1.16 1.63 0.24 1.36 5.48 0.79
            
Earnings per ADS (4 ordinary shares equals 1 ADS ):           
-Basic5.26 7.42 1.08 6.20 24.94 3.62
-Diluted4.66 6.52 0.95 5.44 21.93 3.18
            
Weighted average number of outstanding
    ordinary shares (in thousands):
           
-Basic5,031,543 5,099,138 5,099,138 5,012,651 5,057,540 5,057,540
-Diluted5,684,577 5,809,212 5,809,212 5,713,764 5,761,291 5,761,291


 
PDD HOLDINGS INC.
NOTES TO FINANCIAL INFORMATION
(Amounts in thousands of RMB and US$)
    
 For the three months ended December 31, For the year ended December 31,
 2021 2022 2021 2022
  RMB   RMB   US$  RMB RMB US$
 (Unaudited) (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Revenues           
- Online marketing services and others22,425,001 30,965,203 4,489,532 72,563,402 102,721,924 14,893,279
- Transaction services4,724,189 8,796,628 1,275,391 14,140,449 27,626,494 4,005,465
- Merchandise sales81,672 58,197 8,438 7,246,088 209,171 30,327
Total27,230,862 39,820,028 5,773,361 93,949,939 130,557,589 18,929,071
            


 
PDD HOLDINGS INC.
NOTES TO FINANCIAL INFORMATION
(Amounts in thousands of RMB and US$)
 
 For the three months ended December 31, For the year ended December 31,
 2021 2022 2021 2022
 RMB RMB US$ RMB RMB US$
 (Unaudited) (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Share-based compensation costs
    included in:
           
Costs of revenues5,729 11,777 1,708 26,624 33,788 4,899
Sales and marketing expenses544,492 535,550 77,647 1,612,219 2,158,676 312,979
General and administrative expenses224,155 1,279,760 185,548 792,421 3,004,327 435,586
Research and development expenses718,329 659,298 95,589 2,343,466 2,521,574 365,594
Total1,492,705 2,486,385 360,492 4,774,730 7,718,365 1,119,058

        

 
PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of RMB and US$)
 
 For the three months ended December 31, For the year ended December 31,
 2021 2022
 2021 2022
 RMB RMB US$ RMB RMB US$
 (Unaudited)  (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Net cash generated from operating activities16,399,775  26,550,262  3,849,426  28,783,011  48,507,860  7,032,979 
Net cash used in investing activities(12,692,505) (8,559,916) (1,241,071) (35,562,365) (22,361,670) (3,242,137)
Net cash generated from/ (used in) financing
   activities
193  9,510  1,379  (1,875,154) 10,079  1,461 
Effect of exchange rate changes on cash, cash
   equivalents and restricted cash
(26,454) (109,374) (15,858) (145,157) 100,177  14,524 
            
Increase/ (decrease) in cash, cash equivalents and restricted cash3,681,009  17,890,482  2,593,876  (8,799,665) 26,256,446  3,806,827 
Cash, cash equivalents and restricted cash at
   beginning of period/ year
62,362,962  74,409,935   10,788,427   74,843,636  66,043,971   9,575,476  
Cash, cash equivalents and restricted cash at
   end of period/ year
66,043,971  92,300,417   13,382,303   66,043,971  92,300,417   13,382,303  
                  


 
PDD HOLDINGS 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 December 31, For the year ended December 31,
 2021 2022 2021 2022
 RMB RMB US$ RMB RMB US$
 (Unaudited) (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Operating profit6,906,967 9,113,735 1,321,367 6,896,762 30,401,921 4,407,864
Add: Share-based compensation1,492,705 2,486,385 360,492 4,774,730 7,718,365 1,119,058
Non-GAAP operating profit8,399,672 11,600,120 1,681,859 11,671,492 38,120,286 5,526,922
            
Net income attributable to ordinary shareholders6,619,546 9,453,697 1,370,657 7,768,670 31,538,062 4,572,589
Add: Share-based compensation1,492,705 2,486,385 360,492 4,774,730 7,718,365 1,119,058
Add: Interest expense related to convertible bonds’
amortization to face value and gain or loss on
extinguishment, net
303,141 12,221 1,772 1,219,058 51,655 7,489
Add: Loss from fair value change of certain
investments
29,001 153,467 22,251 67,065 221,640 32,135
Non-GAAP net income attributable to ordinary shareholders8,444,393 12,105,770 1,755,172 13,829,523 39,529,722 5,731,271
            
Non-GAAP diluted weighted-average number of
ordinary shares outstanding (in thousands)
5,747,784 5,809,212 5,809,212 5,784,465 5,761,291 5,761,291
            
Diluted earnings per ordinary share1.16 1.63 0.24 1.36 5.48 0.79
Add: Non-GAAP adjustments to earnings per
ordinary share
0.31 0.45 0.06 1.03 1.38 0.20
Non-GAAP diluted earnings per ordinary share1.47 2.08 0.30 2.39 6.86 0.99
Non-GAAP diluted earnings per ADS5.88 8.34 1.21 9.56 27.45 3.98
 

Coordonnées