SHANGHAI, China, March 11, 2020 (GLOBE NEWSWIRE) -- Pinduoduo Inc. ("Pinduoduo" or the "Company") (NASDAQ: PDD), an innovative and fast growing technology platform and one of the leading Chinese e-commerce players, today announced its unaudited financial results for the fourth quarter and the fiscal year ended December 31, 2019.

Fourth Quarter 2019 Highlights

  • GMV1 in the twelve-month period ended December 31, 2019 was RMB1,006.6 billion (US$2144.6 billion), an increase of 113% from RMB471.6 billion in the twelve-month period ended December 31, 2018.
     
  • Total revenues in the quarter were RMB10,792.7 million (US$1,550.3 million), an increase of 91% from RMB5,653.9 million in the same quarter of 2018.
     
  • Average monthly active users3 in the quarter were 481.5 million, an increase of 77% from 272.6 million in the same quarter of 2018.
     
  • Active buyers4 in the twelve-month period ended December 31, 2019 were 585.2 million, an increase of 40% from 418.5 million in the twelve-month period ended December 31, 2018.
     
  • Annual spending per active buyer5 in the twelve-month period ended December 31, 2019 was RMB1,720.1 (US$247.1), an increase of 53% from RMB1,126.9 in the twelve-month period ended December 31, 2018.

"2019 was an important, formative year for Pinduoduo, a year in which we built up our capabilities and offerings and surpassed RMB1 trillion in GMV for the first time," said Mr. Zheng Huang, Chairman and Chief Executive Officer of Pinduoduo. "We continued to invest in our 585 million users and remain committed to creating an open platform that would benefit all and serve the best interests of our consumers.”

“Since the coronavirus outbreak, we have directed the resources of our ecosystem to support frontline relief efforts, stabilize prices of necessities, and help with the recovery of our merchants and business partners,” Mr. Huang continued.

"We further invested in sales and marketing during the fourth quarter to drive engagement and attract more users,” added Mr. David Liu, Vice President of Strategy. “Our highly engaged users are exploring more categories and making more purchases, driving merchant demand for our online marketing services.”

Fourth Quarter 2019 Unaudited Financial Results

Total revenues were RMB10,792.7 million (US$1,550.3 million), an increase of 91% from RMB5,653.9 million in the same quarter of 2018. The increase was primarily due to an increase in revenues from online marketing services.

  • Revenues from online marketing services were RMB9,686.7 million (US$1,391.4 million), an increase of 91% from RMB5,062.4 million in the same quarter of 2018.
     
  • Revenues from transaction services were RMB1,106.0 million (US$158.9 million), an increase of 87% from RMB591.5 million in the same quarter of 2018.

Total costs of revenues were RMB2,037.4 million (US$292.7 million), an increase of 43% from RMB1,424.0 million in the same quarter of 2018. The increase was mainly due to higher costs for cloud services, call center and merchant support services.

Total operating expenses were RMB10,890.6 million (US$1,564.3 million), compared with RMB6,870.8 million in the same quarter of 2018.

  • Sales and marketing expenses were RMB9,272.5 million (US$1,331.9 million), an increase of 54% from RMB6,024.0 million in the same quarter of 2018, mainly due to an increase in online and offline advertisement and promotions.
     
  • General and administrative expenses were RMB345.7 million (US$49.7 million), an increase of 7% from RMB321.6 million in the same quarter of 2018, primarily due to an increase in headcount.
     
  • Research and development expenses were RMB1,272.4 million (US$182.8 million), an increase of 142% from RMB525.2 million in the same quarter of 2018. The increase was primarily due to an increase in headcount and the recruitment of more experienced R&D personnel and an increase in R&D-related cloud services expenses.

Operating loss was RMB2,135.3 million (US$306.7 million), compared with operating loss of RMB2,640.9 million in the same quarter of 2018. Non-GAAP operating loss6 was RMB1,336.6 million (US$192.0 million), compared with operating loss of RMB2,112.9 million in the same quarter of 2018.

Net loss attributable to ordinary shareholders was RMB1,751.6 million (US$251.6 million), compared with RMB2,423.9 million in the same quarter of 2018. Non-GAAP net loss attributable to ordinary shareholders was RMB815.0 million (US$117.1 million), compared with RMB1,895.9 million in the same quarter of 2018.

Basic and diluted net loss per ADS were RMB1.52 (US$0.20), compared with RMB2.16 in the same quarter of 2018. Non-GAAP basic and diluted net loss per ADS were RMB0.72 (US$0.12), compared with RMB1.72 in the same quarter of 2018.

Net cash flow from operating activities was RMB9,598.0 million (US$1,378.7 million), compared with RMB5,732.4 million in the same quarter of 2018, primarily due to an increase in online marketing services revenues.

Cash, cash equivalents and restricted cash were RMB33.3 billion (US$4.8 billion) as of December 31, 2019, compared with RMB30.5 billion as of December 31, 2018.

Fiscal Year 2019 Financial Results

Total revenues were RMB30,141.9 million (US$4,329.6 million), representing an increase of 130% from RMB13,120.0 million in 2018. The increase was primarily due to an increase in revenues from online marketing services.

  • Revenues from online marketing services were RMB26,813.6 million (US$3,851.5 million), representing an increase of 133% from RMB11,515.6 million in 2018.
     
  • Revenues from transaction services were RMB3,328.2 million (US$478.1 million), representing an increase of 107% from RMB1,604.4 million in 2018.

Total costs of revenues were RMB6,338.8 million (US$910.5 million), representing an increase of 118% from RMB2,905.2 million in 2018. The increase from last year is mainly due to higher costs for cloud services, call center and merchant support services.

Total operating expenses were RMB32,341.3 million (US$4,645.5 million), compared with RMB21,014.5 million in 2018.

  • Sales and marketing expenses were RMB27,174.2 million (US$3,903.3 million), an increase of 102% from RMB13,441.8 million in 2018 as we invested in cultivating greater user recognition and engagement through online and offline advertising campaigns and promotions.
     
  • General and administrative expenses were RMB1,296.7 million (US$186.3 million), a significant decrease from RMB6,456.6 million in 2018, primarily due to a one-time share-based compensation expense recorded in April, 2018.
     
  • Research and development expenses were RMB3,870.4 million (US$555.9 million), an increase of 247% from RMB1,116.1 million in 2018. The increase was primarily due to an increase in headcount and the recruitment of more experienced R&D personnel and an increase in R&D-related cloud services expenses.

Operating loss was RMB8,538.2 million (US$1,226.4 million), compared with operating loss of RMB10,799.7 million in 2018. Non-GAAP operating loss was RMB5,980.5 million (US$859.0 million), compared with RMB3,958.2 million in 2018.

Net loss attributable to ordinary shareholders was RMB6,967.6 million (US$1,000.8 million), compared with RMB10,297.6 million in 2018. Non-GAAP net loss attributable to ordinary shareholders was RMB4,265.8 million (US$612.7 million), compared with RMB3,456.0 million in 2018. 

Basic and diluted net loss per ADS was RMB6.04 (US$0.88), compared with RMB13.88 in 2018. Non-GAAP basic and diluted net loss per ADS were RMB3.68 (US$0.52), compared with RMB4.64 in 2018.

Net cash provided by operating activities was RMB14,821.0 million (US$2,128.9 million), compared with RMB7,767.9 million in 2018, primarily due to an increase in online marketing services revenues.

Conference Call

The Company will host a conference call to discuss the earnings at 7:30 AM U.S. Eastern Time on Wednesday, March 11, 2020 (7:30 PM Beijing/Hong Kong Time on Wednesday, March 11, 2020).

Dial-in numbers for the live conference call are as follows:

International +65-6713-5090
Mainland China 4006-208-038
U.S. +1-845-675-0437
U.K. +44-203-621-4779
Hong Kong +852-3018-6771
Passcode: Pinduoduo

A telephone replay of the call will be available after the conclusion of the conference call until 8:59 AM ET on March 18, 2020.

Dial-in numbers for the replay are as follows:

International +61-2-8199-0299 
U.S. +1-646-254-3697 
Passcode: 7378315

A live and archived webcast of the conference call will be available on the Investor Relations section of Pinduoduo’s website at http://investor.pinduoduo.com/

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP operating loss and non-GAAP net 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 and interest expenses related to the convertible bonds’ amortization to face value.

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 and interest expenses related to the convertible bonds’ amortization to face value, which is a non-cash charge. 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 an innovative and fast growing technology platform that provides buyers with value-for-money merchandise and a fun and interactive shopping experience. The Pinduoduo mobile platform offers a comprehensive selection of attractively priced merchandise, featuring a dynamic social shopping experience that leverages social networks effectively.

For more information, please visit http://investor.pinduoduo.com/

For investor and media inquiries, please contact:

Pinduoduo Inc.
investor@pinduoduo.com
internationalmedia@pinduoduo.com

 
PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
 
 
 As of
 December
31, 2018
 December 31, 2019
  RMB  RMB  US$
    (Unaudited)
    
ASSETS     
Current Assets     
Cash and cash equivalents14,160,322 5,768,186 828,548
Restricted cash16,379,364 27,577,671 3,961,285
Receivables from online payment platforms247,586 1,050,974 150,963
Short-term investments7,630,689 35,288,827 5,068,923
Amounts due from related parties1,019,033 2,365,528 339,787
Prepayments and other current assets953,989 950,277 136,499
Total current assets 40,390,983 73,001,463 10,486,005
      
Non-current assets     
Property, equipment and software, net29,075 41,273 5,928
Intangible asset2,579,338 1,994,292 286,462
Right-of-use assets- 517,188 74,289
Other non-current assets182,667  503,120 72,269
Total non-current assets2,791,080 3,055,873 438,948
      
Total Assets43,182,063   76,057,336 10,924,953
 


 
PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
 
 
 As of
 December
31, 2018
 December 31, 2019
  RMB  RMB  US$
    (Unaudited)
    
LIABILITIES AND
SHAREHOLDERS’ EQUITY
   
Current Liabilities     
Amounts due to related parties478,113  1,502,892  215,877 
Customer advances and deferred revenue191,482  605,970  87,042 
Payable to merchants17,275,934  29,926,488  4,298,671 
Accrued expenses and other liabilities2,225,667  4,877,062  700,547 
Merchant deposits4,188,273  7,840,912  1,126,277 
Short-term borrowings-  898,748  129,097 
Lease liabilities-  115,734  16,624 
Total current liabilities24,359,469   45,767,806  6,574,135 
      
      
Convertible bonds-  5,206,682  747,893 
Lease liabilities-  428,593  61,564 
Other non-current liabilities-  7,389  1,061 
Total non-current liabilities-  5,642,664  810,518 
      
Total Liabilities24,359,469  51,410,470  7,384,653 
      
      
Shareholders’ equity     
Ordinary shares142  148  21 
Treasury stock-    - 
Additional paid-in capital29,114,527  41,493,949  5,960,233 
Accumulated other comprehensive income1,035,783  1,448,230  208,025 
Accumulated deficits(11,327,858) (18,295,461) (2,627,979)
Total shareholders’ equity 18,822,594  24,646,866  3,540,300 
Total liabilities and shareholders’ equity43,182,063  76,057,336  10,924,953 
      


 
PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS  
(Amounts in thousands of RMB and US$)
 
 
 For the three months ended December 31, For the year ended December 31,
 2018  2019 2018  2019
 RMB RMB US$ RMB RMB US$
 (Unaudited) (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Revenues           
Online marketplace services5,653,922  10,792,726  1,550,279  13,119,990  30,141,886  4,329,611 
Total Revenues5,653,922  10,792,726  1,550,279  13,119,990  30,141,886  4,329,611 
            
Costs of revenues           
Costs of online marketplace services(1,424,035) (2,037,437) (292,660) (2,905,249) (6,338,778) (910,508)
Total costs of revenues(1,424,035) (2,037,437) (292,660) (2,905,249) (6,338,778) (910,508)
            
Gross profit4,229,887  8,755,289  1,257,619  10,214,741  23,803,108  3,419,103 
            
Sales and marketing expenses(6,023,974) (9,272,536) (1,331,917) (13,441,813) (27,174,249) (3,903,337)
General and administrative expenses(321,609) (345,682) (49,654) (6,456,612) (1,296,712) (186,261)
Research and development expenses(525,213) (1,272,375) (182,765) (1,116,057) (3,870,358) (555,942)
Total operating expenses(6,870,796) (10,890,593) (1,564,336) (21,014,482) (32,341,319) (4,645,540)
            
Operating loss(2,640,909) (2,135,304) (306,717) (10,799,741) (8,538,211) (1,226,437)
            
Interest and investment income, net233,357  472,540  67,876  584,940  1,541,825  221,469 
Interest expenses  (139,708) (20,068)   (145,858) (20,951)
Foreign exchange gain/(loss)3,158  (13,237) (1,901) 10,037  63,179  9,075 
Other (loss) /income, net(19,499) 27,178  3,904  (12,361) 82,786  11,891 
Loss before income tax and share of results of equity investees(2,423,893) (1,788,531) (256,906) (10,217,125) (6,996,279) (1,004,953)
Share of results of equity investees-  36,894  5,299  -  28,676  4,119 
Income tax expenses  -  -  -  -  - 
Net loss(2,423,893) (1,751,637) (251,607) (10,217,125) (6,967,603) (1,000,834)
 


 
PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(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,
 2018  2019 2018  2019
  RMB  RMB  US$ RMB RMB US$
 (Unaudited) (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
            
Net loss(2,423,893) (1,751,637) (251,607) (10,217,125) (6,967,603) (1,000,834)
Deemed distribution to certain holders of convertible preferred shares-  -  -  (80,496) -  - 
Net loss attributable to ordinary shareholders(2,423,893) (1,751,637) (251,607) (10,297,621) (6,967,603) (1,000,834)
            
   
Loss per ordinary share:
           
  -Basic(0.54) (0.38) (0.05) (3.47) (1.51) (0.22)
  -Diluted(0.54) (0.38) (0.05) (3.47) (1.51) (0.22)
            
Loss per ADS (4 ordinary shares equals 1 ADS ):           
  -Basic(2.16) (1.52) (0.20) (13.88) (6.04) (0.88)
  -Diluted(2.16) (1.52) (0.20) (13.88) (6.04) (0.88)
            
Weighted average number of outstanding ordinary shares (in thousands):           
  -Basic4,455,689  4,649,996  4,649,996  2,968,320  4,627,278  4,627,278 
  -Diluted4,455,689  4,649,996  4,649,996  2,968,320  4,627,278  4,627,278 
                  


 
PINDUODUO 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,
 2018 2019 2018 2019
  RMB  RMB  US$ RMB RMB US$
 (Unaudited) (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Revenues           
Online marketplace services           
 - Online marketing services5,062,378 9,686,699 1,391,407 11,515,575 26,813,641 3,851,539
 - Transaction services591,544 1,106,027 158,872 1,604,415 3,328,245 478,072
Total5,653,922 10,792,726 1,550,279 13,119,990 30,141,886 4,329,611
 


 
PINDUODUO 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,
 2018 2019 2018 2019
 RMB RMB US$ RMBRMB US$
 (Unaudited) (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Share-based compensation costs included in:           
Costs of revenues2,118 7,256 1,042 3,488 23,835 3,424
Sales and marketing expenses191,844 237,354 34,094 405,805 860,862 123,655
General and administrative expenses255,671 224,523 32,251 6,296,186 786,641 112,994
Research and development expenses78,379 329,539 47,335 136,094 886,368 127,319
Total528,012 798,672 114,722 6,841,573 2,557,706 367,392
 


 
PINDUODUO 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,
 2018  2019 2018  2019
 RMB RMB US$ RMB RMB US$
 (Unaudited)  (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Net cash flow generated from operating activities5,732,397  9,598,013  1,378,668  7,767,927  14,820,976  2,128,900 
Net cash flow used in investing activities(238,635) (11,461,872) (1,646,395) (7,548,509) (28,319,678) (4,067,867)
Net cash flow (used in)/generated from financing activities(13,936) 893,899  128,401  17,344,357  15,854,731  2,277,390 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(66,967) (50,260) (7,219) 546,910  450,142  64,659 
            
Increase/(decrease) in cash, cash equivalents and restricted cash5,412,859  (1,020,220) (146,545) 18,110,685  2,806,171  403,082 
Cash, cash equivalents and restricted cash at beginning of period / year25,126,827  34,366,077  4,936,378  12,429,001  30,539,686  4,386,751 
            
Cash, cash equivalents and restricted cash at end of period / year30,539,686  33,345,857  4,789,833  30,539,686  33,345,857  4,789,833 
 


 
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 December 31, For the year ended December 31,
 2018  2019 2018  2019
 RMB RMB US$ RMB RMB US$
 (Unaudited)  (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
Operating Loss(2,640,909) (2,135,304) (306,717) (10,799,741) (8,538,211) (1,226,437)
Add: Share-based compensation528,012  798,672  114,722  6,841,573  2,557,706  367,392 
Non-GAAP operating loss(2,112,897) (1,336,632) (191,995) (3,958,168) (5,980,505) (859,045)
            
Net loss attributable to ordinary shareholders(2,423,893) (1,751,637) (251,607) (10,297,621) (6,967,603) (1,000,834)
Add: Share-based compensation528,012  798,672  114,722  6,841,573  2,557,706  367,392 
Add: Interest expense related to convertible bonds’ amortization to face value  137,982  19,820    144,132  20,703 
Non-GAAP net loss attributable to ordinary shareholders (1,895,881) (814,983) (117,065) (3,456,048) (4,265,765) (612,739)
            
Weighted-average number of ordinary shares outstanding – basic and diluted (in  
thousands)
4,455,689  4,649,996  4,649,996  2,968,320  4,627,278  4,627,278 
Non-GAAP basic and diluted loss per share(0.43) (0.18) (0.03) (1.16) (0.92) (0.13)
Non-GAAP basic and diluted loss per ADS(1.72) (0.72) (0.12) (4.64) (3.68) (0.52)
 

___________________________

1  “GMV” refers to the total value of all orders for products and services placed on the Pinduoduo mobile platform, regardless of whether the products and services are actually sold, delivered or returned. Buyers on the platform are not charged for shipping fees in addition to the listed price of merchandise. Hence, merchants may embed the shipping fees in the listed price. If embedded, then the shipping fees are included in GMV. As a prudential matter aimed at eliminating any influence on Pinduoduo’s GMV of irregular transactions, the Company excludes from its calculation of GMV transactions in certain product categories over certain amounts and transactions by buyers in certain product categories over a certain amount per day.
2  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 RMB6.9618 to US$1.00, the noon buying rate in effect on December 31, 2019 as set forth in the H.10 Statistical Release of the Federal Reserve Board.
3  “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.
4  “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.
5  “Annual spending per active buyer” in a given period refers to the quotient of total GMV in that period divided by the number of active buyers in the same period.
6  The Company’s non-GAAP financial measures exclude share-based compensation expenses and interest expenses related to the convertible bonds’ amortization to face value. See “Reconciliation of Non-GAAP Measures to The Most Directly Comparable GAAP Measures” set forth at the end of this press release.