On August 26th, PDD Holdings (PDD), the parent company of Temu, released its financial report for the second quarter of 2024, which ended on June 30th.
The report shows that the company achieved revenue of 97.06 billion yuan ($13.62 billion) in the second quarter, compared to 52.281 billion yuan in the same period last year, representing an 86% increase. The market expectation was 99.985 billion yuan ($14 billion). The net profit attributable to PDD’s ordinary shareholders was 32.0094 billion yuan ($4.49 billion), an increase of 144% year-over-year. On a non-GAAP basis, the net profit attributable to PDD’s ordinary shareholders was 34.4321 billion yuan ($4.83 billion), a 125% increase year-over-year.
Revenue from online marketing services and other services was 49.1159 billion yuan ($6.7586 billion), a 29% increase from 37.9328 billion yuan ($5.32 billion) in the same period in 2023.
Revenue from transaction services was 47.9437 billion yuan ($6.5973 billion), a 234% increase from 14.3479 billion yuan ($2.01 billion) in the same period in 2023.
Sales and marketing expenses were 26.0491 billion yuan ($3.5845 billion), a 48% increase from 17.5422 billion yuan ($2.46 billion) in the same period in 2023.
Although PDD attracts budget-conscious consumers with low prices and deep discounts on a wide range of products, from daily necessities to headphones, the company is facing pressure from major competitors who are ramping up promotions on their platforms.
PDD’s management stated that despite solid progress over the past few quarters, future revenue growth will inevitably face pressure from fierce competition and external challenges. The company will continue to invest steadfastly, which may impact future profitability.
