PDD Holdings (PDD) Q4 2024 Earnings Call March 20, 2025 05:42 PM ET Company Participants None - ExecutiveLei Chen - General Counsel, Co-CEO & ChairmanJun Liu - VP of Finance Conference Call Participants Joyce Ju - Analyst Operator Ladies and gentlemen, thank you for standing by, and welcome to the PDD Holdings Inc. Fourth Quarter and Fiscal Year twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answe ...

PDD Holdings Announces Fourth Quarter 2024 and Fiscal Year 2024 Unaudited Financial Results DUBLIN and SHANGHAI, March 20, 2025 (GLOBE NEWSWIRE) – PDD Holdings Inc. ("PDD Holdings" or the "Company") (NASDAQ: PDD), today announced its unaudited financial results for the fourth quarter ended and the fiscal year ended December 31, 2024. Fourth Quarter 2024 Highlights "In 2024, we remained committed to driving sustainable growth for both our platform ecosystem and the broader supply chain," said Mr. Lei Chen, C ...

Group 1 - PDD Holdings Inc reported lower-than-expected fourth-quarter earnings and revenue, impacted by strong competition and weak demand in China, but still managed to double its annual profit to $15.4 billion [1] - The stock price of PDD increased by 2% to $128.48, recovering from earlier losses despite a price-target cut from Jefferies from $171 to $156 [2] - Year-to-date, PDD's equity has outperformed the broader market with a 32.5% lead [2] Group 2 - In the options market, PDD has seen a significant increase in trading volume with 57,000 calls and 40,000 puts exchanged, which is four times the typical volume [3] - The most popular options are the March 135 and 130 call contracts, with new positions opening at the weekly 4/25 128-strike put [3] - PDD has consistently outperformed options traders' volatility expectations, reflected in its Schaeffer's Volatility Scorecard (SVS) of 97 out of 100 [3]

Financial Performance - Total revenues for Q4 2024 were RMB 110,610.1 million (US$ 15,153.5 million), an increase of 24% from RMB 88,881.0 million in Q4 2023[4] - Operating profit for Q4 2024 was RMB 25,592.2 million (US$ 3,506.1 million), an increase of 14% from RMB 22,395.0 million in Q4 2023[4] - Net income attributable to ordinary shareholders for Q4 2024 was RMB 27,446.6 million (US$ 3,760.2 million), an increase of 18% from RMB 23,280.3 million in Q4 2023[9] - Total revenues for the fiscal year 2024 were RMB 393,836.1 million (US$ 53,955.3 million), an increase of 59% from RMB 247,639.2 million in 2023[12] - Revenues from transaction services for Q4 2024 were RMB 53,599.0 million (US$ 7,343.0 million), an increase of 33% from RMB 40,205.4 million in Q4 2023[7] - Net income for Q4 2024 was RMB 27,446,637, up 17.5% from RMB 23,280,309 in Q4 2023[36] - Operating profit for the year ended December 31, 2024, was RMB 108,422,862, a significant increase of 84.7% compared to RMB 58,698,762 in 2023[34] Expenses and Costs - Total costs of revenues for the fiscal year 2024 were RMB 153,900.4 million (US$ 21,084.3 million), an increase of 68% from RMB 91,723.6 million in 2023[13] - Research and development expenses for Q4 2024 were RMB 3,777.2 million (US$ 517.5 million), compared to RMB 2,864.4 million in Q4 2023[7] - Research and development expenses for the year ended December 31, 2024, were RMB 12,659,361, an increase of 15.6% from RMB 10,952,374 in 2023[34] Earnings and Shares - Basic earnings per ADS for Q4 2024 were RMB 19.76 (US$ 2.71), compared to RMB 17.00 in Q4 2023[10] - Earnings per ordinary share (diluted) for Q4 2024 was RMB 4.63, compared to RMB 3.96 in Q4 2023, indicating a growth of 16.8%[36] - The diluted earnings per ordinary share for the year ended December 31, 2024, increased to RMB 19.00, up from RMB 10.29 in 2023, marking a growth of 84.5%[45] - The non-GAAP diluted earnings per ordinary share for the year ended December 31, 2024, was RMB 20.68, compared to RMB 11.63 in 2023, reflecting a growth of 77.5%[45] Cash and Investments - Cash, cash equivalents, and short-term investments were RMB 331.6 billion (US$ 45.4 billion) as of December 31, 2024, compared to RMB 217.2 billion as of December 31, 2023[11] - Net cash generated from operating activities for the year ended December 31, 2024, was RMB 121,929,292, an increase of 29.5% from RMB 94,162,531 in 2023[43] - The company reported a net cash used in investing activities of RMB (118,356,036) for the year ended December 31, 2024, compared to RMB (55,431,278) in 2023, indicating a significant increase in investment[43] - The increase in cash, cash equivalents, and restricted cash for the year ended December 31, 2024, was RMB 4,414,516, down from RMB 29,479,488 in 2023, showing a decrease in cash growth[43] Assets and Liabilities - Total assets increased to RMB 505,034,316 as of December 31, 2024, up from RMB 348,078,120 in 2023, reflecting a growth of 45%[30] - Total liabilities rose to RMB 191,721,192 as of December 31, 2024, compared to RMB 160,836,513 in 2023, marking a 19.2% increase[32] - Shareholders' equity grew to RMB 313,313,124 as of December 31, 2024, from RMB 187,241,607 in 2023, reflecting a 67.1% increase[32] Other Notable Changes - The company reported a significant increase in online marketing services revenues, which reached RMB 57,011,061 for Q4 2024, up from RMB 48,675,618 in Q4 2023[38] - The non-GAAP net income attributable to ordinary shareholders for Q4 2024 was RMB 29,850.9 million (US$ 4,089.6 million), an increase of 17% from RMB 25,476.5 million in Q4 2023[9] - The non-GAAP net income attributable to ordinary shareholders for the year ended December 31, 2024, was RMB 122,343,561, a significant increase of 80% from RMB 67,899,292 in 2023[45] - The company experienced a loss from fair value change of certain investments amounting to RMB 25,485 for the year ended December 31, 2024[45]

Core Insights - PDD Holdings Inc. reported mixed earnings for Q4 2024, with revenue falling short of expectations while other metrics exceeded analyst forecasts [1] Financial Performance - The company missed revenue targets but achieved better-than-expected results in other financial metrics [1]

Core Viewpoint - PDD Holdings Inc. reported quarterly earnings of $2.76 per share, exceeding the Zacks Consensus Estimate of $2.56 per share, and showing an increase from $2.40 per share a year ago, indicating a 7.81% earnings surprise [1] Financial Performance - The company posted revenues of $15.15 billion for the quarter ended December 2024, which was 3.34% below the Zacks Consensus Estimate, compared to $12.52 billion in the same quarter last year [2] - Over the last four quarters, PDD has surpassed consensus EPS estimates three times, but has only topped revenue estimates once [2] Stock Performance - PDD Holdings Inc. shares have increased approximately 29.8% since the beginning of the year, contrasting with a -3.5% decline in the S&P 500 [3] Future Outlook - The company's earnings outlook is crucial for investors, with current consensus EPS estimates at $2.83 for the coming quarter and $12.21 for the current fiscal year, with revenues expected to be $15.16 billion and $65.75 billion respectively [7] - The estimate revisions trend for PDD is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Internet - Commerce industry, to which PDD belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive has a presence in key finance and investing hubs with bureaus and studios located in London, New York, Toronto, Vancouver, Sydney, and Perth [2][3] Group 2 - The company is committed to using technology to enhance workflows and has adopted various technological tools [4] - Proactive employs automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Insights - PDD Holdings reported strong financial results for Q4 2024 and the fiscal year 2024, highlighting a commitment to sustainable growth and innovation in the e-commerce ecosystem [3][5][14]. Financial Performance - Total revenues for Q4 2024 reached RMB 110,610.1 million (US$ 15,153.5 million), marking a 24% increase from RMB 88,881.0 million in Q4 2023 [5][7]. - For the fiscal year 2024, total revenues were RMB 393,836.1 million (US$ 53,955.3 million), a significant increase of 59% from RMB 247,639.2 million in 2023 [14]. - Operating profit for Q4 2024 was RMB 25,592.2 million (US$ 3,506.1 million), up 14% from RMB 22,395.0 million in Q4 2023 [7][10]. - Net income attributable to ordinary shareholders in Q4 2024 was RMB 27,446.6 million (US$ 3,760.2 million), an 18% increase from RMB 23,280.3 million in Q4 2023 [11][37]. Revenue Breakdown - Revenues from online marketing services and others in Q4 2024 were RMB 57,011.1 million (US$ 7,810.5 million), a 17% increase from RMB 48,675.6 million in Q4 2023 [8]. - Revenues from transaction services in Q4 2024 were RMB 53,599.0 million (US$ 7,343.0 million), reflecting a 33% increase from RMB 40,205.4 million in Q4 2023 [8]. Cost and Expenses - Total costs of revenues for Q4 2024 were RMB 47,798.4 million (US$ 6,548.4 million), a 36% increase from RMB 35,078.3 million in Q4 2023, primarily due to higher fulfillment and payment processing fees [6][15]. - Total operating expenses for Q4 2024 were RMB 37,219.5 million (US$ 5,099.1 million), up 19% from RMB 31,407.8 million in Q4 2023, mainly driven by increased sales and marketing expenses [9][10]. Cash and Assets - As of December 31, 2024, cash, cash equivalents, and short-term investments totaled RMB 331.6 billion (US$ 45.4 billion), compared to RMB 217.2 billion as of December 31, 2023 [13]. - Total assets as of December 31, 2024, were RMB 505.0 billion (US$ 69.2 billion), reflecting significant growth from RMB 348.1 billion as of December 31, 2023 [32][33]. Earnings Per Share - Basic earnings per ADS for Q4 2024 were RMB 19.76 (US$ 2.71), compared to RMB 17.00 in Q4 2023 [12][21]. - Non-GAAP diluted earnings per ADS for Q4 2024 were RMB 20.15 (US$ 2.76), up from RMB 17.32 in Q4 2023 [12][42].

Core Viewpoint - PDD Holdings Inc. will announce its unaudited financial results for Q4 and the fiscal year ending December 31, 2024, on March 20, 2025, before U.S. markets open [1] Group 1 - The earnings conference call is scheduled for 7:30 AM ET on March 20, 2025 [1] - The conference call will be webcast live and available for replay on the company's investor website [2] Group 2 - PDD Holdings is a multinational commerce group focused on integrating businesses and individuals into the digital economy to enhance productivity and create new opportunities for local communities and small businesses [3]

Core Insights - KraneShares has launched a Single-Stock Levered ETF Suite, including the KraneShares 2X Long PDD Daily ETF (KPDD) and the KraneShares 2X Long BABA Daily ETF (KBAB) [1][5] - These ETFs aim to achieve daily investment results of 200% of the daily percentage change of PDD Holdings and Alibaba's US listings or ADRs [2][6] - PDD Holdings is the fourth-largest e-commerce retailer globally, with over 19 countries of operation and $50 billion in annual gross merchandise value in 2024, while Alibaba is the third-largest, with a diversified business model [3][4] Company Overview - PDD Holdings has reshaped global retail through its platform Temu, which surpassed Amazon in monthly active users [3][9] - Alibaba has seen positive stock momentum due to its Qwen2.5 series large language model and a partnership with Apple for AI integration in new iPhones [3][4] - Both companies have higher average historical annual revenue growth rates compared to US counterparts like Amazon [4][10] Investment Strategy - The Single-Stock Levered ETF Suite provides a way for bullish investors to gain leveraged exposure to leading companies in the China internet sector [5] - PDD and Alibaba are significant holdings in the KraneShares CSI China Internet ETF, with weights of 6.51% and 12.45% respectively as of March 11, 2025 [4]