PDD Holdings (PDD) recently released its financial results, showing that its revenue growth for the December 2025 quarter rebounded to 12%, reaching RMB 123.9 billion, an improvement from the single-digit growth seen in previous quarters. However, net profit declined by 11% year-on-year to RMB 24.5 billion, falling short of market expectations. Following the earnings release, the company’s stock price ultimately closed up approximately 3% in U.S. pre-market trading, reflecting investors weighing the impact of recovering revenue growth against weakening short-term profitability.
Overseas expansion, led by the Temu platform, continues to alleviate competitive pressures for PDD in the domestic market. Against a backdrop of uneven domestic consumption recovery and intensifying competition with Alibaba (BABA) and JD.com (JD), Temu has now entered nearly 100 global markets. After the removal of the de minimis policy that had previously restrained its growth, the business has stabilized. According to industry research analysis, transaction service revenue related to Temu has recovered from the weakness caused by tariff impacts, with revenue growth accelerating for the third consecutive quarter—a trend expected to support the company’s performance in the first half of the year.
Company management stated that they will continue to increase investment in the future, particularly in the supply chain sector, even though this may put pressure on short-term financial performance. At the same time, the company faces a more complex external environment, including regulatory scrutiny arising from a previous incident involving employees and regulatory authorities in China, as well as ongoing tariff pressures. For investors, the key lies in whether Temu’s growth momentum can effectively offset domestic headwinds and the impact of increased investment, thereby determining the sustainability of this recovery phase.
According to the financial report, in the fourth quarter of 2025, PDD’s online marketing services and other revenue reached RMB 60.01 billion, an increase of 5% year-on-year; transaction service revenue reached RMB 63.90 billion, an increase of 19% year-on-year. As of December 31, 2025, the company held RMB 422.3 billion in cash, cash equivalents, and short-term investments, up from RMB 331.6 billion in the same period last year.
Chen Lei, Co-Chairman and Co-Chief Executive Officer of PDD, stated that over the past year, the company has unwaveringly implemented a high-quality development strategy, and over the next decade, it will continue to uphold a long-term vision by investing more resources to serve its stakeholders.
Additionally, PDD officially announced the establishment of “New Pinmu,” launching a brand self-operated model while continuing to heavily invest in China’s supply chain. According to reports, “New Pinmu” has established a dedicated company in Shanghai, with an initial cash injection of RMB 15 billion. It plans to invest a total of RMB 100 billion over the next three years, integrating the supply chain resources of “PDD + Temu” to systematically operate self-operated brands and incubate brands for the global market, promoting high-standard exports of Chinese manufacturing.
