In the first quarter, transaction service revenue surged 327% to US$44.36 billion, overtaking the online marketing sector to become Pinduoduo's biggest source of revenue.
After a lapse of three months, Pinduoduo once again showed impressive quarterly results: revenue increased 131% in the first quarter, net profit surged 202% year on year, and transaction service revenue surged 327% to 44.36 billion US dollars, overtaking the online marketing business to become Pinduoduo's biggest source of revenue.
On Wednesday, May 22, Pinduoduo announced financial results for the first quarter of 2024. Results showed that Pinduoduo's revenue for the first quarter increased 131% year over year to 86.81 billion yuan, exceeding market expectations of 76.86 billion yuan; operating profit increased 275% year over year to 25.97 billion yuan, and net profit attributable to common shareholders increased 246% year over year; non-GAAP adjusted net profit increased 202% year on year to 30.6 billion yuan, significantly exceeding expectations of 15.53 billion yuan.
Pinduoduo's revenue per ADS after dilution in the first quarter was 18.96 yuan, or 5.55 yuan for the same period in 2023, an increase of about 2 times. The revenue per ADS for non-GAAP dilution was 20.72 yuan, compared to 6.92 yuan for the same period in 2023. In addition, Pinduoduo's net cash generated from operating activities in the first quarter was RMB 21.07 billion, compared to RMB 1.34 billion for the same period in 2023, mainly due to an increase in net profit.
After the financial report was announced, the pre-market decline in Pinduoduo's US stock price widened to 8%, but then quickly recovered its losses and is now up 6.1%.
“In the first quarter, we continued to invest in key areas of our high-quality development strategy,” said Liu Jun, vice president of finance at Pinduoduo Holdings. “We place more emphasis on creating long-term value rather than focusing on short-term results, and will continue to invest more in the future.”
Trading services become a pillar of revenue
According to Pinduoduo, revenue growth is mainly due to increased revenue from online marketing services and transaction services. Among them, transaction service revenue surged 327% to US$44.36 billion, overtaking the online marketing business as Pinduoduo's biggest source of revenue. First quarter:
Revenue from online marketing services and other services was $42.46 billion, up 56% year over year.
Transaction services revenue was $44.36 billion, up 327% year over year.
Costs have tripled
With the sharp increase in revenue, Pinduoduo's total cost in the first quarter increased 194% year-on-year to 32.69 billion yuan.
According to Pinduoduo, the cost increase is mainly due to increases in contract fulfillment fees, payment processing costs, maintenance costs, and call center fees. Specifically, in the first quarter:
Total operating expenses were RMB 28.14 billion, an increase of 44% over the previous year, mainly due to increased sales and marketing expenses;
Sales and marketing expenses were RMB 23.41 billion, up 44% year over year, mainly due to increased spending on promotions and advertising campaigns;
General and administrative expenses amounted to RMB 1.82 billion, an increase of 123% year-on-year, mainly due to increased employee-related costs;
R&D expenditure is RMB 2.91 billion, estimated at RMB 3.31 billion, compared to RMB 2.51 billion for the same period in 2023.