Pdd Holdings Inc. ((PDD)) has held its Q4 earnings call. Read on for the main highlights of the call.
PDD Holdings Inc. recently held its earnings call, revealing a positive sentiment driven by strong revenue growth and effective merchant support initiatives. Despite facing challenges such as rising costs, intense competition, and fluctuating profit margins, the company remains committed to its long-term development strategy, particularly in agriculture and global business expansion.
Strong Revenue Growth
PDD Holdings reported impressive revenue figures, with Q4 revenue reaching RMB 110.6 billion, a 24% increase year-on-year. For the full year 2024, the company achieved a total revenue of RMB 393.8 billion, marking a substantial 59% growth compared to the previous year. This growth underscores the company’s robust performance in the market.
Successful Merchant Support Initiatives
The company implemented a 10 billion fee reduction program that benefited over 10 million merchants by enhancing their operational efficiency and reducing costs. Additionally, logistics support measures led to double-digit order growth and extended free shipping to nearly 100 million consumers in remote regions, showcasing PDD Holdings’ commitment to supporting its merchants.
Commitment to Agriculture
PDD Holdings continues to invest in agriculture technology and supply chain innovation, resulting in significant breakthroughs in yield, efficiency, and energy consumption. This commitment highlights the company’s focus on sustainable development and long-term growth in the agriculture sector.
Global Business Strategy
The company maintains its focus on supplying high-quality products to global consumers while adhering to high compliance standards. PDD Holdings is also exploring new business models to expand its global reach, demonstrating its strategic approach to international markets.
Rising Costs and Expenses
The company faced rising costs, with total cost of revenues increasing by 36% year-on-year for Q4 and 68% for the full year 2024. These increases were primarily due to higher fulfillment fees and payment processing fees, posing a challenge to the company’s profitability.
Competition and Market Challenges
PDD Holdings is navigating intense competition and changes in macro conditions and policies, particularly in the domestic e-commerce and global markets. These challenges require the company to adapt and innovate to maintain its competitive edge.
Fluctuating Profit Margins
Despite an increase in non-GAAP operating profit, the company’s non-GAAP operating profit margin decreased from 28% in Q4 2023 to 24% in Q4 2024. This fluctuation highlights the challenges PDD Holdings faces in maintaining profitability amidst rising costs and competitive pressures.
Forward-Looking Guidance
Looking ahead, PDD Holdings emphasizes its commitment to high-quality development in 2025. The company aims to enhance merchant support and broaden the quality supply on its platform, indicating a strategic focus on sustainable growth and long-term success.
In conclusion, PDD Holdings Inc.’s earnings call reflected a positive sentiment with strong revenue growth and successful merchant support initiatives. Despite challenges such as rising costs and intense competition, the company remains focused on its long-term development strategy, particularly in agriculture and global business expansion. Investors and stakeholders can look forward to PDD Holdings’ continued commitment to high-quality development and strategic growth in the coming years.