To The Moon

$PDD Holdings Inc(PDD)$ is scheduled to report its unaudited financial results for the third quarter ended September 30, 2025, before U.S. markets open on Tuesday, November 18, 2025.

PDD Holdings (PDD) is an important company in the e-commerce space, driven by its platforms Pinduoduo (China) and the fast-growing international service, Temu.

Q3 2025 Earnings Forecast & Analyst Estimates

The consensus among analysts suggests a mixed picture for the quarter, with continued revenue growth but a potential decline in earnings year-over-year.

Revenue Growth: The company is widely expected to report revenue growth, albeit at a slower pace than previous periods. This is largely driven by the continued international expansion of Temu.

Profitability Pressure: The forecast decline in EPS is an important point. It is widely attributed to the company's aggressive and costly strategy, particularly the substantial sales and marketing expenses associated with scaling Temu globally and a large merchant support program launched for the Pinduoduo platform.

Summary Write-Up of PDD Holdings (PDD) Fiscal Q2 2025 Earnings

PDD Holdings announced its unaudited financial results for the second quarter ended June 30, 2025, on Monday, August 25, 2025. The results were mixed, showing continued revenue growth but a significant compression in profitability due to aggressive strategic investments.

Key Financial Highlights (Q2 2025 vs. Q2 2024)

Performance Drivers and Commentary

Revenue Composition: The modest 7% revenue growth was primarily driven by:

• Online Marketing Services (core Pinduoduo business), which increased by 13%, suggesting strong advertiser demand on the profitable domestic platform.

• Transaction Services (which includes the fast-growing Temu international business) also contributed to growth.

Profitability Compression: The 21% drop in Operating Profit was the most notable headline. Management attributed this directly to "significant ecosystem investments" and "substantial resources" poured into merchant support and international expansion.

This included an aggressive RMB 100 Billion Support Program for merchants, including a RMB 10 billion fee reduction initiative and new logistics solutions, particularly for remote areas.

Temu Expansion: Although specific figures were not provided, the international business (Temu) was a key driver of the high costs. The management commentary emphasized that these investments are necessary for long-term global expansion and competition.

Balance Sheet Strength: PDD maintained an extremely strong cash position, with Cash, cash equivalents, and short-term investments totaling (), providing ample liquidity to sustain its aggressive investment strategy.

Lesson Learned from Q2 2025 Guidance

PDD Holdings did not provide typical quantitative financial guidance (e.g., a specific revenue forecast) for the upcoming quarter. However, the management commentary was extremely clear and provided an important strategic guidance for investors:

The Core Lesson: "Prioritizing Long-Term Value Creation Over Short-Term Financial Results"

This message was repeatedly emphasized by the Co-CEOs and the VP of Finance during the earnings call, and it carries two major implications for investors:

Volatility is the New Normal for Profitability: Management explicitly warned that they "do not believe this quarter's profit levels are sustainable, and fluctuations in profitability are likely to continue in the coming quarters." The lesson is that PDD is willing to sacrifice operating margin and short-term profit to build a more robust, long-term ecosystem. Investors should expect continued volatility in quarterly EPS and Operating Profit figures.

Focus on Strategic Metrics: The narrative has shifted from quarterly profit beats to strategic investment returns. Investors must now look beyond the EPS number and focus on metrics that validate the heavy spending:

• Growth in Core Business Stickiness: Are merchants adapting to the new programs and growing their volume?

• International User/Traffic Growth (Temu): Is the massive Sales & Marketing expense driving sustainable global market share gains?

• Efficiency of Logistics: Are the logistics support programs (like the 40% growth in remote orders mentioned) becoming a defensible moat against rivals?

The guidance for Q2 2025 taught the market that PDD is in a high-growth, high-investment phase where profit is secondary to market share and ecosystem development. This is a classic "growth stock" strategy, despite the company's size, and it implies that investors must have a long-term horizon to benefit from these sustained, ecosystem-building expenditures.

Key Metrics Investors Should Watch

While revenue and EPS are the headline numbers, the narrative around PDD's long-term growth is tied to performance across its two main platforms, Pinduoduo and Temu.

1. Temu Performance (International Growth Engine)

This is arguably the most critical area. Investors are looking for evidence that the massive investment in Temu is paying off with sustainable user and revenue growth.

• Sales and Marketing Expenses: This will be the primary indicator of Temu's investment burn rate. Investors will be looking to see if the revenue growth justifies the enormous spending. A significant deceleration in revenue growth paired with high expenses would be a concern.

• International Revenue Breakdown: Look for any commentary or disclosure on the revenue contribution from Temu, which falls under Transaction Services Revenue. Strong growth here validates the global expansion strategy.

• Guidance on Future Temu Investment: Management's commentary on the pace and scale of future Temu expansion will heavily influence the stock's forward trajectory.

2. Pinduoduo Core Platform (Domestic Profitability)

The core Pinduoduo platform remains the main profit engine and is expected to show continued resilience in the competitive Chinese market.

• Advertising/Online Marketing Services Revenue: This is the most profitable segment. Continued strength in advertiser spending on the domestic platform indicates a healthy merchant ecosystem and strong platform stickiness.

• Operating Margin: Given the merchant support program announced earlier in the year, investors will be closely watching the margins to see if core profitability is stabilizing or if the support costs are weighing heavily.

3. Cash and Cash Flow

PDD has historically had a very strong balance sheet. Given the high-cost nature of the Temu expansion, Free Cash Flow (FCF) and the overall cash position will be crucial to ensure the company can self-fund its global growth without external financing.

PDD Holdings (PDD) Price Target

Based on 13 Wall Street analysts offering 12 month price targets for PDD Holdings in the last 3 months. The average price target is $144.56 with a high forecast of $168.00 and a low forecast of $120.00. The average price target represents a 10.39% change from the last price of $130.95.

Short-Term Trading Opportunity Post-Earnings

Trading around earnings is inherently high-risk, especially with a volatile stock like PDD. The short-term price action will likely be determined by a comparison of the reported numbers and guidance against the market's high expectations for growth.

Risk Note: PDD is known for its volatility post-earnings. Analysts have a median price target around $121.0 (based on recent reports) compared to the last closing price around $134.47. This indicates that the stock is currently trading above the median target, suggesting some level of high expectation is already priced in, which increases the risk of a sharp correction on any disappointment.

For a short-term trade, attention to the guidance and the Sales and Marketing Expenses relative to revenue will be more important than the simple EPS beat/miss. If the market perceives a higher return on the colossal Temu investment, the stock could surge.

Technical Analysis - Exponential Moving Average (EMA)

PDD also suffered a significant decline when the market pullback due to the concerns over rate cut and AI bubbles, and we could see that PDD is now trading near 50-day period and if the decline continued on Monday (17 Nov), we might need to see a strong Temu growth contribution to the revenue.

On top of that, PDD cost management after spending massive investment would be watched too, as investors might want to see if there is already growth starting to show from this massive Temu investment.

Summary

PDD Holdings is scheduled to report its fiscal Q3 2025 earnings on Tuesday, November 18, 2025, before the market open. The overall theme is continued revenue growth driven by international expansion, but sustained profit pressure due to aggressive spending.

Earnings Forecast

• Revenue: Analysts forecast revenue of approximately $15.21 Billion, representing roughly a +7.4% YoY increase. This modest growth is primarily attributed to the continued scaling of the global e-commerce platform, Temu.

• EPS: Consensus EPS is around $2.21, which would mark a significant decline ( YoY). This drop is expected because the company is heavily reinvesting profits into market share gains, primarily through huge Sales and Marketing expenses for Temu's global push.

Key Metrics to Watch

The short-term stock movement will be dictated less by the headline EPS miss (which is priced in) and more by the growth narrative:

1. Temu Performance: Investors will scrutinize the Sales and Marketing Expense ratio against the growth in Transaction Services Revenue (where Temu is housed). Strong international user growth that validates the high spending is crucial.

2. Core Platform Health (Pinduoduo): The profitability of the core domestic business, indicated by Online Marketing Services Revenue, must remain robust to fund the Temu expansion.

Trading Opportunity

The stock faces high volatility. A significant beat on revenue/Temu growth combined with positive future guidance could lead to a sharp rally. Conversely, disappointing international growth, which suggests the high spending is inefficient, could cause a sharp correction. The market is looking for evidence of a high return on the massive investment burn.

Appreciate if you could share your thoughts in the comment section whether you think PDD could see a significant revenue contributor from Temu, this should help PDD to see if there is a high return on the massive investment burn.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.