Temu Owner PDD Posts Slowest Revenue Growth Since Early 2022
Fourth-quarter revenue climbed 24% to 110.61 billion yuan, equivalent to $15.30 billion, but missed estimates.
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The Chinese owner of bargain app Temu reported slower quarterly profit and revenue growth, capping a turbulent year for the e-commerce giant as it faced stiff competition at home, geopolitical tensions abroad and U.S. tariff uncertainties.
PDD Holdings on Thursday said fourth-quarter revenue climbed 24% to 110.61 billion yuan, equivalent to $15.30 billion, missing a Visible Alpha estimate of 117.83 billion yuan. It was the slowest pace of growth since the first quarter of 2022.
Net profit rose 18% from a year earlier to 27.45 billion yuan, topping analysts’ expectations of 27.00 billion yuan. However, the growth was slower than the 61% rise in the third quarter and the more than twofold increase a year earlier.
“Looking ahead, we will continue to prioritize investments in the platform ecosystem as the cornerstone of our long-term value creation strategy,” said Jun Liu, PDD’s vice president of finance.
Jefferies analysts in a note said PDD’s top-line miss was due to slower-than-expected revenue growth from transaction services, while revenue from online marketing services and others was in line with consensus.
The easing momentum contrasted sharply with the stunning growth rates the company delivered in past years. PDD last year repeatedly warned of a slowdown, pointing to intensifying competition and external challenges.
Pinduoduo, the company’s discount platform in China, has grown rapidly since it launched nearly a decade ago, taking market share from e-commerce stalwarts Alibaba and JD.com . Its sister platform Temu burst onto the international scene in 2022 and swiftly gained attention in the U.S., attracting customers with low prices.
However, Temu has also encountered regulatory scrutiny as it expands overseas. U.S. President Trump in February delayed his plan to end a provision for China imports that lets platforms avoid paying import duties and customs inspections on low-value packages, offering the likes of Temu a brief reprieve.
For the full year, PDD’s total revenue rose 59% to 393.84 billion yuan and net profit climbed 87% to 60.03 billion yuan.
Last month, rival Alibaba posted its fastest pace of revenue growth since late 2023, with revenue for the latest quarter rising 7.6% to 280 billion yuan. Online retailer JD.com earlier this month nearly tripled its quarterly net profit as revenue climbed 13% to 346.99 billion yuan.
U.S.-listed PDD was recently 6.5% lower in premarket trading after the results.
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The social-media company’s revenue increased 14%, falling short of estimates.
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Pinterest shares tumbled after the company projected that revenue growth would slow in the first quarter, amid an advertiser pullback that weighed on its fourth-quarter earnings.
Shares slid 18.5% to $15.10 in after-hours trading after closing the market session down 2.9% at $18.54.
Pinterest reported a 14% increase in fourth-quarter revenue to $1.32 billion, up from $1.15 billion a year earlier, but short of analysts’ estimate of $1.33 billion, according to FactSet. The company posted 17% revenue growth in the third quarter.
The company expects growth to decelerate further in the current first quarter, projecting growth between 11% and 14%. It’s forecasting revenue between $951 million and $971 million.
Chief Executive Officer William Ready said the company needs to broaden its revenue mix and accelerate sales going forward.
“We are not satisfied with our Q4 revenue performance and believe it does not reflect what Pinterest can deliver over time,” he told analysts on a call Thursday. “We are moving with urgency to return over time to the mid-to-high-teens growth, or better than what we have been consistently delivering.”
Pinterest on Thursday recorded a profit of $277.1 million, or 41 cents a share, compared with its profit of $1.85 billion, or $2.68 a share, a year earlier. The $1.85 billion profit in 2024 included a $1.6 billion benefit from deferred tax assets.
Stripping out certain one-time items, Pinterest logged adjusted earnings of 67 cents a share, in line with analyst expectations, according to FactSet.
Ready said the company continues to see headwinds from larger retailers pulling back on advertising spending to protect their margins amid the impact from President Trump’s tariffs.
“We saw continued softness from this cohort of large retailers,” Ready said. “While we see opportunity over the long term, the near-term outlook for this cohort on our platform remains pressured given these headwinds.”
Ready said the company has expanded its footprint among mid-market and small-to-medium business advertisers, as well as international businesses. Still, he said Pinterest had a ways to go to offset the headwinds from larger advertisers, which may become even more pronounced in the current quarter.
Chief Financial Officer Julia Donnelly added that the company is looking to increase its investments in sales and research and development related to artificial-intelligence following the launch of its restructuring effort in January. Pinterest said last month that it would cut about 15% of its workforce, or approximately 700 jobs.
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