PDD's 2025 performance: Profits under pressure

Pinduoduo (PDD Holdings) is reporting Q4 and full-year 2025 earnings today after the US market closes and it's a big moment for one of China's most efficient (and most debated) e-commerce players.

Here's the quick picture: Revenue is expected to reach RMB 415–420 billion for the year, up around 5–7%. But profits are likely to fall, with net profit down roughly 8–13%.

At first glance, that looks like a slowdown. But it's not that simple. PDD has been spending heavily on purpose to defend its position in China and to fuel Temu's global growth. Even so, the company is still incredibly efficient, generating over RMB 4 million in net profit per employee. That's rare in e-commerce.

What to watch in this earnings report

1. Domestic revenue

Growth in China's e-commerce market has cooled, and competition is getting tougher. PDD's online marketing revenue growth has dipped from 14.8% in Q1 to lower levels by Q3. Transaction services revenue from Temu has held around RMB 47–48 billion, but growth there has also slowed.

Q4 standalone revenue is forecast at around RMB 110 billion. The key question: can Duoduo Grocery – now serving pickup points in over 70% of China's villages – absorb the macro weakness and help stabilize growth, especially as competitors pull back from lower-tier markets?

2. Profit levels momentum

Yes, profits are declining year-on-year. But zoom out a bit: In the first three quarters of 2025, PDD still made RMB 81 billion in profit, significantly ahead of Alibaba over the same period. Q4 profit is expected to land between RMB 25–28 billion.

So the real question isn't just "profits are down" – it's:
Is this temporary, or has the business permanently become less profitable?

3. Effectiveness of the subsidy strategy

PDD launched its "10 billion reduction" program in the second half of 2024, followed by a three-year, RMB 100 billion merchant support commitment in April 2025. Marketing expenses surged 43% year-on-year to RMB 33.4 billion in Q1 alone.

The central question for this report: did that spending actually move the needle on gross merchandise value (GMV) and user retention or did it just compress margins without lasting commercial impact?

4. Temu's profitability timeline

Temu remains PDD's most consequential long-term bet. Monthly active users reached 417 million as of Q2, with EU users up 74% year-on-year and now accounting for 34% of global traffic, overtaking the US.

Facing tariff pressure and tightening compliance requirements globally, Temu is shifting from a fully managed model toward a semi-managed structure that cuts tariff exposure by an estimated 40%–60%. It has also added domestic direct shipping and third-party platform channels.

While Temu remained a drag on full-year profit, the market expects it to be near breakeven in the second half of 2025 and on track for full profitability in 2026. If management confirms this timeline, it could be the biggest driver for the stock.

How the market might react

PDD earnings tend to move fast in both directions.

The bull case:

• Revenue beats expectations

• Profits come in strong

• Temu is closer to breakeven than expected

• Signs that subsidies are actually driving growth

The bear case:

• High spending with weak results

• Temu growth slows under global pressure

• Margins stay compressed for longer

With Bitget Wallet, you can trade PDD (tokenized stock) directly with USDT or USDC – long or short – before or after the earnings drop.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Always do your own research before trading.