Q2 FY2026
Filed Aug 25, 2026PDD Holdings Announces Second Quarter 2026 Unaudited Financial Results
Total revenues and operating profit each increased 8% year over year, led by transaction services, while net income attributable to ordinary shareholders decreased 12% and non-GAAP net income attributable to ordinary shareholders decreased 13%. Operating expenses increased 13%, with management stating that it stepped up ecosystem investments during the quarter.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | RMB 112.4 billion (US$16.6 billion) | – | 8% |
| Costs of revenuesGAAP | RMB48.0 billion (US$7.1 billion) | – | – |
| Sales and marketing expensesGAAP | RMB 29.7 billion (US$4.4 billion) | – | – |
| General and administrative expensesGAAP | RMB2.3 billion (US$345 million) | – | – |
| Research and development expensesGAAP | RMB 4.6 billion (US$673 million) | – | – |
| Total operating expensesGAAP | RMB36.6 billion (US$5.4 billion) | – | 13% |
| Operating profitGAAP | RMB 27.8 billion (US$4.1 billion) | – | 8% |
| Non-GAAP operating profitnon-GAAP | RMB29.1 billion (US$4.3 billion) | – | 5% |
| Interest and investment income, netGAAP | RMB13,505 million (US$1,990 million) | – | – |
| Foreign exchange lossGAAP | RMB558 million (US$82 million) | – | – |
| Other income/(loss), netGAAP | RMB(7,399) million (US$(1,090) million) | – | – |
| Profit before income tax and share of results of equity investeesGAAP | RMB33,312 million (US$4,910 million) | – | – |
| Share of results of equity investeesGAAP | RMB(38) million (US$(6) million) | – | – |
| Income tax expensesGAAP | RMB(6,092) million (US$(898) million) | – | – |
| Net income attributable to ordinary shareholdersGAAP | RMB 27.2 billion (US$4.0 billion) | – | (12%) |
| Non-GAAP net income attributable to ordinary shareholdersnon-GAAP | RMB28.5 billion (US$4.2 billion) | – | (13%) |
| Basic earnings per ADSGAAP | RMB19.32 (US$2.85) | – | – |
| Diluted earnings per ADSGAAP | RMB18.45 (US$2.72) | – | – |
| Non-GAAP diluted earnings per ADSnon-GAAP | RMB19.33 (US$2.85) | – | – |
| Basic earnings per ordinary shareGAAP | RMB4.83 (US$0.71) | – | – |
| Diluted earnings per ordinary shareGAAP | RMB4.61 (US$0.68) | – | – |
| Non-GAAP diluted earnings per ordinary sharenon-GAAP | RMB4.83 (US$0.71) | – | – |
| Share-based compensation expensesGAAP | RMB1,307 million (US$193 million) | – | – |
| Net cash generated from operating activitiesGAAP | RMB25.7 billion (US$3.8 billion) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Online marketing services and othersNot specified in the release. | RMB 57.6 billion (US$8.5 billion) | – | – |
| Transaction servicesThe increase in total revenues was primarily due to the increase in revenues from transaction services. | RMB 54.7 billion (US$8.1 billion) | – | 13% |
What drove it
- Total revenue growth was primarily due to the increase in revenues from transaction services.
- Transaction services revenue increased 13% from RMB48.3 billion in the same quarter of 2025 to RMB 54.7 billion (US$8.1 billion).
- Management said it stepped up ecosystem investments in the second quarter and prioritized helping merchants thrive and strengthening the broader industry ecosystem.
- The increase in total operating expenses was primarily due to the increase in sales and marketing expenses.
Concerns
- Net income attributable to ordinary shareholders decreased 12% from the same quarter of 2025.
- Non-GAAP net income attributable to ordinary shareholders decreased 13% from the same quarter of 2025.
- Total operating expenses increased 13%, while total revenues increased 8%.
- Other income/(loss), net was RMB(7,399) million (US$(1,090) million), compared with RMB119 million in the same quarter of 2025.
- Income tax expenses were RMB(6,092) million (US$(898) million), compared with RMB(4,819) million in the same quarter of 2025.
- Management cited evolving global trade and regulatory landscapes as creating significant challenges.
What to watch
- The trajectory of transaction services revenue, which was identified as the primary contributor to total revenue growth.
- The effect of ecosystem investments and sales and marketing expenses on operating expenses and profit.
- Management’s trust, safety, compliance and ecosystem-governance initiatives.
- The impact of global trade and regulatory landscapes referenced by management.
Balance sheet and cash flow
- Cash, cash equivalents and short-term investments were RMB456.4 billion (US$67.3 billion) as of June 30, 2026, compared with RMB422.3 billion as of December 31, 2025.
- Cash and cash equivalents were RMB128,918 million (US$19,000 million) as of June 30, 2026, compared with RMB108,901 million as of December 31, 2025.
- Short-term investments were RMB327,496 million (US$48,267 million) as of June 30, 2026, compared with RMB313,408 million as of December 31, 2025.
- Restricted cash was RMB77,274 million (US$11,389 million) as of June 30, 2026, compared with RMB73,831 million as of December 31, 2025.
- Other non-current assets were RMB96.4 billion (US$14.2 billion) as of June 30, 2026, compared with RMB104.7 billion as of December 31, 2025, which mainly included time deposits, held-to-maturity debt securities, and available-for-sale debt securities.
- Total Assets were RMB663,407 million (US$97,774 million) as of June 30, 2026, compared with RMB630,045 million as of December 31, 2025.
- Total Liabilities were RMB215,620 million (US$31,778 million) as of June 30, 2026, compared with RMB216,660 million as of December 31, 2025.
- Total Shareholders’ Equity was RMB447,787 million (US$65,996 million) as of June 30, 2026, compared with RMB413,385 million as of December 31, 2025.
- Net cash used in investing activities was RMB(19,974) million (US$(2,944) million) for the three months ended June 30, 2026, compared with RMB(27,022) million for the three months ended June 30, 2025.
- Cash, cash equivalents and restricted cash at end of period was RMB206,192 million (US$30,389 million) for the three months ended June 30, 2026, compared with RMB129,900 million for the three months ended June 30, 2025.
Analysis
PDD Holdings reported RMB 112.4 billion (US$16.6 billion) of Q2 2026 revenue, up 8% from RMB104.0 billion in the same quarter of 2025. The company identified transaction services as the primary contributor to growth. Transaction services revenue rose 13% to RMB 54.7 billion (US$8.1 billion), while online marketing services and others generated RMB 57.6 billion (US$8.5 billion).
Costs of revenues were RMB48.0 billion (US$7.1 billion), versus RMB45.9 billion a year earlier. Total operating expenses increased 13% to RMB36.6 billion (US$5.4 billion), with the company attributing the increase primarily to sales and marketing expenses. Sales and marketing expense was RMB 29.7 billion (US$4.4 billion), while general and administrative expense was RMB2.3 billion (US$345 million) and research and development expense was RMB 4.6 billion (US$673 million). Management said it stepped up ecosystem investments during the quarter.
Operating profit increased 8% to RMB 27.8 billion (US$4.1 billion), and non-GAAP operating profit increased 5% to RMB29.1 billion (US$4.3 billion). However, net income attributable to ordinary shareholders fell 12% to RMB 27.2 billion (US$4.0 billion), while non-GAAP net income attributable to ordinary shareholders fell 13% to RMB28.5 billion (US$4.2 billion). The income statement included RMB(7,399) million (US$(1,090) million) of other income/(loss), net, compared with RMB119 million in the same quarter of 2025, and income tax expenses increased to RMB(6,092) million (US$(898) million).
Cash generation increased, with net cash generated from operating activities reaching RMB25.7 billion (US$3.8 billion), compared with RMB21.6 billion in the same quarter of 2025. Cash, cash equivalents and short-term investments were RMB456.4 billion (US$67.3 billion) as of June 30, 2026. The release did not provide forward financial guidance, capital-return disclosures, or free cash flow. Management emphasized compliance, consumer protection, trust and safety initiatives, and support for merchants amid evolving global trade and regulatory landscapes.
Management, verbatim
Since the start of the year, global trade and regulatory landscapes have continued to evolve, creating significant challenges while also presenting new opportunities. We feel a strong sense of responsibility that comes with our unique position in global trade and will work diligently to build a trustworthy platform that consumers can rely on over the long run.
Lei Chen, Co-Chairman and Co-Chief Executive Officer of PDD Holdings
During the first half of the year, we continued to strengthen ecosystem governance within our daily operations, rolling out targeted trust and safety initiatives across categories. We view compliance as a fundamental priority and are fully committed to safeguarding consumer rights and building lasting trust.
Jiazhen Zhao, Co-Chairman and Co-Chief Executive Officer of PDD Holdings
We stepped up our ecosystem investments in the second quarter. At this stage, our priority is helping merchants thrive and strengthening the broader industry ecosystem. We will continue to focus on these fundamentals to drive the platform’s sustainable development over the long term.
Jun Liu, VP of Finance of PDD Holdings
Not in the filing
stated, not guessed- Forward financial guidance was not provided.
- Previous-release outlook was not provided.
- Gross margin was not reported.
- Free cash flow was not reported.
- Debt was not reported.
- Share repurchases were not reported.
- Dividends were not reported.
- Quarter-over-quarter comparisons were not reported for revenue, segments, expenses, profit, earnings per share, or cash flow.
- Year-over-year percentage changes were not reported for online marketing services and others, costs of revenues, individual operating-expense line items, interest and investment income, foreign exchange loss, other income/(loss), profit before income tax and share of results of equity investees, share of results of equity investees, income tax expenses, earnings per share, share-based compensation expenses, or operating cash flow.
- Segment profit or segment margin was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.