Pinduoduo Q4 revenue grew by 12%, net profit declined by 11%, and management announced a focus on supply chain investments.

Ask AI · Why Pinduoduo is betting on supply-chain investments even as profits slide?

Pinduoduo’s parent company saw a slowdown in performance growth, but remains firmly committed to long-term strategic investment.

Pinduoduo’s 2025 full-year financial results show that revenue continued to grow, but profits shrank significantly, reflecting the structural tension between intensifying competition in China’s e-commerce market and the company’s continued ramp-up in spending. The company’s management has clearly stated that, going forward, it will increase investment in the supply chain with an “all-out” posture, and has directly warned that this will put pressure on financial performance.

In 2025 full-year, Pinduoduo’s total revenue rose 10% year over year to RMB 431.8 billion, while net profit attributable to ordinary shareholders fell 12% year over year to RMB 99.4 billion. Fourth-quarter net profit also declined 11% year over year to RMB 24.5 billion, down from RMB 27.4 billion in the same period last year. Liu Jun, Vice President of Finance, said, “These investments are resolute and long-term, and will inevitably affect our financial performance.”

After the earnings were released, market investors need to watch a key signal: while revenue growth is becoming more moderate, pressure on the cost side continues to rise, and management has already made it clear that strategic investment is placed ahead of short-term profitability. On cash reserves, as of the end of 2025, the company’s total cash, cash equivalents, and short-term investments were RMB 422.3 billion, a significant expansion from RMB 331.6 billion at the end of the previous year.

After the financial report was published, Pinduoduo’s share price fell sharply in the short term.

Revenue growth slows, cost pressures intensify

In 2025 full-year, Pinduoduo’s total revenue reached RMB 431.8 billion (approximately US$61.8 billion), up 10% year over year, with growth rate down somewhat versus 2024. Both major revenue sources continued to grow: online marketing services and other revenue rose 10% year over year to RMB 217.8 billion; transaction services revenue rose 9% year over year to RMB 214.1 billion.

However, the pace of cost-side expansion clearly outpaced the revenue growth rate. Full-year operating costs increased 23% year over year to RMB 188.8 billion, an increase of roughly double the revenue growth rate, mainly driven by higher fulfillment expenses, bandwidth and server costs, and payment processing fees.

Total operating expenses rose 13% year over year to RMB 148.4 billion, with R&D expenses showing the most pronounced increase—up 30% year over year to RMB 16.5 billion—mainly due to higher employee-related costs and bandwidth and server spending.

The acceleration in costs directly squeezed profit margins. Full-year GAAP operating profit fell 13% year over year to RMB 94.6 billion; Non-GAAP operating profit, excluding share-based incentive expenses, also fell 13% year over year to RMB 102.6 billion.

Fourth-quarter performance: revenue rebounds, net profit under pressure

In the fourth quarter, Pinduoduo’s revenue rose 12% year over year to RMB 123.9 billion, with the growth rate improving quarter over quarter. Among them, transaction services revenue was even more impressive, up 19% year over year to RMB 63.9 billion; online marketing services revenue rose 5% year over year to RMB 60.0 billion.

Quarterly operating profit rose slightly year over year, from RMB 25.6 billion in the same period last year to RMB 27.7 billion. However, pressured by foreign exchange losses and other non-operating items, along with a significant increase in income tax expense, quarterly net profit ultimately fell 11% year over year to RMB 24.5 billion.

Basic earnings per ADS fell from RMB 19.76 in the prior-year period to RMB 17.50; diluted earnings per ADS fell from RMB 18.53 to RMB 16.51. Non-GAAP diluted earnings per ADS were RMB 17.69, down 12% year over year. Net cash provided by operating activities in the quarter was RMB 24.1 billion, down from RMB 29.5 billion in the prior-year period.

Management sets the tone: supply-chain investment is the core for the next decade

In the face of performance with a slowdown in growth, Pinduoduo’s management spoke collectively in the earnings report, clearly setting a long-term strategic posture that guided market expectations.

Co-Chairman and Co-CEO Chen Lei said the company has consistently stayed on the strategic direction of high-quality development over the past year, and will continue to embrace long-termism by investing more resources into stakeholders across the service ecosystem.

Another Co-Chairman and Co-CEO, Zhao Jiazhen, positioned 2026 as “the starting point for the next decade,” and placed supply-chain investment as the top priority. She emphasized that the company will invest large amounts of resources with an “all-out” mindset to drive sustained benefits for the entire ecosystem.

Vice President of Finance Liu Jun was the most direct in her remarks, noting that the external environment and competitive landscape are changing rapidly, and that in order to meet consumers’ constantly evolving needs, the company must continue exploring and increasing investment, and that these investments “will inevitably affect financial performance.” This wording clearly sends a signal to the market: profit pressure may not be a short-term phenomenon.

The balance sheet remains solid, cash reserves continue to expand

Despite a contraction in earnings, Pinduoduo’s balance sheet remains healthy. As of December 31, 2025, the company’s total cash, cash equivalents, and short-term investments were approximately RMB 422.3 billion (about US$60.4 billion), up about RMB 90.7 billion from RMB 331.6 billion at the end of 2024, providing ample funding for subsequent large-scale strategic investments.

Other non-current assets were RMB 104.7 billion (about US$15.0 billion), up notably from RMB 83.4 billion in the same period last year. This mainly includes time deposits, debt securities held-to-maturity, and debt securities available for sale.

Total assets expanded from RMB 505.0 billion at the end of 2024 to RMB 630.0 billion, while shareholders’ equity rose from RMB 313.3 billion to RMB 414.9 billion. In 2025 full-year, net cash provided by operating activities was RMB 106.9 billion, down from RMB 121.9 billion last year, mainly due to the decline in net profit.