Pinduoduo Announces Fourth Quarter and Fiscal Year 2018 Results
SHANGHAI, CHINA, March 13, 2019 – Pinduoduo Inc. ("Pinduoduo" or the "Company")(NASDAQ: PDD), an innovative and fast growing “new e-commerce” platform and one of theleading Chinese e-commerce players, today announced its unaudited financial results for the
fourth quarter and fiscal year ended December 31, 2018.
Fourth Quarter 2018 Highlights⚫

GMV 1 in the twelve-month period ended December 31, 2018 was RMB471.6 billion(US$268.6 billion), an increase of 234% from RMB141.2 billion in the twelve-month period
ended December 31, 2017.

⚫

Total revenues3 in the quarter were RMB5,653.9 million (US$822.3 million), an increaseof 379% from RMB1,179.4 million in the same quarter of 2017.

⚫

Average monthly active users4 in the quarter were 272.6 million, an increase of 93% from
141.0 million in the same quarter of 2017.

⚫

Active buyers5 in the twelve-month period ended December 31, 2018 were 418.5 million,
an increase of 71% from 244.8 million in the twelve-month period ended December 31,
2017.

⚫

Annual spending per active buyer6 in the twelve-month period ended December 31, 2018
was RMB1,126.9 (US$163.9), an increase of 95% from RMB576.9 in the twelve-month
period ended December 31, 2017.

“We had a strong finish to 2018 in the fourth quarter,” said Mr. Zheng Huang, Chairman and“GMV” refers to the total value of all orders for products and services placed on the Pinduoduo mobile platform, regardless of whether the
products and services are actually sold, delivered or returned. Buyers on the platform are not charged for shipping fees in addition to the listed
price of merchandise. Hence, merchants may embed the shipping fees in the listed price. If embedded, then the shipping fees are included in
GMV. As a prudential matter aimed at eliminating any influence on Pinduoduo’s GMV of irregular transactions, the Company excludes fromits calculation of GMV transactions over certain amounts (RMB100,000) and transactions by buyers over a certain amount (RMB1,000,000)
per day.
2This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for theconvenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB6.8755 to US$1.00, the noonbuying rate in effect on December 31, 2018 as set forth in the H.10 Statistical Release of the Federal Reserve Board.
3 As the Company lost its EGC status on December 31, 2018, the Company adopted ASU No. 2014-09, “Revenue from Contracts with
Customers (Topic 606)”, using the modified retrospective transition approach beginning January 1, 2018. The adoption did not have asignificant impact on the Company’s operating results for the three months and the year ended December 31, 2018 and the comparable
periods.
4“Monthly active users” refers to the number of user accounts that visited the Pinduoduo mobile app during a given month, which does notinclude those that accessed the platform through social networks and access points.
5“Active buyers” in a given period refers to the number of user accounts that placed one or more orders (i) on the Pinduoduo mobile app, and(ii) through social networks and access points in that period, regardless of whether the products and services are actually sold, delivered or
returned.
6“Annual spending per active buyer” in a given period refers to the quotient of total GMV in that period divided by the number of active
buyers in the same period.
11Chief Executive Officer of Pinduoduo. “GMV in the last twelve months increased 234% yearover-year to RMB471.6 billion. This was driven by the rapid growth in our annual active buyer
base and a near doubling in the annual spending per active buyer. We view this as an indicationof users’ growing trust in our platform, and will keep on innovating to satisfy our users’ evolving
needs so they can have the best user experience possible.”“In the fourth quarter, our revenue grew 379% year-over-year and 68% sequentially to RMB5.7
billion,” added Mr. Tian Xu, Vice President of Finance of Pinduoduo. “The growth in ourrevenue is the result of the continued expansion of our buyer base and increasing user
engagement, which translates to greater traffic and attractive advertising return on investmentson our platform. To build on this momentum and increase mindshare with users, we will continue
to invest strategically.”
Fourth Quarter 2018 Financial Results
Total revenues were RMB5,653.9 million (US$822.3 million), an increase of 379% from
RMB1,179.4 million in the same quarter of 2017 and an increase of 68% sequentially from
RMB3,372.4 million in the previous quarter. The increases were primarily due to an increase inrevenues from online marketing services.
⚫

Revenues from online marketing services were RMB5,062.4 million (US$736.3 million),
an increase of 470% from RMB887.6 million in the same quarter of 2017, and an increaseof 70% sequentially from RMB2,974.1 million in the previous quarter.

⚫

Revenues from transaction services were RMB591.5 million (US$86.0 million), an
increase of 103% from RMB291.8 million in the same quarter of 2017, and an increase of
49% sequentially from RMB398.3 million in the previous quarter.

Total costs of revenues were RMB1,424.0 million (US$207.1 million), an increase of 281%
from RMB374.0 million in the same quarter of 2017, and an increase of 84% sequentially from
RMB774.7 million in the previous quarter. The increase from last quarter is mainly due to higher
costs for cloud services, our call center and merchant support services.
Total operating expenses were RMB 6,870.8 million (US$999.3 million), compared with
RMB828.1 million in the same quarter of 2017.
⚫

Sales and marketing expenses were RMB 6,024.0 million (US$876.2 million), an increaseof 699% from RMB753.9 million in the same quarter of 2017, mainly due to an increase in
online and offline advertisement and promotions and branding campaigns.

⚫

General and administrative expenses were RMB321.6 million (US$46.8 million), a
significant increase from RMB11.6 million in the same quarter of 2017, primarily due to anincrease in headcount and share-based compensation expenses.

⚫

Research and development expenses were RMB525.2 million (US$76.4 million), an
increase of 901% from RMB52.5 million in the same quarter of 2017. The increase wasprimarily due to an increase in headcount and the recruitment of more experienced R&D2

personnel, as well as an increase in R&D-related cloud services expenses.
Operating loss was RMB2,640.9 million (US$384.1 million), compared with operating loss of
RMB22.7 million in the same quarter of 2017. Non-GAAP operating loss7 was RMB2,112.9
million (US$307.3 million), compared with RMB10.0 million in the same quarter of 2017.
Net loss attributable to ordinary shareholders was RMB2,423.9 million (US$352.5 million),compared with net income of RMB13.6 million in the same quarter of 2017. Non-GAAP net
loss attributable to ordinary shareholders 8 was RMB1,895.9 million (US$275.7million),compared with Non-GAAP net income attributable to ordinary shareholders of RMB26.3 million
in the same quarter of 2017.
Basic and diluted net loss per ADS was RMB2.16 (US$0.32), compared with net earnings per
ADS of RMB0.04 in the same quarter of 2017. Non-GAAP basic and diluted net loss per ADS
were RMB1.72 (US$0.24), compared with Non-GAAP basic and diluted net earnings per ADS
of RMB0.04 in the same quarter of 2017.
Net cash 9 provided by operating activities was RMB5,732.4 million (US$833.7 million),compared with RMB5,362.6 million in the same quarter of 2017, primarily due to an increase inrevenues from online marketing services.
Cash, cash equivalents and restricted cash were RMB30.5 billion (US$4.4 billion) as ofDecember 31, 2018, compared with RMB12.4 billion as of December 31, 2017.
Fiscal Year 2018 Financial Results
Total revenues were RMB13,120.0 million (US$1,908.2 million), representing an increase of
652% from RMB1,744.1 million in 2017. The increase was primarily due to an increase inrevenues from online marketing services.
⚫

Revenues from online marketing services were RMB11,515.6 million (US$1,674.9
million), representing an increase of 852% from RMB1,209.3 million in 2017.

⚫

Revenues from transaction services were RMB1,604.4 million (US$233.4 million),
representing an increase of 202% from RMB531.4 million in 2017.

⚫

Revenues from merchandise sale were nil, representing a decrease of 100% from RMB3.4
million in 2017.

Non-GAAP operating income/(loss) is defined as operating income/(loss) excluding share-based compensation expenses and impairment oflong term investment. See “Reconciliation of Non-GAAP Measures to The Most Directly Comparable GAAP Measures ” set forth at the endof this press release.
8
Non-GAAP net income/(loss) attributable to ordinary shareholders is defined as net income/(loss) attributable to ordinary shareholders
excluding share-based compensation expenses and impairment of long term investment. See “Reconciliation of Non-GAAP Measures to The
Most Directly Comparable GAAP Measures ” set forth at the end of this press release.
9 As the Company lost its EGC status on December 31, 2018, the Company adopted the guidance of ASU 2016-18 issued by FASB in
November 2016, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, andamounts generally described as restricted cash or restricted cash equivalents. Pursuant to the guidance, the Company retrospectively restatedthe statement of cash flows in the comparative periods.
73

Total costs of revenues were RMB2,905.2 million (US$422.6 million), representing an increaseof 302% from RMB722.8 million in 2017. The increase from last year is mainly due to higher
costs for cloud services, our call center and merchant support services.
Total operating expenses were RMB21,014.5 million (US$3,056.4 million), compared with
RMB1,617.0 million in 2017.
⚫

Sales and marketing expenses were RMB13,441.8 million (US$1,955.0 million), an
increase of 900% from RMB1,344.6 million in 2017 as we invested in cultivating greateruser recognition through online and offline advertising campaigns and promotions.

⚫

General and administrative expenses were RMB6,456.6 million (US$939.1 million), a
significant increase from RMB133.2 million in 2017, primarily due to an increase inheadcount and share-based compensation expenses as we expanded our operations.

⚫

Research and development expenses were RMB1,116.1 million (US$162.3 million), an
increase of 764% from RMB129.2 million in 2017. The increase was primarily due to anincrease in headcount as we invest to build out our technical capabilities. We have recruited
more experienced R&D personnel, as well as incurred more costs in R&D related cloudservices expenses.

Operating loss was RMB10,799.7 million (US$1,570.8 million), compared with operating lossof RMB595.7 million in 2017. Non-GAAP operating loss was RMB3,958.2 million (US$575.7
million), compared with RMB469.2 million in 2017.
Net loss attributable to ordinary shareholders was RMB10,297.6 million (US$1,497.7
million), compared with RMB498.7 million in 2017. Non-GAAP net loss attributable toordinary shareholders was RMB3,456.0 million (US$502.7 million), compared with
RMB372.2 million in 2017.
Basic and diluted net loss per ADS was RMB13.88 (US$2.00), compared with RMB1.12 in2017. Non-GAAP basic and diluted net loss per ADS were RMB4.64 (US$0.68), compared with
RMB0.84 in 2017.
Net cash provided by operating activities was RMB7,767.9 million (US$1,129.8 million),compared with RMB9,686.3 million in 2017, primarily due to an increase in sales and marketing
expenses.
Recent Developments
Follow-on Equity Offering
On February 7, 2019, the Company successfully completed a public offering of 40,185,000
American Depositary Shares (“ADSs”), each representing four Class A ordinary shares of theCompany, and of 14,815,000 ADSs by several shareholders (the “selling shareholders”), at a
public offering price of US$25.00 per ADS. Including the 8,250,000 additional ADSs purchased
upon the full exercise of the underwriters’ over-allotment option, the Company raised a total of
US$1,180 million in proceeds after deducting underwriting discounts and commissions andestimated offering expenses payable.
4Conference Call
The Company will host a conference call to discuss the earnings at 8:00 AM U.S. Eastern Timeon Wednesday, March 13, 2019 (8:00 PM Beijing/Hong Kong Time on Wednesday, March 13,2019).
Dial-in numbers for the live conference call are as follows:
International
Mainland China
U.S.
U.K.
Hong Kong
Passcode:+65-6713-5090
4006-208-038+1-845-675-0437+44-203-621-4779+852-3018-6771
Pinduoduo

A telephone replay of the call will be available after the conclusion of the conference call for
one week.
Dial-in numbers for the replay are as follows:
International
U.S.
Passcode:+61-2-8199-0299+1-646-254-3697
7587753

A live and archived webcast of the conference call will be available on the Investor Relations
section of Pinduoduo’s website at http://investor.pinduoduo.com/
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non-GAAP measures, such as nonGAAP operating income/(loss) and non-GAAP net income/(loss) attributable to ordinary
shareholders, as supplemental measures to review and assess operating performance. The
presentation of these non-GAAP financial measures is not intended to be considered in isolation
or as a substitute for the financial information prepared and presented in accordance withaccounting principles generally accepted in the United States of America (“U.S. GAAP”). The
Company defines non-GAAP operating income/(loss) as operating income/(loss) excluding
share-based compensation expenses and impairment of long term investment. The Company
defines non-GAAP net income/(loss) attributable to ordinary shareholders as net income/(loss)
attributable to ordinary shareholders excluding share-based compensation expenses andimpairment of long term investment.
The Company presents these non-GAAP financial measures because they are used bymanagement to evaluate operating performance and formulate business plans. The Company
believes that the non-GAAP financial measures help identify underlying trends in its businessby excluding the impact of share-based compensation expenses and impairment of long term
investment, which is a non-cash charge. The Company also believes that the non-GAAP
5financial measures could provide further information about the Company’s results of operations,enhance the overall understanding of the Company’s past performance and future prospects.
The non-GAAP financial measures are not defined under U.S. GAAP and are not presented inaccordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical
tools. The Company’s non-GAAP financial measures do not reflect all items of income andexpense that affect the Company’s operations and do not represent the residual cash flow
available for discretionary expenditures. Further, these non-GAAP measures may differ from the
non-GAAP information used by other companies, including peer companies, and therefore theircomparability may be limited. The Company compensates for these limitations by reconcilingthe non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of whichshould be considered when evaluating performance. The Company encourages you to review the
Company’s financial information in its entirety and not rely on a single financial measure.
For more information on the non-GAAP financial measures, please see the table captioned“Reconciliation of Non-GAAP Measures to The Most Directly Comparable GAAP Measures”
set forth at the end of this press release.
Safe Harbor Statements
This announcement contains forward-looking statements. These statements are made under the“safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as “will,” “expects,”“anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,”“potential,” “continue” or other similar expressions. Among other things, the business outlook
and quotations from management in this announcement, as well as Pinduoduo’s strategic andoperational plans, contain forward-looking statements. Pinduoduo may also make written or oral
forward-looking statements in its periodic reports to the U.S. Securities and Exchange
Commission (the “SEC”), in its annual report to shareholders, in press releases and other writtenmaterials and in oral statements made by its officers, directors or employees to third parties.
Statements that are not historical facts, including but not limited to statements about Pinduoduo’s
beliefs and expectations, are forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause actual results to differ
materially from those contained in any forward-looking statement, including but not limited to
the following: Pinduoduo’s growth strategies; its future business development, results ofoperations and financial condition; its ability to understand buyer needs and provide products
and services to attract and retain buyers; its ability to maintain and enhance the recognition andreputation of its brand; its ability to rely on merchants and third-party logistics service providers
to provide delivery services to buyers; its ability to maintain and improve quality control policies
and measures; its ability to establish and maintain relationships with merchants; trends andcompetition in China’s e-commerce market; changes in its revenues and certain cost or expense
items; the expected growth of China’s e-commerce market; PRC governmental policies andregulations relating to Pinduoduo’s industry, and general economic and business conditions
globally and in China and assumptions underlying or related to any of the foregoing. Further
information regarding these and other risks is included in Pinduoduo’s filings with the SEC. All
information provided in this press release and in the attachments is as of the date of this press
release, and Pinduoduo undertakes no obligation to update any forward-looking statement,
except as required under applicable law.
6

About Pinduoduo Inc.
Pinduoduo is an innovative and fast growing “new e-commerce” platform that provides buyers
with value-for-money merchandise and fun and interactive shopping experiences.
The Pinduoduo mobile platform offers a comprehensive selection of attractively priced
merchandise, featuring a dynamic social shopping experience that leverages social networks as
an effective and efficient tool for buyer acquisition and engagement.
For more information, please visit http://investor.pinduoduo.com/
For investor and media inquiries, please contact:
Pinduoduo Inc.
investor@pinduoduo.com
internationalmedia@pinduoduo.com
Christensen
In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com
In U.S.
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@christensenir.com

7

PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”), except for number ofshares and per share data)
As ofDecember
31,2017
RMB(Audited)

December 31, 2018
RMB

US$
(Unaudited)

ASSETS
Current Assets
Cash and cash equivalents
Restricted cash
Receivables from online payment
platforms
Short-term investments
Amounts due from related parties
Prepayments and other current
assetsTotal current assets
Non-current assets
Property and equipment, net
Intangible asset
Loan to a related party
Other non-current assets
Total non-current assets
Total Assets

3,058,152
9,370,849

14,160,322
16,379,364

2,059,533
2,382,280

88,17350,000442,912247,586
7,630,689
1,019,033

36,0101,109,838
148,212

127,742
13,137,828

953,989
40,390,983

138,752
5,874,625

9,279
162,363
5,000
176,642

29,0752,579,338
182,667
2,791,080

4,229
375,149
26,568405,946

13,314,470

43,182,063

6,280,571

8

PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”), except for number ofshares and per share data)
As ofDecember
31,2017
RMB(Audited)

December 31, 2018
RMB

US$
(Unaudited)

LIABILITIES, MEZZANINEEQUITY AND
SHAREHOLDERS’(DEFICITS)/EQUITYCurrent Liabilities
Amounts due to related parties
Customer advances
Payable to merchants
Accrued expenses and otherliabilities
Merchant deposits
Total current liabilities

76,05756,453
9,838,519

478,113
191,482
17,275,934

69,53927,8502,512,680

360,393
1,778,085
12,109,507

2,225,667
4,188,273
24,359,469

323,712609,159
3,542,940

Total Liabilities

12,109,507

24,359,469

3,542,940

Mezzanine equity

2,196,921--

54
61,326142
29,114,527

20
4,234,532(23,101)(1,030,237)

1,035,783(11,327,858)

150,648(1,647,569)(991,958)

18,822,594

2,737,631

13,314,470

43,182,063

6,280,571

Shareholders’ (deficits)/equity
Ordinary Shares
Additional paid-in capital
Accumulated other comprehensive
income/(loss)
Accumulated deficits
Total shareholders’(deficits)/equity
Total liabilities, mezzanine
equity, and shareholders’(deficits)/equity

9

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS)(Amounts in thousands of RMB and US$, except for number of shares and per share data)
For the three months ended December 31,
2017
RMB(Unaudited)

For the years ended December 31,
2017

2018
RMB
(Unaudited)

US$(Unaudited)

RMB(Audited)

2018
RMB(Unaudited)

US$(Unaudited)

Revenues
1,179,402
1,179,402

5,653,922
5,653,922

822,329822,329

1,740,691
3,385
1,744,076

13,119,990
13,119,990

1,908,223
1,908,223

Total costs of revenues(374,024)(374,024)(1,424,035)(1,424,035)(207,117)(207,117)(719,778)(3,052)(722,830)(2,905,249)(2,905,249)(422,551)(422,551)

Gross profit

805,378

4,229,887

615,212

1,021,246

10,214,741

1,485,672

Sales and marketing expenses
General and administrative expenses
Research and development expenses
Impairment of long term investment
Total operating expenses(753,945)(11,649)(52,488)(10,000)(828,082)(6,023,974)(321,609)(525,213)(6,870,796)(876,151)(46,776)(76,389)(999,316)(1,344,582)(133,207)(129,181)(10,000)(1,616,970)(13,441,813)(6,456,612)(1,116,057)(21,014,482)(1,955,031)(939,075)(162,324)(3,056,430)

Operating loss

(22,704)(2,640,909)(384,104)(595,724)(10,799,741)(1,570,758)

Interest income
Foreign exchange (loss)/gain
Other (loss)/income, net

38,892(1,523)(1,074)

233,357
3,158(19,499)

33,940459(2,836)80,783(11,547)
1,373

584,940
10,037(12,361)

85,076
1,460(1,798)

Income/(loss) before income tax
Income tax expenses
Net income/(loss)

13,591
13,591(2,423,893)(2,423,893)(352,541)(352,541)(525,115)(525,115)(10,217,125)(10,217,125)(1,486,020)(1,486,020)

Online marketplace services
Merchandise sales
Total Revenues
Costs of revenues
Costs of online marketplace services
Costs of merchandise sales

10

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS)(Amounts in thousands of RMB and US$, except for number of shares and per share data)
For the three months ended December 31,
2017

2018

RMB
(Unaudited)
Net income/(loss)
Deemed distribution to certain holders ofconvertible preferred shares
Contribution from a holder of convertible
preferred shares
Net income/(loss) attributable to ordinary
shareholders

For the years ended December 31,
2017
RMB(Audited)

US$(Unaudited)

RMB(Unaudited)

2018
RMB
(Unaudited)

US$(Unaudited)

13,591(2,423,893)(352,541)(525,115)(10,217,125)(1,486,020)

-

-

-

-

(80,496)(11,708)---

26,413--

13,591(2,423,893)(352,541)(498,702)(10,297,621)(1,497,728)

Earnings/(deficits) per share for Class A andClass B ordinary shares:-Basic-Diluted

0.01
0.01

(0.54)(0.54)(0.08)(0.08)(0.28)(0.28)(3.47)(3.47)(0.50)(0.50)

Earnings/(deficits) per ADS (4 ordinary
shares equals 1 ADS ):-Basic-Diluted

0.04
0.04

(2.16)(2.16)(0.32)(0.32)(1.12)(1.12)(13.88)(13.88)(2.00)(2.00)

1,758,769,820
1,758,769,820

4,455,688,688
4,455,688,688

4,455,688,688
4,455,688,688

1,764,799,346
1,764,799,346

2,968,319,549
2,968,319,549

2,968,319,549
2,968,319,549

Weighted average number of Class A andClass B ordinary shares outstanding:-Basic-Diluted

11

PINDUODUO INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$, except for number of shares and per share data)

For the three months ended December 31,
2017
RMB(Unaudited)

For the years ended December 31,
2017

2018
US$
(Unaudited)

RMB(Unaudited)

RMB(Audited)

2018
RMB(Unaudited)

US$(Unaudited)

11,515,575
1,604,415
13,119,990

1,674,871
233,352
1,908,223

Revenues
Online marketplace services- Online marketing services- Transaction services
Merchandise sales
Total

887,585
291,817
1,179,402

5,062,378
591,5445,653,922

736,292
86,037
822,32912

1,209,275
531,416
3,385
1,744,076

PINDUODUO INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$, except for number of shares and per share data)

For the three months ended December 31,
2017

Research and development
Total

2017

2018

RMB
(Unaudited)
Share-based compensation costs
included in:
Costs of revenues
Sales and marketing expenses
General and administrative expenses

For the years ended December 31,

210
593
(397)
2,262
2,668

US$
(Unaudited)

RMB(Unaudited)

2,118
191,844
255,671
78,379528,01213308
27,90337,186
11,40076,797

RMB(Audited)

796
1,675
108,141
5,893
116,505

2018
RMB(Unaudited)

US$(Unaudited)

3,488
405,805
6,296,186
136,094
6,841,573

507
59,022915,742
19,794
995,065

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands of RMB and US$, except for number of shares and per share data)

For the three months ended December 31,
2017

Net cash provided by operating activities
Net cash (used in)/provided by investing activities
Net cash (used in)/provided by financing activities
Effect of exchange rate changes on cash, cash
equivalents and restricted cash
Increase in cash, cash equivalents and restricted
cash
Cash, cash equivalents and restricted cash at
beginning of period10
Cash, cash equivalents and restricted cash at
end of period10

For the years ended December 31,
2017

2018

2018

RMB
(Unaudited)
5,362,621(11,926)(300)

RMB(Unaudited)
5,732,397(238,635)(13,936)

US$

RMB

RMB

US$

(Unaudited)
833,743(34,708)(2,027)(Unaudited)
9,686,328
71,651
1,398,860(Unaudited)
7,767,927(7,548,509)
17,344,357(Unaudited)
1,129,798(1,097,885)
2,522,632(13,293)(66,967)(9,740)(47,681)546,91079,5455,337,102

5,412,859

787,268

11,109,158

18,110,685

2,634,090

7,091,899

25,126,827

3,654,545

1,319,843

12,429,001

1,807,723

12,429,001

30,539,686

4,441,813

12,429,001

30,539,686

4,441,813

As the Company lost its EGC status on December 31, 2018, the Company adopted the guidance of ASU 2016-18 issued by FASB in November 2016, which requires that a statement of cash flows explain
the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Pursuant to the guidance, the Company retrospectively
restated the statement of cash flows in the comparative periods.
10

14

PINDUODUO INC.
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES(Amounts in thousands of RMB and US$, except for number of shares and per share data)
For the three months ended December 31,
2017

For the years ended December 31,
2017

2018

RMB
(Unaudited)

US$(Unaudited)(595,724)
116,505
10,000(469,219)(10,799,741)
6,841,573(3,958,168)(1,570,758)
995,065(575,693)(352,541)
76,797-(498,702)
116,505
10,000(10,297,621)
6,841,573-(1,497,728)
995,065-(1,895,881)(275,744)(372,197)(3,456,048)(502,663)

0.01(0.43)(0.06)(0.21)(1.16)(0.17)

Non-GAAP basic earnings/(deficits) per ADS

0.04(1.72)(0.24)(0.84)(4.64)(0.68)

Non-GAAP diluted earnings/(deficits) per share

0.01(0.43)(0.06)(0.21)(1.16)(0.17)

Non-GAAP diluted earnings/(deficits) per ADS

0.04(1.72)(0.24)(0.84)(4.64)(0.68)

RMB(Unaudited)(22,704)
2,668
10,000(10,036)

RMB(Unaudited)(2,640,909)
528,012(2,112,897)

US$(Unaudited)(384,104)
76,797(307,307)

13,591
2,668
10,000(2,423,893)
528,012-26,259

Non-GAAP basic earnings/(deficits) per share

Operating Loss
Add: Share-based compensation
Impairment of long term investment
Non- GAAP operating loss
Net income/(loss) attributable to ordinary
shareholders
Add: Share-based compensation
Impairment of long term investment
Non- GAAP net income/(loss) attributable toordinary shareholders

15

RMB(Unaudited)2018