Pinduoduo Announces First Quarter 2021 Unaudited Financial Results
May 26, 2021
SHANGHAI, China, May 26, 2021 (GLOBE NEWSWIRE) -- Pinduoduo Inc. (“Pinduoduo” or the “Company”) (NASDAQ: PDD), China’s largest
agriculture and interactive commerce platform, today announced its unaudited financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Highlights

Total revenues in the quarter were RMB22,167.1 million (US$13,383.4 million), an increase of 239% from RMB6,541.1
million in the same quarter of 2020.
Average monthly active users2 in the quarter was 724.6 million, an increase of 49% from 487.4 million in the samequarter of 2020.
Active buyers3 in the twelve-month period ended March 31, 2021 was 823.8 million, an increase of 31% from 628.1
million in the twelve-month period ended March 31, 2020.
Operating loss in the quarter was RMB4,147.0 million (US$633.0 million), compared with operating loss of RMB4,397.2
million in the same quarter of 2020. Non-GAAP4 operating loss in the quarter was RMB3,174.1 million (US$484.5million), compared with operating loss of RMB3,587.9 million in the same quarter of 2020.
Net loss attributable to ordinary shareholders in the quarter was RMB2,905.4 million (US$ 443.5 million), comparedwith RMB4,119.3 million in the same quarter of 2020. Non-GAAP net loss attributable to ordinary shareholders in thequarter was RMB1,890.3 million (US$288.5 million), compared with RMB3,169.6 million in the same quarter of 2020.
“Our growing scale gives us both greater capacity and responsibility to live up to our mission to ‘benefit all’,” said Mr. Lei Chen, Chairman and Chief
Executive Officer of Pinduoduo. “We envision Pinduoduo as a platform that not only facilitates the trading of goods and services but also serves as aconduit for turning ideas into solutions to everyday problems.”“We remain laser-focused on serving our users and anticipating what they need, and doing so in a way that is respectful of the community andenvironment,” added Mr. David Liu, Vice President of Strategy. “We will continue to engage our users, merchants and partners in improving all aspectsof our services.”“We continued to deliver strong results in the first quarter and remain disciplined,” said Mr. Tony Ma, Vice President of Finance. “Our total revenues,excluding contribution from merchandise sales, for the first quarter 2021 increased 161% from the prior year, while our non-GAAP operating and net
losses narrowed at the same time.”
First Quarter 2021 Unaudited Financial Results
Total revenues were RMB22,167.1 million (US$3,383.4 million), an increase of 239% from RMB6,541.1 million in the same quarter of 2020. The
increase was primarily due to an increase in revenues from online marketing services and contribution from merchandise sales.

Revenues from online marketing services and others were RMB14,111.5 million (US$2,153.8 million), an increase of
157% from RMB5,492.3 million in the same quarter of 2020.
Revenues from transaction services were RMB2,931.5 million (US$447.4 million), an increase of 180% fromRMB1,048.8 million in the same quarter of 2020.
Revenues from merchandise sales were RMB5,124.1 million (US$782.1 million), an increase of RMB5,124.1 million fromnil in the same quarter of 2020.
Total costs of revenues were RMB10,746.1 million (US$1,640.2 million), an increase of 487% from RMB1,830.2 million in the same quarter of 2020.
The increase was mainly due to costs attributable to merchandise sales, higher cost of payment processing fees, cloud services fees, and delivery andstorage fees.
Total operating expenses were RMB15,568.0 million (US$2,376.1 million), compared with RMB9,108.0 million in the same quarter of 2020.

Sales and marketing expenses were RMB12,997.4 million (US$1,983.8 million), an increase of 78% from RMB7,296.6
million in the same quarter of 2020, mainly due to an increase in advertising expenses and promotion and couponexpenses.

General and administrative expenses were RMB351.9 million (US$53.7 million), an increase of 4% from RMB338.3
million in the same quarter of 2020.
Research and development expenses were RMB2,218.7 million (US$338.6 million), an increase of 51% fromRMB1,473.2 million in the same quarter of 2020. The increase was primarily due to an increase in headcount and therecruitment of more experienced R&D personnel and an increase in R&D-related cloud services expenses.
Operating loss was RMB4,147.0 million (US$633.0 million), compared with operating loss of RMB4,397.2 million in the same quarter of 2020.
Non-GAAP operating loss was RMB3,174.1 million (US$484.5 million), compared with operating loss of RMB3,587.9 million in the same quarter of2020.
Net loss attributable to ordinary shareholders was RMB2,905.4 million (US$443.5 million), compared with RMB4,119.3 million in the same quarterof 2020. Non-GAAP net loss attributable to ordinary shareholders was RMB1,890.3 million (US$288.5 million), compared with RMB3,169.6 million
in the same quarter of 2020.
Basic and diluted net loss per ADS were RMB2.33 (US$0.36), compared with RMB3.54 in the same quarter of 2020. Non-GAAP basic and diluted
net loss per ADS were RMB1.52 (US$0.23), compared with RMB2.73 in the same quarter of 2020.
Net cash flow used in operating activities was RMB3,724.5 million (US$568.5 million), compared with RMB567.1 million in the same quarter of2020, primarily due to an increase in restricted cash outflow due to seasonality, offset by increase in online marketing services revenues.
Cash, cash equivalents and short-term investments were RMB83.4 billion (US$12.7 billion) as of March 31, 2021, compared with RMB87.0 billion
as of December 31, 2020.
Recent Development
As of April 30, 2021, US$756.4 million of the 0% convertible bonds due in 2024 have been converted into newly issued ADSs.
Conference CallThe Company will host a conference call to discuss the earnings at 7:30 AM U.S. Eastern Time on Wednesday, May 26, 2021 (7:30 PM Beijing/HongKong Time on Wednesday, May 26, 2021).
The conference call will be webcast live at https://investor.pinduoduo.com/investor-events. The webcast will be available for replay at the same
website following the conclusion of the call.
__________________________
1 This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience ofthe reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB6.5518 to US$1.00, the noon buying rate in effecton March 31, 2021 as set forth in the H.10 Statistical Release of the Federal Reserve Board.
2 “Monthly active users” refers to the number of user accounts that visited the Pinduoduo mobile app during a given month, which does not include
those that accessed the platform through social networks and access points.
3 “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.
4 The Company’s non-GAAP financial measures exclude share-based compensation expenses, fair value change of long-term investments, andinterest expenses related to the convertible bonds’ amortization to face value and gain on extinguishment. See “Reconciliation of Non-GAAP
Measures to The Most Directly Comparable GAAP Measures” set forth at the end of this press release.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP operating loss and non-GAAP net 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 accordancewith accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s non-GAAP financial measures exclude
share-based compensation expenses, fair value change of long-term investments, and interest expenses related to the convertible bonds’
amortization to face value and gain on extinguishment.
The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance andformulate business plans. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding
the impact of share-based compensation expenses, fair value change of long-term investments, and interest expenses related to the convertible
bonds’ amortization to face value and gain on extinguishment, which are non-cash charges. The Company also believes that the non-GAAP financial
measures could provide further information about the Company’s results of operations, and 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 in accordance 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 and expenses thataffect 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 their comparability may belimited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performancemeasure, all of which should 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 businessoutlook and quotations from management in this announcement, as well as Pinduoduo’s strategic and operational plans, contain forward-lookingstatements. 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 written materials and in oral statements made by its officers,
directors or employees to fourth parties. Statements that are not historical facts, including but not limited to statements about Pinduoduo’s beliefs andexpectations, 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 growthstrategies; its future business development, results of operations 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 and reputation of its brand; its ability to rely on merchants
and fourth-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies andmeasures; its ability to establish and maintain relationships with merchants; trends and competition 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 and regulations relating
to Pinduoduo’s industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of theforegoing. 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.
About Pinduoduo Inc.
Pinduoduo is a mobile-only marketplace that connects millions of agricultural producers with consumers across China. Pinduoduo aims to bring morebusinesses and people into the digital economy so that local communities can benefit from the increased productivity and convenience through newmarket opportunities.
For more information on Pinduoduo news and industry trends, please visit the content hub at https://stories.pinduoduo-global.com/.

PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))As ofDecember
31, 2020
RMB

March 31, 2021
RMB

US$(Unaudited)

ASSETS
Current assets
Cash and cash equivalents
Restricted cashReceivables from online payment platforms
Short-term investments
Amounts due from related parties
Prepayments and other current assets

22,421,189
52,422,447
729,548
64,551,094
4,240,069
5,159,531

17,012,97847,297,740
699,203
66,342,813
4,131,179
4,152,823

2,596,688
7,219,045
106,719
10,125,891
630,541
633,845

Total current assets

149,523,878

139,636,736

21,312,729

Other non-current assets

202,853
1,276,751
629,827
7,275,305

227,917
1,169,499
651,701
11,733,999

34,787
178,500
99,4691,790,958

Total non-current assets

9,384,736

13,783,116

2,103,714

158,908,614

153,419,852

23,416,443

Non-current assets
Property, equipment and software, net
Intangible asset
Right-of-use assets

Total Assets

PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))As ofDecember
31, 2020
RMB

March 31, 2021
RMB

US$(Unaudited)

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities
Amounts due to related parties
Customer advances and deferred revenuesPayable to merchants
Accrued expenses and other liabilities
Merchant deposits
Short-term borrowings
Lease liabilities

3,385,863
2,423,190
53,833,981
11,193,372
10,926,319
1,866,316
253,036

4,885,267
1,786,246
49,360,986
10,609,374
11,589,459
634,995
271,940

745,637
272,634
7,533,958
1,619,307
1,768,897
96,91941,506

Total current liabilities

83,882,077

79,138,267

12,078,858

Non-current liabilities
Convertible bonds
Lease liabilities
Other non-current liabilities

14,432,792
414,9392,918

11,502,472
418,330
2,467

1,755,620
63,850377

Total non-current liabilities

14,850,649

11,923,269

1,819,847

Total Liabilities

98,732,726

91,061,536

13,898,705

Shareholders’ equity
Ordinary shares
Additional paid-in capital
Accumulated other comprehensive loss
Accumulated deficits

159
86,698,660(1,047,728)(25,475,203)

161
91,270,473(531,699)(28,380,619)

25
13,930,595(81,153)(4,331,729)

Total Shareholders’ Equity

60,175,888

62,358,316

9,517,738

Total Liabilities and Shareholders’ Equity

158,908,614

153,419,852

23,416,443

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(Amounts in thousands of RMB and US$)For the three months ended March 31,2020

Revenues
Costs of revenues
Gross profit
Sales and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses
Operating loss
Interest and investment income, net

2021

RMB
(Unaudited)
6,541,059(1,830,247)

RMB(Unaudited)
22,167,099(10,746,050)

US$(Unaudited)
3,383,359(1,640,168)

4,710,812

11,421,049

1,743,191(7,296,621)(338,274)(1,473,150)(12,997,407)(351,855)(2,218,743)(1,983,792)(53,704)(338,646)(9,108,045)(15,568,005)(2,376,142)(4,397,233)(4,146,956)(632,951)

460,282

970,477

148,124

Interest expenses
Foreign exchange loss
Other (loss)/income, net
Loss before income tax and share of results of equity investees
Share of results of equity investees
Income tax expenses(150,634)(19,273)(12,391)(335,456)(10,374)
470,384(51,201)(1,583)
71,795(4,119,249)(80)-(3,051,925)
146,509-(465,816)
22,362-Net loss(4,119,329)(2,905,416)(443,454)

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(Amounts in thousands of RMB and US$, except for per share data)
For the three months ended March 31,2020

2021

RMB
(Unaudited)

RMB(Unaudited)

US$(Unaudited)

Net loss(4,119,329)(2,905,416)(443,454)

Net loss attributable to ordinary shareholders(4,119,329)(2,905,416)(443,454)

Loss per ordinary share:-Basic-Diluted(0.89)(0.89)(0.58)(0.58)(0.09)(0.09)

Loss per ADS (4 ordinary shares equals 1 ADS):-Basic-Diluted(3.54)(3.54)(2.33)(2.33)(0.36)(0.36)

4,650,112
4,650,112

4,983,530
4,983,530

4,983,530
4,983,530

Weighted average number of outstanding ordinary shares (in thousands):-Basic-Diluted

PINDUODUO INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$)For the three months ended March 31,
2020
RMB(Unaudited)

2021
RMB
(Unaudited)

US$(Unaudited)

Revenues- Online marketing services and others- Transaction services- Merchandise sales

5,492,270
1,048,789-14,111,486
2,931,475
5,124,138

2,153,833
447,430
782,096

Total

6,541,059

22,167,099

3,383,359

PINDUODUO INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$)For the three months ended March 31,

2020

2021

RMB
(Unaudited)

RMB(Unaudited)

US$(Unaudited)

Share-based compensation costs included in:
Costs of revenues
Sales and marketing expenses
General and administrative expenses
Research and development expenses

8,447231,799
220,188348,9394,364
299,483
191,170
477,792666
45,71029,17872,926

Total

809,373

972,809148,480

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands of RMB and US$)For the three months ended March 31,2020

2021

RMB
(Unaudited)(567,070)(1,584,192)
1,205,472
99,058RMB(Unaudited)(3,724,547)(5,621,047)(1,238,874)
51,550US$(Unaudited)(568,477)(857,939)(189,089)
7,868

Cash, cash equivalents and restricted cash at beginning of period(846,732)
33,345,857(10,532,918)
74,843,636(1,607,637)
11,423,370

Cash, cash equivalents and restricted cash at end of period

32,499,125

64,310,718

9,815,733

Net cash flow used in operating activities
Net cash flow used in investing activities
Net cash flow provided by/(used in) financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Decrease in cash, cash equivalents and restricted cash

PINDUODUO INC.
RECONCILIATION OF NON-GAAP MEASURES TO THE MOST DIRECTLY COMPARABLE GAAP MEASURES(Amounts in thousands of RMB and US$, except for per share data)
For the three months ended March 31,2020

2021

RMB
(Unaudited)(4,397,233)
809,373

RMB(Unaudited)(4,146,956)
972,809

US$(Unaudited)(632,951)
148,480

Non-GAAP operating loss

(3,587,860)(3,174,147)(484,471)

Net loss attributable to ordinary shareholders
Add: Share-based compensation
Add: Interest expense related to convertible bonds’ amortization to face value and gain
on extinguishment, net(4,119,329)
809,373
140,312(2,905,416)
972,809318,611(443,454)
148,480
48,630Operating Loss
Add: Share-based compensation

Less: Fair value change of long-term investments
Non-GAAP net loss attributable to ordinary shareholders-(276,336)(42,177)(3,169,644)(1,890,332)(288,521)

Weighted-average number of ordinary shares outstanding – basic and diluted (inthousands)

4,650,112

4,983,530

4,983,530

Non-GAAP basic and diluted loss per ordinary share(0.89)
0.21(0.68)(0.58)
0.20(0.38)(0.09)
0.03(0.06)

Non-GAAP basic and diluted loss per ADS(2.73)(1.52)(0.23)

Basic and diluted loss per ordinary share
Add: Non-GAAP adjustments to loss per ordinary share

For investor and media inquiries, please contact:
Pinduoduo Inc.
investor@pinduoduo.com
internationalmedia@pinduoduo.com

Source: Pinduoduo Inc.