Pinduoduo Announces Second Quarter 2022 Unaudited Financial Results
SHANGHAI, CHINA, August 29, 2022 (GLOBE NEWSWIRE) – Pinduoduo Inc. (“Pinduoduo”
or the “Company”) (NASDAQ: PDD), China’s largest agriculture platform, today announced its
unaudited financial results for the second quarter ended June 30, 2022.
Second Quarter 2022 Highlights⚫

Total revenues in the quarter were RMB31,439.6 million (US$14,693.8 million), an
increase of 36% from RMB23,046.2 million in the same quarter of 2021.

⚫

Operating profit in the quarter was RMB8,697.2 million (US$1,298.5 million), an increaseof 335% from RMB1,997.5 million in the same quarter of 2021. Non-GAAP2 operating
profit in the quarter was RMB10,541.5 million (US$1,573.8 million), an increase of 231%
from RMB3,185.2 million in the same quarter of 2021.

⚫

Net income attributable to ordinary shareholders in the quarter was RMB8,896.3
million (US$1,328.2 million), an increase of 268% from RMB2,414.6 million in the samequarter of 2021. Non-GAAP net income attributable to ordinary shareholders in thequarter was RMB10,776.3 million (US$1,608.9 million), an increase of 161% from
RMB4,125.3 million in the same quarter of 2021.

“We saw a recovery in consumer sentiment in the second quarter especially during the 618
shopping festival, a reflection of the resilience of overall consumption,” said Mr. Lei Chen,Chairman and Chief Executive Officer of Pinduoduo. “We remain committed to building aplatform that serves as a force for good.”“The postponement of certain projects and lower business-related expenses during the first halfof the quarter affected overall expenses in short term,” said Ms. Jun Liu, VP of Finance ofPinduoduo. “Looking ahead, we stay dedicated to investing in areas such as agriculture and R&D
to better serve our consumers.”

1This 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 RMB6.6981 to US$1.00, the noonbuying rate in effect on June 30, 2022 as set forth in the H.10 Statistical Release of the Federal Reserve Board.
2 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 or loss on extinguishment. See “Reconciliation of NonGAAP Measures to The Most Directly Comparable GAAP Measures” set forth at the end of this press release.

1Second Quarter 2022 Unaudited Financial Results
Total revenues were RMB31,439.6 million (US$4,693.8 million), an increase of 36% from
RMB23,046.2 million in the same quarter of 2021. The increase was primarily due to an increase
in revenues from online marketing services and transaction services, offset by the decrease ofrevenues from merchandise sales.
⚫

Revenues from online marketing services and others were RMB25,172.7 million(US$3,758.2 million), an increase of 39% from RMB18,080.4 million in the same quarterof 2021.

⚫

Revenues from transaction services were RMB6,216.2 million (US$928.1 million), anincrease of 107% from RMB3,007.6 million in the same quarter of 2021.

⚫

Revenues from merchandise sales were RMB50.7 million (US$7.6 million), a decreaseof 97% from RMB1,958.2 million in the same quarter of 2021.

Total costs of revenues were RMB7,961.9 million (US$1,188.7 million), a slight increase of 1%
from RMB7,897.9 million in the same quarter of 2021.

2

Total operating expenses were RMB14,780.5 million (US$2,206.7 million), compared withRMB13,150.9 million in the same quarter of 2021.
⚫

Sales and marketing expenses were RMB11,343.4 million (US$1,693.5 million), an
increase of 9% from RMB10,387.9 million in the same quarter of 2021, mainly due toincreased spending in promotion and advertising activities.

⚫

General and administrative expenses were RMB825.7 million (US$123.3 million), an
increase of 90% from RMB434.2 million in the same quarter of 2021, primarily due to anincrease in staff related costs.

⚫

Research and development expenses were RMB2,611.4 million (US$389.9 million), an
increase of 12% from RMB2,328.8 million in the same quarter of 2021. The increase wasprimarily due to an increase in headcount and the recruitment of more experienced R&Dpersonnel.

Operating profit in the quarter was RMB8,697.2 million (US$1,298.5 million), an increase of
335% from RMB1,997.5 million in the same quarter of 2021. Non-GAAP operating profit in
the quarter was RMB10,541.5 million (US$1,573.8 million), an increase of 231% fromRMB3,185.2 million in the same quarter of 2021.
Net income attributable to ordinary shareholders in the quarter was RMB8,896.3 million(US$1,328.2 million), an increase of 268% from RMB2,414.6 million in the same quarter of2021. Non-GAAP net income attributable to ordinary shareholders in the quarter was
RMB10,776.3 million (US$1,608.9 million), an increase of 161% from RMB4,125.3 million in
the same quarter of 2021.
Basic earnings per ADS was RMB7.06 (US$1.05) and diluted earnings per ADS was
RMB6.22 (US$0.93), compared with basic earnings per ADS of RMB1.93 and diluted earnings
per ADS of RMB1.69 in the same quarter of 2021. Non-GAAP diluted earnings per ADS wasRMB7.54 (US$1.13), compared with RMB2.85 in the same quarter of 2021.
Net cash flow generated from operating activities was RMB19,373.9 million (US$2,892.4million), compared with RMB7,371.2 million in the same quarter of 2021, mainly due to theincrease in net income and the changes in working capitals.
Cash, cash equivalents and short-term investments were RMB119.4 billion (US$17.8 billion)
as of June 30, 2022, compared with RMB92.9 billion as of December 31, 2021.

3

Conference CallThe Company will host a conference call to discuss the earnings at 7:30 AM U.S. Eastern Timeon Monday, August 29, 2022 (7:30 PM Beijing/Hong Kong Time on Monday, August 29, 2022).
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.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non-GAAP measures, such as nonGAAP operating profit and non-GAAP net income 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 forthe financial information prepared and presented in accordance with 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 valueand gain or loss on extinguishment.
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, fair value change of long-term
investments, and interest expenses related to the convertible bonds’ amortization to face value
and gain or loss on extinguishment, which are non-cash charges. The Company also believes
that the non-GAAP financial measures could provide further information about the Company’sresults of operations, and enhance the overall understanding of the Company’s past performanceand 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 analyticaltools. The Company’s non-GAAP financial measures do not reflect all items of income andexpenses 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 thenon-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 theCompany’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.

4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’sbeliefs 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 providersto 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.

5

About Pinduoduo Inc.
Pinduoduo connects millions of agricultural producers with consumers across China. Pinduoduo
aims to bring more businesses and people into the digital economy so that local communities canbenefit from the increased productivity and convenience through new market opportunities.
For more information on Pinduoduo news and industry trends, please visit the content hub athttps://stories.pinduoduo-global.com/.
For investor and media inquiries, please contact:
Pinduoduo Inc.
investor@pinduoduo.com
internationalmedia@pinduoduo.com

6

PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))As ofDecember
31, 2021
RMB

June 30, 2022
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
Total current assets

6,426,715
59,617,256
673,737
86,516,618
4,250,155
3,424,687
160,909,168

13,057,463
49,806,558
617,724
106,322,578
4,110,162
1,531,816
175,446,301

1,949,428
7,435,923
92,224
15,873,543
613,631
228,695
26,193,444

Non-current assets
Property, equipment and software, net
Intangible assets
Right-of-use assets
Deferred tax assets
Other non-current assets
Total non-current assets

2,203,323
701,220
938,537
31,504
16,425,966
20,300,550

1,450,866
435,841
882,300
24,14813,759,949
16,553,104

216,609
65,069131,724
3,605
2,054,306
2,471,313

Total Assets

181,209,718

191,999,405

28,664,757

7

PINDUODUO INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))As ofDecember
31, 2021
RMB

June 30, 2022
RMB

US$(Unaudited)

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities
Amounts due to related parties
Customer advances and deferred revenues
Payable to merchants
Accrued expenses and other liabilities
Merchant deposits
Lease liabilities
Total current liabilities

1,963,007
1,166,764
62,509,714
14,085,513
13,577,552
427,164
93,729,714

2,494,855
1,242,716
52,897,387
13,828,902
14,772,915
477,639
85,714,414

372,472
185,533
7,897,372
2,064,600
2,205,538
71,31012,796,825

Non-current liabilities
Convertible bonds3
Lease liabilities
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities

11,788,907
544,263
31,291996
12,365,457

14,874,632
462,401
38,66980
15,375,782

2,220,724
69,0355,773
122,295,544

Total Liabilities

106,095,171

101,090,196

15,092,369

Shareholders’ equity
Ordinary shares
Additional paid-in capital3
Accumulated other comprehensive (loss)/income3
Accumulated deficits3
Total Shareholders’ Equity

161
95,340,819

162
94,889,255

24
14,166,593(2,519,900)(17,706,533)
75,114,547

864,028(4,844,236)
90,909,209

128,996(723,225)
13,572,388

Total Liabilities and Shareholders’ Equity

181,209,718

191,999,405

28,664,757

3

The Group adopted ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”)
on January 1, 2022, using the modified retrospective method with a cumulative-effect adjustment to the opening balance of convertible bonds,
additional paid-in capital, accumulated other comprehensive income/ (loss) and accumulated deficits.

8

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/ (LOSS)(Amounts in thousands of RMB and US$)For the three months ended June 30,2021

For the six months ended June 30,

2022

2021
RMB
(Unaudited)

RMB(Unaudited)

2022
US$
(Unaudited)

RMB(Unaudited)
23,046,220

RMB(Unaudited)
31,439,568

US$(Unaudited)
4,693,804

45,213,319

55,233,257

8,246,108

Costs of revenues
Gross profit(7,897,886)
15,148,334(7,961,866)
23,477,702(1,188,675)
3,505,129(18,643,936)
26,569,383(15,121,461)
40,111,796(2,257,575)
5,988,533

Sales and marketing expenses
General and administrative expensesResearch and development expenses
Total operating expenses(10,387,873)(434,151)(2,328,831)(13,150,855)(11,343,447)(825,722)(2,611,366)(14,780,535)(1,693,532)(123,277)(389,867)(2,206,676)(23,385,280)(786,006)(4,547,574)(28,718,860)(22,562,515)(1,417,835)(5,279,873)(29,260,223)(3,368,495)(211,677)(788,264)(4,368,436)

Operating profit/ (loss)

1,997,479

8,697,167

1,298,453(2,149,477)

10,851,573

1,620,097

Interest and investment income, net
Interest expenses
Foreign exchange gain/ (loss)

544,629(293,999)
44,452756,991(13,148)(199,349)

113,016(1,963)(29,762)

1,515,106(629,455)
34,0781,553,252(25,788)(179,265)

231,894(3,850)(26,764)

Other income, net

123,391

1,266,235

189,044593,775

1,506,005

224,8412,415,952(1,372)
2,414,580

10,507,896(53,493)(1,558,063)
8,896,340

1,568,788(7,986)(232,613)
1,328,189(635,973)
145,137(490,836)

13,705,777(87,109)(2,122,877)
11,495,791

2,046,218(13,005)(316,937)
1,716,276

Revenues

Profit/ (loss) before income tax and shareof results of equity investees
Share of results of equity investees
Income tax expenses
Net income/ (loss)

9

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/ (LOSS)(Amounts in thousands of RMB and US$, except for per share data)

For the three months ended June 30,
2021

2022

RMB
(Unaudited)
Net income/ (loss)
Net income/ (loss) attributable to ordinary
shareholders

For the six months ended June 30,

RMB(Unaudited)2021
US$(Unaudited)

RMB(Unaudited)

2022
RMB
(Unaudited)

US$(Unaudited)

2,414,580

8,896,340

1,328,189(490,836)

11,495,791

1,716,276

2,414,580

8,896,340

1,328,189(490,836)

11,495,791

1,716,276

Earnings/ (loss) per ordinary share:-Basic-Diluted

0.48
0.42

1.76
1.56

0.26
0.23

(0.10)(0.10)

2.28
2.02

0.34
0.30

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

1.93
1.69

7.06
6.22

1.05
0.93

(0.39)(0.39)

9.12
8.07

1.361.21

5,013,747
5,719,402

5,042,417
5,716,947

5,042,417
5,716,947

4,998,722
4,998,722

5,039,591
5,708,590

5,039,591
5,708,590

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

10

PINDUODUO INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$)For the three months ended June 30,
2021

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

For the six months ended June 30,2022

2021

RMB(Unaudited)

RMB(Unaudited)

US$(Unaudited)

18,080,419
3,007,638
1,958,163
23,046,220

25,172,651
6,216,207
50,71031,439,568

3,758,178
928,055
7,571
4,693,804

11

RMB(Unaudited)
32,191,905
5,939,113
7,082,301
45,213,319

2022
RMB
(Unaudited)
43,331,076
11,807,614
94,56755,233,257

US$(Unaudited)
6,469,160
1,762,830
14,1188,246,108

PINDUODUO INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$)For the three months ended June 30,2021
RMB(Unaudited)
Share-based compensation costs
included in:
Costs of revenues
Sales and marketing expenses
General and administrative expenses
Research and development expenses
Total

7,442
383,540
220,365
576,416
1,187,763

For the six months ended June 30,

2022

2021
US$(Unaudited)

RMB(Unaudited)

6,989
513,559
661,019662,781
1,844,348

12

1,043
76,672
98,68898,951
275,354

RMB(Unaudited)

11,806
683,023
411,535
1,054,208
2,160,572

2022
RMB(Unaudited)

US$(Unaudited)

16,1701,014,664
1,044,315
1,291,949
3,367,098

2,414
151,485155,912
192,883
502,694

PINDUODUO INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands of RMB and US$)For the three months ended June 30,2021

Net cash generated from operating activities
Net cash used in investing activities
Net cash (used in)/ generated from financing
activities
Effect of exchange rate changes on cash, cash
equivalents and restricted cash
Increase/ (decrease) in cash, cash equivalents andrestricted cash
Cash, cash equivalents and restricted cash at
beginning of period
Cash, cash equivalents and restricted cash atend of period

For the six months ended June 30,2022

2021

2022

RMB
(Unaudited)
7,371,215(3,484,056)

RMB(Unaudited)
19,373,871(8,593,271)

US$

RMB

RMB

US$

(Unaudited)
2,892,443(1,282,942)(Unaudited)
3,646,668(9,105,103)(Unaudited)
10,305,775(13,445,360)(Unaudited)
1,538,612(2,007,339)(636,619)

268

40(1,875,493)

311

46

(192,413)(50,839)(7,590)(140,863)(40,676)(6,073)

3,058,127

10,730,029

1,601,951(7,474,791)(3,179,950)(474,754)

64,310,718

52,133,992

7,783,400

74,843,636

66,043,971

9,860,105

67,368,845

62,864,021

9,385,351

67,368,845

62,864,021

9,385,351

13

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 June 30,
2021

For the six months ended June 30,

RMB(Unaudited)
1,997,479
1,187,763
3,185,242

RMB(Unaudited)
8,697,167
1,844,348
10,541,515

US$(Unaudited)
1,298,453
275,354
1,573,807

2021
RMB(Unaudited)(2,149,477)
2,160,572
11,0952,414,580
1,187,763

8,896,340
1,844,348

1,328,189
275,354(490,836)
2,160,572

11,495,791
3,367,098

1,716,276
502,694

298,863

13,148

1,963

617,474

25,7883,850

224,100

22,4593,353(52,236)

88,05913,1474,125,306

10,776,295

1,608,859

2,234,974

14,976,736

2,235,967

5,784,208

5,716,947

5,716,947

5,795,517

5,708,590

5,708,590

Diluted earnings/ (loss) per ordinary share
Add: Non-GAAP adjustments to earnings/ (loss)
per ordinary share

0.42

1.56

0.23(0.10)

2.02

0.30

0.29

0.32

0.05

0.49

0.60

0.09

Non-GAAP diluted earnings per ordinary share

0.71

1.88

0.28

0.39

2.62

0.39

Non-GAAP diluted earnings per ADS

2.85

7.54

1.13

1.54

10.49

1.57

Operating profit/ (loss)
Add: Share-based compensation
Non-GAAP operating profit
Net income/ (loss) attributable to ordinary
shareholders
Add: Share-based compensation
Add: Interest expense related to convertible bonds’
amortization to face value and gain or loss on
extinguishment, net
Add: Loss/ (gain) from fair value change of longterm investments
Non-GAAP net income attributable to ordinary
shareholders
Non-GAAP diluted weighted-average number ofordinary shares outstanding (in thousands)

2022

14

2022
RMB(Unaudited)
10,851,573
3,367,098
14,218,671

US$(Unaudited)
1,620,097
502,694
2,122,791