PDD Holdings Announces Fourth Quarter 2022 and Fiscal Year 2022 Unaudited Financial Results
March 20, 2023
DUBLIN and SHANGHAI, March 20, 2023 (GLOBE NEWSWIRE) -- PDD Holdings Inc. (“PDD Holdings” or the “Company”) (NASDAQ: PDD), today
announced its unaudited financial results for the fourth quarter and the fiscal year ended December 31, 2022.
Fourth Quarter 2022 Highlights

Total revenues in the quarter were RMB39,820.0 million (US$15,773.4 million), an increase of 46% from RMB27,230.9
million in the same quarter of 2021.
Operating profit in the quarter was RMB9,113.7 million (US$1,321.4 million), an increase of 32% from RMB6,907.0 million
in the same quarter of 2021. Non-GAAP2 operating profit in the quarter was RMB11,600.1 million (US$1,681.9 million),
an increase of 38% from RMB8,399.7 million in the same quarter of 2021.
Net income attributable to ordinary shareholders in the quarter was RMB9,453.7 million (US$1,370.7 million), an
increase of 43% from RMB6,619.5 million in the same quarter of 2021. Non-GAAP net income attributable to ordinary
shareholders in the quarter was RMB12,105.8 million (US$1,755.2 million), an increase of 43% from RMB8,444.4 million
in the same quarter of 2021.
“In 2022, we focused on strengthening our core capabilities to improve our technological know-how and bring the benefits of digitalization to society,”said Mr. Lei Chen, Chairman and Chief Executive Officer of PDD Holdings. “As we enter the new year, we remain dedicated to creating value for all
stakeholders through innovation.”“We continued our technology focus with our annual R&D spending exceeding RMB 10 billion,” said Ms. Jun Liu, VP of Finance of PDD Holdings. “Wewill further step up our investments in technology to drive sustainable growth of our company.”_______________________________
1 This announcement contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) at a specified rate solely for the convenience ofthe reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB6.8972 to US$1.00, the noon buying rate in effect on
December 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 certain investments, and interest
expenses related to the convertible bonds’ amortization to face value and gain or loss on extinguishment. See “Reconciliation of Non- GAAP
Measures to The Most Directly Comparable GAAP Measures” set forth at the end of this press release.
Fourth Quarter 2022 Financial Results
Total revenues were RMB39,820.0 million (US$5,773.4 million), an increase of 46% from RMB27,230.9 million in the same quarter of 2021. The
increase was primarily due to an increase in revenues from online marketing services and transaction services, partially offset by the decrease ofrevenues from merchandise sales.

Revenues from online marketing services and others were RMB30,965.2 million (US$4,489.5 million), an increase of
38% from RMB22,425.0 million in the same quarter of 2021.
Revenues from transaction services were RMB8,796.6 million (US$1,275.4 million), an increase of 86% from
RMB4,724.2 million in the same quarter of 2021.
Revenues from merchandise sales were RMB58.2 million (US$8.4 million), a decrease of 29% from RMB81.7 million in
the same quarter of 2021.
Total costs of revenues were RMB8,926.7 million (US$1,294.3 million), an increase of 37% from RMB6,515.5 million in the same quarter of 2021.
The increase mainly came from the increased server cost due to a one-off rebate in the fourth quarter of 2021 and increased fulfilment fees.
Total operating expenses were RMB21,779.6 million (US$3,157.7 million), compared with RMB13,808.4 million in the same quarter of 2021.

Sales and marketing expenses were RMB17,732.4 million (US$2,571.0 million), an increase of 56% from RMB11,365.8
million in the same quarter of 2021, mainly due to the increased spending in promotion and advertising activities.
General and administrative expenses were RMB1,640.5 million (US$237.9 million), an increase of 291% from RMB420.0
million in the same quarter of 2021, primarily due to an increase in staff related costs.
Research and development expenses were RMB2,406.7 million (US$348.9 million), an increase of 19% from
RMB2,022.6 million in the same quarter of 2021. The increase was primarily due to an increase in headcount and therecruitment of more experienced R&D personnel and server cost.
Operating profit in the quarter was RMB9,113.7 million (US$1,321.4 million), an increase of 32% from RMB6,907.0 million in the same quarter of2021. Non-GAAP operating profit in the quarter was RMB11,600.1 million (US$1,681.9 million), an increase of 38% from RMB8,399.7 million in thesame quarter of 2021.
Net income attributable to ordinary shareholders in the quarter was RMB9,453.7 million (US$1,370.7 million), an increase of 43% from
RMB6,619.5 million in the same quarter of 2021. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB12,105.8
million (US$1,755.2 million), an increase of 43% from RMB8,444.4 million in the same quarter of 2021.
Basic earnings per ADS was RMB7.42 (US$1.08) and the diluted earnings per ADS was RMB6.52 (US$0.95), compared with basic earnings per
ADS of RMB5.26 and diluted earnings per ADS of RMB4.66 in the same quarter of 2021. Non-GAAP diluted earnings per ADS was RMB8.34(US$1.21), compared with RMB5.88 in the same quarter of 2021.
Net cash generated from operating activities was RMB26,550.3 million (US$3,849.4 million), compared with RMB16,399.8 million in the samequarter of 2021, mainly due to the increase in net income and the changes in working capitals.
Cash, cash equivalents and short-term investments were RMB149.4 billion (US$21.7 billion) as of December 31, 2022, compared with RMB92.9
billion as of December 31, 2021.
Fiscal Year 2022 Financial Results
Total revenues were RMB130,557.6 million (US$18,929.1 million), representing an increase of 39% from RMB93,949.9 million in 2021. The increase
was primarily due to an increase in revenues from online marketing services and revenues from transaction services, partially offset by the decrease ofrevenues from merchandise sales.

Revenues from online marketing services and others were RMB102,721.9 million (US$14,893.3 million), representing
an increase of 42% from RMB72,563.4 million in 2021.
Revenues from transaction services were RMB27,626.5 million (US$4,005.5 million), representing an increase of 95%
from RMB14,140.4 million in 2021.
Revenues from merchandise sales were RMB209.2 million (US$30.3 million), a decrease of 97% from RMB7,246.1
million in 2021.
Total costs of revenues were RMB31,462.3 million (US$4,561.6 million), a slight decrease of 1% from RMB31,718.1 million in 2021.
Total operating expenses were RMB68,693.4 million (US$9,959.6 million), compared with RMB55,335.1 million in 2021.

Sales and marketing expenses were RMB54,343.7 million (US$7,879.1 million), an increase of 21% from RMB44,801.7
million in 2021, mainly due to the increased spending in promotion and advertising activities.
General and administrative expenses were RMB3,964.9 million (US$574.9 million), an increase of 157% from
RMB1,540.8 million in 2021, primarily due to an increase in staff related costs.
Research and development expenses were RMB10,384.7 million (US$1,505.6 million), an increase of 15% from
RMB8,992.6 million in 2021. The increase was primarily due to an increase in headcount and the recruitment of moreexperienced R&D personnel.
Operating profit was RMB30,401.9 million (US$4,407.9 million), an increase of 341% from RMB6,896.8 million in 2021. Non-GAAP operating profit
was RMB38,120.3 million (US$5,526.9 million), an increase of 227% from RMB11,671.5 million in 2021.
Net income attributable to ordinary shareholders was RMB31,538.1 million (US$4,572.6 million), an increase of 306% from RMB7,768.7 million in
2021. Non-GAAP net income attributable to ordinary shareholders was RMB39,529.7 million (US$5,731.3 million), an increase of 186% from
RMB13,829.5 million in 2021.
Basic earnings per ADS was RMB24.94 (US$3.62) and the diluted earnings per ADS was RMB21.93 (US$3.18), compared with basic earnings per
ADS of RMB6.20 and diluted earnings per ADS of RMB5.44 in 2021. Non-GAAP diluted earnings per ADS was RMB27.45 (US$3.98), comparedwith RMB9.56 in 2021.
Net cash generated from operating activities was RMB48,507.9 million (US$7,033.0 million), compared with RMB28,783.0 million in 2021, mainly
due to the increase in net income and the changes in working capitals.
Conference Call
The Company will host a conference call to discuss the earnings at 7:30 AM ET on Monday, March 20, 2023 (11:30 AM GMT and 7:30 PM HKT on thesame day).
The conference call will be webcast live at https://investor.pddholdings.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 non-GAAP 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 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 certain investments, and interest expenses related to the convertible bonds’ amortization to
face value and gain or loss 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 certain 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’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 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 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 the Company’s strategic and operational plans, contain forward-looking
statements. The Company 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 third parties. Statements that are not historical facts, including but not limited to statements about the Company’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: the Company’s
growth strategies; 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 onmerchants 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 and competition in China’s and global e-commerce markets;changes in its revenues and certain cost or expense items; the expected growth of China’s and global e-commerce markets; PRC governmental
policies and regulations relating to the Company’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 the Company’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 the Company undertakes no obligation to
update any forward-looking statement, except as required under applicable law.
About PDD Holdings
PDD Holdings is a multinational commerce group that owns and operates a portfolio of businesses, including Pinduoduo and Temu. PDD Holdings
aims to bring more businesses and people into the digital economy so that local communities and small businesses can benefit from the increased
productivity and new opportunities.
For more information, please visit www.pddholdings.com.

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
As of
December31, 2021
RMB

December 31, 2022
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 assets

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

34,326,192
57,974,225
587,696
115,112,554
6,318,830
2,298,379

4,976,830
8,405,473
85,208
16,689,751
916,144333,235

Total current assets

160,909,168

216,617,876

31,406,641

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

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

1,044,847
134,002
1,416,081
1,045,030
16,862,117

151,489
19,428205,312
151,515
2,444,777

Total non-current assets

20,300,550

20,502,077

2,972,521

Total Assets

181,209,718

237,119,953

34,379,162

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))
As of
December31, 2021
RMB

December 31, 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
Convertible bonds, current portion3

1,963,007
1,166,764
62,509,714
14,085,513
13,577,552-

1,676,391
1,389,655
63,316,695
20,960,723
15,058,229
13,885,751

243,054
201,481
9,180,058
3,039,019
2,183,238
2,013,245

427,164

602,036

87,287

93,729,714

116,889,480

16,947,382

Other non-current liabilities

11,788,907
544,263
31,291996

1,575,755
870,782
13,025-

228,463
126,252
1,888-

Total non-current liabilities

12,365,457

2,459,562

356,603

Total Liabilities

106,095,171

119,349,042

17,303,985

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

Shareholders’ equity
Ordinary shares

161

170

25

Additional paid-in capital3
Statutory reserves
Accumulated other comprehensive (loss)/income3

95,340,819-

99,250,468
5,000

14,389,965
725(2,519,900)

3,322,238

481,679

Accumulated (deficits)/ surplus3(17,706,533)

15,193,035

2,202,783

Total Shareholders’ Equity

75,114,547

117,770,911

17,075,177

Total Liabilities and Shareholders’ Equity

181,209,718

237,119,953

34,379,162______________________________
3 The Company 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 surplus/ (deficits).

PDD HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Amounts in thousands of RMB and US$)For the three months ended December 31,
2021

For the year ended December 31,

2022

2021

93,949,939(31,718,093)

US$(Unaudited)
18,929,071(4,561,604)

4,479,110

62,231,846

99,095,291

14,367,467(17,732,384)(1,640,527)(2,406,677)(2,570,954)(237,854)(348,935)(44,801,720)(1,540,774)(8,992,590)(54,343,719)(3,964,935)(10,384,716)(7,879,099)(574,862)(1,505,642)(13,808,386)(21,779,588)(3,157,743)(55,335,084)(68,693,370)(9,959,603)

Operating profit

6,906,967

9,113,735

1,321,367

6,896,762

30,401,921

4,407,864

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

914,643(303,116)
48,105
115,086

1,351,698(12,221)(23,819)
168,825

195,978(1,772)(3,453)24,477

3,061,662(1,231,002)
71,750656,255

3,997,100(51,655)(149,710)
2,221,358

579,525(7,489)(21,706)
322,066

Income tax expenses

7,681,685
16,680(1,078,819)

10,598,218(78,908)(1,065,613)

1,536,597(11,441)(154,499)

9,455,427
246,828(1,933,585)

36,419,014(155,285)(4,725,667)

5,280,260(22,514)(685,157)

Net income

6,619,546

9,453,697

1,370,657

7,768,670

31,538,062

4,572,589

Costs of revenues
Gross profit
Sales and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses

RMB(Unaudited)
39,820,028(8,926,705)

US$(Unaudited)
5,773,361(1,294,251)

20,715,353

30,893,323(11,365,829)(419,962)(2,022,595)

2022
RMB
(Unaudited)
130,557,589(31,462,298)

Revenues

RMB(Unaudited)
27,230,862(6,515,509)

Other income, net
Profit before income tax and share of
results of equity investees
Share of results of equity investees

RMB

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME(Amounts in thousands of RMB and US$, except for per share data)
For the three months ended December 31,
2021

2022

RMB
(Unaudited)

RMB(Unaudited)

US$(Unaudited)

6,619,546

9,453,697

1,370,657

6,619,546

9,453,697

Earnings per ordinary share:-Basic-Diluted

1.32
1.16

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

Net income
Net income attributable to ordinary
shareholders

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

For the year ended December 31,
2021

2022

RMB

RMB
(Unaudited)

US$(Unaudited)

7,768,670

31,538,062

4,572,589

1,370,657

7,768,670

31,538,062

4,572,589

1.85
1.63

0.27
0.24

1.55
1.36

6.24
5.48

0.90
0.79

5.26
4.66

7.42
6.52

1.08
0.95

6.20
5.44

24.94
21.93

3.62
3.18

5,031,543
5,684,577

5,099,138
5,809,212

5,099,138
5,809,212

5,012,651
5,713,764

5,057,540
5,761,291

5,057,540
5,761,291

PDD HOLDINGS INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$)For the three months ended December 31,
2021

2022

RMB
(Unaudited)

RMB(Unaudited)

US$(Unaudited)

22,425,001
4,724,189
81,67230,965,203
8,796,628
58,197

27,230,862

39,820,028

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

For the year ended December 31,
2021

2022

RMB

RMB
(Unaudited)

US$(Unaudited)

4,489,532
1,275,391
8,438

72,563,402
14,140,449
7,246,088

102,721,924
27,626,494
209,171

14,893,279
4,005,465
30,327

5,773,361

93,949,939

130,557,589

18,929,071

PDD HOLDINGS INC.
NOTES TO FINANCIAL INFORMATION(Amounts in thousands of RMB and US$)For the three months ended December 31,
2021

2022

RMB
(Unaudited)

RMB(Unaudited)

US$(Unaudited)

5,729
544,492
224,155
718,329

11,777535,550
1,279,760
659,298

1,708
77,647
185,548
95,5891,492,705

2,486,385

360,492

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

For the year ended December 31,
2021
RMB

2022
RMB
(Unaudited)

US$(Unaudited)

26,624
1,612,219
792,421
2,343,466

33,7882,158,676
3,004,327
2,521,574

4,899
312,979
435,586
365,594

4,774,730

7,718,365

1,119,058

PDD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands of RMB and US$)For the three months ended December 31,
2021

Net cash generated from operating
activities
Net cash used in investing activities
Net cash generated from/ (used in)financing
activities
Effect of exchange rate changes on cash,
cash
equivalents and restricted cash
Increase/ (decrease) in cash, cash
equivalents and restricted cash
Cash, cash equivalents and restrictedcash atbeginning of period/ year2022

For the year ended December 31,
2021

RMB
(Unaudited)

RMB(Unaudited)

US$(Unaudited)

16,399,775(12,692,505)

26,550,262(8,559,916)

193

2022

RMB

RMB
(Unaudited)

US$(Unaudited)

3,849,426(1,241,071)

28,783,011(35,562,365)

48,507,860(22,361,670)

7,032,979(3,242,137)

9,510

1,379

(1,875,154)

10,0791,461(26,454)(109,374)(15,858)(145,157)

100,177

14,524

3,681,009

17,890,482

2,593,876(8,799,665)

26,256,446

3,806,827

62,362,962

74,409,935

10,788,427

74,843,636

66,043,971

9,575,476

Cash, cash equivalents and restrictedcash atend of period/ year

66,043,971

92,300,417

13,382,303

66,043,971

92,300,417

13,382,303

PDD HOLDINGS 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 December 31,
2021

2022

For the year ended December 31,
2021

RMB
(Unaudited)
6,906,967
1,492,705

RMB(Unaudited)
9,113,735
2,486,385

US$(Unaudited)
1,321,367
360,492

Non-GAAP operating profit

8,399,672

11,600,120

Net income 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 from fair value change of certain
investments
Non-GAAP net income attributable toordinary shareholders

6,619,546
1,492,705

2022

6,896,762
4,774,730

RMB(Unaudited)
30,401,921
7,718,365

US$(Unaudited)
4,407,864
1,119,058

1,681,859

11,671,492

38,120,286

5,526,922

9,453,697
2,486,385

1,370,657
360,492

7,768,670
4,774,730

31,538,062
7,718,365

4,572,589
1,119,058

303,141

12,221

1,772

1,219,058

51,655

7,489

29,001

153,467

22,251

67,065

221,640

32,1358,444,393

12,105,770

1,755,172

13,829,523

39,529,722

5,731,271

5,747,784

5,809,212

5,809,212

5,784,465

5,761,291

5,761,291

Diluted earnings per ordinary share
Add: Non-GAAP adjustments to earnings per
ordinary share

1.16

1.63

0.24

1.36

5.48

0.79

0.31

0.45

0.06

1.03

1.38

0.20

Non-GAAP diluted earnings per ordinary share

1.47

2.08

0.30

2.39

6.86

0.99

Non-GAAP diluted earnings per ADS

5.88

8.34

1.21

9.56

27.45

3.98

Operating profit
Add: Share-based compensation

Non-GAAP diluted weighted-average number ofordinary shares outstanding (in thousands)

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RMB