Q3 2025 PDD Holdings Inc Earnings Call

Speaker #1: Ladies and gentlemen, thank you for standing by and welcome to the PDD Holdings Inc. third quarter 2025 earnings conference call. At this time, all participants are in listen-only mode.

Speaker #1: There will be a presentation followed by a question-and-answer session. At that time, if you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad.

Speaker #1: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today. Please, go ahead.

Speaker #2: Thank you, operator, and hello, everyone. Thank you for joining us today. PDD Holdings' earnings release was distributed earlier and is available on our website at investor.pddholdings.com and through the new global newswire services.

Speaker #2: Before we begin, I'd like to refer you to our safe harbor statement in the earnings press release, which applies to this call. As we will make certain forward-looking statements.

Speaker #2: Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to GAAP measures.

Speaker #2: Joining us today on the call are Mr. Chen Lei, our Chairman and Co-Chief Executive Officer, and Mr. Zhao Jiazhen, our Executive Director and Co-Chief Executive Officer.

Speaker #2: Our VP of Finance, Ms. Jun Liu, is unfortunately on medical leave. Delivering the prepared remarks on Liu's behalf today will be Ms. Xin Yiling from our Investor Relations team, who has spoken on our earlier earnings calls.

Speaker #2: Lei and Jiazhen will make some general remarks on our performance for the past quarter and our strategic focus. Xin Yi will then walk us through our financial results for the third quarter ending September 30, 2025.

Speaker #2: And during the Q&A session, Lei and Jiazhen will answer questions in Chinese and will help translate. Please kindly note that the English translation is for reference only, and in case of any discrepancy, statements in their original language should prevail.

Speaker #2: Now it's my pleasure to introduce our Chairman and Co-Chief Executive Officer, Mr. Lei Chen. Lei, please go ahead.

Speaker #3: Hello everyone, and thank you for joining our Q3 2025 earnings conference call. This year marks the 10th anniversary of the company's founding. Just before this earnings release, we celebrated our 10th birthday.

Speaker #3: When we started in 2015, we pioneered the team purchase model, which offered the value proposition of more savings and more fun at scale. We created a new e-commerce paradigm defined by three core principles: namely, benefit all, people first, and more open.

Speaker #3: Since then, we have gradually grown from a startup into a key player in the e-commerce industry. Along our journey, we have created greater value for our users, our merchants, as well as for the industry and society.

Speaker #3: This quarter, we reported $108 billion in revenue. With growth remaining under pressure, we always prioritize long-term value over short-term results. Looking back over the past decade, we have upheld our core value of benfen, adhered firmly to our own duties and principles, and maintained focus on our core business of e-commerce.

Speaker #3: Through our journey, we strive to create value for our users and to address the needs of a wider range of consumers. We have also made every effort to give back to the industry ecosystem, driving the industry to become more beneficial for all, more people-first, and more open.

Speaker #3: Since day one, our mission has been to serve a laborious range of consumers by offering affordable prices and quality services. Ten years ago, we introduced the team purchase model to address the challenges faced by farmers and growers, as well as industrial ballot merchants.

Speaker #3: has helped a large base. This e-commerce model of farmers and everyday workers increases their income while offering urban and rural consumers access to quality foods and daily necessities at affordable prices.

Speaker #3: Today, ten years later, our focus remains on the day-to-day lives of people from all walks of life. We continue to provide consumers with quality goods at affordable prices and help merchants, many of which are SMEs, expand their market reach.

Speaker #3: And ultimately, we help producers and consumers live a better life. As a new e-commerce platform born in the mobile internet era, we moved beyond the traditional online shopping model that places products at the center.

Speaker #3: And instead, we put people first. We built our model around a consumer focus. We tried to understand the human touch behind every click, and we honor the consumer trust behind every order.

Speaker #3: We strive to bring more savings and more fun to every purchasing experience. With this goal in mind, we will continue to see driven product innovation, technology iteration, service upgrades, and improvements in product selection and the efficiency of the supply chain.

Speaker #3: In doing so, we aim to satisfy the diverse and rapidly growing needs of everyday consumers. Throughout our journey, we have faced fears and persistent industry competition.

Speaker #3: And yet, we have remained steadfast in our focus on the company's intrinsic value in the long run. We promote the high-quality growth of the platform ecosystem, and we advocate for a more open industry environment.

Speaker #3: Since last year, we have further elevated our ecosystem development and rolled out substantial merchant support initiatives such as the $10 billion fee reduction program and $100 billion support program.

Speaker #3: Through these initiatives, we made investments in our merchants and the wider ecosystem, creating room for innovation and growth for both established brands and SMEs. We hope to play our part in accelerating supply chain upgrades and in addressing the long-standing challenges faced by our merchants, who had quality but lacked brand recognition.

Speaker #3: As we look ahead, the e-commerce industry is witnessing even more intense competition. We will continue to uphold the principles that have guided us for the past 10 years.

Speaker #3: Staying true to our mission of creating value for our consumers and focusing on investing in a high-quality development of our platform and a wider industry.

Speaker #3: Today, the scale of our business is far greater than it was ten years ago. And with greater scale comes greater social responsibility. Therefore, as we think about our growth in this new era, we must do so in a way that prioritizes the interests of a wider public and the long-term outlook of the entire ecosystem.

Speaker #3: Going forward, more strategic initiatives similar to the $100 billion support program will be rolled out to support both the supply side and the demand side. We will also strengthen our efforts in giving back to the industry and the broader society.

Speaker #3: Three years ago, we launched our global business, which has now grown to serve many markets. Today, with the rapid evolution of trade barriers and other global events, we are seeing significant shifts in the platform's regulatory environment, including in trade policies, tax rules, data security, and product compliance regulations across different countries and regions.

Speaker #3: This means we will inevitably face greater challenges and more uncertainties. As a young global company, we are working hard to learn, keep up, and adapt to these trends.

Speaker #3: However, there remain significant uncertainties exposing the company to risks that are unpredictable and difficult to quantify, which may impact our financial performance both in the short term and over the long term.

Speaker #3: And in the midst of fierce industry competition, a complex global environment, and our continuous ecosystem investments, our quarterly profitability will fluctuate and is inherently unpredictable.

Speaker #3: Therefore, simple linear projections might not be a good way to project future performance. As we have emphasized in the past, short-term stock price fluctuations have never been our focus.

Speaker #3: And rather, our focus remains on building long-lasting intrinsic value by doing the right thing and creating value for consumers. It is with our firm commitment to high-quality development that we embark on the next decade towards our vision of Costco plus Disney.

Speaker #3: And with that, we will turn the call over to Zhao Jiazhen.

Speaker #2: 大家好，我是 Zhao

Speaker #2: Jiazen。感谢大家参加第三季度业绩的发布会。 Good day,

Speaker #3: Everyone, thank you again for joining our Q3 2025 earnings call. This is Jiazhen Zhao. Thank you.

Speaker #2: 今年三季度是从拼多多创业十周年，如前面所说，十年来我们始终坚持为用户创造价值。

Speaker #2: ????????????????????????????????????????????????????????????????????????????Q3 2025 PDD Holdings Inc.??????????

Speaker #3: Company's 10th anniversary. As Lei mentioned, over the past 10 years, we have remained committed to creating value for our users and growing alongside our merchants.

Speaker #3: We have strived to drive the industry to become more open and have delivered incremental value to society. At this 10-year juncture, we will continue to step up our efforts to give back to the supply side and the demand side as part of our efforts to drive industry upgrades and deliver more savings and more fun to the general public.

Speaker #2: 在本季度，我们的营收增速继续承压，经营利润仅录得低个位数增长。在当下，建设行业围绕新业态的竞争持续加剧。我们将继续投入真金白银，反哺平台生态。类似百亿减免、千亿扶持的重磅会商举措，将长期持续。这都将影响营收和利润的可持续表现。本季度的利润不能作为接下来的业绩指引，不排除未来几个季度的业绩表现将出现反复波动。

Speaker #3: In this quarter, our revenue growth continued to be under pressure, and operating profit grew in low single digits. Currently, we see intensified competition within the e-commerce sector that is centered around new business models.

Speaker #3: We will continue to invest back into our platform ecosystem, and our investments into the merchant support initiatives, similar to the $10 billion fee reduction program and the $100 billion support program, will continue in the long run.

Speaker #3: These investments will affect the sustained performance of revenue and net profit. Accordingly, our financial results for this quarter should now be considered as guidance for future performance.

Speaker #3: We cannot rule out the possibility that the financial performance in the next few quarters will continue to fluctuate.

Speaker #3: Over the past 在过去十年，我们从一家初创公司成长为公众平台，受益于中国经济的快速发展，也始终没有忘记承担平台企业的社会责任。一直积极回馈农业和产业。今年以来，我们的电商行业首次推出千亿级别的会商不农行动，并通过多多好特产、新资供给、电商吸金等举措，持续推动平台生态的高质量发展。 decade, we grew from a startup into a public platform. We benefited from China's rapid economic development and at the same time, we have not lost sight of the social responsibilities that are inherent to a platform company and the proactively gave back to the agriculture and other industries.

Speaker #3: And this year, we rolled out the first $100 billion support program in the e-commerce industry to support merchants and farmers. Through initiatives such as Doudou Premium Produce, new quality supply, and logistics support to remote regions, we continue to drive the high-quality development of the platform ecosystem.

Speaker #2: 作为起家于农产品的新建商，用户和商家在拼多多交易的第一单就是农产品。一路走来，我们在农业的各个领域，包括供应链、仓储物流、新农人、农业科研等都进行了长期的投入。大幅提升了农产品上行的规模和效率。为广大农户增产增收，也借此成为中国最大的农产品上行平台。

Speaker #3: As a new e-commerce platform with roots in agriculture, the first product bought and sold on Pinduoduo was agricultural produce. Along the way, we have made long-term investments across different parts of the agriculture industry.

Speaker #3: From supply chain and warehousing logistics to supporting new generations of farmers and agricultural research and development, these efforts have significantly increased the scale and efficiency of agricultural product distribution, greatly promoted product standardization, and helped farmers increase output and income.

Speaker #3: And in this process, we have become the largest platform for agricultural products in China.

Speaker #2: 今年以来，我们依托千亿扶持战略，推出了多多好特产专项行动，继续加码对农业领域的投入。根据平台发布的2025农产品上行半年报，我们对农业的投入收效显著。今年上半年，农产品销量同比增加47%，农货上架数量同样保持高速增长。尤其是00后农货上架的数量同比增长超30%。农产品上行的空间依然后劲十足。

Speaker #3: And in the third quarter, our Doudou Premium Produce team visited dozens of agriculture specialty regions including湖北锦州、河南商丘、山东莱阳、云南普洱。 This year, on the back of $100 billion support program, we launched the Doudou Premium Produce initiative to step up our investments into agriculture.

Speaker #3: Based on the 2025 Agriculture Product Half-Year Report that we just issued, our investments in agriculture have yielded significant results. In the first half of this year, agriculture sales grew by 47% year over year, and we saw a similarly rapid increase in the number of agriculture merchants, with a particularly notable increase of over 30% year over year in the generation of merchants born in the 2000s.

Speaker #3: This demonstrates that the online distribution of agriculture products continues to hold immense promise. In the third quarter, our

Speaker #2: 在上季度，我们的多多好特产专项行动先后走进了湖北荆州、河南商丘、山东莱阳、云南普洱、四川安岳等地数十个农特产区。为各地商家推出定制方案，推动各大产区从规模化向品质化发展。9月各地农产区迎来丰收季，我们投入10亿补贴资金，20亿流量资源包，联合平台30万农货商家上线多多丰收馆，助力各地农货及时初春进城，促进各地农户丰产增收。

Speaker #3: Doudou Premium Produce team visited dozens of agriculture specialty regions including湖北锦州、河南商丘、山东莱阳、云南普洱、四川安岳 to develop tailored solutions for the merchants and help them make the transition from a model that prioritizes scale to one that prioritizes quality.

Speaker #3: And during the harvest season starting in September, we allocated $1 billion in subsidies and $2 billion in traffic support. In collaboration with the 300,000 agriculture merchants on our platform, we rolled out the Doudou Harvest Season program to facilitate the timely distribution of produce from rural areas to urban markets.

Speaker #3: Helping farmers increase income. In

Speaker #3: In the early days of our company, ?????????????? PIN ????????????????????????????????????????????????????????????????????????????????????????? Our team purchase model brought about a solution to the legacy challenges within the industrial belt and enabled the industries to quickly scale across regions.

Speaker #3: The number of e-commerce merchants in many of these regions grew from just 100 or 200 to several thousand. However, this growth has also led to commoditized competition.

Speaker #3: And today, these industrial belts have reached a critical juncture that calls for transformation.

Speaker #3: This quarter, ?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????We continue to invest in a new quality supply initiative through our $100 billion support program. Our teams visited dozens of industrial belts such as down jackets in Pinghu, snacks in Huizhou, children's wear in Foshan, bags and luggage in Xiaodong, and Hanfu in Chaotian, leveraging our digital capabilities and fee reduction and merchant support programs. We continue to enhance quality and efficiency for our merchants.

Speaker #3: We aim to address the challenges of commoditized competition faced by many industries by incrementally innovating across each part of the supply chain, from raw materials to finished products.

Speaker #2: 在这月底，我们发布了薪资供给一周年发展报告。从报告来看，平台排在商家数量快速增长。95后商家的数量同比增长31%。00后商家的数量同比增长44%。优质产品SQ数量同比增长超五成。产业带的品牌店铺也实现大幅增长。各大产业带正在迈步正在逐步迈向高质量发展。

Speaker #3: At the end of

Speaker #3: In September, we released the one-year development report on new quality supply. The report shows rapid growth in the number of industrial belt merchants. The number of merchants between the ages of 25 and 30 grew by 31% year over year, and those born in the 2000s grew by 44%.

Speaker #3: The number of high-quality SKUs increased by over 50% year-over-year, and we've also seen a significant rise in the branded stores from these industrial belts.

Speaker #3: And these figures demonstrate that the key industrial belts are steadily moving towards high-quality development.

Speaker #3: ?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????And on supply side investments, we have allowed us to bring more savings and more fun to a broad base of ordinary consumers. We see urban white-collar workers holding fresh flowers from Yunnan, while young people in small towns buy trendy designer toys.

Speaker #3: We see mountain villagers enjoying high-quality seafood, while herdsmen in western regions wear UV-protective jackets. Taking the western regions as an example, the exemption of transshipment fees has led to a significant surge in order volume for pet supplies, outdoor and sun protection gear, designer toys, and fresh produce and plants.

Speaker #3: Among other product categories, this greatly stimulated the economic activities between the regions. Starting afresh.

Speaker #2: 专家十周年的亲切点赞，我们将继续坚持消费者导向，持续进化组织，以钉钉子的精神，扎扎实实一个一个地解决用户、商家、产业的实际问题。持续构建多方共赢的平台生态，承担更大的社会责任，继续为广大的普通人创造价值。

Speaker #3: From this 10-year mark, we will continue to put consumers first and drive organizational evolution. One by one, we will tackle the practical problems faced by our users, merchants, and the industries through persistent, focused efforts.

Speaker #3: And continue to build a thriving platform that benefits all, taking on greater social responsibility and creating value for the public.

Speaker #2: 接下来，有幸您为大家介绍我们这个季度的财务表现。

Speaker #3: Now, I'll hand it over to Xingyi to provide you with an update on our Q3 financial performance.

Speaker #4: Thank you, Jiazhen. Hello, everyone. This is Xingyi from the Investor Relations team. June is on medical leave, and I will deliver the prepared remarks on behalf of her.

Speaker #4: Let me walk you through our financial performance for the third quarter ended September 30, 2025. In terms of income statements, in the third quarter, our total revenues increased 9% year over year to RMB 108.3 billion.

Speaker #4: Revenues from online marketing were driven by an increase in services and transaction services. Revenues from online marketing services and others were RMB 53.3 billion this quarter, up 8% from the same quarter of 2024.

Speaker #4: Online marketing services growth moderated further as competition intensified and as we invest in the merchant ecosystem. Revenues from transaction services were RMB 54.9 billion, up 10% from the same quarter last year.

Speaker #4: Moving on to costs and expenses. Our total costs of revenues increased 18% from RMB 39.7 billion in Q3 2024 to RMB 46.8 billion this quarter, mainly due to an increase in fulfillment fees, bandwidth and server costs, and payment processing fees.

Speaker #4: On a GAAP basis, total operating expenses this quarter increased 3% to RMB 36.4 billion, from RMB 35.4 billion in the same quarter of 2024.

Speaker #4: On a non-GAAP basis, total operating expenses increased to RMB 34.4 billion this quarter, from RMB 32.9 billion in Q3 2024. Our total non-GAAP operating expenses as a percentage of total revenues this quarter was 32%, roughly in line with the same quarter last year.

Speaker #4: Looking into specific expense items, our non-GAAP sales and marketing expenses this quarter were RMB 29.8 billion, flat compared to the same quarter last year.

Speaker #4: On a non-GAAP basis, our sales and marketing expenses as a percentage of our revenues this quarter were 28%, compared to 30% in the same quarter last year.

Speaker #4: Our non-GAAP general and administrative expenses were RMB 896 million, compared to RMB 647 million in the same quarter of 2024. Our research and development expenses were RMB 3.7 billion this quarter on a non-GAAP basis and RMB 4.3 billion on a GAAP basis, up 41% year over year.

Speaker #4: Our investment in R&D reached a new high this quarter, reflecting our focus on improving the core technology capabilities of our platform. We are committed to investing in R&D over the long run to capture opportunities in supply chain innovation and consumer experience.

Speaker #4: On a GAAP basis, operating profit for the quarter was RMB 25 billion, versus RMB 24.3 billion in the same quarter last year. Non-GAAP operating profit was RMB 27.1 billion, versus RMB 28 billion in the same quarter last year.

Speaker #4: Non-GAAP operating profit margin was 25% this quarter, down from 27% for the same quarter last year. As we invest in the platform ecosystem, our profitability may continue to fluctuate.

Speaker #4: Net income attributable to ordinary shareholders was RMB 29.3 billion for the quarter, compared to RMB 25 billion in the same quarter last year. Basic earnings per ADS was RMB 20.96, and diluted earnings per ADS was RMB 19.7, versus basic earnings of RMB 18.02 and diluted earnings per ADS of RMB 16.91 in the same quarter of 2024.

Speaker #4: Non-GAAP net income attributable to ordinary shareholders was RMB 31.4 billion, versus RMB 27.5 billion in the same quarter last year. Non-GAAP diluted earnings per ADS was RMB 21.08, versus RMB 18.59 in the same quarter of 2024.

Speaker #4: Now, as Lei and Jiazhen mentioned, we are facing an increasingly competitive industry landscape, which calls for more investments in the platform ecosystem. Therefore, as we roll out greater merchant support initiatives and ecosystem investments, financial results may continue to fluctuate from quarter to quarter.

Speaker #4: That completes our income statements. Now, let me move on to cash flow. Our net cash generated from operating activities was RMB 45.7 billion, compared with RMB 27.5 billion in the same quarter last year.

Speaker #4: As of September 30, 2025, we had RMB 423.8 billion in cash, cash equivalents, and short-term investments. Thank you. This concludes my prepared remarks.

Speaker #4: remarks. Thank you, Xingyi.

Speaker #3: And next, we'll move on to the Q&A session. In today's Q&A session, Lei and Jiazhen will take questions from analysts on the line. We can take a maximum of two questions from each analyst.

Speaker #3: Lei and Jiazhen will answer questions in Chinese, and we'll help translate for convenient purposes. Operators will open for

Speaker #3: Ladies and gentlemen, we will...

Speaker #4: Now begin the question and answer session. If you wish to ask a question, please wait for your name to be announced. If you press star 1 on your telephone and wish to cancel your request, please press the pound or hash key.

Speaker #4: Participants are requested to restrict the number of questions to two at each time. Your first question comes from Joyce Chu with Bank of America.

Speaker #4: Please go ahead.

Speaker #5: Lei, Jiazhen, Xingyi, carry on. 我的第一个问题是，三季度我们看到线上零售的大盘在逐渐回暖，啊，行业同比增速呢达到了过去几个季度的最好水平，想请公司和我们分享一下在过去一段时间里面对行业趋势的观察和解读，啊，同时我们也注意到这个季度公司的广告收入增速呢有所放缓，整体的变现率也有一些波动，啊，想请管理层谈一谈这个主要的原因，呃，是什么，您觉得在这样的情况在未来几个季度是不是会持续，呃，其次呢，呃，我们今年也观察到一些平台企业围绕着新模式，啊，做了大量的业务创新，还有资源的投入，在很短的时间里呢就改变了行业的竞争格局，呃，在此想请教一下管理层是怎么思考电商这个行业在未来一段时间的竞争格局的，非常感谢。 I will translate myself. My first question in overall online retail sector is, in the third quarter we see a recovery as the industry COE of growth reached its best level in the past few quarters.

Speaker #5: company's perspective on the recent industry Could management share the trend, in the meantime we noticed a slowdown in Doudou's online marketing service revenue this quarter, which we estimate also indicated some pressure on the take rate, could management elaborate on the main factors dragging the growth, and do you anticipate this trend will continue in the next couple of quarters?

Speaker #5: secondly, in the past few quarters, we've seen several platform companies roll out major business innovations and ramp up investment in the new models. Which has really shifted the competitive dynamics, how does management view the competitive outlook in China's and why?

Speaker #5: e-commerce, sector from here, much.

Speaker #5: Thank you very And

Speaker #3: is Zhao Jiazhen. Let me take this yeah, hi, this question. I posted a出来众多，而且各方实力都很强的这个行业的格局下面呢，啊，我们认为竞争是不可避免的。而面对竞争和行业的这个快速的变化，我们主要思考的是平台可以为消费者、商家，还有其他的平台的参与方能够创造什么样的独特价值，而不会去过分的关注短期的行业动向和竞争对手一举一动。 And in the past few quarters, the industry has entered a new investment cycle.

Speaker #3: the e-commerce sector is evolving rapidly, and within an industry landscape, that has a large number of strong players. Competition is unavoidable. And fast-changing environment, our primary focus should be that what faced with this competitive and unique value our platform can create for the consumers, merchants, and other participants.

Speaker #3: pay too much attention to the We do not short-term industry trends or every move made by the competition. And as we see it, from here

Speaker #4: 在我们看来呢，接下来平台的发展要结合自身的优势，我们去谋求高质量的发展。通过实在的这个能力的提升，服务好商家和消费者，创造更多的价值，当然我们也很高兴的看到啊，这个整体的线上零售的回暖。

Speaker #3: Onwards, we must leverage our inherent strength to pursue high-quality growth and enhance our core capabilities in order to better serve our merchants and consumers.

Speaker #3: And, along the way, we are encouraged to see more value. Of course, we are in overall recovery in online retail.

Speaker #4: 那今年的初始呢，我们进一步的意识到高质量发展的参与人价值。因此呢，在这个阶段，我们管理层下决心将平台生态建设升级到新的阶段。推出了千亿扶持的会商计划，平台主动拿出真金白银反哺商家和产业。为品牌商家、中小商家的创新和发展，创造充分的空间。

Speaker #3: At the beginning of this year, we recognized the long-term value of high-quality growth, and our management team made a commitment to elevate our platform ecosystem investments to a new stage. We launched the $100 billion support program to assist our merchants.

Speaker #3: platform proactively dedicating And this involves the substantial resources to invest in merchants and the broader industry. And in doing so, we target to provide ample room for innovation and growth for both established brands and the SMEs.

Speaker #4: 那与此同时呢，平台也成立了商家权益保护委员会，建立了与商家沟通的谈效机制。对商家售后服务体系进行了专项升级，并且对这个异常订单售后等问题呢，实行了多项的改进和治理的举措。优化商家的经营环境，全力构建多方共赢的平台生态。

Speaker #3: And

Speaker #3: And in the meantime, we also formed the Merchant Protection Committee to create a long-term communication mechanism with our merchants, we have also undertaken targeted upgrades to the merchant after-sales service system and implemented multiple evolvement improvements to address issues like abnormal order on optimizing the business environment for disputes.

Speaker #3: Our merchants and nurturing a platform ecosystem where all participants can thrive. And these efforts are all focused together.

Speaker #4: 那站在当前的节点往前看，呃，我们管理层一致认为继续加码平台生态投入，从更大的社会公众利益和长期健康生态的角度呢，来考虑企业发展的问题，是我们平台应该做的事情。我们将专注于平台长期的内生价值，以及平台的长期健康发展。因此呢，未来一段时间内，类似于千亿扶持等惠及供需两侧的战略项目，将会进一步的增多。平台反哺产业回馈社会的力度呢，也会加大。

Speaker #3: At this juncture, management unanimously agreed that it is our responsibility to further increase investment in our platform ecosystem. Looking ahead, we must think about the company's development from the broader perspective of public interest and the long-term health of the entire ecosystem.

Speaker #3: We will remain focused on the platform's intrinsic value and healthy development in the long run. Therefore, during this period, we plan to roll out more strategic initiatives that benefit both merchants and consumers.

Speaker #3: programs such support program, and as the $100 billion invest in the industry and give back to the society.

Speaker #1: danger The .

Speaker #2: of the topic

Speaker #2: rates . We mentioned several quarters ago that as platform increases the scale . and also Back to competition intensifies as , our growth set to slow down as we continue to rate is support invest in .

Speaker #2: Programs to create unique value for consumers and merchants will always be our perspective. Our intrinsic value is maintained in terms of your needs. And a second question about long-term competition.

Speaker #1: That

Speaker #1: the . . . Now

Speaker #2: And as you have observed on competition in our has intensified and industry over the seen many industry we've peers months , capital resources to aggressively deploying develop new models , leading to increasingly significant competition emerging around models in the e-commerce sector .

Speaker #2: business Digital this environment will continue to substantial invest capital to strengthen our platform ecosystem merchant support . Major initiatives such as the 10 billion fee reduction program and 100 billion support program be over will the long run and with sustained more similar launched .

Speaker #2: fierce business

Speaker #1: Other

Speaker #2: The programs to be platform willing is to let go some of the profits to for the entire ecosystem . We view these as term investments development of the our long .

Speaker #1: And the . Jun Liu .

Speaker #1: the .

Speaker #2: Numerous create-room-like initiatives for this.

Speaker #1: The . Then the .

Speaker #2: this long And term investments naturally impact our revenue and performance and moving profit will amid the changing external intensifying our competition , long term set to are conditions and increase and therefore we do not think this quarter is profitability serve should as guidance for future performance .

Speaker #2: And there is still the possibility of continuous fluctuation in the results over the coming quarters. Thank you. Thank you, Joyce.

Speaker #2: Operator: We're ready for the next analyst on the line.

Speaker #3: Next, your question comes from Alicia Yap of Citigroup.

Speaker #4: Hello . When Chen CC disorder T1 2020 , should . So the . Token . The one . You I can . Your your your .

Speaker #4: Thoughts on the . On the . management for taking my Thanks questions . Two questions . The first one is global in the operation business .

Speaker #4: We have observed that the company and its peers are facing regulatory and public scrutiny in many countries, some of which are quite intense.

Speaker #4: How does management view this situation and what are the plans? And a second question is, the company has mentioned in the merchant investment the past few quarters.

Speaker #4: Could you the current share then this initiatives , and should we the financial this assess impacts of initiative ? And what are the company's status of how future you plans ?

Speaker #4: .

Speaker #5: . Now what I think

Speaker #5: . You . Thank Alicia You can do the the the . The . The . The . Also .

Speaker #2: Hi , Alicia . This is like . Let me let me answer your first question . After more than three years of development , global company's the business serves local consumers now in many markets has and received positive feedback from users worldwide .

Speaker #2: We are greatly encouraged by such support and trust. At the same time, we sense a profound responsibility.

Speaker #5: To . The . The fact that the . Are . Cao . On the issue the . Of this of .

Speaker #2: So from the beginning, the very goal of our global business has been to achieve sustainable development in each market and deliver tangible value to consumers. We continuously reflect on how to integrate with the local culture, therefore, practices and legal compliance systems in each of the markets.

Speaker #2: And so it will become organic, part of the local economies.

Speaker #5: Also , we . And the . For . Not .

Speaker #2: the growth of The our business alongside trends regulatory across different markets . Now set a higher standard for us . We have always believed that providing consumers safe and with a trustworthy shopping environment is fundamental a e-commerce duty of platform .

Speaker #2: Accordingly, management has made trust and safety, as well as product compliance, a key component of the company's high-quality development strategy, and has made substantial investments in this area.

Speaker #5: As you do . Can . To a . See also . those who . So for Want to . Only .

Speaker #2: And on the technical front , we continuously are refining the and policies processes for merchant onboarding and product listing . The company has dedicated significant resources combining automated and manual screening to proactively product monitor listing , sales and after sales services by , and doing so , we hope to enhance our ability to detect and respond to risks and at the same time , we actively collaborate external with stakeholders and incorporate their feedback to hold ourselves to higher standards .

Speaker #5: On . So . the When .

Speaker #2: And in 2000 terms of our teams, we continue to invest in building a professional compliance team that keeps up with regulatory trends in our operating markets and promptly implements adjustments in our business operations.

Speaker #5: To suit the.

Speaker #2: despite And these efforts , regulatory environment in areas such as trade policies , tax data security and product compliance are undergoing significant changes across various countries and regions .

Speaker #2: And this presents us with greater challenges and heightened uncertainty.

Speaker #5: When . In the . In 2020 .

Speaker #2: As a young and global we organization , striving to are learn and to these adapt to changes . However , I have to admit that this process introduces significant uncertainties which bring unpredictable and quantify difficult to impact the company's financial and could performance in the short and long both term .

Speaker #5: Now, as the only ...

Speaker #2: And in facing such uncertainties and to us , we remain very focused on strengthening our internal and enhancing platform compliance and fostering capabilities healthier and more a sustainable platform ecosystem .

Speaker #2: Thank you .

Speaker #1: Anyhow .

Speaker #2: Hi, this is Roger. Let me answer your second question.

Speaker #1: And listen, from the online financial Q3 2025 PDD Holdings Inc. earnings call.

Speaker #2: And over the past ten years we have undergone a extraordinary growth journey , evolving from a startup to a public platform with social influence certain .

Speaker #2: In this journey, we have benefited rapidly from the development of the digital economy. At the same time, we have also taken on social responsibilities that are expected of a platform company like ours.

Speaker #2: And over these ten years , we have different ways to explored leverage digital capabilities to serve the broader communities and give back to the society , and particularly around rural revitalization and industrial upgrades .

Speaker #1: To the San, use are uses.

Speaker #2: As part of this journey, we launched strategic initiatives such as the Research $10 Billion Agricultural Program to inject new energy into agriculture modernization.

Speaker #2: And this year, we took another critical step to launch the first $100 billion support program in the e-commerce sector. Through key measures such as total premium new quality supply and production, as well as logistics support for remote regions.

Speaker #2: We are continuously improving the platform ecosystem and brought more high quality merchants and products to the consumer market , driving the broader high quality development of different industries .

Speaker #1: And to switch to.

Speaker #2: And regarding your question around merchant support investments , we have always emphasized that as e-commerce platform , we must collaborate closely with all the ecosystem participants create value to for consumers and merchants are vital partners in our efforts to serve the for consumers well and a healthy therefore sustainable and merchant ecosystem is a fundamental pillar of the platform's quality development high .

Speaker #1: And . We .

Speaker #2: hope these initiatives will We promote high quality growth quality for merchants , for instance , the fee reduction policies we introduced have lowered merchants costs , enabling them to be more willing and able to reinvest in their products and services .

Speaker #2: And currently, we are already seeing some positive feedback from these ecosystems on our platform investments.

Speaker #1: The . 20 .

Speaker #2: And this year marks our ten year anniversary and standing this new starting at point , we will continue to diligently address the practical challenges faced by our users , merchants and industries .

Speaker #2: One by one , and we hope to take a greater social responsibility and by building a platform ecosystem that benefits all . Thank you .

Speaker #2: Okay . Operator . I think we have time for one more analyst .

Speaker #3: Your next question comes from Kenneth Fong with UBS.

uh,

The company's operating margin has declined this quarter compared to the previous quarter. Meanwhile, management just mentioned plans for increased investment. So, how should we evaluate the company's upcoming investment pace as well as its profitability level?

Share what the new consumption Trend that we observed during the recent, uh, annual uh, shopping Festival promotion. Uh, additionally, we have seen other industry participant achieving good result with the new business models such as quick Commerce during double 11. So, um, how does management view the competitive landscape under this emerging models. Uh, thank you.

Um, hi, this is Let me answer your question.

I think.

Uh, in the third quarter, heightened competition, together with our ongoing investments in the $100 billion Support Program, put pressure on our revenue growth and also led to a decline in operating margins, both year on year and quarter on quarter.

Wait.

At the moment, the industry landscape continues to change rapidly. In this environment, it is crucial for us to maintain our long-term strategic focus, looking ahead. We will continue to increase investments in our platform ecosystem. This includes measures such as merchant fee reduction and marketing support for high-quality merchants.

And all targeted at creating more room for the healthy development of the supply chain, and these investments will pose challenges to our revenue and profits.

And at the same time, as mentioned in our prepared remarks, our Global business is currently facing a complex global environment, the policies and Industry regulatory Landscapes across different countries and regions have undergone and are expected to continue undergoing. Significant changes

This will bring unforeseeable risks and challenges to our company, which may also impact the company's financial performance in both the short and long term.

As we communicated over the past few quarters, we will firmly prioritize high-quality development in the long term over short-term financial results. Accordingly, our financial performance may fluctuate over the coming quarters, and linear projections may not be appropriate for financial forecasts.

And as to your second question,

And over the past past few months, we have observed. An overall positive consumption momentum with gradually recovering Market confidence and during the Q3 promotional period consumption needs in. The e-commerce sector was further, stimulated showing a steadily improving trend.

Users.

Um, at the same time, we clearly recognize that the e-commerce competition remains very, very intense.

New business models continue to emerge, and the market landscape is constantly evolving.

For.

And in such an environment, we will further raise our standards strengthen our core capabilities and continue to deepen. Our efforts in supply chain improvements and platform, ecosystem development to identify new growth opportunities. And from a long-term perspective will increase high quality Investments to translate these capabilities into products and services that offer consumers greater quality for money.

Um, this process will now be immediate but will demand continuous efforts

For considerable period of time. We may be at a competitive disadvantage to our competitors, and this will potentially be accompanied by a financial pressures such as slower Revenue growth.

And, but our attitude remains positive. But first, we choose to view competitions through a long-term lens and plan around proactively increasing Investments to create more possibilities for the healthy and sustainable development of the ecosystem, even if this means forgoing, some fruit and profits.

And this trade-offs are made with the intention to build a more robust and sustainable long-term value. Made the industry competition. Thank you.

Okay. Um, thank you, Dan.

Um, it's about time, and thank you all for joining us today. We look forward to speaking with you again next quarter. Thank you, and have a great day.

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect.