Pinduoduo Falls Despite Q3 Revenue Growth

Pinduoduo Inc (NASDAQ:PDD) reported third-quarter FY21 revenue growth of 51% year-on-year to $3.3 billion, missing the consensus of $4.2 billion.

Average monthly active users rose 15% Y/Y to 741.5 million. Active buyers in the 12 months ended September 30 increased 19% Y/Y to 867.3 million.

Revenues from online marketing services and others rose 44% Y/Y to $2.8 billion. Revenues from transaction services jumped 161% Y/Y to $539.6 million.

Revenues from merchandise sales declined 79% Y/Y to $12.7 million. Pinduoduo posted a non-GAAP operating profit of $506.1 million.

Non-GAAP earnings per ADS of $0.34 beat the consensus of $0.02.

Pinduoduo held $15.2 billion in cash and equivalents and generated $1.4 billion in operating cash flow.

"We are placing more focus on investments in R&D, away from the previous emphasis on sales and marketing in our first five years," CEO Lei Chen said.

"We want to leverage our strength in technology to deepen our digital inclusion efforts in agriculture and will allocate all profits from the third quarter to the '10 Billion Agriculture Initiative'."

"Meanwhile,” concluded Chen, “we are seeing the younger generation maturing quickly and will promote more young leaders to critical roles in the next six to 12 months.”

PDD shares traded lower by $10.99, or 13.5% to $70.38 soon after Friday’s opening bell .