PDD NASDAQ: PDD reported second-quarter 2026 revenue growth of 8% as the e-commerce company continued to increase investment in platform governance, merchant support, supply-chain development and rural logistics. Net income declined as those investments weighed on profitability.
Revenue for the quarter ended June 30 was RMB112.4 billion, while net income attributable to ordinary shareholders was RMB27.2 billion, down 12% from a year earlier. Co-Chairman and Co-Chief Executive Officer Zhao Jiazhen said the company’s performance remained steady, but that continued investment in its platform and broader industry ecosystem affected quarterly results.
Revenue Growth Led by Transaction Services
Financial Director Jiong Li said transaction-services revenue increased 13% year over year to RMB54.7 billion. Revenue from online marketing services and other sources was RMB57.6 billion, compared with RMB55.7 billion in the same quarter of 2025.
Total cost of revenue rose 5% to RMB48 billion. On a GAAP basis, operating expenses increased 13% to RMB36.6 billion. Research and development expense, measured on a non-GAAP basis, climbed 40% year over year to RMB4.3 billion, while non-GAAP sales and marketing expenses increased 10% to RMB29.3 billion.
- GAAP operating profit increased 8% to RMB27.8 billion.
- Non-GAAP operating profit was RMB29.1 billion, compared with RMB27.7 billion a year earlier.
- Non-GAAP operating margin was 26%, versus 27% in the prior-year quarter.
- Diluted earnings per ADS were RMB18.45 on a GAAP basis, down from RMB20.75 a year earlier.
- Net cash generated from operating activities rose to RMB25.7 billion from RMB21.6 billion.
As of June 30, PDD had RMB456.4 billion in cash equivalents and short-term investments.
Support Program and Governance Investments
Zhao said PDD’s RMB100 billion support program has entered a phase in which sustained investment is beginning to produce results across the platform’s supply and demand ecosystem. The initiative includes fee reductions, merchant support and programs aimed at agricultural regions and manufacturing clusters.
The company said it has introduced more than 150 comprehensive trust-and-safety measures to date, including more than 50 targeted initiatives in June. Those measures addressed product-listing controls, food and drug safety, merchant qualification reviews, advertising compliance, intellectual-property protection, misleading marketing and livestream e-commerce standards.
PDD also said it has increased R&D spending on risk-control systems and expanded specialist trust-and-safety teams. In food safety, the company said it prohibited the sale of freshly prepared food and beverage products, while tightening merchant-review and product-information requirements.
The support program has extended to agricultural areas through the company’s Duoduo Premium Produce Initiative, which has worked with specialty-producing regions on product development, cultivation standards and cold-chain logistics. Zhao cited Hainan’s Golden Diamond pineapple as an example, saying local planting area for the variety had expanded to more than 100,000 mu from initially scattered trial plots.
In manufacturing regions, PDD said it is helping merchants with traffic exposure, data tools, market expansion, cost reductions, smart manufacturing and warehousing upgrades. Zhao said some factories supported through these efforts had cut production cycles in half and improved fulfillment capacity.
Rural Delivery and Supply-Chain Focus
PDD said its free-shipping-to-villages program, launched six months ago, has established last-mile networks in more than 10 provinces and municipalities, including county-level transit hubs and village pickup points. The company said the program is intended to broaden rural access to consumer goods, appliances, agricultural supplies and farming equipment while creating jobs in counties and rural communities.
During the question-and-answer session, Zhao said e-commerce logistics are relatively mature across much of China but last-mile delivery remains a bottleneck in remote western areas and rural communities. He said the company would continue making targeted, practical investments to improve fulfillment reliability and address those gaps.
Zhao also said PDD does not currently see significant synergies between its core e-commerce and grocery businesses and quick commerce, given differences in supply-chain requirements and operating models. Rather than pursuing that area, the company plans to focus resources on improving product supply and delivery infrastructure where it believes it has established strengths.
Global Regulatory Changes and First-Party Brands
Co-Chairman and Co-Chief Executive Officer Chen Lei said changes in global regulatory and compliance requirements have created both challenges and opportunities for PDD’s international business. Addressing a question about new European Union customs duties on low-value cross-border shipments, Chen said affected markets would face lower fulfillment efficiency and higher costs in the short term, which would have a considerable impact on those businesses.
In response, PDD is adjusting supply chains, optimizing fulfillment processes, onboarding more local merchants and accelerating local warehousing and fulfillment infrastructure, Chen said. The company also plans to continue strengthening product quality, consumer protection and intellectual-property compliance.
Zhao provided an update on PDD’s first-party brand initiative, describing it as an extension of the company’s long-term supply-chain investment. The business will selectively focus on product categories where PDD and its supply-chain partners have advantages, working with manufacturers on product planning, research and development, quality standards and market testing.
He said the initial rollout has taken longer than expected, but remains a long-term strategic priority. PDD’s first-party products will complement, rather than replace, offerings from third-party merchants, Zhao said, with both intended to serve different consumer use cases and market segments.
Looking ahead, Li said PDD remains confident in the long-term potential of China’s consumer market and e-commerce industry. He said the company’s focus remains on strengthening its merchant ecosystem and supply chain, with the expectation that sustainable growth in the platform’s intrinsic value will follow over time.
About PDD (NASDAQ:PDD)
PDD NASDAQ: PDD is the holding company best known for operating Pinduoduo, a China-based, mobile-first e-commerce platform that emphasizes interactive, social shopping and group-buying mechanics to drive user engagement and low prices. Founded in 2015 by entrepreneur Colin Huang, the business has grown by connecting consumers directly with merchants and manufacturers, with particular emphasis on value-oriented goods and fresh agricultural produce. The company is based in Shanghai and completed a U.S.
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