6-K - PDD - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2023

Commission File Number: 001-38591

PDD Holdings Inc.

First Floor, 25 St Stephen’s Green,

Dublin 2, D02 XF99

Ireland

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

Exhibit Index

Exhibit 99.1—Press Release (Earnings Release)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PDD HOLDINGS INC.
By	:	/s/ Lei Chen
Name	:	Lei Chen
Title	:	Chairman of the Board of Directors and Co-Chief Executive Officer

Date: August 29, 2023

Exhibit 99.1

PDD Holdings Announces Second Quarter 2023 UnauditedFinancial Results

DUBLIN and SHANGHAI, August 29, 2023 (GLOBE NEWSWIRE) – PDD Holdings Inc. (“PDD Holdings” or the “Company”) (NASDAQ: PDD), today announced its unaudited financial results for the second quarter ended June 30, 2023.

Second Quarter 2023 Highlights

·	Total revenues in the quarter were RMB52,280.7 million (US$^1^7,209.8<br>million), an increase of 66% from RMB31,439.6 million in the same quarter of 2022.
·	Operating profit in the quarter was RMB12,718.8 million (US$1,754.0 million), an increase of 46%<br>from RMB8,697.2 million in the same quarter of 2022. Non-GAAP^2^operating profit in the quarter was RMB14,609.4 million (US$2,014.7 million), an increase of 39% from RMB10,541.5 million in the same<br>quarter of 2022.
---	---
·	Net income attributable to ordinary shareholders in the quarter was RMB13,108.1 million (US$1,807.7<br>million), an increase of 47% from RMB8,896.3 million in the same quarter of 2022. Non-GAAP net income attributable to ordinary shareholders<br>in the quarter was RMB15,269.4 million (US$2,105.7 million), an increase of 42% from RMB10,776.3 million in the same quarter of 2022.
---	---

“Technology serves as a pivotal driving force of sustainable, high-quality development,” said Mr. Lei Chen, Chairman and Co-Chief Executive Officer of PDD Holdings. “We remain unwaveringly committed to leveraging our resources and technology background to spearhead innovation, champion digital inclusion and generate a positive impact on society at large.”

“Over the recent quarter, we saw a positive shift in consumer sentiment, leading to a rise in demand across various product sectors,” stated Mr. Jiazhen Zhao, Executive Director and Co-Chief Executive Officer of PDD Holdings. “We are deeply dedicated to high-quality development to create values for every party of our ecosystem.”

“In Q2, we seized the opportunities of favorable consumption trends and invested firmly and responsibly,” said Ms. Jun Liu, VP of Finance at PDD Holdings. “Looking ahead, we will continue to invest with determination and patience to execute our high-quality development strategy.”

^1^This announcement contains translations of certain Renminbi (“RMB”) amounts into U.S. dollars (“US$”) at a specified rate solely for the convenience of the reader. Unless otherwise noted, the translation of RMB into US$ has been made at RMB7.2513 to US$1.00, the noon buying rate in effect on June 30, 2023 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. See “Reconciliation of Non-GAAP Measures to The Most Directly Comparable GAAP Measures” set forth at the end of this press release.

Second Quarter 2023 Unaudited Financial Results

Totalrevenues were RMB52,280.7 million (US$7,209.8 million), an increase of 66% from RMB31,439.6 million in the same quarter of 2022. The increase was primarily due to an increase in revenues from online marketing services and transaction services.

·	Revenues from online marketing services and others were RMB37,932.8 million (US$5,231.2 million),<br>an increase of 50% from RMB25,223.4 million in the same quarter of 2022.
·	Revenues from transaction services were RMB14,347.9 million (US$1,978.7 million), an increase of<br>131% from RMB6,216.2 million in the same quarter of 2022.
---	---

Totalcosts of revenues were RMB18,689.8 million (US$2,577.4 million), an increase of 135% from RMB7,961.9 million in the same quarter of 2022. The increase mainly came from the increased fulfilment fees and payment processing fees.

Totaloperating expenses were RMB20,872.2 million (US$2,878.4 million), an increase of 41% from RMB14,780.5 million in the same quarter of 2022. The increase was primarily due to an increase in sales and marketing expenses.

·	Sales and marketing expenses were RMB17,542.2 million (US$2,419.2 million), an increase of 55%<br>from RMB11,343.4 million in the same quarter of 2022, mainly due to the increased spending in promotion and advertising activities.
·	General and administrative expenses were RMB596.0 million (US$82.2 million), compared with RMB825.7<br>million in the same quarter of 2022.
---	---
·	Research and development expenses were RMB2,734.0 million (US$377.0 million), compared with RMB2,611.4<br>million in the same quarter of 2022.
---	---

Operatingprofit in the quarter was RMB12,718.8 million (US$1,754.0 million), an increase of 46% from RMB8,697.2 million in the same quarter of 2022. Non-GAAP operating profit in the quarter was RMB14,609.4 million (US$2,014.7 million), an increase of 39% from RMB10,541.5 million in the same quarter of 2022.

Netincome attributable to ordinary shareholders in the quarter was RMB13,108.1 million (US$1,807.7 million), an increase of 47% from RMB8,896.3 million in the same quarter of 2022. Non-GAAP net income attributable to ordinary shareholders in the quarter was RMB15,269.4 million (US$2,105.7 million), an increase of 42% from RMB10,776.3 million in the same quarter of 2022.

Basicearnings per ADS was RMB9.64 (US$1.33) and the diluted earnings per ADS was RMB9.00 (US$1.24), compared with basic earnings per ADS of RMB7.06 and diluted earnings per ADS of RMB6.22 in the same quarter of 2022. Non-GAAP diluted earnings per ADS was RMB10.47 (US$1.44), compared with RMB7.54 in the same quarter of 2022.

Netcash generated from operating activities was RMB23,396.0 million (US$3,226.5 million), compared with RMB19,373.9 million in the same quarter of 2022.

Cash,cash equivalents and short-term investments were RMB179.5 billion (US$24.8 billion) as of June 30, 2023, compared with RMB149.4 billion as of December 31, 2022.

Recent Development

Independent Director Appointment

PDD Holdings today announced the appointment of Ms. Ivonne M.C.M. Rietjens to serve as an independent director of the Company, effective on August 29, 2023. Ms. Rietjens has more than 25 years of experience in food safety. She has been a full professor at Wageningen University since 2001 and is currently head of the division of toxicology. She is also an elected member of the Royal Netherlands Academy of Arts Sciences (KNAW) and the chairperson of the KNAW Scientific Council for Natural Sciences and Engineering. Adding Ms. Rietjens to the Board increases the total number of board members to 7, of which 4 are independent directors.

Legal and Compliance Committee

PDD Holdings has formed a Legal and Compliance Committee, chaired by Mr. Lei Chen, which replaces the General Counsel role and function, effective on August 29, 2023.

Conference Call

The Company’s management will hold an earnings conference call at 7:30 AM ET on August 29, 2023 (12:30 PM IST and 7:30 PM HKT on the same 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, non-GAAP net income attributable to ordinary shareholders, non-GAAP diluted earnings per ordinary share and non-GAAP diluted earnings per ADS, 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 accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s non-GAAP financial measures exclude 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.

The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate 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, which are non-cash charges. The Company also believes that the non-GAAP financial measures may 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 Company’s 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. These 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 be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, 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 business outlook 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 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: 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 on merchants 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 the e-commerce markets globally and in the countries or regions where the Company has operations; changes in its revenues and certain cost or expense items; the expected growth of e-commerce markets globally and in the countries or regions where the Company has operations; developments in the relevant governmental policies and regulations relating to the Company’s industry; and general economic and business conditions globally and in the countries or regions where the Company has operations; 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. 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 investor and media inquiries, please contact:

[email protected]

PDD HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))

	As<br> of
	December 31, 2022		June 30,<br><br> 2023
	RMB		RMB		US
			(Unaudited)
ASSETS
Current<br> assets
Cash<br> and cash equivalents		34,326,192		31,379,326
Restricted<br> cash		57,974,225		52,055,133
Receivables<br> from online payment platforms		587,696		1,559,765
Short-term<br> investments		115,112,554		148,129,260
Amounts<br> due from related parties		6,318,830		5,097,426
Prepayments<br> and other current assets		2,298,379		2,985,263
Total<br> current assets		216,617,876		241,206,173
Non-current<br> assets
Property,<br> equipment and software, net		1,044,847		1,064,374
Intangible<br> assets		134,002		22,651
Right-of-use<br> assets		1,416,081		2,121,964
Deferred<br> tax assets		1,045,030		1,544,634
Other<br> non-current assets		16,862,117		28,325,561
Total<br> non-current assets		20,502,077		33,079,184
Total<br> Assets		237,119,953		274,285,357

All values are in US Dollars.

PDD HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”))

	As of
	December 31, 2022		June 30,<br><br> 2023
	RMB		RMB		US
			(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Amounts due to related parties		1,676,391		1,832,025
Customer advances and deferred revenues		1,389,655		1,639,290
Payable to merchants		63,316,695		60,115,463
Accrued expenses and other liabilities		20,960,723		30,889,820
Merchant deposits		15,058,229		16,131,012
Convertible bonds, current portion		13,885,751		14,431,092
Lease liabilities		602,036		955,395
Total current liabilities		116,889,480		125,994,097
Non-current liabilities
Convertible bonds		1,575,755		1,634,852
Lease liabilities		870,782		1,248,107
Deferred tax liabilities		13,025		64,222
Total non-current liabilities		2,459,562		2,947,181
Total Liabilities		119,349,042		128,941,278
Shareholders’ equity
Ordinary shares		170		176
Additional paid-in capital		99,250,468		102,681,784
Statutory reserves		5,000		5,000
Accumulated other comprehensive income		3,322,238		6,254,971
Retained earnings		15,193,035		36,402,148
Total Shareholders’ Equity		117,770,911		145,344,079
Total Liabilities and Shareholders’ Equity		237,119,953		274,285,357

All values are in US Dollars.

PDD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands of RMB and US$)

	For the three months ended June 30,								For the six months ended June 30,
	2022			2023					2022			2023
	RMB			RMB			US		RMB			RMB			US
	(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Revenues		31,439,568			52,280,748					55,233,257			89,917,798
Costs of revenues		(7,961,866	)		(18,689,787	)		)		(15,121,461	)		(29,815,072	)		)
Gross profit		23,477,702			33,590,961					40,111,796			60,102,726
Sales and marketing expenses		(11,343,447	)		(17,542,209	)		)		(22,562,515	)		(33,801,897	)		)
General and administrative expenses		(825,722	)		(596,033	)		)		(1,417,835	)		(1,412,435	)		)
Research and development expenses		(2,611,366	)		(2,733,964	)		)		(5,279,873	)		(5,240,621	)		)
Total operating expenses		(14,780,535	)		(20,872,206	)		)		(29,260,223	)		(40,454,953	)		)
Operating profit		8,697,167			12,718,755					10,851,573			19,647,773
Interest and investment income, net		756,991			2,287,741					1,553,252			3,751,340
Interest expenses		(13,148	)		(11,937	)		)		(25,788	)		(23,624	)		)
Foreign exchange (loss)/ gain		(199,349	)		155,717					(179,265	)		139,680
Other income, net		1,266,235			1,106,471					1,506,005			2,333,991
Profit before income tax and share of results of equity investees		10,507,896			16,256,747					13,705,777			25,849,160
Share of results of equity investees		(53,493	)		9,781					(87,109	)		116,170
Income tax expenses		(1,558,063	)		(3,158,442	)		)		(2,122,877	)		(4,756,217	)		)
Net income		8,896,340			13,108,086					11,495,791			21,209,113

All values are in US Dollars.

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 June 30,					For the six months ended June 30,
	2022		2023			2022		2023
	RMB		RMB		US	RMB		RMB		US
	(Unaudited)		(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)		(Unaudited)
Net income		8,896,340		13,108,086			11,495,791		21,209,113
Net income attributable to ordinary shareholders		8,896,340		13,108,086			11,495,791		21,209,113
Earnings per ordinary share:
-Basic		1.76		2.41			2.28		3.96
-Diluted		1.56		2.25			2.02		3.63
Earnings per ADS (4 ordinary shares equals 1 ADS ):
-Basic		7.06		9.64			9.12		15.82
-Diluted		6.22		9.00			8.07		14.53
Weighted average number of outstanding ordinary shares (in thousands):
-Basic		5,042,417		5,438,394			5,039,591		5,360,987
-Diluted		5,716,947		5,833,348			5,708,590		5,845,398

All values are in US Dollars.

PDD HOLDINGS INC.

NOTES TO FINANCIAL INFORMATION

(Amounts in thousands of RMB and US$)

	For the three months ended June 30,					For the six months ended June 30,
	2022		2023			2022		2023
	RMB		RMB		US	RMB		RMB		US
	(Unaudited)		(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)		(Unaudited)
Revenues
- Online marketing services and others		25,223,361		37,932,831			43,425,643		65,177,257
- Transaction services		6,216,207		14,347,917			11,807,614		24,740,541
Total		31,439,568		52,280,748			55,233,257		89,917,798

All values are in US Dollars.

PDD HOLDINGS INC.

NOTES TO FINANCIAL INFORMATION

(Amounts in thousands of RMB and US$)

	For the three months ended June 30,					For the six months ended June 30,
	2022		2023			2022		2023
	RMB		RMB		US	RMB		RMB		US
	(Unaudited)		(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)		(Unaudited)
Share-based compensation expenses included in:
Costs of revenues		6,989		28,276			16,170		65,644
Sales and marketing expenses		513,559		989,326			1,014,664		1,478,099
General and administrative expenses		661,019		225,799			1,044,315		703,861
Research and development expenses		662,781		647,228			1,291,949		1,176,427
Total		1,844,348		1,890,629			3,367,098		3,424,031

All values are in US Dollars.

PDD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands of RMB and US$)

	For the three months ended June 30,								For the six months ended June 30,
	2022			2023					2022			2023
	RMB			RMB			US		RMB			RMB			US
	(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Net cash generated from operating activities		19,373,871			23,395,981					10,305,775			24,734,003
Net cash used in investing activities		(8,593,271	)		(11,519,860	)		)		(13,445,360	)		(34,140,107	)		)
Net cash generated from financing activities		268			7,233					311			7,286
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(50,839	)		881,105					(40,676	)		532,860
Increase/ (decrease) in cash, cash equivalents and restricted cash		10,730,029			12,764,459					(3,179,950	)		(8,865,958	)		)
Cash, cash equivalents and restricted cash at beginning of period		52,133,992			70,670,000					66,043,971			92,300,417
Cash, cash equivalents and restricted cash at end of period		62,864,021			83,434,459					62,864,021			83,434,459

All values are in US Dollars.

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 June 30,					For the six months ended June 30,
	2022		2023			2022		2023
	RMB		RMB		US	RMB		RMB		US
	(Unaudited)		(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)		(Unaudited)
Operating profit		8,697,167		12,718,755			10,851,573		19,647,773
Add: Share-based compensation expenses		1,844,348		1,890,629			3,367,098		3,424,031
Non-GAAP operating profit		10,541,515		14,609,384			14,218,671		23,071,804
Net income attributable to ordinary shareholders		8,896,340		13,108,086			11,495,791		21,209,113
Add: Share-based compensation expenses		1,844,348		1,890,629			3,367,098		3,424,031
Add: Interest expenses related to convertible bonds’ amortization to face value		13,148		11,937			25,788		23,624
Add: Loss from fair value change of certain investments		22,459		258,704			88,059		738,980
Non-GAAP net income attributable to ordinary shareholders		10,776,295		15,269,356			14,976,736		25,395,748
Non-GAAP diluted weighted-average number of ordinary shares outstanding (in thousands)		5,716,947		5,833,348			5,708,590		5,845,398
Diluted earnings per ordinary share		1.56		2.25			2.02		3.63
Add: Non-GAAP adjustments to earnings per ordinary share		0.32		0.37			0.60		0.71
Non-GAAP diluted earnings per ordinary share		1.88		2.62			2.62		4.34
Non-GAAP diluted earnings per ADS		7.54		10.47			10.49		17.38

All values are in US Dollars.