Temu Parent PDD Warns Current Profits Not Sustainable As Competition Heats Up In China
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PDD Holdings, parent of Temu, reported a 7% year-on-year revenue increase to $14.52 billion for Q2 2025, exceeding estimates. However, executives warned that current profit levels are unsustainable due to rising competition and necessary investments in the merchant ecosystem, leading to potential short-term volatility. Adjusted operating profit fell 20.7% to $3.87 billion, with margins declining from 36.0% to 26.7%. Despite challenges, PDD remains optimistic about China's consumer market and holds $54 billion in cash. PDD stock rose 3.37% to $131.39 following the report.
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