Net income down 11% year over year. Non-GAAP earnings down 12%. Revenue growth at 12.5% when the street was expecting 20%+. By every headline metric, this was a bad quarter for PDD. 🚨
The stock went up.
Here's what happened: EPS came in at USD 2.36 diluted, beating the USD 2.13 consensus. The bar had been set so low by months of Temu regulatory doom headlines that when the company didn't actually collapse, short sellers had to cover. Relief rally, not a fundamentals rally. The real question now: is Temu's compliance cost problem temporary or permanent? Management is still not disclosing Temu revenue separately. Until they do, no one really knows. 📈
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