09:05 AM EDT, 08/26/2024 (MT Newswires) -- PDD Holdings' ( PDD ) second-quarter revenue increased year over year but fell short of market estimates, while the Chinese e-commerce platform expects competition and external challenges to impact its future results.

Adjusted earnings jumped to 23.24 renminbi ($3.20) per American depositary share in the three-month period ended June 30 from 10.47 renminbi a year earlier, topping the Street's view for 20.02 renminbi. PDD owns the Pinduoduo social commerce platform in China and an e-commerce marketplace in North America, Temu.

Revenue soared 86% year over year to 97.06 billion renminbi, but trailed the Capital IQ-polled consensus of 100.1 billion renminbi.

"While encouraged by the solid progress we made in the past few quarters, we see many challenges ahead," co-Chief Executive Lei Chen said in a statement. "We are prepared to accept short-term sacrifices and potential decline in profitability."

The company's Nasdaq-listed American depositary receipts fell 17% in premarket activity.

"In (the second quarter), our top line growth slowed down significantly versus the last few quarters," Jun Liu, vice president of finance, said during an earnings call, according to a Capital IQ transcript. "Further slowdown is inevitable as a result of competition and global uncertainties."

Revenue from online marketing services advanced 29% to 49.12 billion renminbi. Transaction services revenue surged to 47.94 billion renminbi from 14.35 billion renminbi in the prior-year quarter. Total operating expenses rose 48% year over year to nearly 30.8 billion renminbi, mainly due to higher sales and marketing costs, according to the company.

"Looking ahead, revenue growth will inevitably face pressure due to intensified competition and external challenges," Liu said in an earnings statement. "Profitability will also likely to be impacted as we continue to invest resolutely."

PDD plans to "invest firmly" in supply chain efficiencies amid increasing competition among e-commerce platforms, Chen said on the call. "This will be the key focus for our high-quality development going forward," he told analysts.

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