Chinese e-commerce giant, Pinduoduo (NASDAQ: PDD) announced its fourth quarter financial results on Wednesday during pre-market hours. The Company missed earnings estimates, which sent shares lower by 16% after the opening bell.
For the fourth quarter, Pinduoduo reported earnings loss of USD 24 cents per share on revenue of USD 822.3 Million. Analysts expected earnings loss of USD 22 cents per share on revenue of USD 757.3 Million.
Despite Pinduoduo’s earnings miss, the Company’s revenue growth and beat showed its substantial growth year-over-year. Revenue grew by 379% from the same quarter a year prior.
“The growth in our revenue is the result of the continued expansion of our buyer base and increasing user engagement, which translates to greater traffic and attractive advertising return on investments on our platform. To build on this momentum and increase mindshare with users, we will continue to invest strategically.” said Mr. Tian Xu, Vice President of Finance of Pinduoduo.
The better-than-expected revenue was due to the Company’s increase in active users. Pinduoduo reported that average monthly active users grew by 93% to 272.6 million from the same quarter last year.
Active buyers in the quarter were 418.5 million, increasing by 71% year-over-year. Annual spending per active buyer was USD 163.90, increasing by 95% year-over-year.
The revenue growth was also driven by Pinduoduo’s online marketing services. Revenue from online marketing services rose by 470% year-over-year to USD 736.3 Million. Revenue from transaction services grew by 103% to USD 86 Million for the quarter.
“We had a strong finish to 2018 in the fourth quarter,” said Mr. Zheng Huang, Chairman and Chief Executive Officer of Pinduoduo. “GMV in the last twelve months increased 234% year-over-year to RMB 471.6 Billion. This was driven by the rapid growth in our annual active buyer base and a near doubling in the annual spending per active buyer. We view this as an indication of users’ growing trust in our platform, and will keep on innovating to satisfy our users’ evolving needs so they can have the best user experience possible.”