PDD Holdings, the Chinese group behind Pinduoduo and the cross-border marketplace Temu, reports second quarter 2026 results before US markets open on Monday, August 24, with a management call scheduled for 7:30 a.m. Eastern. The company confirmed the date in a release issued on August 17.
The print matters well beyond the ticker. It is the first full quarter in which Temu’s largest market, the United States, operated with no low value duty exemption at all, and the last quarter before the European Union’s own parcel duty regime took effect on July 1.
In short
- Date and time: PDD Holdings publishes second quarter 2026 unaudited results before the US open on Monday, August 24, 2026, followed by a 7:30 a.m. ET call.
- The bar: consensus sits near USD 17.1bn in revenue, implying roughly 18% growth in dollars against the year ago quarter, with earnings per American depositary share estimated in a USD 2.72 to USD 2.85 range.
- The currency catch: the yuan has strengthened materially over the past year, so an 18% dollar comparison corresponds to something closer to 11% growth in renminbi.
- The margin question: first quarter net income attributable to ordinary shareholders fell 15% year on year even as revenue rose 11%, and the company has told investors that supply chain investment is now the core strategic priority.
- The regulatory bracket: the results land four days before Temu’s August 28 deadline to file a Digital Services Act action plan with the European Commission, and one quarter before EU parcel duties begin showing up in the numbers.
What PDD Holdings actually reports on August 24
PDD Holdings will publish unaudited financial results for the three months ended June 30, 2026. The company said in its August 17 announcement that the release comes before US markets open, with management hosting a conference call at 7:30 a.m. Eastern the same morning.
The group reports in renminbi and converts headline figures into dollars using a single noon buying rate fixed at the quarter end date. That convention matters this quarter more than most, for reasons set out below.
PDD does not break out Temu as a reporting segment. Investors instead read the cross-border business through two revenue lines: online marketing services and other revenue, which is largely domestic advertising on Pinduoduo, and transaction services revenue, which captures commissions and the fully managed cross-border flows that Temu runs.
Because Temu’s fully managed model books merchandise revenue through transaction services, the spread between those two lines has become the market’s proxy for how the overseas business is tracking. In the first quarter, that spread widened sharply.
A second convention trips up first time readers. PDD’s US listed security is an American depositary share, and per share estimates circulating in dollars refer to that unit rather than to an ordinary share, which is why headline earnings per share figures are not directly comparable with the renminbi net income line.
Why there is no guidance to anchor on
PDD does not issue formal revenue or earnings guidance, and management has repeatedly declined to quantify Temu’s contribution. The call therefore carries unusual weight, because qualitative commentary is the only forward-looking signal the market gets.
Analysts have consequently built their models from third party data: app download trackers, advertising spend estimates, customs filings and merchant surveys. Those inputs have diverged this year, which explains the unusually wide dispersion in published estimates.
The bar Wall Street has set for the quarter
Consensus revenue for the June quarter clusters around USD 17.1bn, with some compilations closer to USD 16.9bn. On the earnings line, published estimates range from about USD 2.72 to USD 2.85 per American depositary share, depending on the provider and on how non-GAAP adjustments are treated.
The USD 17.13bn figure implies roughly 18% growth against the year ago quarter as those providers measure it. On the profit side, an estimate of USD 2.85 per ADS would represent a decline of about 7% versus the comparable quarter of 2025, which tells you the market is already modelling revenue growth without operating leverage.
Sell side positioning is mixed rather than bullish. The consensus rating sits at a moderate buy with an average price target near USD 110.81, but BNP Paribas carries an underperform rating and Barclays has downgraded the stock. Shares closed at USD 86.94 on August 17, up 2.54% that session but only 0.77% higher over the preceding month, lagging both the retail and wholesale sector and the S&P 500.
The dispersion itself is informative. A spread of roughly USD 200m on the revenue line and thirteen cents on earnings is wide for a company of this size, and it reflects genuine disagreement about how much duty cost passed into Temu’s reported cost of revenues rather than into merchant margins.
| Metric | Q2 2025 reported | Q2 2026 consensus | Implied change |
|---|---|---|---|
| Total revenues | RMB 103.98bn (about USD 14.5bn) | About USD 17.1bn | About +18% in dollars |
| Operating profit | RMB 25.79bn (down 21% year on year) | Not separately consensus tracked | Watch the ratio, not the level |
| Net income to ordinary shareholders | RMB 30.75bn (down 4% year on year) | Not separately consensus tracked | Non-operating income was a large contributor |
| Earnings per ADS | Implied comparable near USD 3.08 | USD 2.72 to USD 2.85 | Roughly minus 7% at the top of the range |
| Share price context | Not applicable | USD 86.94 on August 17, 2026 | Average target USD 110.81 |
One line in that table deserves flagging. In the June 2025 quarter, net income attributable to ordinary shareholders of RMB 30.75bn exceeded operating profit of RMB 25.79bn, which means non-operating items, principally interest and investment income on a very large cash pile, carried a meaningful share of the bottom line.
That gap is a reminder to read the operating profit line first. A headline earnings beat driven by treasury income tells you little about whether Temu’s unit economics are improving.
Why the dollar headline overstates the underlying growth
The single most common misreading of this print will involve currency. PDD reports in renminbi, most published consensus figures circulate in dollars, and the exchange rate has moved a long way in twelve months.
The currency arithmetic, spelled out
The year ago quarter’s RMB 103.98bn in revenue was converted at roughly 7.17 renminbi to the dollar, producing the USD 14.5bn base that dollar denominated growth rates are measured against. As of August 21, 2026, the dollar bought about 6.72 renminbi, a move of roughly 6% in the Chinese currency’s favour.
Run the consensus back through that rate and the picture changes. USD 17.13bn at 6.72 renminbi to the dollar is about RMB 115bn, which against RMB 103.98bn a year earlier is growth of roughly 11%, not 18%.
The exact figure will depend on the noon buying rate PDD fixes at June 30, 2026, which the company has not disclosed and which will differ from the August spot rate. The direction of the adjustment, however, is not in doubt.
What an 11% yuan basis print would actually mean
Eleven percent would be almost exactly in line with the 11% growth PDD reported in the March quarter. In other words, the consensus that looks like reacceleration in dollars looks like stability in renminbi.
That distinction changes the story a reader takes away. A business reaccelerating into a tariff shock is a very different proposition from one holding a steady growth rate while its cost base rises.
What the March quarter told us about the cost base
The first quarter of 2026 is the most useful baseline available, and it was not a comfortable one. Total revenues reached RMB 106.2bn, about USD 15.4bn at the RMB 6.8980 rate used in that release, up 11% from RMB 95.7bn a year earlier.
Profit moved the other way. Net income attributable to ordinary shareholders fell 15% to RMB 12.5bn, and the non-GAAP measure fell 17% to RMB 14.1bn. Analysts polled by FactSet had modelled roughly RMB 109.95bn of revenue and RMB 22.80bn of net profit, so the quarter missed on both lines, and the shares fell on the day.
Where the mix rotated
The two revenue lines diverged. Online marketing services and other revenue came in at RMB 49.9bn, essentially flat against RMB 48.7bn, while transaction services revenue rose 20% to RMB 56.3bn from RMB 47.0bn.
Read plainly, the high margin domestic advertising engine stalled while the lower margin transaction line, which carries the cross-border merchandise flow, did the growing. That is a mix shift that mechanically compresses group margin even when revenue grows.
Where the margin went
Total costs of revenues rose 15% to RMB 46.9bn from RMB 40.9bn, outpacing the 11% revenue increase. Sales and marketing expenses were roughly flat at RMB 33.8bn against RMB 33.4bn, which is consistent with the sharp pullback in Temu’s overseas advertising discussed below.
Reported operating profit still rose, by 22% on a GAAP basis to RMB 19.6bn and 15% on a non-GAAP basis to RMB 21.1bn, against a weak comparable. The fall in net income despite rising operating profit points to non-operating items moving against the company year on year.
| Line item (Q1 2026) | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Total revenues | RMB 106.2bn | RMB 95.7bn | +11% |
| Online marketing services and other | RMB 49.9bn | RMB 48.7bn | Broadly flat |
| Transaction services | RMB 56.3bn | RMB 47.0bn | +20% |
| Total costs of revenues | RMB 46.9bn | RMB 40.9bn | +15% |
| Sales and marketing expenses | RMB 33.8bn | RMB 33.4bn | Broadly flat |
| Operating profit (GAAP) | RMB 19.6bn | Not restated here | +22% |
| Net income to ordinary shareholders | RMB 12.5bn | RMB 14.7bn | minus 15% |
| Non-GAAP net income | RMB 14.1bn | RMB 16.9bn | minus 17% |
Management framed the quarter as deliberate. Co-chairman and co-chief executive Lei Chen said in the release that the period marked “the start of deep transformations in our business, our internal processes and our organization”, while co-chairman and co-chief executive Jiazhen Zhao identified supply chain investment as the core strategic priority going forward.
Those are not the words of a company planning to defend margin in the near term. They set up a June quarter in which investors should expect spending to remain elevated.
How the tariff regime rebuilt Temu’s US economics
Temu’s original proposition rested on a customs rule rather than a supply chain advantage. Parcels valued below USD 800 entered the United States duty free and with limited inspection, which let a Chinese warehouse ship directly to an American doorstep at a landed cost domestic retailers could not match.
That rule is gone. The exemption was withdrawn for commercial shipments in August 2025, and US Customs and Border Protection moved to an indefinite suspension of the USD 800 administrative exemption in June 2026, requiring informal or formal entry for effectively all inbound goods. The Court of International Trade has since upheld the repeal of the de minimis exemption, closing the most obvious route back.
The June quarter is therefore the first full three month period in which every Temu parcel entering the United States carried duty and a customs entry. The March quarter was already largely tariffed, but the year ago comparable was not, which is why the year on year cost of revenues line is worth close reading.
There is a timing nuance worth holding on to. The duty free exemption for China origin goods was withdrawn part way through the June 2025 quarter, so the year ago comparable contains a stretch of untariffed trading, which flatters this year’s cost growth comparison rather than the reverse.
From direct parcels to local stock
Temu’s answer has been to move inventory rather than to absorb duty. The company pushed hard into local fulfilment, prioritising US based sellers and domestic warehouses, and industry estimates suggest US warehouses now handle roughly 20 to 25% of Temu’s US volume, with the remainder still routed through direct shipping or semi-managed sellers.
A semi-managed programme now sits alongside the original fully managed model. Under it, sellers take on more responsibility for inventory, pricing and logistics, which shifts working capital off Temu’s balance sheet but also reduces its control over price. This is the same migration from direct parcels to domestic fulfilment that has reshaped every China to US marketplace this year.
The accounting consequence is subtle but real. Fully managed merchandise flows through transaction services revenue at low margin, while a semi-managed marketplace commission is smaller in absolute revenue but carries a far better margin. A shift in that mix can suppress reported revenue growth while improving profitability, or the reverse.
The advertising retreat
The clearest evidence of a changed strategy is in media buying. Temu cut US advertising spend across nearly every major platform through the first five months of 2026, according to spend tracking data reported this year.
The scale of the pullback is striking. Temu went from being the single largest advertiser on X between January and May 2025 to roughly the fifty-first largest over the same months in 2026, a reduction of about 95%. Spend fell approximately 74% on YouTube, 74% on TikTok, 46% on Snapchat and 10% on Instagram.
Crucially, the user base did not collapse. US monthly active users rose about 21% year on year over that period, with monthly US downloads holding in a band of roughly 5.5 to 6.8 million. Claire Holubowskyj, senior research analyst at Enders Analysis, has described the strategy as transitioning toward efficiency and user retention rather than raw acquisition.
For the June quarter, that combination points to lower sales and marketing intensity than the market once assumed, partially offsetting the duty burden. The March quarter’s flat sales and marketing line is consistent with exactly that.
Europe delivers the second shock, and it lands next quarter
Anyone reading this print as the end of the regulatory cost story will be reading it too early. The European Union removed its own EUR 150 customs duty relief threshold with effect from July 1, 2026, applying a fixed EUR 3 customs duty to small consignments below that value. The Council gave final legislative approval in February 2026.
July 1 falls one day after the quarter PDD is about to report. The EU change therefore appears in third quarter numbers, not these, and any commentary on the call will be forward looking rather than reflected in the figures.
A separate EU-wide handling fee of roughly EUR 2 per parcel remains under discussion within the customs reform package and the multiannual financial framework, with November 2026 floated as a target. That measure is distinct from the EUR 3 duty and is not yet settled, and there are reasonable grounds to expect the EU parcel handling fee to slip past November.
| Regime element | United States | European Union |
|---|---|---|
| Former low value threshold | USD 800 de minimis | EUR 150 customs duty relief |
| Current status | Indefinitely suspended since June 24, 2026 | Removed with effect from July 1, 2026 |
| What applies now | Informal or formal entry, full duty, 10 digit classification | Fixed EUR 3 customs duty on consignments below EUR 150 |
| Postal channel | New entry process for postal shipments at or below USD 2,500 since July 24, 2026 | Handled within the general parcel regime |
| Next milestone | Entry Type 13 voluntary electronic test from September 22, 2026 | Approximately EUR 2 handling fee still under negotiation |
| First quarter affected | Fully reflected in Q2 2026 | First reflected in Q3 2026 |
Read together, the two tables above describe the real question facing PDD. The US cost shock is now visible in reported numbers, and the European one is visible only in guidance and tone.
The regulatory calendar wrapped around this print
Earnings day is not the only date in Temu’s diary this week. The European Commission fined Temu EUR 200m under the Digital Services Act after finding that the platform failed to properly identify, analyse and assess the systemic risks of illegal products reaching EU consumers.
The Commission’s criticism was specific. It found that Temu’s 2024 risk assessment leaned on generic information about the e-commerce sector rather than evidence drawn from Temu’s own service, which is a finding about methodology as much as about outcomes.
What happens on August 28
Temu must provide the Commission with an action plan by August 28, 2026 setting out how it will remedy the identified breaches. That is four days after the earnings release, which puts a live compliance obligation directly into the window in which management is talking to investors. The August 28 DSA deadline is the nearer term regulatory risk of the two.
Temu is not alone. According to the Commission, Shein, Amazon and AliExpress have all been questioned about how they tackle illegal products, Shein faces formal proceedings covering illegal product sales and recommender system transparency, and AliExpress reached binding commitments in June 2025 that avoided a fine.
The pattern across those cases is that platforms which engage early with binding commitments have fared better than those that contest findings. Whether Temu’s action plan follows that template is a question analysts are entitled to ask on Monday, even if management declines to answer it.
The domestic backdrop is not quiet either
Temu absorbs most of the attention, but Pinduoduo’s home market accounts for the larger share of group revenue, and it has been the site of an expensive competitive war. Alibaba, JD.com and Meituan poured cumulative subsidies estimated at between RMB 80bn and RMB 100bn into food delivery and instant retail over roughly the past year.
PDD has largely stayed out of meal delivery, which spared it the worst of that spending. It has not, however, escaped the demand consequences, because subsidised instant retail pulls discretionary spending toward rival apps.
Regulators have since intervened. China’s State Administration for Market Regulation flagged the delivery price war as a priority enforcement case in late January 2026 and summoned platforms again in February, after which consumer subsidies were substantially wound down.
There is a second domestic pressure that rarely gets named. Merchant support programmes, under which PDD reduces fees and funds seller subsidies, have been an explicit part of company statements for several quarters, and they sit in the cost base rather than in marketing.
Those programmes are defensible strategy, because merchant churn is the main structural risk to a low price marketplace. They also mean that a competitor’s subsidy war raises PDD’s costs even when PDD declines to fight it directly.
The flat online marketing services line in the March quarter is the number that captures this pressure best. Domestic advertising revenue is the most direct read on Pinduoduo merchant confidence, and it did not grow.
What to listen for on the call
The release itself will settle the revenue and profit lines within seconds. The call is where the quarter is actually interpreted, and a short list of items will carry most of the information.
- The revenue mix. Whether transaction services growth remains near 20% while online marketing services stays flat, or whether the domestic line reaccelerates.
- Cost of revenues as a share of revenue. This is the cleanest available proxy for landed duty costs flowing through the fully managed model.
- Sales and marketing discipline. A second consecutive flat quarter would confirm the advertising retreat is structural rather than tactical.
- Any qualitative comment on Europe. Management does not guide, but a remark about EU duty costs would be the first indication of third quarter pressure.
- Supply chain capital allocation. Jiazhen Zhao named this the core priority, so the scale and pace of that spending is the main margin variable for the next several quarters.
Investors can follow the call through the company’s investor events page, where the webcast and replay are hosted (PDD Holdings investor events).
What the print means for sellers, rivals and shoppers
For third party sellers, the semi-managed shift is the number that matters. If Temu confirms continued migration toward locally stocked, seller-managed inventory, then the platform is asking merchants to fund the working capital that duty rules made unavoidable.
For competing retailers, the relevant question is whether Temu’s price gap has narrowed durably. Duties and domestic warehousing raised landed costs across the board, which has closed part of the distance between Temu and incumbents such as Amazon, Walmart Marketplace and Shein, though the comparison varies sharply by category, as the head to head between Temu and Shein illustrates.
For shoppers, the practical effect is already visible. Prices have risen and assortment has narrowed in several categories as duty replaced the old exemption, and the EU change from July will produce a similar, smaller adjustment for European buyers during the second half.
For the equity itself, the setup is unusual. A stock trading at USD 86.94 against an average target near USD 110.81 implies the market expects a re-rating, while the flat one month performance and the split analyst ratings suggest few investors want to underwrite that view before seeing the numbers.
The realistic range of outcomes
Three scenarios cover most of the probability. A revenue print near USD 17.1bn with cost of revenues growing no faster than revenue would be read as evidence that the tariff shock has been absorbed, and would likely support the shares.
A revenue print in line but with cost of revenues again outpacing revenue, as in the March quarter, would confirm that growth is being bought rather than earned. That is the outcome the flat share price over the past month appears to be discounting.
A revenue miss combined with rising costs would be the difficult case, because it would remove the argument that heavy investment is at least purchasing volume. Given that the March quarter already missed on both revenue and profit, this scenario cannot be dismissed.
Whichever lands, the currency point should frame the reaction. Readers who compare a dollar headline against a dollar consensus without adjusting for a 6% move in the renminbi will draw the wrong conclusion about the underlying business.
Frequently asked questions
When exactly does PDD Holdings report second quarter 2026 results?
Before US markets open on Monday, August 24, 2026, according to the company’s August 17 announcement. Management holds a conference call at 7:30 a.m. Eastern the same morning, webcast on the PDD Holdings investor events page.
What are analysts expecting?
Consensus revenue sits near USD 17.13bn, with some compilations closer to USD 16.94bn. Earnings per American depositary share estimates range from about USD 2.72 to USD 2.85, and the USD 2.85 figure would represent a decline of roughly 7% against the year ago quarter.
Does PDD Holdings break out Temu separately?
No. The company reports online marketing services and other revenue alongside transaction services revenue, and does not disclose Temu as a segment. Analysts infer Temu’s trajectory mainly from the transaction services line, which carries the fully managed cross-border merchandise flow.
Why does the exchange rate matter so much for this print?
PDD reports in renminbi while most consensus figures circulate in dollars. The year ago quarter was converted at roughly 7.17 renminbi to the dollar, and the rate stood near 6.72 in late August 2026, so a headline dollar growth rate of about 18% corresponds to roughly 11% in renminbi.
How did the tariff changes affect Temu?
The removal of the USD 800 de minimis exemption ended duty free entry for low value parcels, raising Temu’s landed costs and forcing a shift toward US warehousing and semi-managed sellers. Industry estimates put US warehouse handling at roughly 20 to 25% of Temu’s US volume in 2026.
What changed in the European Union, and when does it show up?
The EU removed its EUR 150 customs duty relief threshold from July 1, 2026, applying a fixed EUR 3 duty to consignments below that value after the Council gave final approval in February 2026. Because the change took effect one day after the quarter end, it will first appear in third quarter results.
What is the August 28 deadline about?
The European Commission fined Temu EUR 200m under the Digital Services Act for failing to properly assess the systemic risk of illegal products on its platform. Temu must submit an action plan setting out remedies by August 28, 2026, four days after the earnings release.
Why did Temu cut its US advertising spend so sharply?
Spend tracking data for January to May 2026 shows reductions of roughly 95% on X, 74% on YouTube, 74% on TikTok, 46% on Snapchat and 10% on Instagram against the same months of 2025. Analysts attribute the shift to a focus on retention and efficiency once tariffs removed the price advantage that made mass acquisition economic.
What single number best shows whether the quarter was good?
Cost of revenues as a percentage of total revenue. In the March quarter it grew 15% against 11% revenue growth, which is why net income fell despite higher sales, and a repeat would indicate the duty burden is still not absorbed.