Pinduoduo Q1 Earnings Preview: Accelerated Growth on Low Base for Temu

Pinduoduo is set to announce its Q1 2026 financial results on Wednesday, and driven by the low base effect of Temu and the robust growth of its domestic business, the company is expected to achieve a significant rebound in profits.

Goldman Sachs estimates that Pinduoduo's revenue for the first quarter will grow by 13% year-on-year, with adjusted EBIT growing by 37% to 25 billion yuan, benefiting from the low base of the same period last year. Goldman Sachs estimates that online marketing revenue for the first quarter will be 51.9 billion yuan (year-on-year +7%), and transaction commission revenue will be 55.9 billion yuan (year-on-year +19%), with the group's adjusted net profit at 26.2 billion yuan (year-on-year +55%).

Citi estimates that the total revenue for the first quarter will grow by 13% to 108.1 billion yuan, which is close to Bloomberg's consensus expectation of 108.6 billion yuan. Among them, online marketing service revenue will grow by 4.9% year-on-year to 51.1 billion yuan, and transaction service revenue will grow by 21% year-on-year to 57 billion yuan, with Temu contributing about 44.95 billion yuan (year-on-year +32%), benefiting from the low base affected by tariffs in the first quarter of last year. Citi estimates that the adjusted net profit will grow by 34% year-on-year to 22.7 billion yuan (21% profit margin), which is lower than the market consensus expectation of 24.6 billion yuan.

Morgan Stanley's expectation for the first quarter's revenue is 486.8 billion yuan (for the whole year), with the corresponding ModelWare net profit of 110.3 billion yuan.

Investors should pay close attention to, Temu's GMV and revenue outlook, especially the progress of business model adjustments in the context of the exit from the small-value duty-free policy and tariff changes; the driving force behind domestic Pinduoduo GMV growth and the implementation of the "New Pinmu" plan; the impact of regulatory fines on the cost side and subsequent compliance investments; the pace of supply chain and rural logistics investment; the progress of AI advertising technology and AI intelligent entity applications; and whether there will be adjustments to shareholder return policies against the backdrop of strong free cash flow.

Temu: Strong in Europe, Stable in the US

The global user data of Temu is a major focus in this round of forward-looking analysis.

Citi, citing Sensor Tower data, points out that as of March 2026, Temu's global iOS monthly active users reached 193 million, a year-on-year increase of 13%; Android monthly active users reached 331 million, a year-on-year increase of 16%. The monthly active users in the UK and major EU markets maintain a double-digit year-on-year increase of 20%-40%, indicating strong user demand in the region, while the US market monthly active users are basically flat.

Morgan Stanley's April data shows that Temu's global monthly active users grew by 11% year-on-year to 511 million, a sequential decrease of 2%. By region, the US monthly active users grew by 36% year-on-year (low base last year due to the cancellation of duty-free for small packages), Europe grew by 11% year-on-year, and Latin America decreased by 1% year-on-year. Global daily active users grew by 10% year-on-year to 86.1 million, with the US growing by 27% year-on-year and Europe by 15%. However, global monthly downloads decreased by 37% year-on-year to 25.2 million, with both Europe and Latin America decreasing by 50%, while the US saw a significant increase of 80% due to the low base.

Morgan Stanley also cited its AlphaWise consumer survey, pointing out that the proportion of Temu shoppers in the US has rebounded from the low point in 2025, with 21% of respondents saying they have shopped on Temu in the past three months, the highest level since the end of 2024.

Citi, citing Bloomberg tracking data, shows that Temu's US sales in the first quarter were $140.8 million, a sequential decrease of 4%, a year-on-year decrease of 6%,