Hello Group Inc. Announces Unaudited Financial Results for the First Quarter of 2024

Rhea-AI Summary

Hello Group (NASDAQ: MOMO) announced its unaudited financial results for Q1 2024, showing a 9.2% YoY revenue decline to RMB2,560.4 million (US$354.6 million).

Net income plummeted to RMB5.2 million (US$0.7 million) from RMB390.3 million last year, attributed to a significant withholding tax accrual on undistributed earnings.

Monthly Active Users on the Tantan app fell to 13.7 million from 19.5 million, and paying users on the Momo app dropped to 7.1 million from 7.8 million YoY.

Despite a revenue decrease, Hello Group made operational adjustments, reducing costs and expenses by 12.4% YoY to RMB2,120.0 million (US$293.6 million).

Income from operations was RMB460.3 million (US$63.8 million), up slightly from RMB436.2 million in the previous year. However, net income per ADS dropped significantly from RMB1.96 to RMB0.03.

Looking forward, Hello Group expects Q2 2024 revenues between RMB2.65 billion to RMB2.75 billion, indicating a 12.4%-15.5% YoY decline.

Positive

• Income from operations increased to RMB460.3 million (US$63.8 million) from RMB436.2 million YoY.
• Income from operations for Tantan rose to RMB28.6 million (US$4.0 million) from RMB5.2 million YoY.
• Mobile marketing revenues increased by 26.2% to RMB26.6 million (US$3.7 million).
• Cash and cash equivalents grew to RMB15,115.8 million (US$2,093.5 million) as of March 31, 2024.
• The Company paid a special cash dividend of US$0.54 per ADS in March 2024.
• Hello Group's board extended the share repurchase program to June 30, 2026, increasing the total authorization to US$286.1 million.

Negative

• Net revenues decreased by 9.2% to RMB2,560.4 million (US$354.6 million).
• Net income attributable to Hello Group dropped significantly to RMB5.2 million (US$0.7 million) from RMB390.3 million YoY.
• Non-GAAP net income decreased to RMB59.9 million (US$8.3 million) from RMB471.9 million YoY.
• Monthly Active Users of Tantan fell to 13.7 million from 19.5 million YoY.
• Tantan's paying users declined to 1.1 million from 1.6 million YoY.
• Live video service revenues dropped by 13.3% to RMB1,238.5 million (US$171.5 million).
• Value-added service revenues decreased by 4.9% to RMB1,294.4 million (US$179.3 million).
• Mobile games revenues declined by 88.3% to RMB0.4 million (US$0.1 million).
• Net income per ADS fell drastically from RMB1.96 to RMB0.03.
• Income tax expenses surged to RMB557.6 million (US$77.2 million) from RMB122.6 million YoY.

Insights

Financial Analyst

Given the financial results from Hello Group Inc.’s first quarter of 2024, there are several concerning indicators for investors. Most notably, net revenues decreased by 9.2% year-over-year, highlighting declining performance. More critically, the net income plummeted to RMB5.2 million from RMB390.3 million, a stark reduction, which points to significant operational or market challenges. While costs and expenses have decreased by 12.4%, the reduction in income is primarily due to the accrual of withholding income tax on historical undistributed earnings, which is an important factor to consider for future profitability.

One positive note is the increase in cash reserves, although the special cash dividend and share repurchase program could be seen as a strategy to maintain shareholder confidence amidst declining revenues. The outlook for the second quarter of 2024 expects further declines, projecting a 12.4% to 15.5% decrease in net revenues year-over-year. This paints a rather cautious picture for potential investors, as the company is adjusting its operations and facing a challenging macro-economic environment.

Market Research Analyst

The user metrics for Hello Group Inc., particularly for its main applications Momo and Tantan, reveal troubling trends. The Monthly Active Users (MAU) on Tantan fell to 13.7 million in March 2024 from 19.5 million a year ago. This significant drop in engagement suggests that the company’s products are facing competitive pressure or failing to meet user expectations. The decline in paying users for both Momo and Tantan further accentuates these challenges. While the company is making efforts to improve its ecosystem and innovate its product offerings, it remains unclear whether these strategies will effectively counteract the adverse trends in user metrics.

The shift in revenue streams from live video services to newer standalone apps indicates an evolving business model which might take some time to stabilize. The proactive de-emphasizing of large-scale competition events and the pivot away from less dating-centric services are strategic shifts that could eventually yield positive results but present short-term revenue impacts.

BEIJING, May 28, 2024 /PRNewswire/ -- Hello Group Inc. (NASDAQ: MOMO) ("Hello Group" or the "Company"), a leading player in mainland China's online social networking space, today announced its unaudited financial results for the first quarter of 2024.  

First Quarter of 2024 Highlights

• Net revenues decreased by 9.2% year over year to RMB2,560.4 million (US$354.6 million*) in the first quarter of 2024.
• Net income attributable to Hello Group Inc. decreased to RMB5.2 million (US$0.7 million) in the first quarter of 2024, from RMB390.3 million in the same period of 2023.
• Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB59.9 million (US$8.3 million) in the first quarter of 2024, from RMB471.9 million in the same period of 2023, mainly due to the accrual of withholding income tax of RMB448.6 million (US$62.1 million) on historical undistributed earnings generated by our wholly-foreign owned enterprise ("WFOE").
• Diluted net income per American Depositary Share ("ADS") was RMB0.03 (US$0.00) in the first quarter of 2024, compared to RMB1.96 in the same period of 2023.
• Non-GAAP diluted net income per ADS (note 1) was RMB0.31 (US$0.04) in the first quarter of 2024, compared to RMB2.36 in the same period of 2023.
• Monthly Active Users ("MAU") on Tantan app were 13.7 million in March 2024, compared to 19.5 million in March 2023.
• For the Momo app total paying users was 7.1 million for the first quarter of 2024, compared to 7.8 million for the same period last year. Tantan had 1.1 million paying users for the first quarter of 2024 compared to 1.6 million from the year ago period.

"We have made steady progress in implementing our strategic priorities for Momo, Tantan, and our new endeavors since the beginning of the year," commented Yan Tang, Chairman and CEO of Hello Group. "Product innovation and our ability to leverage technological advancements have enabled Momo to play an important role in helping users discover new relationships and build meaningful interactions. This has laid a solid foundation for us to maintain user and revenue scale over the long term. I am also glad to see that our overseas team has accelerated the localization process to drive continued growth in the new endeavors. We look forward to delivering high quality social and entertainment services to a much broader user base global wise." 

* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rate solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB7.2203 to US$1.00, the effective noon buying rate for March 29, 2024 as set forth in the H.10 statistical release of the Federal Reserve Board.

First Quarter of 2024 Financial Results

Net revenues

Total net revenues were RMB2,560.4 million (US$354.6 million) in the first quarter of 2024, a decrease of 9.2% from RMB2,818.9 million in the first quarter of 2023.

Live video service revenues were RMB1,238.5 million (US$171.5 million) in the first quarter of 2024, a decrease of 13.3% from RMB1,429.3 million during the same period of 2023. The decrease was primarily attributable to our proactive operational adjustments to de-emphasise large scale competition events in the Momo app and a soft consumer sentiment in the current macro environment, and to a lesser degree, Tantan pivoting away from the less dating-centric live video service.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,294.4 million (US$179.3 million) in the first quarter of 2024, a decrease of 4.9% from RMB1,361.5 million during the same period of 2023. The decrease was primarily due to our product adjustments to improve Momo app's ecosystem as well as the impact of the macro economy on consumer sentiment, and to a lesser extent, the decline in Tantan's paying users. The decrease was partially offset by the rapid revenue growth from the new standalone apps.

Mobile marketing revenues were RMB26.6 million (US$3.7 million) in the first quarter of 2024, an increase of 26.2% from RMB21.1 million during the same period of 2023.

Mobile games revenues were RMB0.4 million (US$0.1 million) in the first quarter of 2024, a decrease of 88.3% from RMB3.7 million in the first quarter of 2023.

Net revenues from the Momo segment decreased from RMB2,510.1 million in the first quarter of 2023 to RMB2,318.9 million (US$321.2 million) in the first quarter of 2024, primarily due to the decrease in net revenues from value-added service and live video service on Momo app. The decrease was partially offset by the revenue growth of the new standalone apps. Net revenues from the Tantan segment decreased from RMB308.6 million in the first quarter of 2023 to RMB241.5 million (US$33.4 million) in the first quarter of 2024, mainly due to the decrease in net revenues from live video service, and to a lesser extent, the decrease from value-added service.

Cost and expenses

Cost and expenses were RMB2,120.0 million (US$293.6 million) in the first quarter of 2024, a decrease of 12.4% from RMB2,419.1 million in the first quarter of 2023. The decrease was primarily attributable to: (a) a decrease in revenue sharing with broadcasters related to live video service on Momo app and Tantan app, and a decrease in revenue sharing with virtual gift recipients of virtual gift service on Momo app. The decrease was partially offset by an increase in revenue sharing with virtual gift recipients for new standalone apps; (b) a decrease in salary expenses and share-based compensation expenses, due to our continuous optimization in personnel costs and the newly granted share options which had lower fair value; (c) a decrease in sales and marketing expenses due to less marketing and promotional spend on live video service and our strategy to trim inefficient channel marketing spend.

Non-GAAP cost and expenses (note 1) were RMB2,065.3 million (US$286.0 million) in the first quarter of 2024, a decrease of 11.6% from RMB2,337.4 million during the same period of 2023.

Income from operations

Income from operations was RMB460.3 million (US$63.8 million) in the first quarter of 2024, compared to RMB436.2 million during the same period of 2023. Income from operations of the Momo segment was RMB434.0 million (US$60.1 million) in the first quarter of 2024, which decreased from RMB435.0 million in the first quarter of 2023. Income from operations of the Tantan segment was RMB28.6 million (US$4.0 million) in the first quarter of 2024, which increased from RMB5.2 million in the first quarter of 2023.

Non-GAAP income from operations (note 1) was RMB515.0 million (US$71.3 million) in the first quarter of 2024, compared to RMB517.8 million during the same period of 2023. Non-GAAP income from operations of the Momo segment was RMB488.5 million (US$67.7 million) in the first quarter of 2024, which decreased from RMB507.5 million in the first quarter of 2023. Non-GAAP income from operations of the Tantan segment was RMB28.8 million (US$4.0 million) in the first quarter of 2024, compared to RMB14.5 million in the first quarter of 2023.  

Income tax expenses

Income tax expenses were RMB557.6 million (US$77.2 million) in the first quarter of 2024, compared to RMB122.6 million in the first quarter of 2023. In the first quarter of 2024, we accrued an income tax expenses of RMB109.0 million (US$15.1 million) associated with the profit generated in this quarter. Additionally, we accrued a withholding income tax of RMB448.6 million (US$62.1 million) associated with our WFOE's historical undistributed earnings for the potential remittance of earnings from our WFOE to its offshore parent company in the form of dividend distribution. Because we believe that we might continue to distribute the WFOE's undistributed earnings in the future to fund our demands in overseas business operations, payments of dividends, potential investments, etc, to be prudent, we accrued withholding tax on the total balance of undistributed earnings of our WFOE as of March 31, 2024. From the first quarter of 2024, dividends paid by our wholly foreign-owned subsidiary in the Chinese mainland to its offshore parent company in Hong Kong are qualified for the preferential withholding tax rate of 5% under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income, instead of the normal withholding tax rate of 10%.

Net income

Net income was RMB5.2 million (US$0.7 million) in the first quarter of 2024, compared to RMB389.5 million during the same period of 2023. Net loss of the Momo segment was RMB20.8 million (US$2.9 million) in the first quarter of 2024, compared to a net income of RMB389.0 million in the same period of 2023. Net income from the Tantan segment was RMB28.2 million (US$3.9 million) in the first quarter of 2024, compared to RMB4.5 million in the first quarter of 2023.

Non-GAAP net income (note 1) was RMB59.9 million (US$8.3 million) in the first quarter of 2024, compared to RMB471.1 million during the same period of 2023. Non-GAAP net income from the Momo segment was RMB33.7 million (US$4.7 million) in the first quarter of 2024, which decreased from RMB461.5 million in the first quarter of 2023. Non-GAAP net income of the Tantan segment was RMB28.4 million (US$3.9 million) in the first quarter of 2024, compared to RMB13.7 million in the first quarter of 2023.

Net income attributable to Hello Group Inc.

Net income attributable to Hello Group Inc. was RMB5.2 million (US$0.7 million) in the first quarter of 2024, compared to RMB390.3 million during the same period of 2023.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB59.9 million (US$8.3 million) in the first quarter of 2024, compared to RMB471.9 million during the same period of 2023.

Net income per ADS

Diluted net income per ADS was RMB0.03 (US$0.00) in the first quarter of 2024, compared to RMB1.96 in the first quarter of 2023.

Non-GAAP diluted net income per ADS (note 1) was RMB0.31 (US$0.04) in the first quarter of 2024, compared to RMB2.36 in the first quarter of 2023.

Cash and cash flow

As of March 31, 2024, the Company's cash, cash equivalents, short-term deposits, long-term deposits, short-term restricted cash and long-term restricted cash totaled RMB15,115.8 million (US$2,093.5 million), compared to RMB13,478.5 million as of December 31, 2023.

Net cash provided by operating activities in the first quarter of 2024 was RMB400.2 million (US$55.4 million), compared to RMB451.1 million in the first quarter of 2023.

Recent Development

Payment of a special cash dividend

In March 2024, Hello Group's board of directors declared a special cash dividend in the amount of US$0.54 per ADS, or US$0.27 per ordinary share. The cash dividend was paid on April 30, 2024 to shareholders of record at the close of business on April 12, 2024. The aggregate amount of cash dividends paid was US$98.9 million.

Share repurchase program

On June 7, 2022, Hello Group's board of directors authorized a share repurchase program under which the Company may repurchase up to US$200 million of its shares up to June 6, 2024 (the "Share Repurchase Program"). On March 14, 2024, Hello Group's board of directors approved to amend the Share Repurchase Program to (i) extend the term of the Share Repurchase Program up to June 30, 2026, and (ii) upsize the Share Repurchase Program so that the Company is authorized to, from time to time, acquire up to an aggregate of US$286.1 million worth of its shares in the form of ADSs and/or the ordinary shares of the Company in the open market and through privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations.

As of May 28, 2024, the Company has repurchased 22.3 million ADSs for US$122.6 million on the open market under Share Repurchase Program announced on June 7, 2022 and amended on March 14, 2024, at an average purchase price of US$5.48 per ADS.

Business Outlook

For the second quarter of 2024, the Company expects total net revenues to be between RMB2.65 billion to RMB2.75 billion, representing a decrease of 15.5% to 12.4% year over year. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.

Note 1: Non-GAAP measures

To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we, Hello Group, use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation.

Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures.

Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to the GAAP results. In addition, our calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Our non-GAAP information (including non-GAAP cost and operating expenses, income (loss) from operations, net income (loss), net income attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation. A limitation of using these non-GAAP financial measures is that share-based compensation has been and will continue to be for the foreseeable future significant recurring expenses in our results of operations. We compensate for such limitation by providing reconciliations of our non-GAAP measures to our U.S. GAAP measures. Please see the reconciliation tables at the end of this earnings release.

Conference Call

Hello Group's management will host an earnings conference call on Tuesday, May 28, 2024, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on May 28, 2024).

Participants can register for the conference call by navigating to:

https://s1.c-conf.com/diamondpass/10039014-cp8m51.html.

Upon registration, each participant will receive details for the conference call, including dial-in numbers, conference call passcode and a unique access PIN. Please dial in 10 minutes before the call is scheduled to begin.

A telephone replay of the call will be available after the conclusion of the conference call through June 4, 2024. The dial-in details for the replay are as follows:

U.S. / Canada: 1-855-883-1031

Hong Kong: 800-930-639

Passcode: 10039014

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of Hello Group's website at https://ir.hellogroup.com.

About Hello Group Inc.

We are a leading player in mainland China's online social networking space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions. Momo is a mobile application that connects people and facilitates social interactions based on location, interests and a variety of online recreational activities. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application. Tantan is designed to help its users find and establish romantic connections as well as meet interesting people. Starting from 2019, we have incubated a number of other new apps, such as Hertz, Soulchill, Duidui and Tietie, which target more niche markets and more selective demographics.

For investor and media inquiries, please contact:

Hello Group Inc.

Investor Relations
Phone: +86-10-5731-0538
Email: ir@hellogroup.com 

Christensen

In China
Ms. Xiaoyan Su
Phone: +86-10-5900-1548
E-mail: Xiaoyan.Su@christensencomms.com 

In U.S.

Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com 

Safe Harbor Statement

This news release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to our management quotes, our financial outlook for the second quarter of 2024, as well as the amount of, timing, methods and funding sources for repurchases of our shares under the share repurchase program.

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the first quarter of 2024 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the second quarter of 2024 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth.  Moreover, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers, the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, general economic conditions, and other factors.  For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission.

All information provided in this press release and in the attachments is as of the date of the press release. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, after the date of this release, except as required by law. Such information speaks only as of the date of this release.          

Hello Group Inc.
Unaudited Condensed Consolidated Statement of Operations
(All amounts in thousands, except share and per share data)
	Three months
	Ended March 31
	2023		2024		2024
	RMB		RMB		US$
Net revenues:
Live video service	1,429,340		1,238,541		171,536
Value-added service	1,361,469		1,294,376		179,269
Mobile marketing	21,071		26,595		3,683
Mobile games	3,699		432		60
Other services	3,279		476		66
Total net revenues	2,818,858		2,560,420		354,614
Cost and expenses:
Cost of revenues	(1,664,188)		(1,503,008)		(208,164)
Research and development	(236,803)		(192,191)		(26,618)
Sales and marketing	(379,786)		(293,431)		(40,640)
General and administrative	(138,298)		(131,381)		(18,196)
Total cost and expenses	(2,419,075)		(2,120,011)		(293,618)
Other operating income, net	36,394		19,906		2,757
Income from operations	436,177		460,315		63,753
Interest income	99,787		121,107		16,773
Interest expense	(10,415)		(23,698)		(3,282)
Other gain or loss, net	-		(9,245)		(1,280)
Income before income tax and share of (loss) income on equity method investments	525,549		548,479		75,964
Income tax expenses	(122,613)		(557,613)		(77,229)
Income (loss) before share of income on equity method investments	402,936		(9,134)		(1,265)
Share of (loss) income on equity method investments	(13,475)		14,318		1,983
Net income	389,461		5,184		718
Less: net loss attributable to non-controlling interest	(828)		-		-
Net income attributable to the shareholders of Hello Group Inc.	390,289		5,184		718
Net income per share attributable to ordinary shareholders
Basic	1.04		0.01		0.00
Diluted	0.98		0.01		0.00
Weighted average shares used in calculating net income per ordinary share
Basic	377,017,080		374,650,649		374,650,649
Diluted	409,102,277		389,278,806		389,278,806

 

	Hello Group Inc.
	Unaudited Condensed Consolidated Statement of Comprehensive Income
	(All amounts in thousands, except share and per share data)
		Three months
		Ended March 31
		2023			2024			2024
		RMB			RMB			US$
	Net income	389,461			5,184			718
	Other comprehensive income, net of tax:
	Foreign currency translation adjustment	2,181			54,894			7,603
	Comprehensive income	391,642			60,078			8,321
	Less: comprehensive (loss) income attributed to the non-controlling interest	(1,670)			3,084			427
	Comprehensive income attributable to Hello Group Inc.	393,312			56,994			7,894

 

 

Hello Group Inc.
Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands, except share and per share data)
	December 31		March 31		March 31
	2023		2024		2024
	RMB		RMB		US$
Assets
Current assets
Cash and cash equivalents	5,620,466		6,023,224		834,207
Short-term deposits	1,270,626		1,129,454		156,428
Restricted cash	10,147		1,504,307		208,344
Accounts receivable, net of allowance for doubtful accounts of RMB12,780 and RMB12,497 as of December 31, 2023 and March 31, 2024, respectively	201,517		189,561		26,254
Amounts due from related parties	7,258		-		-
Prepaid expenses and other current assets	723,364		823,251		114,019
Total current assets	7,833,378		9,669,797		1,339,252
Long-term deposits	3,924,975		3,805,075		526,997
Long-term restricted cash	2,652,299		2,653,744		367,539
Right-of-use assets, net	109,572		116,607		16,150
Property and equipment, net	659,033		688,699		95,384
Intangible assets, net	17,086		15,806		2,189
Rental deposits	12,962		13,766		1,907
Long-term investments	786,911		710,557		98,411
Amounts due from RPT-non current	20,000		-		-
Other non-current assets	180,052		200,649		27,790
Deferred tax assets	31,741		34,240		4,742
Total assets	16,228,009		17,908,940		2,480,361
Liabilities and equity
Current liabilities
Accounts payable	616,681		604,398		83,711
Deferred revenue	442,805		459,797		63,681
Accrued expenses and other current liabilities	630,617		564,205		78,141
Amounts due to related parties	4,314		-		-
Lease liabilities due within one year	60,008		66,136		9,160
Income tax payable	94,719		100,756		13,955
Deferred consideration in connection with business acquisitions	27,261		27,723		3,840
Long-term borrowings, current portion	215,615		217,094		30,067
Dividends payable	-		714,120		98,904
Short-term borrowings	-		1,334,664		184,849
Total current liabilities	2,092,020		4,088,893		566,308
Deferred tax liabilities	24,987		391,502		54,222
Convertible Senior Notes	19,571		19,920		2,759
Long-term borrowings	1,938,385		1,938,169		268,433
Lease liabilities	52,171		52,487		7,269
Other non-current liabilities	114,085		139,721		19,351
Total liabilities	4,241,219		6,630,692		918,342
Shareholder's equity (i)	11,986,790		11,278,248		1,562,019
Total liabilities and shareholder's equity	16,228,009		17,908,940		2,480,361
(i): As of March 31, 2024, the number of ordinary shares outstanding was 370,162,906.

 

Hello Group Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(All amounts in thousands, except share and per share data)
	Three months
	Ended March 31
	2023		2024		2024
	RMB		RMB		US$
Cash flows from operating activities:
Net income	389,461		5,184		718
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	22,844		14,310		1,982
Amortization of intangible assets	1,279		1,279		177
Share-based compensation	81,657		54,670		7,572
Share of loss (income) on equity method investments	13,475		(14,318)		(1,983)
Loss on long-term investments	-		9,245		1,280
Gain or loss on disposal of property and equipment	67		258		36
Provision of loss on receivable and other assets	9,182		1,776		246
Changes in operating assets and liabilities:
Accounts receivable	(548)		10,980		1,521
Prepaid expenses and other current assets	24,352		(9,677)		(1,340)
Amounts due from related parties	55		-		-
Rental deposits	-		(802)		(111)
Deferred tax assets	440		(2,498)		(346)
Other non-current assets	(7,485)		(7,597)		(1,052)
Accounts payable	20,379		(17,454)		(2,417)
Income tax payable	(6,393)		6,036		836
Deferred revenue	(8,811)		16,674		2,309
Accrued expenses and other current liabilities	(132,733)		(56,800)		(7,867)
Amount due to related parties	3,169		-		-
Deferred tax liabilities	34,120		365,011		50,553
Other non-current liabilities	6,564		23,893		3,309
Net cash provided by operating activities	451,074		400,170		55,423
Cash flows from investing activities:
Purchase of property and equipment	(10,234)		(44,176)		(6,118)
Purchase of short-term deposits	(497,342)		-		-
Cash received on maturity of short-term deposits	900,000		300,000		41,550
Purchase of long-term deposits	-		(718,860)		(99,561)
Cash received on maturity of long-term deposits	-		718,860		99,561
Cash received from sales of long-term investment	-		2,000		277
Other investing activities	738		385		53
Net cash provided by investing activities	393,162		258,209		35,762
Cash flows from financing activities:
Proceeds from exercise of share options	3		11		2
Payment in relation to the share repurchase program	(3,237)		(112,261)		(15,548)
Repurchase of subsidiary's share options	(1,539)		-		-
Proceeds from short-term borrowings	-		1,331,635		184,429
Repayment of long-term borrowings	-		(215)		(30)
Payment for redemption of convertible bonds	(478,786)		-		-
Net cash (used in) provided by financing activities	(483,559)		1,219,170		168,853
Effect of exchange rate changes	(9,426)		20,814		2,882
Net increase in cash and cash equivalents	351,251		1,898,363		262,920
Cash, cash equivalents and restricted cash at the beginning of period	5,198,601		8,282,912		1,147,170
Cash, cash equivalents and restricted cash at the end of period	5,549,852		10,181,275		1,410,090

 

	Hello Group Inc.
	Reconciliation of Non-GAAP financial measures to comparable GAAP measures
	(All amounts in thousands, except per share data)
	1.	Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures.
		Three months				Three months				Three months
		Ended March 31, 2023				Ended March 31, 2024				Ended March 31, 2024
		GAAP	Share-based compensation	Non-GAAP		GAAP	Share-based compensation	Non-GAAP		GAAP	Share-based compensation	Non-GAAP
		RMB	RMB	RMB		RMB	RMB	RMB		US$	US$	US$
	Cost of revenues	(1,664,188)	1,635	(1,662,553)		(1,503,008)	1,882	(1,501,126)		(208,164)	261	(207,903)
	Research and development	(236,803)	22,372	(214,431)		(192,191)	8,786	(183,405)		(26,618)	1,217	(25,401)
	Sales and marketing	(379,786)	7,746	(372,040)		(293,431)	6,117	(287,314)		(40,640)	847	(39,793)
	General and administrative	(138,298)	49,904	(88,394)		(131,381)	37,885	(93,496)		(18,196)	5,247	(12,949)
	Cost and operating expenses	(2,419,075)	81,657	(2,337,418)		(2,120,011)	54,670	(2,065,341)		(293,618)	7,572	(286,046)
	Income from operations	436,177	81,657	517,834		460,315	54,670	514,985		63,753	7,572	71,325
	Net income attributable to Hello Group Inc.	390,289	81,657	471,946		5,184	54,670	59,854		718	7,572	8,290

 

Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
	Three months
	Ended March 31, 2024
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Net revenues:
Live video service	1,150,844		87,697		-		1,238,541		171,536
Value-added service	1,149,285		145,091		-		1,294,376		179,269
Mobile marketing	17,893		8,702		-		26,595		3,683
Mobile games	432		-		-		432		60
Other services	434		-		42		476		66
Total net revenues	2,318,888		241,490		42		2,560,420		354,614
Cost and expenses (ii):
Cost of revenues	(1,392,824)		(110,184)		-		(1,503,008)		(208,164)
Research and development	(150,861)		(41,330)		-		(192,191)		(26,618)
Sales and marketing	(236,659)		(54,482)		(2,290)		(293,431)		(40,640)
General and administrative	(123,752)		(7,591)		(38)		(131,381)		(18,196)
Total cost and expenses	(1,904,096)		(213,587)		(2,328)		(2,120,011)		(293,618)
Other operating income	19,158		724		24		19,906		2,757
Income (loss) from operations	433,950		28,627		(2,262)		460,315		63,753
Interest income	120,958		147		2		121,107		16,773
Interest expense	(23,698)		-		-		(23,698)		(3,282)
Other gain or loss, net	(9,245)		-		-		(9,245)		(1,280)
Income (loss) before income tax and share of income on equity method investments	521,965		28,774		(2,260)		548,479		75,964
Income tax expenses	(557,079)		(534)		-		(557,613)		(77,229)
(Loss) income before share of income on equity method investments	(35,114)		28,240		(2,260)		(9,134)		(1,265)
Share of income on equity method investments	14,318		-		-		14,318		1,983
Net (loss) income	(20,796)		28,240		(2,260)		5,184		718
(ii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three months
	Ended March 31, 2024
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	1,878		4		-		1,882		261
Research and development	8,638		148		-		8,786		1,217
Sales and marketing	6,117		-		-		6,117		847
General and administrative	37,874		11		-		37,885		5,247
Total cost and expenses	54,507		163		-		54,670		7,572

 

 

						Hello Group Inc.
						Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report
						(All amounts in thousands, except share and per share data)
		Three months
		Ended March 31, 2024
		Momo		Tantan		QOOL		Total		Total
		RMB		RMB		RMB		RMB		US$
	Income (loss) from operations	433,950		28,627		(2,262)		460,315		63,753
	Share-based compensation	54,507		163		-		54,670		7,572
	Non-GAAP income (loss) from operations	488,457		28,790		(2,262)		514,985		71,325
	Net (loss) income	(20,796)		28,240		(2,260)		5,184		718
	Share-based compensation	54,507		163		-		54,670		7,572
	Non-GAAP net income (loss)	33,711		28,403		(2,260)		59,854		8,290

   

 

Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
	Three months
	Ended March 31, 2023
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$[1]
Net revenues:
Live video service	1,289,718		139,622		-		1,429,340		208,128
Value-added service	1,193,544		167,925		-		1,361,469		198,246
Mobile marketing	20,021		1,050		-		21,071		3,068
Mobile games	3,699		-		-		3,699		539
Other services	3,137		-		142		3,279		477
Total net revenues	2,510,119		308,597		142		2,818,858		410,458
Cost and expenses (iii):
Cost of revenues	(1,500,531)		(163,114)		(543)		(1,664,188)		(242,325)
Research and development	(169,308)		(67,495)		-		(236,803)		(34,481)
Sales and marketing	(312,640)		(65,852)		(1,294)		(379,786)		(55,301)
General and administrative	(128,078)		(7,746)		(2,474)		(138,298)		(20,138)
Total cost and expenses	(2,110,557)		(304,207)		(4,311)		(2,419,075)		(352,245)
Other operating income, net	35,478		854		62		36,394		5,299
Income (loss) from operations	435,040		5,244		(4,107)		436,177		63,512
Interest income	99,531		204		52		99,787		14,530
Interest expense	(10,415)		-		-		(10,415)		(1,517)
Income (loss) before income tax and share of income on equity  method investments	524,156		5,448		(4,055)		525,549		76,525
Income tax expenses	(121,642)		(971)		-		(122,613)		(17,854)
Income (loss) before share of income on equity method investments	402,514		4,477		(4,055)		402,936		58,671
Share of loss on equity method investments	(13,475)		-		-		(13,475)		(1,962)
Net income (loss)	389,039		4,477		(4,055)		389,461		56,709
(iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three months
	Ended March 31, 2023
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	1,618		17		-		1,635		238
Research and development	13,170		9,202		-		22,372		3,258
Sales and marketing	7,741		5		-		7,746		1,128
General and administrative	49,896		8		-		49,904		7,267
Total cost and expenses	72,425		9,232		-		81,657		11,891
[1] All translations from RMB to U.S. dollars are made at a rate of RMB6.8676 to US$1.00, the effective noon buying rate for March 31, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

					Hello Group Inc.
					Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report
					(All amounts in thousands, except share and per share data)
	Three months
	Ended March 31, 2023
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Income (loss) from operations	435,040		5,244		(4,107)		436,177		63,512
Share-based compensation	72,425		9,232		-		81,657		11,891
Non-GAAP income (loss) from operations	507,465		14,476		(4,107)		517,834		75,403
Net income (loss)	389,039		4,477		(4,055)		389,461		56,709
Share-based compensation	72,425		9,232		-		81,657		11,891
Non-GAAP net income (loss)	461,464		13,709		(4,055)		471,118		68,600

 

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SOURCE Hello Group Inc.

FAQ

What was Hello Group's revenue for Q1 2024?

Hello Group's revenue for Q1 2024 was RMB2,560.4 million (US$354.6 million), a 9.2% decrease YoY.

How much did Hello Group's net income drop in Q1 2024?

Hello Group's net income dropped to RMB5.2 million (US$0.7 million) from RMB390.3 million YoY.

What were the Monthly Active Users on the Tantan app in March 2024?

The Monthly Active Users on the Tantan app were 13.7 million in March 2024, down from 19.5 million in March 2023.

How many paying users did the Momo app have in Q1 2024?

The Momo app had 7.1 million paying users in Q1 2024, down from 7.8 million YoY.

What caused the decline in Hello Group's non-GAAP net income for Q1 2024?

The decline in non-GAAP net income for Q1 2024 was caused by a significant withholding tax accrual on undistributed earnings.

What is the revenue outlook for Hello Group in Q2 2024?

Hello Group expects its Q2 2024 revenues to be between RMB2.65 billion to RMB2.75 billion, indicating a 12.4%-15.5% YoY decline.

Did Hello Group declare any dividends in Q1 2024?

Yes, Hello Group declared a special cash dividend of US$0.54 per ADS in March 2024.

What changes were made to Hello Group's Share Repurchase Program in 2024?

Hello Group extended the share repurchase program to June 30, 2026, and increased the total authorization to US$286.1 million.