Hello Group Inc. Announces Unaudited Financial Results for the Second Quarter of 2023

Rhea-AI Summary

Hello Group Inc. announces unaudited financial results for Q2 2023. Net revenues increased by 0.9% YoY to RMB3,137.7 million. Net income attributable to Hello Group Inc. increased to RMB568.4 million. Non-GAAP net income attributable to Hello Group Inc. increased to RMB632.1 million. Diluted net income per ADS was RMB2.82. Non-GAAP diluted net income per ADS was RMB3.14. MAU on Tantan application decreased to 17.3 million. Total paying users for Momo app decreased to 7.9 million. Tantan had 1.4 million paying users. Net revenues for first half of 2023 decreased by 4.8% YoY to RMB5,956.5 million. Net income attributable to Hello Group Inc. was RMB958.7 million. Non-GAAP net income attributable to Hello Group Inc. was RMB1,104.1 million. Diluted net income per ADS was RMB4.78. Non-GAAP diluted net income per ADS was RMB5.49.

Positive

• Hello Group Inc. reported an increase in net revenues and net income for Q2 2023. Non-GAAP net income also showed growth. The company's diluted net income per ADS improved compared to the same period last year. The financial performance indicates positive progress for Hello Group Inc.

Negative

• MAU on Tantan application decreased in Q2 2023 compared to the previous year. Total paying users for Momo app also decreased. Net revenues for the first half of 2023 decreased compared to the same period last year.

BEIJING, Aug. 31, 2023 /PRNewswire/ -- Hello Group Inc. (NASDAQ: MOMO) ("Hello Group" or the "Company"), a leading mobile social and entertainment platform in China, today announced its unaudited financial results for the second quarter of 2023.   

Second Quarter of 2023 Highlights

• Net revenues increased by 0.9% year over year to RMB3,137.7 million (US$432.7 million*) in the second quarter of 2023.
• Net income attributable to Hello Group Inc. increased to RMB568.4 million (US$78.4 million) in the second quarter of 2023, from RMB345.6 million in the same period of 2022.
• Non-GAAP net income attributable to Hello Group Inc. (note 1) increased to RMB632.1 million (US$87.2 million) in the second quarter of 2023, from RMB463.5 million in the same period of 2022.
• Diluted net income per American Depositary Share ("ADS") was RMB2.82 (US$0.39) in the second quarter of 2023, compared to RMB1.68 in the same period of 2022.
• Non-GAAP diluted net income per ADS (note 1) was RMB3.14 (US$0.43) in the second quarter of 2023, compared to RMB2.22 in the same period of 2022.
• Monthly Active Users ("MAU") on Tantan application were 17.3 million in June 2023, compared to 24.8 million in June 2022.
• For the Momo app total paying users was 7.9 million for the second quarter of 2023, compared to 8.6 million for the same period last year. Tantan had 1.4 million paying users for the second quarter of 2023 compared to 2.2 million from the year ago period.

First Half of 2023 Highlights

• Net revenues decreased by 4.8% year over year to RMB5,956.5 million (US$821.4 million) for the first half of 2023.
• Net income attributable to Hello Group Inc. was RMB958.7 million (US$132.2 million) for the first half of 2023, compared to RMB635.5 million during the same period of 2022.
• Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,104.1 million (US$152.3 million) for the first half of 2023, compared to RMB862.0 million during the same period of 2022.
• Diluted net income per ADS was RMB4.78 (US$0.66) for the first half of 2023, compared to RMB3.11 during the same period of 2022.
• Non-GAAP diluted net income per ADS (note 1) was RMB5.49 (US$0.76) for the first half of 2023, compared to RMB4.16 during the same period of 2022.

"We delivered solid results in the second quarter, with strong financial performance and good progress on the execution of our various strategic priorities." Commented Yan Tang, Chairman and CEO of Hello Group.

"We celebrated Momo's 12th anniversary recently. I am glad to see how we have grown from a single-function app to a multi-brand listed company with a presence in several countries and regions. In Q2 we achieved the first year on year topline growth since the beginning of the pandemic three years ago, thanks to the stabilization and recovery of Momo's cash cow business. The Group level profitability improved significantly both year on year and from the previous quarter, mainly due to our effective cost control initiatives, which led to Tantan's break-even and the stable performance of Momo." Commented Sichuan Zhang, COO of Hello Group.

Second Quarter of 2023 Financial Results

Net revenues

Total net revenues were RMB3,137.7 million (US$432.7 million) in the second quarter of 2023, an increase of 0.9% from RMB3,110.4 million in the second quarter of 2022.

Live video service revenues were RMB1,588.8 million (US$219.1 million) in the second quarter of 2023, an increase of 4.5% from RMB1,520.0 million during the same period of 2022. The increase was primarily attributable to the increase in average revenues per paying user ("ARPPU") driven by new operational events and gamified features.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,499.5 million (US$206.8 million) in the second quarter of 2023, a decrease of 2.4% from RMB1,536.4 million during the same period of 2022. The decrease was mainly due to a decline in Momo and Tantan's paying user, which put pressure on respective businesses value-added service revenues. However, the decrease was partially offset by the rapid revenue growth from the new standalone apps.

Mobile marketing revenues were RMB37.0 million (US$5.1 million) in the second quarter of 2023, an increase of 3.0% from RMB35.9 million during the same period of 2022.

Mobile games revenues were RMB2.6 million (US$0.4 million) in the second quarter of 2023, a decrease of 84.8% from RMB17.2 million in the second quarter of 2022. The decrease in mobile game revenues was mainly due to the Company's strategic decision to pivot away from game distribution business.

Net revenues from the Momo segment increased from RMB2,779.5 million in the second quarter of 2022 to RMB2,816.6 million (US$388.4 million) in the second quarter of 2023, primarily due to the increase in net revenues from live video service and the new standalone apps. The increase completely offset the decrease of value-added service on Momo application. Net revenues from the Tantan segment decreased from RMB330.8 million in the second quarter of 2022 to RMB320.7 million (US$44.2 million) in the second quarter of 2023, due to the decrease in net revenues from membership subscription.

Cost and expenses

Cost and expenses were RMB2,515.5 million (US$346.9 million) in the second quarter of 2023, a decrease of 10.3% from RMB2,804.8 million in the second quarter of 2022. The decrease was primarily attributable to: (a) a decrease in sales and marketing expenses due to our initiatives to control cost and optimize Tantan's channel marketing strategy and our reduction of marketing costs of new apps; (b) a decrease in salary expenses and share-based compensation expenses, due to our continuous optimization in personnel costs and the decreased fair value of newly granted share options. The decrease was partially offset by the increase in revenue sharing with broadcasters related to our live video service and with virtual gift recipients for new standalone apps.

Non-GAAP cost and expenses (note 1) were RMB2,451.8 million (US$338.1 million) in the second quarter of 2023, a decrease of 8.7% from RMB2,686.9 million during the same period of 2022.

Other operating income

Other operating income was RMB22.9 million (US$3.2 million) in the second quarter of 2023, a decrease from RMB40.6 million during the second quarter of 2022. The other operating income mainly consisted of government incentives and additional input VAT deduction.

Income from operations

Income from operations was RMB645.1 million (US$89.0 million) in the second quarter of 2023, compared to RMB346.2 million during the same period of 2022. Income from operations of the Momo segment was RMB618.8 million (US$85.3 million) in the second quarter of 2023, which increased from RMB483.5 million in the second quarter of 2022. Income from operations of the Tantan segment was RMB30.2 million (US$4.2 million) in the second quarter of 2023, compared to a loss from operations of RMB131.3 million in the second quarter of 2022.

Non-GAAP income from operations (note 1) was RMB708.8 million (US$97.8 million) in the second quarter of 2023, compared to RMB464.1 million during the same period of 2022. Non-GAAP income from operations of the Momo segment was RMB680.8 million (US$93.9 million) in the second quarter of 2023, which increased from RMB589.2 million in the second quarter of 2022. Non-GAAP income from operations of the Tantan segment was RMB31.9 million (US$4.4 million) in the second quarter of 2023, compared to a non-GAAP loss from operations of RMB119.0 million in the second quarter of 2022.  

Income tax expenses

Income tax expenses were RMB166.0 million (US$22.9 million) in the second quarter of 2023, compared to RMB146.0 million in the second quarter of 2022. The increase was primarily due to the higher profit from Momo segment in the second quarter of 2023.

Net income

Net income was RMB567.6 million (US$78.3 million) in the second quarter of 2023, compared to RMB344.3 million during the same period of 2022. Net income from the Momo segment was RMB542.4 million (US$74.8 million) in the second quarter of 2023, compared to RMB482.0 million in the same period of 2022. Net income from the Tantan segment was RMB29.1 million (US$4.0 million) in the second quarter of 2023, compared to a net loss of RMB131.7 million in the second quarter of 2022.

Non-GAAP net income (note 1) was RMB631.3 million (US$87.1 million) in the second quarter of 2023, compared to RMB462.3 million during the same period of 2022. Non-GAAP net income from the Momo segment was RMB604.4 million (US$83.4million) in the second quarter of 2023, which increased from RMB587.6 million in the second quarter of 2022. Non-GAAP net income of the Tantan segment was RMB30.8 million (US$4.3 million) in the second quarter of 2023, compared to a non-GAAP net loss of RMB119.4 million in the second quarter of 2022.

Net income attributable to Hello Group Inc.

Net income attributable to Hello Group Inc. was RMB568.4 million (US$78.4 million) in the second quarter of 2023, compared to RMB345.6 million during the same period of 2022.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB632.1 million (US$87.2 million) in the second quarter of 2023, compared to RMB463.5 million during the same period of 2022.

Net income per ADS

Diluted net income per ADS was RMB2.82 (US$0.39) in the second quarter of 2023, compared to RMB1.68 in the second quarter of 2022.

Non-GAAP diluted net income per ADS (note 1) was RMB3.14 (US$0.43) in the second quarter of 2023, compared to RMB2.22 in the second quarter of 2022.

Cash and cash flow

As of June 30, 2023, the Company's cash, cash equivalents, short-term deposits, long-term deposits, short-term investments, short-term restricted cash and long-term restricted cash totaled RMB11,267.4 million (US$1,553.9 million), compared to RMB13,398.8 million as of December 31, 2022. In the second quarter of 2023, we paid an equivalent of RMB937.2 million (US$129.3 million) cash dividend to our shareholders, and in late June we prepaid an equivalent of RMB2,258.5 million (US$322.1 million) cash to repurchase our convertible senior notes, which was settled in early July.

Net cash provided by operating activities in the second quarter of 2023 was RMB827.7 million (US$114.2 million), compared to RMB200.3 million in the second quarter of 2022.

First Half of 2023 Financial Results

Net revenues for the first half of 2023 were RMB5,956.5 million (US$821.4 million), a decrease of 4.8% from RMB6,258.5 million in the same period of 2022.

Net income attributable to Hello Group Inc. was RMB958.7 million (US$132.2 million) for the first half of 2023, compared to RMB635.5 million during the same period of 2022.

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,104.1 million (US$152.3 million) for the first half of 2023, compared to RMB862.0 million during the same period of 2022.

Diluted net income per ADS was RMB4.78 (US$0.66) during the first half of 2023, compared to RMB3.11 in the same period of 2022.

Non-GAAP diluted net income per ADS (note 1) was RMB5.49 (US$0.76) during the first half of 2023, compared to RMB4.16 in the same period of 2022.

Net cash provided by operating activities was RMB1,278.8 million (US$176.4 million) during the first half of 2023, compared to RMB243.7 million in the same period of 2022.

Recent Development

Execution of 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 over the next 24 months. As of August 31, 2023, the Company has repurchased 12.1 million ADSs for US$57.2 million on the open market under this program, at an average purchase price of US$4.72 per ADS.

Business Outlook

For the third quarter of 2023, the Company expects total net revenues to be between RMB2.9 billion to RMB3.0 billion, representing a decrease of 10.3% to 7.2% 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 Thursday, August 31, 2023, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on August 31, 2023).

Participants can register for the conference call by navigating to:

https://s1.c-conf.com/diamondpass/10033114-tr54ev.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 September 7, 2023. The dial-in details for the replay are as follows:

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

Hong Kong:      800-930-639
Passcode:        10033114

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 China's online social and entertainment 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. We also operate a number of other applications to serve different social and entertainment demands from our users.

For investor and media inquiries, please contact:

Hello Group Inc.

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

Christensen

In China
Mr. Eric Yuan
Phone: +86-10-5900-1548
E-mail: eric.yuan@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 third quarter of 2023, 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 second quarter of 2023 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the third quarter of 2023 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 impact of the COVID-19 pandemic on the Company's business operations and the economy in China, 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.          

* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates 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 RMB7.2513 to US$1.00, the effective noon buying rate for June 30, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

 

Hello Group Inc.
Unaudited Condensed Consolidated Statement of Operations
(All amounts in thousands, except share and per share data)
	Three months						First half year
	Ended June 30						Ended June 30
	2022		2023		2023		2022		2023		2023
	RMB		RMB		US$		RMB		RMB		US$
Net revenues:
Live video service	1,519,978		1,588,849		219,112		3,128,701		3,018,189		416,227
Value-added service	1,536,384		1,499,482		206,788		3,019,815		2,860,951		394,543
Mobile marketing	35,913		36,986		5,101		63,786		58,057		8,006
Mobile games	17,200		2,606		359		42,697		6,305		869
Other services	940		9,763		1,347		3,494		13,042		1,800
Total net revenues	3,110,415		3,137,686		432,707		6,258,493		5,956,544		821,445
Cost and expenses:
Cost of revenues	(1,797,846)		(1,819,559)		(250,929)		(3,619,234)		(3,483,747)		(480,431)
Research and development	(238,262)		(214,649)		(29,601)		(488,457)		(451,452)		(62,258)
Sales and marketing	(610,953)		(356,525)		(49,167)		(1,199,530)		(736,311)		(101,542)
General and administrative	(157,746)		(124,787)		(17,209)		(317,581)		(263,085)		(36,281)
Total cost and expenses	(2,804,807)		(2,515,520)		(346,906)		(5,624,802)		(4,934,595)		(680,512)
Other operating income, net	40,570		22,919		3,161		64,501		59,313		8,180
Income from operations	346,178		645,085		88,962		698,192		1,081,262		149,113
Interest income	93,630		115,321		15,903		191,487		215,108		29,665
Interest expense	(28,231)		(11,963)		(1,650)		(47,565)		(22,378)		(3,086)
Other gain or loss, net	66,303		4,565		630		77,922		4,565		630
Income before income tax and share of income on equity method investments	477,880		753,008		103,845		920,036		1,278,557		176,322
Income tax expenses	(146,045)		(165,969)		(22,888)		(296,819)		(288,582)		(39,797)
Income before share of income on equity method investments	331,835		587,039		80,957		623,217		989,975		136,525
Share of income (loss) on equity method investments	12,513		(19,439)		(2,681)		9,913		(32,914)		(4,539)
Net income	344,348		567,600		78,276		633,130		957,061		131,986
Less: net loss attributable to non-controlling interest	(1,221)		(795)		(110)		(2,324)		(1,623)		(224)
Net income attributable to the shareholders of Hello Group Inc.	345,569		568,395		78,386		635,454		958,684		132,210
Net income per share attributable to ordinary shareholders
Basic	0.87		1.50		0.21		1.60		2.54		0.35
Diluted	0.84		1.41		0.19		1.56		2.39		0.33
Weighted average shares used in calculating net income per ordinary share
Basic	396,777,496		377,920,901		377,920,901		396,013,164		377,471,487		377,471,487
Diluted	434,212,413		409,201,815		409,201,815		432,896,998		409,151,850		409,151,850

 

 

Hello Group Inc.
Unaudited Condensed Consolidated Statement of Comprehensive Income
(All amounts in thousands, except share and per share data)
	Three months							First half year
	Ended June 30							Ended June 30
	2022		2023		2023			2022		2023		2023
	RMB		RMB		US$			RMB		RMB		US$
Net income	344,348		567,600		78,276			633,130		957,061		131,986
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment	(151,539)		107,975		14,890			(140,489)		110,156		15,191
Comprehensive income	192,809		675,575		93,166			492,641		1,067,217		147,177
Less: comprehensive income attributed to the non-controlling interest	8,915		10,188		1,405			6,879		8,518		1,175
Comprehensive income attributable to Hello Group Inc.	183,894		665,387		91,761			485,762		1,058,699		146,002

 

 

Hello Group Inc.
Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands, except share and per share data)
	December 31		June 30		June 30
	2022		2023		2023
	RMB		RMB		US$
Assets
Current assets
Cash and cash equivalents	5,018,129		4,615,319		636,482
Short-term deposits	5,300,000		3,250,000		448,195
Restricted cash	97,706		9,379		1,293
Short-term investments	300,240		305,730		42,162
Accounts receivable, net of allowance for doubtful accounts of RMB5,870 and RMB13,498 as of December 31, 2022 and June 30, 2023, respectively	188,711		203,239		28,028
Amounts due from related parties	55		-		-
Prepaid expenses and other current assets	819,706		2,953,856		407,355
Total current assets	11,724,547		11,337,523		1,563,515
Long-term deposits	2,600,000		3,000,000		413,719
Long-term restricted cash	82,766		87,016		12,000
Right-of-use assets, net	115,520		78,302		10,798
Property and equipment, net	172,984		141,230		19,477
Intangible assets, net	22,203		19,645		2,709
Rental deposits	20,737		19,786		2,729
Long-term investments	893,988		874,202		120,558
Other non-current assets	162,499		176,777		24,379
Deferred tax assets	34,343		33,885		4,673
Total assets	15,829,587		15,768,366		2,174,557
Liabilities and equity
Current liabilities
Accounts payable	617,022		638,944		88,116
Deferred revenue	484,775		462,636		63,800
Accrued expenses and other current liabilities	797,504		657,012		90,606
Amounts due to related parties	9,178		12,076		1,665
Lease liabilities due within one year	88,352		46,121		6,360
Income tax payable	68,765		65,048		8,971
Dividends payable	-		20,884		2,879
Deferred consideration in connection with business acquisitions	26,483		27,842		3,840
Convertible senior notes-current	2,646,168		2,425,857		334,541
Total current liabilities	4,738,247		4,356,420		600,778
Deferred tax liabilities	22,011		103,994		14,341
Lease liabilities	33,281		31,106		4,290
Other non-current liabilities	105,410		103,817		14,317
Total liabilities	4,898,949		4,595,337		633,726
Shareholder's equity (i)	10,930,638		11,173,029		1,540,831
Total liabilities and shareholder's equity	15,829,587		15,768,366		2,174,557
(i): As of June 30, 2023, the number of ordinary shares outstanding was 379,047,992.

 

 

Hello Group Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(All amounts in thousands, except share and per share data)
	Three months						First half year
	Ended June 30						Ended June 30
	2022		2023		2023		2022		2023		2023
	RMB		RMB		US$		RMB		RMB		US$
Cash flows from operating activities:
Net income	344,348		567,600		78,276		633,130		957,061		131,986
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	28,081		18,787		2,591		56,060		41,631		5,741
Amortization of intangible assets	1,279		1,279		176		2,558		2,558		353
Share-based compensation	117,948		63,748		8,792		226,564		145,405		20,053
Share of (income) loss on equity method investments	(12,513)		19,439		2,681		(9,913)		32,914		4,539
Gain on repurchase of convertible senior notes	(66,303)		(4,565)		(630)		(77,922)		(4,565)		(630)
Cash received on distributions from equity method investments	1,708		1,349		186		1,708		1,349		186
Gain or loss on disposal of property and equipment	180		(527)		(73)		140		(460)		(63)
Provision of loss on receivable and other assets	365		1,022		141		367		10,204		1,407
Changes in operating assets and liabilities:
Accounts receivable	(9,927)		(20,117)		(2,774)		(7,278)		(20,665)		(2,850)
Prepaid expenses and other current assets	(13,584)		170,514		23,515		(57,562)		194,866		26,873
Amounts due from related parties	-		-		-		-		55		8
Rental deposits	3,136		951		131		683		951		131
Deferred tax assets	-		17		2		(1,576)		457		63
Other non-current assets	19,075		30,424		4,196		60,690		22,939		3,163
Accounts payable	(16,996)		11,459		1,580		(105,954)		31,838		4,391
Income tax payable	(30,714)		2,674		369		(35,288)		(3,719)		(513)
Deferred revenue	(11,921)		(14,062)		(1,939)		(54,535)		(22,873)		(3,154)
Accrued expenses and other current liabilities	(63,615)		(54,827)		(7,561)		(195,833)		(187,560)		(25,866)
Amount due to related parties	(3,240)		(272)		(38)		(3,397)		2,897		400
Deferred tax liabilities	(61,942)		48,397		6,674		(157,327)		82,517		11,380
Other non-current liabilities	(25,016)		(15,548)		(2,144)		(31,656)		(8,984)		(1,239)
Net cash provided by operating activities	200,349		827,742		114,151		243,659		1,278,816		176,359
Cash flows from investing activities:
Purchase of property and equipment	(21,694)		(11,010)		(1,518)		(43,341)		(21,244)		(2,930)
Payment for long-term investments	(55,343)		(9,000)		(1,241)		(55,343)		(9,000)		(1,241)
Purchase of short-term deposits	-		-		-		-		(497,342)		(68,587)
Cash received on maturity of short-term deposits	100,000		2,609,820		359,911		1,010,000		3,509,820		484,026
Cash received on investment income distribution	-		1,517		209		3,523		1,517		209
Purchase of long-term deposits	(400,000)		(1,350,000)		(186,174)		(1,550,000)		(1,350,000)		(186,174)
Cash received on maturity of long-term deposits	1,200,000		-		-		1,200,000		-		-
Other investing activities	318		947		131		322		1,685		232
Net cash provided by investing activities	823,281		1,242,274		171,318		565,161		1,635,436		225,535
Cash flows from financing activities:
Deferred payment for business acquisition	-		-		-		(5,563)		-		-
Proceeds from exercise of share options	2		16		2		33		19		3
Repurchase of ordinary shares	(2,335)		-		-		(2,335)		(3,237)		(446)
Repurchase of subsidiary's share options	(21,110)		(2,557)		(353)		(25,537)		(4,096)		(565)
Dividends payment	(840,997)		(937,249)		(129,253)		(840,997)		(937,249)		(129,253)
Payment in relation to redemption of convertible bonds	(1,002,537)		(2,114,224)		(291,565)		(1,112,544)		(2,593,010)		(357,592)
Net cash used in financing activities	(1,866,977)		(3,054,014)		(421,169)		(1,986,943)		(3,537,573)		(487,853)
Effect of exchange rate changes	93,897		145,860		20,115		78,286		136,434		18,814
Net decrease in cash and cash equivalents	(749,450)		(838,138)		(115,585)		(1,099,837)		(486,887)		(67,145)
Cash, cash equivalents and restricted cash at the beginning of period	5,296,647		5,549,852		765,360		5,647,034		5,198,601		716,920
Cash, cash equivalents and restricted cash at the end of period	4,547,197		4,711,714		649,775		4,547,197		4,711,714		649,775

 

 

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 June 30, 2022				Ended June 30, 2023				Ended June 30, 2023
	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	(1,797,846)	7,914	(1,789,932)		(1,819,559)	1,552	(1,818,007)		(250,929)	214	(250,715)
Research and development	(238,262)	23,965	(214,297)		(214,649)	13,821	(200,828)		(29,601)	1,906	(27,695)
Sales and marketing	(610,953)	10,894	(600,059)		(356,525)	6,813	(349,712)		(49,167)	940	(48,227)
General and administrative	(157,746)	75,175	(82,571)		(124,787)	41,562	(83,225)		(17,209)	5,732	(11,477)
Cost and operating expenses	(2,804,807)	117,948	(2,686,859)		(2,515,520)	63,748	(2,451,772)		(346,906)	8,792	(338,114)
Income from operations	346,178	117,948	464,126		645,085	63,748	708,833		88,962	8,792	97,754
Net income attributable to Hello Group Inc.	345,569	117,948	463,517		568,395	63,748	632,143		78,386	8,792	87,178

 

 

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-continued.
	First half year				First half year				First half year
	Ended June 30, 2022				Ended June 30, 2023				Ended June 30, 2023
	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	(3,619,234)	10,992	(3,608,242)		(3,483,747)	3,187	(3,480,560)		(480,431)	440	(479,991)
Research and development	(488,457)	44,939	(443,518)		(451,452)	36,193	(415,259)		(62,258)	4,991	(57,267)
Sales and marketing	(1,199,530)	21,499	(1,178,031)		(736,311)	14,559	(721,752)		(101,542)	2,008	(99,534)
General and administrative	(317,581)	149,134	(168,447)		(263,085)	91,466	(171,619)		(36,281)	12,614	(23,667)
Cost and operating expenses	(5,624,802)	226,564	(5,398,238)		(4,934,595)	145,405	(4,789,190)		(680,512)	20,053	(660,459)
Income from operations	698,192	226,564	924,756		1,081,262	145,405	1,226,667		149,113	20,053	169,166
Net income attributable to Hello Group Inc.	635,454	226,564	862,018		958,684	145,405	1,104,089		132,210	20,053	152,263

 

 

Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
	Three months
	Ended June 30, 2023
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Net revenues:
Live video service	1,443,602		145,247		-		1,588,849		219,112
Value-added service	1,329,310		170,172		-		1,499,482		206,788
Mobile marketing	31,670		5,316		-		36,986		5,101
Mobile games	2,606		-		-		2,606		359
Other services	9,459		-		304		9,763		1,347
Total net revenues	2,816,647		320,735		304		3,137,686		432,707
Cost and expenses (ii):
Cost of revenues	(1,658,335)		(160,651)		(573)		(1,819,559)		(250,929)
Research and development	(163,040)		(51,609)		-		(214,649)		(29,601)
Sales and marketing	(282,903)		(72,378)		(1,244)		(356,525)		(49,167)
General and administrative	(116,197)		(6,198)		(2,392)		(124,787)		(17,209)
Total cost and expenses	(2,220,475)		(290,836)		(4,209)		(2,515,520)		(346,906)
Other operating income, net	22,648		271		-		22,919		3,161
Income (loss) from operations	618,820		30,170		(3,905)		645,085		88,962
Interest income	114,946		358		17		115,321		15,903
Interest expense	(11,963)		-		-		(11,963)		(1,650)
Other gain or loss, net	4,565		-		-		4,565		630
Income (loss) before income tax and share of income on equity method investments	726,368		30,528		(3,888)		753,008		103,845
Income tax expenses	(164,541)		(1,428)		-		(165,969)		(22,888)
Income (loss) before share of income on equity method investments	561,827		29,100		(3,888)		587,039		80,957
Share of loss on equity method investments	(19,439)		-		-		(19,439)		(2,681)
Net income (loss)	542,388		29,100		(3,888)		567,600		78,276
(ii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three months
	Ended June 30, 2023
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	1,437		115		-		1,552		214
Research and development	12,222		1,599		-		13,821		1,906
Sales and marketing	6,813		-		-		6,813		940
General and administrative	41,554		8		-		41,562		5,732
Total cost and expenses	62,026		1,722		-		63,748		8,792

 

 

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 June 30, 2023
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Income (loss) from operations	618,820		30,170		(3,905)		645,085		88,962
Share-based compensation	62,026		1,722		-		63,748		8,792
Non-GAAP income (loss) from operations	680,846		31,892		(3,905)		708,833		97,754
Net income (loss)	542,388		29,100		(3,888)		567,600		78,276
Share-based compensation	62,026		1,722		-		63,748		8,792
Non-GAAP net income (loss)	604,414		30,822		(3,888)		631,348		87,068

 

 

Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
		Three months
		Ended June 30, 2022
		Momo		Tantan		QOOL		Total			Total
		RMB		RMB		RMB		RMB			US$[1]
Net revenues:
Live video service		1,403,596		116,382		-		1,519,978			226,927
Value-added service		1,321,967		214,417		-		1,536,384			229,376
Mobile marketing		35,913		-		-		35,913			5,362
Mobile games		17,200		-		-		17,200			2,568
Other services		782		-		158		940			140
Total net revenues	2,779,458			330,799		158			3,110,415		464,373
Cost and expenses (iii):
Cost of revenues		(1,631,584)		(165,696)		(566)		(1,797,846)			(268,411)
Research and development		(171,614)		(66,648)		-		(238,262)			(35,572)
Sales and marketing		(386,496)		(223,311)		(1,146)		(610,953)			(91,213)
General and administrative		(144,574)		(8,685)		(4,487)		(157,746)			(23,551)
Total cost and expenses		(2,334,268)		(464,340)		(6,199)		(2,804,807)			(418,747)
Other operating income		38,344		2,225		1		40,570			6,057
Income (loss) from operations		483,534		(131,316)		(6,040)		346,178			51,683
Interest income		93,506		52		72		93,630			13,979
Interest expense		(28,231)		-		-		(28,231)			(4,215)
Other gain or loss, net		66,303		-		-		66,303			9,899
Income (loss) before income tax and share of income on equity method investments		615,112		(131,264)		(5,968)		477,880			71,346
Income tax expenses		(145,628)		(417)		-		(146,045)			(21,804)
Income (loss) before share of income on equity method investments		469,484		(131,681)		(5,968)		331,835			49,542
Share of income on equity method investments		12,513		-		-		12,513			1,868
Net income (loss)		481,997		(131,681)		(5,968)		344,348			51,410
(iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three months
	Ended June 30, 2022
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	2,152		5,762		-		7,914		1,182
Research and development	17,659		6,306		-		23,965		3,578
Sales and marketing	10,693		201		-		10,894		1,626
General and administrative	75,134		41		-		75,175		11,223
Total cost and expenses	105,638		12,310		-		117,948		17,609
[1] All translations from RMB to U.S. dollars are made at a rate of RMB6. 6981 to US$1.00, the effective noon buying rate for June 30, 2022 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 June 30, 2022
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Income (loss) from operations	483,534		(131,316)		(6,040)		346,178		51,683
Share-based compensation	105,638		12,310		-		117,948		17,609
Non-GAAP income (loss) from operations	589,172		(119,006)		(6,040)		464,126		69,292
Net income (loss)	481,997		(131,681)		(5,968)		344,348		51,410
Share-based compensation	105,638		12,310		-		117,948		17,609
Non-GAAP net income (loss)	587,635		(119,371)		(5,968)		462,296		69,019

 

 

Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
	First half year
	Ended June 30, 2023
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Net revenues:
Live video service	2,733,320		284,869		-		3,018,189		416,227
Value-added service	2,522,854		338,097		-		2,860,951		394,543
Mobile marketing	51,691		6,366		-		58,057		8,006
Mobile games	6,305		-		-		6,305		869
Other services	12,596		-		446		13,042		1,800
Total net revenues	5,326,766		629,332		446		5,956,544		821,445
Cost and expenses (iv):
Cost of revenues	(3,158,866)		(323,765)		(1,116)		(3,483,747)		(480,431)
Research and development	(332,348)		(119,104)		-		(451,452)		(62,258)
Sales and marketing	(595,543)		(138,230)		(2,538)		(736,311)		(101,542)
General and administrative	(244,275)		(13,944)		(4,866)		(263,085)		(36,281)
Total cost and expenses	(4,331,032)		(595,043)		(8,520)		(4,934,595)		(680,512)
Other operating income	58,126		1,125		62		59,313		8,180
Income (loss) from operations	1,053,860		35,414		(8,012)		1,081,262		149,113
Interest income	214,477		562		69		215,108		29,665
Interest expense	(22,378)		-		-		(22,378)		(3,086)
Other gain or loss, net	4,565		-		-		4,565		630
Income (loss) before income tax and share of income on equity method investments	1,250,524		35,976		(7,943)		1,278,557		176,322
Income tax expenses	(286,183)		(2,399)		-		(288,582)		(39,797)
Income (loss) before share of income on equity method investments	964,341		33,577		(7,943)		989,975		136,525
Share of income on equity method investments	(32,914)		-		-		(32,914)		(4,539)
Net income (loss)	931,427		33,577		(7,943)		957,061		131,986
(iv) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	First half year
	Ended June 30, 2023
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	3,055		132		-		3,187		440
Research and development	25,392		10,801		-		36,193		4,991
Sales and marketing	14,554		5		-		14,559		2,008
General and administrative	91,450		16		-		91,466		12,614
Total cost and expenses	134,451		10,954		-		145,405		20,053

 

 

Hello Group Inc. Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report (All amounts in thousands, except share and per share data)
	First half year
	ended June 30, 2023
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Operating income (loss)	1,053,860		35,414		(8,012)		1,081,262		149,113
Share-based compensation	134,451		10,954		-		145,405		20,053
Non-GAAP operating income (loss)	1,188,311		46,368		(8,012)		1,226,667		169,166
Net income (loss)	931,427		33,577		(7,943)		957,061		131,986
Share-based compensation	134,451		10,954		-		145,405		20,053
Non-GAAP net income (loss)	1,065,878		44,531		(7,943)		1,102,466		152,039

 

 

Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
	First half year
	Ended June 30, 2022
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Net revenues:
Live video service	2,887,119		241,582		-		3,128,701		467,103
Value-added service	2,581,559		438,256		-		3,019,815		450,847
Mobile marketing	63,786		-		-		63,786		9,523
Mobile games	42,697		-		-		42,697		6,374
Other services	3,172		-		322		3,494		521
Total net revenues	5,578,333		679,838		322		6,258,493		934,368
Cost and expenses (v):
Cost of revenues	(3,276,411)		(341,911)		(912)		(3,619,234)		(540,337)
Research and development	(359,913)		(128,544)		-		(488,457)		(72,925)
Sales and marketing	(704,176)		(493,458)		(1,896)		(1,199,530)		(179,085)
General and administrative	(291,770)		(16,761)		(9,050)		(317,581)		(47,414)
Total cost and expenses	(4,632,270)		(980,674)		(11,858)		(5,624,802)		(839,761)
Other operating income	56,690		7,769		42		64,501		9,630
Income (loss) from operations	1,002,753		(293,067)		(11,494)		698,192		104,237
Interest income	191,249		104		134		191,487		28,588
Interest expense	(47,565)		-		-		(47,565)		(7,101)
Other gain or loss, net	77,922		-		-		77,922		11,633
Income (loss) before income tax and share of income on equity method investments	1,224,359		(292,963)		(11,360)		920,036		137,357
Income tax expenses	(295,733)		(1,086)		-		(296,819)		(44,314)
Income (loss) before share of income on equity method investments	928,626		(294,049)		(11,360)		623,217		93,043
Share of income on equity method investments	9,913		-		-		9,913		1,480
Net income (loss)	938,539		(294,049)		(11,360)		633,130		94,523
(v) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	First half year
	Ended June 30, 2022
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	3,999		6,993		-		10,992		1,641
Research and development	36,112		8,827		-		44,939		6,709
Sales and marketing	21,283		216		-		21,499		3,210
General and administrative	149,047		87		-		149,134		22,265
Total cost and expenses	210,441		16,123		-		226,564		33,825

 

 

Hello Group Inc. Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report (All amounts in thousands, except share and per share data)
	First half year
	ended June 30, 2022
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Operating income (loss)	1,002,753		(293,067)		(11,494)		698,192		104,237
Share-based compensation	210,441		16,123		-		226,564		33,825
Non-GAAP operating income (loss)	1,213,194		(276,944)		(11,494)		924,756		138,062
Net income (loss)	938,539		(294,049)		(11,360)		633,130		94,523
Share-based compensation	210,441		16,123		-		226,564		33,825
Non-GAAP net income (loss)	1,148,980		(277,926)		(11,360)		859,694		128,348

 

View original content:https://www.prnewswire.com/news-releases/hello-group-inc-announces-unaudited-financial-results-for-the-second-quarter-of-2023-301914565.html

SOURCE Hello Group Inc.

FAQ

What were the net revenues for Q2 2023?

The net revenues for Q2 2023 were RMB3,137.7 million.

What was the net income for Q2 2023?

The net income attributable to Hello Group Inc. for Q2 2023 was RMB568.4 million.

What was the diluted net income per ADS for Q2 2023?

The diluted net income per ADS for Q2 2023 was RMB2.82.

Did the company show growth in non-GAAP net income?

Yes, the non-GAAP net income attributable to Hello Group Inc. increased to RMB632.1 million for Q2 2023.

Did the company's net revenues decrease in the first half of 2023?

Yes, the net revenues for the first half of 2023 decreased by 4.8% compared to the same period last year.