Hello Group Inc. Announces Unaudited Financial Results for the Second Quarter of 2022
BEIJING, Sept. 1, 2022 /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 2022.
Second Quarter of 2022 Highlights
Net revenues decreased by 15.3% year over year to RMB3,110.4 million (US$464.4 million*) in the second quarter of 2022. Net income attributable to Hello Group Inc. decreased to RMB345.6 million (US$51.6 million) in the second quarter of 2022, from RMB464.2 million in the same period of 2021. Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB463.5 million (US$69.2 million) in the second quarter of 2022, from RMB551.0 million in the same period of 2021. Diluted net income per American Depositary Share (“ADS“) was RMB1.68 (US$0.25) in the second quarter of 2022, compared to RMB2.15 in the same period of 2021. Non-GAAP diluted net income per ADS (note 1) was RMB2.22 (US$0.33) in the second quarter of 2022, compared to RMB2.54 in the same period of 2021. Monthly Active Users (“MAU“) on Momo application were 111.2 million in June 2022, compared to 115.6 million in June 2021. MAU on Tantan application were 24.8 million in June 2022. For the Momo app total paying users was 8.6 million for the second quarter of 2022, compared to 9.3 million for the same period last year. Tantan had 2.2 million paying users for the second quarter of 2022 compared to 3.1 million from the year ago period.
* 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 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.
First Half of 2022 Highlights
Net revenues decreased 12.4% year over year to RMB6,258.5 million (US$934.4 million) for the first half of 2022. Net income attributable to Hello Group Inc. was RMB635.5 million (US$94.9 million) for the first half of 2022, compared to RMB925.8 million during the same period of 2021. Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB862.0 million (US$128.7 million) for the first half of 2022, compared to RMB1,184.6 million during the same period of 2021. Diluted net income per ADS was RMB3.11 (US$0.46) for the first half of 2022, compared to RMB4.29 during the same period of 2021. Non-GAAP diluted net income per ADS (note 1) was RMB4.16 (US$0.62) for the first half of 2022, compared to RMB5.45 during the same period of 2021.
“The COVID resurgence in the first half of 2022 has brought many challenges and uncertainties to the overall market environment and our execution of strategic goals. However, I’m pleased to see that our team managed to deliver good results in the second quarter by adjusting our product and operational initiatives in a timely manner to cope with external headwinds, at the same time adapting our execution plan to fit the evolving external environment.” commented Li Wang, CEO of Hello Group.
Second Quarter of 2022 Financial Results
Net revenues
Total net revenues were RMB3,110.4 million (US$464.4 million) in the second quarter of 2022, a decrease of 15.3% from RMB3,671.7 million in the second quarter of 2021.
Live video service revenues were RMB1,520.0 million (US$226.9 million) in the second quarter of 2022, a decrease of 27.7% from RMB2,101.3 million during the same period of 2021. The decrease was primarily attributable to consumption softness caused by the macro uncertainties including COVID resurgence, regulatory changes, and to a lesser extent the strategic decision to de-emphases Tantan‘s live streaming business.
Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,536.4 million (US$229.4 million) in the second quarter of 2022, an increase of 1.9% from RMB1,507.3 million during the same period of 2021. The year-over-year increase was primarily attributable to the rapid revenue growth from the new standalone apps. The increase was partially offset by the decrease in Tantan‘s value-added service due to the demonetization process to improve user experience and retention, as well as COVID‘s negative impact on users‘ dating sentiment and propensity to pay for VAS.
Mobile marketing revenues were RMB35.9 million (US$5.4 million) in the second quarter of 2022, a decrease of 30.4% from RMB51.6 million during the same period of 2021. The decrease in mobile marketing revenues was due to the negative impact of macro headwind on client‘s advertising budget, and our product adjustment to address new regulation requirement.
Mobile games revenues were RMB17.2 million (US$2.6 million) in the second quarter of 2022, an increase of 87.3% from RMB9.2 million in the second quarter of 2021, primarily due to one new mobile game launched in the second half of 2021.
Net revenues from the Momo segment decreased from RMB3,157.5 million in the second quarter of 2021 to RMB2,779.5 million (US$415.0 million) in the second quarter of 2022, primarily due to the decrease in net revenues from live video service. Net revenues from the Tantan segment decreased from RMB513.5 million in the second quarter of 2021 to RMB330.8 million (US$49.4 million) in the second quarter of 2022, due to our strategy to lower the monetization level in order to improve user experience and retention, as well as the impact from the elevated COVID situations.
Cost and expenses
Cost and expenses were RMB2,804.8 million (US$418.7 million) in the second quarter of 2022, a decrease of 8.8% from RMB3,075.6 million in the second quarter of 2021. The decrease was primarily attributable to: (a) a decrease in revenue sharing with broadcasters related to Momo‘s core live video service and Tantan‘s live video service, which was partially offset by an increase in revenue sharing with virtual gift recipients for our virtual gift service; (b) a decrease in depreciation and amortization cost due to the impairment of intangible assets in 2021; (c) a decrease in marketing and promotional expenses by improving marketing efficiency of Momo and Tantan, which was partially offset by an increase to promote our new app “Tietie“; and (d) a decrease in salary expenses, due to our continuous optimization in personnel costs since the beginning of the year.
Non-GAAP cost and expenses (note 1) were RMB2,686.9 million (US$401.1 million) in the second quarter of 2022, a decrease of 9.8% from RMB2,980.1 million during the same period of 2021.
Other operating income
Other operating income was RMB40.6 million (US$6.1 million) in the second quarter of 2022, a decrease from RMB90.3 million during the second quarter of 2021. The other operating income mainly consisted of government incentives.
Income from operations
Income from operations was RMB346.2 million (US$51.7 million) in the second quarter of 2022, compared to RMB686.3 million during the same period of 2021. Income from operations of the Momo segment was RMB483.5 million (US$72.2 million) in the second quarter of 2022, which decreased from RMB711.3 million in the second quarter of 2021. Loss from operations of the Tantan segment was RMB131.3 million (US$19.6 million) in the second quarter of 2022, compared to loss from operations of RMB11.9 million in the second quarter of 2021.
Non-GAAP income from operations (note 1) was RMB464.1 million (US$69.3 million) in the second quarter of 2022, compared to RMB781.9 million during the same period of 2021. Non-GAAP income from operations of the Momo segment was RMB589.2 million (US$88.0 million) in the second quarter of 2022, which decreased from RMB835.8 million in the second quarter of 2021. Non-GAAP loss from operations of the Tantan segment was RMB119.0 million (US$17.8 million) in the second quarter of 2022, compared to non-GAAP loss from operations of RMB40.9 million in the second quarter of 2021.
Other gain or loss, net
Other gain was RMB66.3 million (US$9.9 million) in the second quarter of 2022, which was resulted from the Company repurchased some of our convertible senior notes from certain bond holders in the second quarter of 2022, compared to a loss of RMB10.5 million in the same period of 2021.
Income tax expenses
Income tax expenses were RMB146.0 million (US$21.8 million) in the second quarter of 2022, compared to RMB291.5 million in the second quarter of 2021. The decrease was primarily due to the following reasons: (a) the lower profit in the second quarter of 2022; (b) in the second quarter of 2022, we accrued withholding income tax of RMB37.7 million (US$5.6 million) on undistributed earnings generated in the second quarter of 2022 by our wholly-foreign owned enterprise (“WFOE“), because we plan to remit WFOE‘s earnings to its offshore parent company in the foreseeable future to fund its demand on US dollar in business operations, payments of dividends, potential investments, etc. In the second quarter of 2021, the Company distributed dividends of RMB1,300.0 million from our WFOE in China to our offshore entity and paid withholding income tax of RMB130.0 million.
Net income
Net income was RMB344.3 million (US$51.4 million) in the second quarter of 2022, compared to RMB461.5 million during the same period of 2021. Net income from the Momo segment was RMB482.0 million (US$72.0 million) in the second quarter of 2022, compared to RMB481.3 million in the same period of 2021. Net loss from the Tantan segment was RMB131.7 million (US$19.7 million) in the second quarter of 2022, compared to net loss of RMB6.7 million in the second quarter of 2021.
Non-GAAP net income (note 1) was RMB462.3 million (US$69.0 million) in the second quarter of 2022, compared to RMB548.3 million during the same period of 2021. Non-GAAP net income from the Momo segment was RMB587.6 million (US$87.7 million) in the second quarter of 2022, which decreased from RMB605.8 million in the second quarter of 2021. Non-GAAP net loss of the Tantan segment was RMB119.4 million (US$17.8 million) in the second quarter of 2022, compared to non-GAAP net loss of RMB44.5 million in the second quarter of 2021.
Net income attributable to Hello Group Inc.
Net income attributable to Hello Group Inc. was RMB345.6 million (US$51.6 million) in the second quarter of 2022, compared to a net income of RMB464.2 million during the same period of 2021.
Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB463.5 million (US$69.2 million) in the second quarter of 2022, compared to RMB551.0 million during the same period of 2021.
Net income per ADS
Diluted net income per ADS was RMB1.68 (US$0.25) in the second quarter of 2022, compared to RMB2.15 in the second quarter of 2021.
Non-GAAP diluted net income per ADS (note 1) was RMB2.22 (US$0.33) in the second quarter of 2022, compared to RMB2.54 in the second quarter of 2021.
Cash and cash flow
As of June 30, 2022, the Company‘s cash, cash equivalents, short-term deposits, long-term deposits, short-term restricted cash and long-term restricted cash totaled RMB13,947.2 million (US$2,082.3 million), compared to RMB15,707.0 million as of December 31, 2021. The decrease of cash, cash equivalents, short-term deposits, long-term deposits, short-term restricted cash and long-term restricted cash was mainly due to the cash dividend we paid to our shareholders and payment for repurchase of convertible senior notes in the second quarter of 2022.
Net cash provided by operating activities in the second quarter of 2022 was RMB200.3 million (US$29.9 million), compared to a net cash used in operating activities of RMB167.8 million in the second quarter of 2021. For the second quarter of 2022, included in our cash provided by operating activities is RMB100.0 million (US$14.9 million) of cash payment to Chinese tax authorities to repatriate RMB1,000.0 million (US$149.3 million) from our WFOE in China to our offshore entity. For the second quarter of 2021, included in our cash used in operating activities is RMB678.2 million of cash payment to Tantan founders to settle the previously granted liability-classified share options upon their termination of services with Tantan.
First Half of 2022 Financial Results
Net revenues for the first half of 2022 were RMB6,258.5 million (US$934.4 million), a decrease of 12.4% from RMB7,142.3 million in the same period of 2021.
Net income attributable to Hello Group Inc. was RMB635.5 million (US$94.9 million) for the first half of 2022, compared to RMB925.8 million during the same period of 2021.
Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB862.0 million (US$128.7 million) for the first half of 2022, compared to RMB1,184.6 million during the same period of 2021.
Diluted net income per ADS was RMB3.11 (US$0.46) during the first half of 2022, compared to RMB4.29 in the same period of 2021.
Non-GAAP diluted net income per ADS (note 1) was RMB4.16 (US$0.62) during the first half of 2022, compared to RMB5.45 in the same period of 2021.
Net cash provided by operating activities was RMB243.7 million (US$36.4 million) during the first half of 2022, compared to RMB333.8 million in the same period of 2021.
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 September 1, 2022, the Company has repurchased 4.18 million ADSs for US$19.2 million on the open market under this program, at an average purchase price of US$4.58 per ADS.
Business Outlook
For the third quarter of 2022, the Company expects total net revenues to be between RMB3.1 billion to RMB3.2 billion, representing a decrease of 17.5% to 14.9% year-over-year. This forecast reflects the Company‘s current and preliminary views on the market and operational conditions, which are subject to change, particularly as to the potential impact of the COVID-19 resurgence on the Chinese and global economies, as well as on users‘ paying capabilities.
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, impairment loss on goodwill and intangible assets, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions.
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 (loss) attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation, impairment loss on goodwill and intangible assets, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions. A limitation of using these non-GAAP financial measures is that share-based compensation, impairment loss on goodwill and intangible assets, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions have 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, September 1, 2022, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on September 1, 2022).
Participants can register for the conference call by navigating to:
https://s1.c-conf.com/diamondpass/10024750-8qar7z.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 8, 2022. The dial-in details for the replay are as follows:
U.S. / Canada: 1-855-883-1031
Hong Kong: 800-930-639
Passcode: 10024750
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. It 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: [email protected]
Christensen
In China
Mr. Eric Yuan
Phone: +86-10-5900-1548
E-mail: [email protected]
In U.S.
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: [email protected]
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 2022, 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 2022 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the third quarter of 2022 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.
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
2021
2022
2022
2021
2022
2022
RMB
RMB
US$
RMB
RMB
US$
Net revenues:
Live video service
2,101,332
1,519,978
226,927
4,063,427
3,128,701
467,103
Value-added service
1,507,258
1,536,384
229,376
2,962,771
3,019,815
450,847
Mobile marketing
51,601
35,913
5,362
90,318
63,786
9,523
Mobile games
9,182
17,200
2,568
20,366
42,697
6,374
Other services
2,341
940
140
5,428
3,494
521
Total net revenues
3,671,714
3,110,415
464,373
7,142,310
6,258,493
934,368
Cost and expenses:
Cost of revenues
(2,070,329)
(1,797,846)
(268,411)
(4,008,574)
(3,619,234)
(540,337)
Research and development
(268,325)
(238,262)
(35,572)
(554,818)
(488,457)
(72,925)
Sales and marketing
(650,236)
(610,953)
(91,213)
(1,263,809)
(1,199,530)
(179,085)
General and administrative
(86,747)
(157,746)
(23,551)
(264,709)
(317,581)
(47,414)
Total cost and expenses
(3,075,637)
(2,804,807)
(418,747)
(6,091,910)
(5,624,802)
(839,761)
Other operating income
90,268
40,570
6,057
116,168
64,501
9,630
Income from operations
686,345
346,178
51,683
1,166,568
698,192
104,237
Interest income
94,448
93,630
13,979
191,142
191,487
28,588
Interest expense
(18,302)
(28,231)
(4,215)
(36,663)
(47,565)
(7,101)
Other gain or loss, net
(10,500)
66,303
9,899
(18,000)
77,922
11,633
Income before income tax and share of income on equity method
investments
751,991
477,880
71,346
1,303,047
920,036
137,357
Income tax expenses
(291,509)
(146,045)
(21,804)
(382,907)
(296,819)
(44,314)
Income before share of income on equity method investments
460,482
331,835
49,542
920,140
623,217
93,043
Share of income on equity method investments
1,042
12,513
1,868
2,303
9,913
1,480
Net income
461,524
344,348
51,410
922,443
633,130
94,523
Less: net loss attributable to non-controlling interest
(2,636)
(1,221)
(182)
(3,376)
(2,324)
(347)
Net income attributable to the shareholders of Hello Group Inc.
464,160
345,569
51,592
925,819
635,454
94,870
Net income per share attributable to ordinary shareholders
Basic
1.13
0.87
0.13
2.25
1.6
0.24
Diluted
1.07
0.84
0.13
2.15
1.56
0.23
Weighted average shares used in calculating net income per
ordinary share
Basic
411,540,714
396,777,496
396,777,496
411,753,583
396,013,164
396,013,164
Diluted
449,020,572
434,212,413
434,212,413
448,597,242
432,896,998
432,896,998
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
2021
2022
2022
2021
2022
2022
RMB
RMB
US$
RMB
RMB
US$
Net income
461,524
344,348
51,410
922,443
633,130
94,523
Other comprehensive loss, net of tax:
Foreign currency translation adjustment
(28,396)
(151,539)
(22,624)
(32,198)
(140,489)
(20,974)
Comprehensive income
433,128
192,809
28,786
890,245
492,641
73,549
Less: comprehensive (loss) income attributed to the non-
controlling interest
(6,162)
8,915
1,331
(5,783)
6,879
1,027
Comprehensive income attributable to Hello Group Inc.
439,290
183,894
27,455
896,028
485,762
72,522
Hello Group Inc.
Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands, except share and per share data)
December 31
June 30
June 30
2021
2022
2022
RMB
RMB
US$
Assets
Current assets
Cash and cash equivalents
5,570,563
4,364,550
651,610
Short-term deposits
2,860,000
6,600,000
985,354
Restricted cash
–
102,270
15,269
Accounts receivable, net of allowance for doubtful accounts of RMB15,127
and RMB6,765 as of December 31, 2021 and June 30, 2022, respectively
205,225
213,983
31,947
Prepaid expenses and other current assets
775,072
824,221
123,053
Total current assets
9,410,860
12,105,024
1,807,233
Long-term deposits
7,200,000
2,800,000
418,029
Long-term restricted cash
76,471
80,377
12,000
Right-of-use assets, net
257,934
179,102
26,739
Property and equipment, net
180,664
192,372
28,720
Intangible assets, net
27,320
24,762
3,697
Rental deposits
19,204
21,453
3,203
Long-term investments
820,006
885,947
132,268
Other non-current assets
83,930
99,139
14,801
Deferred tax assets
34,849
36,425
5,438
Total assets
18,111,238
16,424,601
2,452,128
Liabilities and equity
Current liabilities
Accounts payable
726,207
626,497
93,534
Deferred revenue
539,967
486,264
72,597
Accrued expenses and other current liabilities
911,050
771,145
115,129
Amount due to related parties
5,016
1,619
242
Lease liabilities due within one year
162,950
121,587
18,152
Income tax payable
125,773
90,484
13,509
Deferred consideration in connection with business acquisitions
44,802
41,220
6,154
Total current liabilities
2,515,765
2,138,816
319,317
Deferred tax liabilities
213,384
54,469
8,132
Convertible senior notes
4,565,292
3,606,426
538,425
Lease liabilities
103,105
63,588
9,493
Other non-current liabilities
128,095
113,405
16,931
Total liabilities
7,525,641
5,976,704
892,298
Shareholder’s equity (i)
10,585,597
10,447,897
1,559,830
Total liabilities and shareholder’s equity
18,111,238
16,424,601
2,452,128
(i): As of June 30, 2022, the number of ordinary shares outstanding was 396,887,230.
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
2021
2022
2022
2021
2022
2022
RMB
RMB
US$
RMB
RMB
US$
Cash flows from operating activities:
Net income
461,524
344,348
51,410
922,443
633,130
94,523
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation of property and equipment
40,072
28,081
4,192
82,615
56,060
8,370
Amortization of intangible assets
36,108
1,279
191
73,061
2,558
382
Share-based compensation
60,658
117,948
17,609
205,915
226,564
33,825
Share of income on equity method investments
(1,042)
(12,513)
(1,868)
(2,303)
(9,913)
(1,480)
Gain on repurchase of convertible senior notes
–
(66,303)
(9,899)
–
(77,922)
(11,633)
Loss on long-term investments
10,500
–
–
18,000
–
–
Gain on disposal of subsidiaries
(15,526)
–
–
(15,526)
–
–
Cash received on distributions from equity method investments
–
1,708
255
–
1,708
255
Loss or gain on disposal of property and equipment
(1,101)
180
27
(1,079)
140
21
Provision of losses on receivable and other assets
169
365
54
564
367
55
Changes in operating assets and liabilities:
Accounts receivable
(15,162)
(9,927)
(1,482)
(22,742)
(7,278)
(1,087)
Prepaid expenses and other current assets
(31,941)
(13,584)
(2,028)
(118,618)
(57,562)
(8,594)
Rental deposits
(1,951)
3,136
468
(592)
683
102
Deferred tax assets
(627)
–
–
(1,234)
(1,576)
(235)
Other non-current assets
36,720
19,075
2,848
49,050
60,690
9,061
Accounts payable
48,889
(16,996)
(2,537)
47,822
(105,954)
(15,819)
Income tax payable
(119,269)
(30,714)
(4,585)
(96,378)
(35,288)
(5,268)
Deferred revenue
16,464
(11,921)
(1,780)
16,085
(54,535)
(8,142)
Accrued expenses and other current liabilities
23,189
(63,615)
(9,497)
(95,783)
(195,833)
(29,237)
Amount due to related parties
600
(3,240)
(484)
(6,556)
(3,397)
(507)
Deferred tax liabilities
(9,027)
(61,942)
(9,248)
(18,265)
(157,327)
(23,488)
Share-based compensation liability
(678,153)
–
–
(678,153)
–
–
Other non-current liabilities
(28,877)
(25,016)
(3,735)
(24,517)
(31,656)
(4,726)
Net cash (used in) provided by operating activities
(167,783)
200,349
29,911
333,809
243,659
36,378
Cash flows from investing activities:
Purchase of property and equipment
(20,020)
(21,694)
(3,239)
(45,203)
(43,341)
(6,471)
Payment for long-term investments
(300,000)
(55,343)
(8,262)
(300,000)
(55,343)
(8,262)
Purchase of short-term deposits
(1,566,688)
–
–
(2,476,688)
–
–
Cash received on maturity of short-term deposits
2,089,618
100,000
14,930
2,658,912
1,010,000
150,789
Cash received on investment income distribution
–
–
–
5,610
3,523
526
Cash of disposed subsidiaries
(8,750)
–
–
(8,750)
–
–
Purchase of long-term deposits
(250,000)
(400,000)
(59,718)
(250,000)
(1,550,000)
(231,409)
Cash received on maturity of long-term deposits
–
1,200,000
179,155
–
1,200,000
179,155
Other investing activities
2,390
318
47
2,393
322
48
Net cash (used in) provided by investing activities
(53,450)
823,281
122,913
(413,726)
565,161
84,376
Cash flows from financing activities:
Deferred payment for business acquisition
–
–
–
(12,907)
(5,563)
(831)
Proceeds from exercise of share options
310
2
–
310
33
5
Repurchase of ordinary shares
(103,072)
(2,335)
(349)
(106,151)
(2,335)
(349)
Repurchase of subsidiary’s share options
(2,780)
(21,110)
(3,152)
(5,561)
(25,537)
(3,813)
Dividends payment
(852,743)
(840,997)
(125,558)
(852,743)
(840,997)
(125,558)
Payment for redemption of convertible bonds
–
(1,002,537)
(149,675)
–
(1,112,544)
(166,098)
Net cash used in financing activities
(958,285)
(1,866,977)
(278,734)
(977,052)
(1,986,943)
(296,644)
Effect of exchange rate changes
(28,952)
93,897
14,020
(25,036)
78,286
11,689
Net decrease in cash and cash equivalents
(1,208,470)
(749,450)
(111,890)
(1,082,005)
(1,099,837)
(164,201)
Cash, cash equivalents and restricted cash at the beginning of period
3,492,537
5,296,647
790,769
3,366,072
5,647,034
843,080
Cash, cash equivalents and restricted cash at the end of period
2,284,067
4,547,197
678,879
2,284,067
4,547,197
678,879
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, 2021
Ended June 30, 2022
Ended June 30, 2022
GAAP
Amortization of
intangible assets from
business acquisitions
Share-based
compensation
Tax impacts
Non-GAAP
GAAP
Share-based
compensation
Non-GAAP
GAAP
Share-based
compensation
Non-GAAP
(ii)
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
US$
US$
US$
Cost of revenues
(2,070,329)
17,256
4,201
–
(2,048,872)
(1,797,846)
7,914
(1,789,932)
(268,411)
1,182
(267,229)
Research and development
(268,325)
1,461
33,965
–
(232,899)
(238,262)
23,965
(214,297)
(35,572)
3,578
(31,994)
Sales and marketing
(650,236)
16,137
14,588
–
(619,511)
(610,953)
10,894
(600,059)
(91,213)
1,626
(89,587)
General and administrative
(86,747)
–
7,904
–
(78,843)
(157,746)
75,175
(82,571)
(23,551)
11,223
(12,328)
Cost and operating expenses
(3,075,637)
34,854
60,658
–
(2,980,125)
(2,804,807)
117,948
(2,686,859)
(418,747)
17,609
(401,138)
Income from operations
686,345
34,854
60,658
–
781,857
346,178
117,948
464,126
51,683
17,609
69,292
Net income
464,160
34,854
60,658
(8,714)
550,958
345,569
117,948
463,517
51,592
17,609
69,201
attributable to Hello Group Inc.
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, 2021
Ended June 30, 2022
Ended June 30, 2022
GAAP
Amortization of
intangible assets
from business
acquisitions
Share-
based
compensa
tion
Tax impacts
Non-GAAP
GAAP
Share-based
compensation
Non-GAAP
GAAP
Share-based
compensation
Non-GAAP
(ii)
RMB
RMB
RMB
RMB
RMB
RMB
RMB
RMB
US$
US$
US$
Cost of revenues
(4,008,574)
34,567
7,925
–
(3,966,082)
(3,619,234)
10,992
(3,608,242)
(540,337)
1,641
(538,696)
Research and development
(554,818)
3,660
74,174
–
(476,984)
(488,457)
44,939
(443,518)
(72,925)
6,709
(66,216)
Sales and marketing
(1,263,809)
32,326
32,144
–
(1,199,339)
(1,199,530)
21,499
(1,178,031)
(179,085)
3,210
(175,875)
General and administrative
(264,709)
–
91,672
–
(173,037)
(317,581)
149,134
(168,447)
(47,414)
22,265
(25,149)
Cost and operating expenses
(6,091,910)
70,553
205,915
–
(5,815,442)
(5,624,802)
226,564
(5,398,238)
(839,761)
33,825
(805,936)
Income from operations
1,166,568
70,553
205,915
–
1,443,036
698,192
226,564
924,756
104,237
33,825
138,062
Net income
925,819
70,553
205,915
(17,639)
1,184,648
635,454
226,564
862,018
94,870
33,825
128,695
attributable to Hello Group Inc.
(ii) Includes tax impacts related to the amortization of intangible assets from business acquisition.
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$
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 loss 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
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)
Three months
Ended June 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$[1]
Net revenues:
Live video service
1,884,821
216,511
–
2,101,332
325,455
Value-added service
1,210,220
297,038
–
1,507,258
233,445
Mobile marketing
51,601
–
–
51,601
7,992
Mobile games
9,182
–
–
9,182
1,422
Other services
1,706
–
635
2,341
362
Total net revenues
3,157,530
513,549
635
3,671,714
568,676
Cost and expenses (iv):
Cost of revenues
(1,796,504)
(266,197)
(7,628)
(2,070,329)
(320,653)
Research and development
(195,371)
(72,954)
–
(268,325)
(41,558)
Sales and marketing
(378,938)
(270,266)
(1,032)
(650,236)
(100,709)
General and administrative
(140,905)
59,205
(5,047)
(86,747)
(13,435)
Total cost and expenses
(2,511,718)
(550,212)
(13,707)
(3,075,637)
(476,355)
Other operating income
65,445
24,798
25
90,268
13,981
Income (loss) from operations
711,257
(11,865)
(13,047)
686,345
106,302
Interest income
94,112
291
45
94,448
14,628
Interest expense
(18,302)
–
–
(18,302)
(2,835)
Other gain or loss, net
(10,500)
–
–
(10,500)
(1,626)
Income (loss) before income tax and share of income on equity
method investments
776,567
(11,574)
(13,002)
751,991
116,469
Income tax (expenses) benefits
(296,344)
4,835
–
(291,509)
(45,149)
Income (loss) before share of income on equity method
investments
480,223
(6,739)
(13,002)
460,482
71,320
Share of income on equity method investments
1,042
–
–
1,042
161
Net income (loss)
481,265
(6,739)
(13,002)
461,524
71,481
(iv) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three months
Ended June 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Cost of revenues
2,640
1,561
–
4,201
651
Research and development
29,663
4,302
–
33,965
5,261
Sales and marketing
12,971
1,617
–
14,588
2,259
General and administrative
79,308
(71,404)
–
7,904
1,224
Total cost and expenses
124,582
(63,924)
–
60,658
9,395
[1] All translations from RMB to U.S. dollars are made at a rate of RMB6.4566 to US$1.00, the effective noon buying rate for June 30, 2021 as set forth in the H.10
statistical release of the Federal Reserve Board.
Hello Group Inc.
Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report
(All amounts in thousands, except share and per share data)
Three months
Ended June 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Income (loss) from operations
711,257
(11,865)
(13,047)
686,345
106,302
Share-based compensation
124,582
(63,924)
–
60,658
9,395
Amortization of intangible assets from
business acquisitions
–
34,854
–
34,854
5,398
Non-GAAP income (loss) from operations
835,839
(40,935)
(13,047)
781,857
121,095
Net income (loss)
481,265
(6,739)
(13,002)
461,524
71,481
Share-based compensation
124,582
(63,924)
–
60,658
9,395
Amortization of intangible assets from
business acquisitions
–
34,854
–
34,854
5,398
Tax impacts
–
(8,714)
–
(8,714)
(1,351)
Non-GAAP net income (loss)
605,847
(44,523)
(13,002)
548,322
84,923
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
Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
First half year
Ended June 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Net revenues:
Live video service
3,595,710
467,717
–
4,063,427
629,345
Value-added service
2,349,235
613,536
–
2,962,771
458,875
Mobile marketing
90,318
–
–
90,318
13,988
Mobile games
20,366
–
–
20,366
3,154
Other services
3,674
–
1,754
5,428
841
Total net revenues
6,059,303
1,081,253
1,754
7,142,310
1,106,203
Cost and expenses (vi):
Cost of revenues
(3,453,399)
(547,186)
(7,989)
(4,008,574)
(620,849)
Research and development
(400,701)
(154,117)
–
(554,818)
(85,930)
Sales and marketing
(705,767)
(556,976)
(1,066)
(1,263,809)
(195,739)
General and administrative
(300,356)
45,084
(9,437)
(264,709)
(40,998)
Total cost and expenses
(4,860,223)
(1,213,195)
(18,492)
(6,091,910)
(943,516)
Other operating income
85,406
30,736
26
116,168
17,992
Income (loss) from operations
1,284,486
(101,206)
(16,712)
1,166,568
180,679
Interest income
190,455
596
91
191,142
29,604
Interest expense
(36,663)
–
–
(36,663)
(5,678)
Other gain or loss, net
(18,000)
–
–
(18,000)
(2,788)
Income (loss) before income tax and share
of income on equity method investments
1,420,278
(100,610)
(16,621)
1,303,047
201,817
Income tax (expenses) benefits
(389,946)
7,039
–
(382,907)
(59,305)
Income (loss) before share of income on
equity method investments
1,030,332
(93,571)
(16,621)
920,140
142,512
Share of income on equity method
investments
2,303
–
–
2,303
357
Net income (loss)
1,032,635
(93,571)
(16,621)
922,443
142,869
(vi) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
First half year
ended June 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Cost of revenues
4,965
2,960
–
7,925
1,227
Research and development
60,188
13,986
–
74,174
11,488
Sales and marketing
25,877
6,267
–
32,144
4,978
General and administrative
160,792
(69,120)
–
91,672
14,198
Total cost and expenses
251,822
(45,907)
–
205,915
31,891
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, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Operating income (loss)
1,284,486
(101,206)
(16,712)
1,166,568
180,679
Share-based compensation
251,822
(45,907)
–
205,915
31,891
Amortization of intangible assets
from business acquisitions
–
70,553
–
70,553
10,928
Non-GAAP operating income
(loss)
1,536,308
(76,560)
(16,712)
1,443,036
223,498
Net income (loss)
1,032,635
(93,571)
(16,621)
922,443
142,869
Share-based compensation
251,822
(45,907)
–
205,915
31,891
Amortization of intangible assets
from business acquisitions
–
70,553
–
70,553
10,928
Tax impacts
–
(17,639)
–
(17,639)
(2,732)
Non-GAAP net income (loss)
1,284,457
(86,564)
(16,621)
1,181,272
182,956