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