Hello Group Inc. Announces Unaudited Financial Results for the Third Quarter of 2022
BEIJING, Dec. 8, 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 third quarter of 2022.
Third Quarter of 2022 Highlights
Net revenues decreased by 14.0% year over year to RMB3,233.0 million (US$454.5 million*) in the third quarter of 2022. Net income attributable to Hello Group Inc. increased to RMB450.8 million (US$63.4 million) in the third quarter of 2022, from RMB403.2 million in the same period of 2021. Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB535.8 million (US$75.3 million) in the third quarter of 2022, from RMB571.6 million in the same period of 2021. Diluted net income per American Depositary Share (“ADS”) was RMB2.20 (US$0.31) in the third quarter of 2022, compared to RMB1.93 in the same period of 2021. Non-GAAP diluted net income per ADS (note 1) was RMB2.60 (US$0.37) in the third quarter of 2022, compared to RMB2.70 in the same period of 2021. Monthly Active Users (“MAU”) on Momo application were 108.8 million in September 2022, compared to 115.5 million in September 2021. MAU on Tantan application were 20.9 million in September 2022. For the Momo app total paying users was 8.4 million for the third quarter of 2022, compared to 9.3 million for the same period last year. Tantan had 2.0 million paying users for the third quarter of 2022 compared to 2.9 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 RMB7.1135 to US$1.00, the effective noon buying rate for September 30, 2022 as set forth in the H.10 statistical release of the Federal Reserve Board.
First Nine Months of 2022 Highlights
Net revenues decreased 12.9% year over year to RMB9,491.5 million (US$1,334.3 million) for the first nine months of 2022. Net income attributable to Hello Group Inc. was RMB1,086.3 million (US$152.7 million) for the first nine months of 2022, compared to RMB1,329.0 million during the same period of 2021. Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,397.8 million (US$196.5 million) for the first nine months of 2022, compared to RMB1,756.2 million during the same period of 2021. Diluted net income per ADS was RMB5.30 (US$0.75) for the first nine months of 2022, compared to RMB6.22 during the same period of 2021. Non-GAAP diluted net income per ADS (note 1) was RMB6.75 (US$0.95) for the first nine months of 2022, compared to RMB8.14 during the same period of 2021.
“I am very happy to return to the CEO position. In the third quarter, thanks to product and operational enhancements, we delivered good financial results and made solid progress across all business lines.” commented Yan Tang, Chairman and CEO of Hello Group. “Such progress on the business front, coupled with the efforts to improve cost efficiency, allowed us to see meaningful bottom line improvement on a sequential basis. I am very proud of the execution capabilities that the team demonstrated in such a challenging environment.”
Third Quarter of 2022 Financial Results
Net revenues
Total net revenues were RMB3,233.0 million (US$454.5 million) in the third quarter of 2022, a decrease of 14.0% from RMB3,759.2 million in the third quarter of 2021.
Live video service revenues were RMB1,657.5 million (US$233.0 million) in the third quarter of 2022, a decrease of 23.5% from RMB2,166.7 million during the same period of 2021. The decrease was primarily attributable to COVID related consumption softness and regulatory changes, and to a lesser extent, Tantan’s product adjustment to improve user experience in September last year and negative impact of pandemic resurgence and channel investment reduction.
Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,537.7 million (US$216.2 million) in the third quarter of 2022, an increase of 0.3% from RMB1,533.3 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 the negative impact of COVID and the reduction of channel investments on Tantan’s user growth and paying conversion.
Mobile marketing revenues were RMB28.2 million (US$4.0 million) in the third quarter of 2022, a decrease of 34.8% from RMB43.3 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.
Mobile games revenues were RMB7.7 million (US$1.1 million) in the third quarter of 2022, a decrease of 4.1% from RMB8.1 million in the third quarter of 2021. The decrease in mobile game revenues was mainly due to the decrease in paying users of mobile games.
Net revenues from the Momo segment decreased from RMB3,246.3 million in the third quarter of 2021 to RMB2,891.0 million (US$406.4 million) in the third quarter of 2022, primarily due to the decrease in net revenues from live video service. Net revenues from the Tantan segment decreased from RMB510.7 million in the third quarter of 2021 to RMB341.3 million (US$48.0 million) in the third quarter of 2022, due to our demonetization strategy to improve user experience, as well as the negative impact of COVID and the reduction of channel investments on Tantan’s user growth and paying conversion.
Cost and expenses
Cost and expenses were RMB2,734.2 million (US$384.4 million) in the third quarter of 2022, a decrease of 17.6% from RMB3,319.9 million in the third 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 sales and marketing expenses due to our initiatives to control cost and optimize Tantan’s channel marketing strategy; (c) a decrease in salary expenses and share-based compensation expenses, due to our continuous optimization in personnel costs since the beginning of the year and the decreased fair value of the share options new grants; (d) no production cost from television program and film compared to the third quarter of 2021; and (e) a decrease in depreciation and amortization cost due to the impairment of intangible assets in 2021.
Non-GAAP cost and expenses (note 1) were RMB2,649.2 million (US$372.4 million) in the third quarter of 2022, a decrease of 15.7% from RMB3,143.2 million during the same period of 2021.
Income from operations
Income from operations was RMB520.1 million (US$73.1 million) in the third quarter of 2022, compared to RMB460.5 million during the same period of 2021. Income from operations of the Momo segment was RMB569.4 million (US$80.0 million) in the third quarter of 2022, which decreased from RMB676.5 million in the third quarter of 2021. Loss from operations of the Tantan segment was RMB44.5 million (US$6.2 million) in the third quarter of 2022, compared to loss from operations of RMB179.8 million in the third quarter of 2021.
Non-GAAP income from operations (note 1) was RMB605.1 million (US$85.1 million) in the third quarter of 2022, compared to RMB637.2 million during the same period of 2021. Non-GAAP income from operations of the Momo segment was RMB648.2 million (US$91.1 million) in the third quarter of 2022, which decreased from RMB786.3 million in the third quarter of 2021. Non-GAAP loss from operations of the Tantan segment was RMB38.3 million (US$5.4 million) in the third quarter of 2022, compared to non-GAAP loss from operations of RMB112.9 million in the third quarter of 2021.
Other gain or loss, net
Other gain was RMB40.4 million (US$5.7 million) in the third quarter of 2022, which mainly resulted from the Company’s repurchase of its convertible senior notes from certain bond holders in the third quarter of 2022, partially offset by impairment loss on other long-term investments.
Income tax expenses
Income tax expenses were RMB156.0 million (US$21.9 million) in the third quarter of 2022, compared to RMB143.2 million in the third quarter of 2021. The increase was primarily due to the fact that in the third quarter of 2022, we accrued withholding income tax of RMB42.9 million (US$6.0 million) on undistributed earnings generated in the third 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 for US dollars in business operations, payments of dividends and debts, potential investments, share repurchase plan, etc.
Net income
Net income was RMB449.9 million (US$63.2 million) in the third quarter of 2022, compared to RMB395.9 million during the same period of 2021. Net income from the Momo segment was RMB499.6 million (US$70.2 million) in the third quarter of 2022, compared to RMB611.1 million in the same period of 2021. Net loss from the Tantan segment was RMB45.0 million (US$6.3 million) in the third quarter of 2022, compared to net loss of RMB179.0 million in the third quarter of 2021.
Non-GAAP net income (note 1) was RMB534.8 million (US$75.2 million) in the third quarter of 2022, compared to RMB564.3 million during the same period of 2021. Non-GAAP net income from the Momo segment was RMB578.4 million (US$81.3 million) in the third quarter of 2022, which decreased from RMB720.9 million in the third quarter of 2021. Non-GAAP net loss of the Tantan segment was RMB38.8 million (US$5.5 million) in the third quarter of 2022, compared to non-GAAP net loss of RMB120.5 million in the third quarter of 2021.
Net income attributable to Hello Group Inc.
Net income attributable to Hello Group Inc. was RMB450.8 million (US$63.4 million) in the third quarter of 2022, compared to a net income of RMB403.2 million during the same period of 2021.
Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB535.8 million (US$75.3 million) in the third quarter of 2022, compared to RMB571.6 million during the same period of 2021.
Net income per ADS
Diluted net income per ADS was RMB2.20 (US$0.31) in the third quarter of 2022, compared to RMB1.93 in the third quarter of 2021.
Non-GAAP diluted net income per ADS (note 1) was RMB2.60 (US$0.37) in the third quarter of 2022, compared to RMB2.70 in the third quarter of 2021.
Cash and cash flow
As of September 30, 2022, the Company’s cash, cash equivalents, short-term deposits, long-term deposits, short-term restricted cash and long-term restricted cash totaled RMB13,021.3 million (US$1,830.5 million), compared to RMB15,707.0 million as of December 31, 2021. The decrease was due to a number of cash outflow items, including our cash dividend payment of RMB841.0 million (US$118.2 million) to shareholders; an aggregate payment of RMB2,137.0 million (US$300.4 million) for the repurchase of the company’s convertible notes; an aggregate of RMB287.7 million (US$40.4 million) in relation to the share repurchase program; and RMB300.0 million (US$42.2 million) payment to Chinese tax authorities to repatriate cash from our WOFE in China to our offshore entity in the first nine months of 2022.
Net cash provided by operating activities in the third quarter of 2022 was RMB444.5 million (US$62.5 million), compared to RMB559.9 million in the third quarter of 2021.
First Nine Months of 2022 Financial Results
Net revenues for the first nine months of 2022 were RMB9,491.5 million (US$1,334.3 million), a decrease of 12.9% from RMB10,901.5 million in the same period of 2021.
Net income attributable to Hello Group Inc. was RMB1,086.3 million (US$152.7 million) for the first nine months of 2022, compared to RMB1,329.0 million during the same period of 2021.
Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,397.8 million (US$196.5 million) for the first nine months of 2022, compared to RMB1,756.2 million during the same period of 2021.
Diluted net income per ADS was RMB5.30 (US$0.75) during the first nine months of 2022, compared to RMB6.22 in the same period of 2021.
Non-GAAP diluted net income per ADS (note 1) was RMB6.75 (US$0.95) during the first nine months of 2022, compared to RMB8.14 in the same period of 2021.
Net cash provided by operating activities was RMB688.2 million (US$96.7 million) during the first nine months of 2022, compared to RMB893.7 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 December 8, 2022, the Company has repurchased 12.0 million ADSs for US$56.7 million on the open market under this program, at an average purchase price of US$4.71 per ADS.
Business Outlook
For the fourth quarter of 2022, the Company expects total net revenues to be between RMB3.15 billion to RMB3.25 billion, representing a decrease of 14.3% to 11.5% 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, December 8, 2022, at 8:00 a.m. U.S. Eastern Time (9:00 p.m. Beijing / Hong Kong Time on December 8, 2022).
Participants can register for the conference call by navigating to:
https://s1.c-conf.com/diamondpass/10027148-ghj92l.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 December 15, 2022. The dial-in details for the replay are as follows:
U.S. / Canada: 1-855-883-1031
Hong Kong: 800-930-639
Passcode: 10027148
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 fourth 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 third quarter of 2022 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the fourth 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 nine months
Ended September 30
Ended September 30
2021
2022
2022
2021
2022
2022
RMB
RMB
US$
RMB
RMB
US$
Net revenues:
Live video service
2,166,733
1,657,531
233,012
6,230,160
4,786,232
672,838
Value-added service
1,533,288
1,537,666
216,162
4,496,059
4,557,481
640,681
Mobile marketing
43,323
28,243
3,970
133,641
92,029
12,937
Mobile games
8,052
7,719
1,085
28,418
50,416
7,087
Other services
7,784
1,862
262
13,212
5,356
753
Total net revenues
3,759,180
3,233,021
454,491
10,901,490
9,491,514
1,334,296
Cost and expenses:
Cost of revenues
(2,183,337)
(1,886,135)
(265,149)
(6,191,911)
(5,505,369)
(773,933)
Research and development
(260,939)
(245,105)
(34,456)
(815,757)
(733,562)
(103,123)
Sales and marketing
(680,896)
(467,012)
(65,652)
(1,944,705)
(1,666,542)
(234,279)
General and administrative
(194,734)
(135,933)
(19,109)
(459,443)
(453,514)
(63,754)
Total cost and expenses
(3,319,906)
(2,734,185)
(384,366)
(9,411,816)
(8,358,987)
(1,175,089)
Other operating income
21,221
21,289
2,993
137,389
85,790
12,060
Income from operations
460,495
520,125
73,118
1,627,063
1,218,317
171,267
Interest income
93,564
89,274
12,550
284,706
280,761
39,469
Interest expense
(18,669)
(25,010)
(3,516)
(55,332)
(72,575)
(10,202)
Other gain or loss, net
–
40,403
5,680
(18,000)
118,325
16,634
Income before income tax and
share of income on equity method
investments
535,390
624,792
87,832
1,838,437
1,544,828
217,168
Income tax expenses
(143,158)
(156,041)
(21,936)
(526,065)
(452,860)
(63,662)
Income before share of income on
equity method investments
392,232
468,751
65,896
1,312,372
1,091,968
153,506
Share of income (loss) on equity
method investments
3,658
(18,880)
(2,654)
5,961
(8,967)
(1,261)
Net income
395,890
449,871
63,242
1,318,333
1,083,001
152,245
Less: net loss attributable to non-
controlling interest
(7,301)
(964)
(136)
(10,677)
(3,288)
(462)
Net income attributable to the
shareholders of Hello Group Inc.
403,191
450,835
63,378
1,329,010
1,086,289
152,707
Net income per share attributable to
ordinary shareholders
Basic
1.01
1.15
0.16
3.26
2.75
0.39
Diluted
0.96
1.1
0.15
3.11
2.65
0.37
Weighted average shares used in
calculating net income per ordinary share
Basic
400,835,428
391,027,485
391,027,485
408,074,205
394,333,009
394,333,009
Diluted
437,639,164
423,608,050
423,608,050
444,906,615
429,765,849
429,765,849
Hello Group Inc.
Unaudited Condensed Consolidated Statement of Comprehensive Income
(All amounts in thousands, except share and per share data)
Three months
First nine months
Ended September 30
Ended September 30
2021
2022
2022
2021
2022
2022
RMB
RMB
US$
RMB
RMB
US$
Net income
395,890
449,871
63,242
1,318,333
1,083,001
152,245
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment
368
(188,343)
(26,477)
(31,830)
(328,832)
(46,226)
Comprehensive income
396,258
261,528
36,765
1,286,503
754,169
106,019
Less: comprehensive (loss) income attributed to the non-
controlling interest
(7,540)
10,831
1,523
(13,323)
17,710
2,490
Comprehensive income attributable to Hello Group Inc.
403,798
250,697
35,242
1,299,826
736,459
103,529
Hello Group Inc.
Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands, except share and per share data)
December 31
September 30
September 30
2021
2022
2022
RMB
RMB
US$
Assets
Current assets
Cash and cash equivalents
5,570,563
3,435,616
482,971
Short-term deposits
2,860,000
5,900,000
829,409
Restricted cash
–
100,327
14,104
Accounts receivable, net of allowance for doubtful accounts of RMB15,127
and RMB5,945 as of December 31, 2021 and September 30, 2022,
respectively
205,225
194,344
27,320
Prepaid expenses and other current assets
775,072
877,348
123,336
Total current assets
9,410,860
10,507,635
1,477,140
Long-term deposits
7,200,000
3,500,000
492,022
Long-term restricted cash
76,471
85,362
12,000
Right-of-use assets, net
257,934
142,492
20,031
Property and equipment, net
180,664
186,949
26,281
Intangible assets, net
27,320
23,482
3,301
Rental deposits
19,204
20,737
2,915
Long-term investments
820,006
863,452
121,382
Other non-current assets
83,930
119,620
16,816
Deferred tax assets
34,849
35,836
5,038
Total assets
18,111,238
15,485,565
2,176,926
Liabilities and equity
Current liabilities
Accounts payable
726,207
622,980
87,576
Deferred revenue
539,967
467,763
65,757
Accrued expenses and other current liabilities
911,050
664,867
93,466
Amount due to related parties
5,016
9,443
1,327
Lease liabilities due within one year
162,950
102,585
14,421
Income tax payable
125,773
74,848
10,522
Deferred consideration in connection with business acquisitions
44,802
27,313
3,840
Convertible Senior Notes-current
–
2,726,763
383,322
Total current liabilities
2,515,765
4,696,562
660,231
Deferred tax liabilities
213,384
37,635
5,291
Convertible senior notes
4,565,292
–
–
Lease liabilities
103,105
42,578
5,986
Other non-current liabilities
128,095
114,577
16,107
Total liabilities
7,525,641
4,891,352
687,615
Shareholder’s equity (i)
10,585,597
10,594,213
1,489,311
Total liabilities and shareholder’s equity
18,111,238
15,485,565
2,176,926
(i): As of September 30, 2022, the number of ordinary shares outstanding was 385,309,239.
Hello Group Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(All amounts in thousands, except share and per share data)
Three months
First nine months
Ended September 30
Ended September 30
2021
2022
2022
2021
2022
2022
RMB
RMB
US$
RMB
RMB
US$
Cash flows from operating activities:
Net income
395,890
449,871
63,242
1,318,333
1,083,001
152,245
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation of property and equipment
38,696
27,047
3,802
121,311
83,107
11,683
Amortization of intangible assets
34,722
1,279
180
107,783
3,837
539
Share-based compensation
143,280
84,976
11,945
349,195
311,540
43,797
Share of income (loss) on equity method investments
(3,658)
18,880
2,654
(5,961)
8,967
1,261
Gain on repurchase of convertible senior notes
–
(51,653)
(7,261)
–
(129,575)
(18,215)
Loss on long-term investments
–
11,250
1,581
18,000
11,250
1,581
Gain on disposal of subsidiaries
–
–
–
(15,526)
–
–
Cash received on distributions from equity method investments
–
–
–
–
1,708
240
Loss or gain on disposal of property and equipment
2,351
(923)
(130)
1,272
(783)
(110)
Provision of losses on receivable and other assets
(322)
(820)
(115)
242
(453)
(64)
Changes in operating assets and liabilities:
Accounts receivable
(1,616)
22,973
3,229
(24,358)
15,695
2,206
Prepaid expenses and other current assets
(85,048)
41,418
5,822
(203,666)
(16,144)
(2,269)
Rental deposits
(922)
716
101
(1,514)
1,399
197
Deferred tax assets
(782)
590
83
(2,016)
(986)
(139)
Other non-current assets
(57,100)
16,130
2,268
(8,050)
76,820
10,799
Accounts payable
(28,400)
(438)
(62)
19,422
(106,392)
(14,956)
Income tax payable
24,947
(15,635)
(2,198)
(71,431)
(50,923)
(7,159)
Deferred revenue
9,369
(19,356)
(2,721)
25,454
(73,891)
(10,387)
Accrued expenses and other current liabilities
56,954
(108,513)
(15,255)
(38,829)
(304,346)
(42,784)
Amount due to related parties
1,860
7,824
1,100
(4,696)
4,427
622
Deferred tax liabilities
(8,676)
(14,425)
(2,028)
(26,941)
(171,752)
(24,145)
Share-based compensation liability
–
–
–
(678,153)
–
–
Other non-current liabilities
38,335
(26,655)
(3,747)
13,818
(58,311)
(8,197)
Net cash provided by operating activities
559,880
444,536
62,490
893,689
688,195
96,745
Cash flows from investing activities:
Purchase of property and equipment
(30,919)
(27,051)
(3,803)
(76,122)
(70,392)
(9,896)
Payment for long-term investments
–
–
–
(300,000)
(55,343)
(7,780)
Purchase of short-term deposits
(2,100,000)
(1,700,000)
(238,982)
(4,576,688)
(1,700,000)
(238,982)
Cash received on maturity of short-term deposits
3,458,658
2,700,000
379,560
6,117,570
3,710,000
521,544
Cash received on investment income distribution
–
–
–
5,610
3,523
495
Cash of disposed subsidiaries
–
–
–
(8,750)
–
–
Purchase of long-term deposits
–
(1,000,000)
(140,578)
(250,000)
(2,550,000)
(358,473)
Cash received on maturity of long-term deposits
–
–
–
–
1,200,000
168,693
Other investing activities
13
2,781
391
2,406
3,103
436
Net cash provided by (used in) investing activities
1,327,752
(24,270)
(3,412)
914,026
540,891
76,037
Cash flows from financing activities:
Deferred payment for business acquisition
–
(15,858)
(2,229)
(12,907)
(21,421)
(3,011)
Proceeds from exercise of share options
461
18
3
771
51
7
Payment in relation to the share repurchase program
(756,714)
(285,355)
(40,115)
(862,865)
(287,690)
(40,443)
Repurchase of subsidiary’s share options
(48,489)
(14,330)
(2,014)
(54,050)
(39,867)
(5,604)
Dividends payment
–
–
–
(852,743)
(840,997)
(118,225)
Payment for redemption of convertible bonds
–
(1,024,443)
(144,014)
–
(2,136,987)
(300,413)
Net cash used in financing activities
(804,742)
(1,339,968)
(188,369)
(1,781,794)
(3,326,911)
(467,689)
Effect of exchange rate changes
(3,661)
(6,190)
(869)
(28,697)
72,096
10,135
Net increase (decrease) in cash and cash equivalents
1,079,229
(925,892)
(130,160)
(2,776)
(2,025,729)
(284,772)
Cash, cash equivalents and restricted cash at the beginning of period
2,284,067
4,547,197
639,235
3,366,072
5,647,034
793,847
Cash, cash equivalents and restricted cash at the end of period
3,363,296
3,621,305
509,075
3,363,296
3,621,305
509,075
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 September 30, 2021
Ended September 30, 2022
Ended September 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
(2,183,337)
17,286
6,623
–
(2,159,428)
(1,886,135)
1,496
(1,884,639)
(265,149)
210
(264,939)
Research and development
(260,939)
–
29,094
–
(231,845)
(245,105)
21,713
(223,392)
(34,456)
3,052
(31,404)
Sales and marketing
(680,896)
16,165
27,653
–
(637,078)
(467,012)
8,453
(458,559)
(65,652)
1,188
(64,464)
General and administrative
(194,734)
–
79,910
–
(114,824)
(135,933)
53,314
(82,619)
(19,109)
7,495
(11,614)
Cost and operating expenses
(3,319,906)
33,451
143,280
–
(3,143,175)
(2,734,185)
84,976
(2,649,209)
(384,366)
11,945
(372,421)
Income from operations
460,495
33,451
143,280
–
637,226
520,125
84,976
605,101
73,118
11,945
85,063
Net income attributable to Hello
Group Inc.
403,191
33,451
143,280
(8,363)
571,559
450,835
84,976
535,811
63,378
11,945
75,323
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 nine months
First nine months
First nine months
Ended September 30, 2021
Ended September 30, 2022
Ended September 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
(6,191,911)
51,853
14,548
–
(6,125,510)
(5,505,369)
12,488
(5,492,881)
(773,933)
1,756
(772,177)
Research and development
(815,757)
3,660
103,268
–
(708,829)
(733,562)
66,652
(666,910)
(103,123)
9,370
(93,753)
Sales and marketing
(1,944,705)
48,491
59,797
–
(1,836,417)
(1,666,542)
29,952
(1,636,590)
(234,279)
4,211
(230,068)
General and administrative
(459,443)
–
171,582
–
(287,861)
(453,514)
202,448
(251,066)
(63,754)
28,460
(35,294)
Cost and operating expenses
(9,411,816)
104,004
349,195
–
(8,958,617)
(8,358,987)
311,540
(8,047,447)
(1,175,089)
43,797
(1,131,292)
Income from operations
1,627,063
104,004
349,195
–
2,080,262
1,218,317
311,540
1,529,857
171,267
43,797
215,064
Net income attributable to
Hello Group Inc.
1,329,010
104,004
349,195
(26,002)
1,756,207
1,086,289
311,540
1,397,829
152,707
43,797
196,504
(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 September 30, 2022
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Net revenues:
Live video service
1,517,872
139,659
–
1,657,531
233,012
Value-added service
1,336,050
201,616
–
1,537,666
216,162
Mobile marketing
28,243
–
–
28,243
3,970
Mobile games
7,719
–
–
7,719
1,085
Other services
1,126
–
736
1,862
262
Total net revenues
2,891,010
341,275
736
3,233,021
454,491
Cost and expenses (iii):
Cost of revenues
(1,704,934)
(180,277)
(924)
(1,886,135)
(265,149)
Research and development
(176,727)
(68,378)
–
(245,105)
(34,456)
Sales and marketing
(335,350)
(130,222)
(1,440)
(467,012)
(65,652)
General and administrative
(124,184)
(8,574)
(3,175)
(135,933)
(19,109)
Total cost and expenses
(2,341,195)
(387,451)
(5,539)
(2,734,185)
(384,366)
Other operating income
19,563
1,722
4
21,289
2,993
Income (loss) from operations
569,378
(44,454)
(4,799)
520,125
73,118
Interest income
89,003
187
84
89,274
12,550
Interest expense
(25,010)
–
–
(25,010)
(3,516)
Other gain or loss, net
40,403
–
–
40,403
5,680
Income (loss) before income tax and share of income on equity
method investments
673,774
(44,267)
(4,715)
624,792
87,832
Income tax expenses
(155,328)
(713)
–
(156,041)
(21,936)
Income (loss) before share of income on equity method
investments
518,446
(44,980)
(4,715)
468,751
65,896
Share of loss on equity method investments
(18,880)
–
–
(18,880)
(2,654)
Net income (loss)
499,566
(44,980)
(4,715)
449,871
63,242
(iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three months
Ended September 30, 2022
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Cost of revenues
1,478
18
–
1,496
210
Research and development
15,640
6,073
–
21,713
3,052
Sales and marketing
8,446
7
–
8,453
1,188
General and administrative
53,272
42
–
53,314
7,495
Total cost and expenses
78,836
6,140
–
84,976
11,945
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 September 30, 2022
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Income (loss) from operations
569,378
(44,454)
(4,799)
520,125
73,118
Share-based compensation
78,836
6,140
–
84,976
11,945
Non-GAAP income (loss) from operations
648,214
(38,314)
(4,799)
605,101
85,063
Net income (loss)
499,566
(44,980)
(4,715)
449,871
63,242
Share-based compensation
78,836
6,140
–
84,976
11,945
Non-GAAP net income (loss)
578,402
(38,840)
(4,715)
534,847
75,187
Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
Three months
Ended September 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$[1]
Net revenues:
Live video service
1,932,141
234,592
–
2,166,733
336,272
Value-added service
1,257,158
276,130
–
1,533,288
237,962
Mobile marketing
43,323
–
–
43,323
6,724
Mobile games
8,052
–
–
8,052
1,250
Other services
5,589
–
2,195
7,784
1,208
Total net revenues
3,246,263
510,722
2,195
3,759,180
583,416
Cost and expenses (iv):
Cost of revenues
(1,884,931)
(269,376)
(29,030)
(2,183,337)
(338,849)
Research and development
(194,475)
(66,464)
–
(260,939)
(40,497)
Sales and marketing
(336,691)
(341,636)
(2,569)
(680,896)
(105,673)
General and administrative
(171,609)
(16,321)
(6,804)
(194,734)
(30,222)
Total cost and expenses
(2,587,706)
(693,797)
(38,403)
(3,319,906)
(515,241)
Other operating income
17,946
3,270
5
21,221
3,293
Income (loss) from operations
676,503
(179,805)
(36,203)
460,495
71,468
Interest income
93,174
356
34
93,564
14,521
Interest expense
(18,669)
–
–
(18,669)
(2,897)
Income (loss) before income tax and share of income on
equity method investments
751,008
(179,449)
(36,169)
535,390
83,092
Income tax (expenses) benefits
(143,562)
404
–
(143,158)
(22,218)
Income (loss) before share of income on equity method
investments
607,446
(179,045)
(36,169)
392,232
60,874
Share of income on equity method investments
3,658
–
–
3,658
568
Net income (loss)
611,104
(179,045)
(36,169)
395,890
61,442
(iv) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three months
Ended September 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Cost of revenues
2,847
3,776
–
6,623
1,028
Research and development
18,071
11,023
–
29,094
4,515
Sales and marketing
11,280
16,373
–
27,653
4,292
General and administrative
77,616
2,294
–
79,910
12,402
Total cost and expenses
109,814
33,466
–
143,280
22,237
[1] All translations from RMB to U.S. dollars are made at a rate of RMB6.4434 to US$1.00, the effective noon buying rate for September 30, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board.
Hello Group Inc.
Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report
(All amounts in thousands, except share and per share data)
Three months
Ended September 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Income (loss) from operations
676,503
(179,805)
(36,203)
460,495
71,468
Share-based compensation
109,814
33,466
–
143,280
22,237
Amortization of intangible assets from
business acquisitions
–
33,451
–
33,451
5,192
Non-GAAP income (loss) from operations
786,317
(112,888)
(36,203)
637,226
98,897
Net income (loss)
611,104
(179,045)
(36,169)
395,890
61,442
Share-based compensation
109,814
33,466
–
143,280
22,237
Amortization of intangible assets from
business acquisitions
–
33,451
–
33,451
5,192
Tax impacts
–
(8,363)
–
(8,363)
(1,298)
Non-GAAP net income (loss)
720,918
(120,491)
(36,169)
564,258
87,573
Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
First nine months
Ended September 30, 2022
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Net revenues:
Live video service
4,404,991
381,241
–
4,786,232
672,838
Value-added service
3,917,609
639,872
–
4,557,481
640,681
Mobile marketing
92,029
–
–
92,029
12,937
Mobile games
50,416
–
–
50,416
7,087
Other services
4,298
–
1,058
5,356
753
Total net revenues
8,469,343
1,021,113
1,058
9,491,514
1,334,296
Cost and expenses (v):
Cost of revenues
(4,981,345)
(522,188)
(1,836)
(5,505,369)
(773,933)
Research and development
(536,640)
(196,922)
–
(733,562)
(103,123)
Sales and marketing
(1,039,526)
(623,680)
(3,336)
(1,666,542)
(234,279)
General and administrative
(415,954)
(25,335)
(12,225)
(453,514)
(63,754)
Total cost and expenses
(6,973,465)
(1,368,125)
(17,397)
(8,358,987)
(1,175,089)
Other operating income
76,253
9,491
46
85,790
12,060
Income (loss) from operations
1,572,131
(337,521)
(16,293)
1,218,317
171,267
Interest income
280,252
291
218
280,761
39,469
Interest expense
(72,575)
–
–
(72,575)
(10,202)
Other gain or loss, net
118,325
–
–
118,325
16,634
Income (loss) before income tax and share
of income on equity method investments
1,898,133
(337,230)
(16,075)
1,544,828
217,168
Income tax expenses
(451,061)
(1,799)
–
(452,860)
(63,662)
Income (loss) before share of income on
equity method investments
1,447,072
(339,029)
(16,075)
1,091,968
153,506
Share of loss on equity method investments
(8,967)
–
–
(8,967)
(1,261)
Net income (loss)
1,438,105
(339,029)
(16,075)
1,083,001
152,245
(v) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
First nine months
Ended September 30, 2022
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Cost of revenues
5,477
7,011
–
12,488
1,756
Research and development
51,752
14,900
–
66,652
9,370
Sales and marketing
29,729
223
–
29,952
4,211
General and administrative
202,319
129
–
202,448
28,460
Total cost and expenses
289,277
22,263
–
311,540
43,797
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 nine months
ended September 30, 2022
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Operating income (loss)
1,572,131
(337,521)
(16,293)
1,218,317
171,267
Share-based compensation
289,277
22,263
–
311,540
43,797
Non-GAAP operating income
(loss)
1,861,408
(315,258)
(16,293)
1,529,857
215,064
Net income (loss)
1,438,105
(339,029)
(16,075)
1,083,001
152,245
Share-based compensation
289,277
22,263
–
311,540
43,797
Non-GAAP net income (loss)
1,727,382
(316,766)
(16,075)
1,394,541
196,042
Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
First nine months
Ended September 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Net revenues:
Live video service
5,527,851
702,309
–
6,230,160
966,906
Value-added service
3,606,393
889,666
–
4,496,059
697,777
Mobile marketing
133,641
–
–
133,641
20,741
Mobile games
28,418
–
–
28,418
4,410
Other services
9,263
–
3,949
13,212
2,051
Total net revenues
9,305,566
1,591,975
3,949
10,901,490
1,691,885
Cost and expenses (vi):
Cost of revenues
(5,338,330)
(816,562)
(37,019)
(6,191,911)
(960,970)
Research and development
(595,176)
(220,581)
–
(815,757)
(126,604)
Sales and marketing
(1,042,458)
(898,612)
(3,635)
(1,944,705)
(301,813)
General and administrative
(471,965)
28,763
(16,241)
(459,443)
(71,304)
Total cost and expenses
(7,447,929)
(1,906,992)
(56,895)
(9,411,816)
(1,460,691)
Other operating income
103,352
34,006
31
137,389
21,322
Income (loss) from operations
1,960,989
(281,011)
(52,915)
1,627,063
252,516
Interest income
283,629
952
125
284,706
44,186
Interest expense
(55,332)
–
–
(55,332)
(8,587)
Other gain or loss, net
(18,000)
–
–
(18,000)
(2,794)
Income (loss) before income tax and share of
income on equity method investments
2,171,286
(280,059)
(52,790)
1,838,437
285,321
Income tax (expenses) benefits
(533,508)
7,443
–
(526,065)
(81,644)
Income (loss) before share of income on
equity method investments
1,637,778
(272,616)
(52,790)
1,312,372
203,677
Share of income on equity method investments
5,961
–
–
5,961
925
Net income (loss)
1,643,739
(272,616)
(52,790)
1,318,333
204,602
(vi) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
First nine months
ended September 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Cost of revenues
7,812
6,736
–
14,548
2,258
Research and development
78,259
25,009
–
103,268
16,027
Sales and marketing
37,157
22,640
–
59,797
9,280
General and administrative
238,408
(66,826)
–
171,582
26,629
Total cost and expenses
361,636
(12,441)
–
349,195
54,194
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 nine months
ended September 30, 2021
Momo
Tantan
QOOL
Total
Total
RMB
RMB
RMB
RMB
US$
Operating income (loss)
1,960,989
(281,011)
(52,915)
1,627,063
252,516
Share-based compensation
361,636
(12,441)
–
349,195
54,194
Amortization of intangible assets
from business acquisitions
–
104,004
–
104,004
16,141
Non-GAAP operating income (loss)
2,322,625
(189,448)
(52,915)
2,080,262
322,851
Net income (loss)
1,643,739
(272,616)
(52,790)
1,318,333
204,602
Share-based compensation
361,636
(12,441)
–
349,195
54,194
Amortization of intangible assets
from business acquisitions
–
104,004
–
104,004
16,141
Tax impacts
–
(26,002)
–
(26,002)
(4,035)
Non-GAAP net income (loss)
2,005,375
(207,055)
(52,790)
1,745,530
270,902