#China #Beijing #Hello Group #Tantan #Momo

Hello Group Inc. Reports Q3 2024 Financial Results

Hello Group Inc., a key player in China's online social networking, has revealed its unaudited financial performance for the third quarter of 2024. The company reported a notable decrease in net revenues and income compared to the previous year, a reflection of the ongoing adjustments in their business strategy.

Financial Performance Overview

In the third quarter of 2024, Hello Group's net revenues dropped by 12.1% year-over-year, totaling RMB 2,674.7 million (approximately $381.1 million). The decline in financial performance can be attributed to various factors, including competitive pressures within the sector and changing consumer preferences. Net income attributable to Hello Group fell to RMB 449.4 million ($64.0 million), down from RMB 546.4 million a year prior. Similarly, non-GAAP net income saw a decrease to RMB 493.3 million ($70.3 million) from RMB 605.9 million in Q3 2023.

The diluted net income per American Depositary Share (ADS) was reported at RMB 2.46 ($0.35), down from RMB 2.75 from the same period last year. Additionally, the total number of monthly active users (MAU) for the Tantan app dropped significantly, with a reported 12 million users in September 2024 compared to 15.7 million in 2023.

Revenue Breakdown

Breaking down the revenue sources, live video service revenues amounted to RMB 1,286.4 million ($183.3 million) for Q3 2024, marking a decrease of 16.0% from RMB 1,530.8 million in the same quarter of the previous year. This drop is mainly due to the company's decision to shift focus away from large-scale competitive events on the Momo app, coupled with weaker consumer sentiment in the current economic environment.

Value-added services, which include revenue from virtual gifts and subscription services, also saw a decline, totaling RMB 1,356.3 million ($193.3 million), a drop of 7.5% from the previous year's RMB 1,466.7 million. The decrease in user base and paying users for Tantan further impacted revenues, with their paying user count dropping to 0.9 million in Q3 2024 from 1.4 million in the same period last year.

Operational Adjustments and Strategic Outlook

Chairman and CEO Yan Tang stated, "Q3 2024 was a fruitful quarter for us. We delivered satisfactory financial results and executed well against our strategic priorities across all business lines." He highlighted that their overseas business exhibited a resurgence due to improved operational efficiency and progressive localization efforts. The company is optimistic about diversifying and investing further into global markets.

The focus on optimizations and user experience also reflects Hello Group's intent to rebound from the latest financial setbacks. The company plans to continue enhancing its product offerings while preparing for potential economic challenges ahead.

Future Projections

Looking ahead to Q4 2024, Hello Group anticipates total net revenues to be in the range of RMB 2.56 billion to RMB 2.66 billion, indicating a projected decline of 14.7% to 11.4% year-over-year. This outlook is shaped by the current market conditions and operational contexts.

In conclusion, while Hello Group Inc. faces challenges reflected in declining revenues and user engagement, the company's proactive adjustments and strategic direction showcase its commitment to regaining market traction within the evolving landscape of social networking. The sustained focus on operational efficiency and product enhancement stands as a pivotal strategy moving forward.