#China #Beijing #Hello Group #Tantan #Momo

Hello Group Inc. Financial Overview for Q1 2025

Hello Group Inc. (NASDAQ: MOMO) recently announced its unaudited financial results for the first quarter of 2025. The company, which thrives in the online social and entertainment space within Asia, shared a report that highlights several key metrics of its financial performance.

Financial Highlights

In the first quarter, Hello Group reported net revenues of RMB 2,520.8 million (approximately US$347.4 million), reflecting a year-over-year decline of 1.5%. Notably, the revenues generated from overseas operations saw a remarkable increase of 71.9%, rising to RMB 414.6 million (about US$57.1 million).

Despite the decline in total net revenues, the company experienced substantial growth in net income attributable to its operations, which surged to RMB 358.0 million (US$49.3 million) compared to just RMB 5.2 million in Q1 of 2024. This shift indicates a significant improvement in profitability against the previous year’s performance.

Additionally, the non-GAAP net income attributable to Hello Group escalated to RMB 403.8 million (US$55.6 million), marking a significant leap from RMB 59.9 million the prior year. The diluted net income per American Depositary Share (ADS) saw an impressive climb from RMB 0.03 last year to RMB 2.07 (US$0.29) in Q1 2025. Likewise, the non-GAAP diluted net income per ADS increased from RMB 0.31 to RMB 2.34 (US$0.32).

Active usage saw a dip as the Monthly Active Users (MAUs) on the Tantan app were recorded at 10.7 million in March 2025, noticeably down from 13.7 million in March 2024. Similarly, Momo app noted a decrease in total paying users, down from 7.1 million last year to 4.2 million in the recent quarter.

Revenue Breakdown

The reduction in overall net revenues has been attributed largely to weaker consumer sentiment affecting top users in the current macro environment, particularly impacting the Momo app. Conversely, Tantan faced a decrease in paying users due to challenges in maintaining its user base. However, this trend was somewhat mitigated by robust growth in the overseas app sector, particularly from established brands like Soulchill.

Total value-added service revenues, which comprise virtual gift revenues from various user interactions, amounted to RMB 2,489.9 million (US$343.1 million). This figure represents a slight drop of 1.7% from RMB 2,532.9 million during the same period of 2024, primarily due to the decline in user spending and engagement.

Operating Costs and Expenses

Hello Group's costs and expenses climbed to RMB 2,234.5 million (US$307.9 million), reflecting an increase of 5.4% from the previous year. Increased expenses were primarily linked to revenue sharing with overseas virtual gift receivers and heightened sales and marketing efforts for international app promotion.

Tax Liabilities and Cash Flow

The income tax expenses for the quarter significantly dropped to RMB 70.4 million (US$9.7 million) down from RMB 557.6 million in Q1 2024, largely due to the prior year's provision for withholding taxes associated with undistributed earnings.

As of March 31, 2025, Hello Group's cash and cash equivalents totaled RMB 12,785.9 million (US$1,761.9 million), down from RMB 14,728.5 million at the end of 2024. Cash provided by operational activities was recorded at RMB 239.7 million (US$33.0 million), a noticeable decline from RMB 400.2 million last year.

Upcoming Outlook

Looking ahead, Hello Group projects total net revenues for Q2 2025 to be in the range of RMB 2.57 billion to RMB 2.67 billion, suggesting a potential decrease of 4.5% to 0.8% year-over-year. This projection reflects the company's current assumption based on prevailing market conditions.

With a strategic focus on overseas growth and adapting to user needs, Hello Group is poised to leverage its position as a key player in the online social networking domain in Asia. The upcoming quarters will be crucial as they seek to stabilize user engagement and enhance financial performance in a competitive landscape.