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Hello Group Inc. Announces Unaudited Financial Results for the Second Quarter of 2021

BEIJING, Aug. 26, 2021 /PRNewswire/ -- Hello Group Inc. (NASDAQ: MOMO) (the "Company"), a leading mobile social and entertainment platform in China, today announced its unaudited financial results for the second quarter of 2021.

Second Quarter of 2021 Highlights

  • Net revenues decreased by 5.1% year over year to RMB3,671.7 million (US$568.7 million*) in the second quarter of 2021.
  • Net income attributable to Hello Group Inc. increased to RMB464.2 million (US$71.9 million) in the second quarter of 2021 from RMB456.4 million in the same period of 2020.
  • Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB551.0 million (US$85.3 million) in the second quarter of 2021, from RMB669.8 million in the same period of 2020.
  • Diluted net income per American Depositary Share ("ADS") was RMB2.15 (US$0.33) in the second quarter of 2021, compared to RMB2.11 in the same period of 2020.
  • Non-GAAP diluted net income per ADS (note 1) was RMB2.54 (US$0.39) in the second quarter of 2021, compared to RMB3.05 in the same period of 2020.
  • Monthly Active Users ("MAU") on the Company application were 115.6 million in June 2021, compared to 111.5 million in June 2020.
  • Total paying users of our live video service and value-added service, without double counting the overlap and including 3.1 million paying users of Tantan Limited ("Tantan"), were 12.4 million for the second quarter of 2021, compared to 12.8 million for the second quarter of 2020, which included 3.9 million paying users of Tantan.

First Half of 2021 Highlights

  • Net revenues decreased 4.3% year over year to RMB7,142.3 million (US$1,106.2 million) for the first half of 2021.
  • Net income attributable to Hello Group Inc. was RMB925.8 million (US$143.4 million) for the first half of 2021, compared with RMB995.3 million during the same period of 2020.
  • Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,184.6 million (US$183.5 million) for the first half of 2021, compared with RMB1,406.0 million during the same period of 2020.
  • Diluted net income per ADS was RMB4.29 (US$0.66) for the first half of 2021, compared with RMB4.57 during the same period of 2020.
  • Non-GAAP diluted net income per ADS (note 1) was RMB5.45 (US$0.84) for the first half of 2021, compared with RMB6.39 during the same period of 2020.

"The second quarter of 2021 was a solid quarter with decent financial results and progress on all of our strategic priorities." commented Li Wang, CEO of Hello Group. "The fundamentals of the core Momo as a social platform continued to strengthen. At the same time revenue performance and structure showed solid improvements. The healthy and productive core business gives us important leverage to plow new grounds and build longer term drivers for the group."

* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.4566 to US$1.00, the effective noon buying rate for June 30, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board.

Second Quarter of 2021 Financial Results

Net revenues

Total net revenues were RMB3,671.7 million (US$568.7 million) in the second quarter of 2021, a decrease of 5.1% from RMB3,868.3 million in the second quarter of 2020.

Live video service revenues were RMB2,101.3 million (US$325.5 million) in the second quarter of 2021, a decrease of 19.3% from RMB2,602.9 million during the same period of 2020. The decrease was primarily due to our structural reform on the Company's core live video business, which was used to revive the long tail content ecosystem. The decrease was partially offset by the growth from Tantan's live video service revenues, which were RMB216.5 million (US$33.5 million) in the second quarter of 2021, compared to RMB191.7 million in the same period of 2020.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,507.3 million (US$233.4 million) in the second quarter of 2021, an increase of 25.2% from RMB1,204.3 million during the same period of 2020. The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by more innovative products and operational ideas launched, and more paying scenarios introduced to enhance the social entertainment experience of Momo users, and to a lesser extent, the increase in the virtual gift revenues of new applications. The increase was partially offset by the decrease in the membership subscription revenues of Tantan, due to the decrease of paying users of Tantan.

Mobile marketing revenues were RMB51.6 million (US$8.0 million) in the second quarter of 2021, an increase of 35.9% from RMB38.0 million during the same period of 2020. The increase in mobile marketing revenues was primarily caused by the increased demand from brand marketers.

Mobile games revenues were RMB9.2 million (US$1.4 million) in the second quarter of 2021, a decrease of 20.6% from RMB11.6 million in the second quarter of 2020. The decrease in mobile game revenues was mainly due to the continued decrease in quarterly paying users of mobile games.

Net revenues from the Momo segment decreased from RMB3,340.7 million in the second quarter of 2020 to RMB3,157.5 million (US$489.0 million) in the second quarter of 2021, primarily due to the decrease in net revenues from live video service, partially offset by the increase in net revenues from value-added service. Net revenues from the Tantan segment decreased from RMB517.2 million in the second quarter of 2020 to RMB513.5 million (US$79.5 million) in the second quarter of 2021, which was mainly due to the decrease in the membership subscription revenues. 

Cost and expenses

Cost and expenses were RMB3,075.6 million (US$476.4 million) in the second quarter of 2021, a decrease of 2.3% from RMB3,146.9 million in the second quarter of 2020. The decrease was primarily attributable to: (a) a decrease in share-based compensation expenses due to the fair value remeasurement of liability classified options granted to Tantan's founders; (b) a decrease in infrastructure-related spending, such as server depreciation costs; (c) a decrease in commission fees paid to payment channels. These decreases were partially offset by an increase in revenue sharing with virtual gift recipients for our virtual gift service, an increase in revenue sharing with broadcasters related to Tantan's live video service, and an increase in marketing and promotional expenses to promote our core live video services.

Non-GAAP cost and expenses (note 1) were RMB2,980.1 million (US$461.6 million) in the second quarter of 2021, an increase of 1.9% from RMB2,923.7 million during the same period of 2020.

Other operating income

Other operating income was RMB90.3 million (US$14.0 million) in the second quarter of 2021, a decrease from RMB91.3 million during the second quarter of 2020. The other operating income mainly consisted of government incentives.

Income from operations

Income from operations was RMB686.3 million (US$106.3 million) in the second quarter of 2021, compared to RMB812.7 million during the same period of 2020. Income from operations of the Momo segment was RMB711.3 million (US$110.2 million) in the second quarter of 2021, which decreased from RMB945.3 million in the second quarter of 2020. Loss from operations of the Tantan segment was RMB11.9 million (US$1.8 million) in the second quarter of 2021, compared to loss from operations of RMB125.6 million in the second quarter of 2020.

Non-GAAP income from operations (note 1) was RMB781.9 million (US$121.1 million) in the second quarter of 2021, compared to RMB1,035.8 million during the same period of 2020. Non-GAAP income from operations of the Momo segment was RMB835.8 million (US$129.5 million) in the second quarter of 2021, which decreased from RMB1,102.6 million in the second quarter of 2020. Non-GAAP loss from operations of the Tantan segment was RMB40.9 million (US$6.3 million) in the second quarter of 2021, compared to non-GAAP loss from operations of RMB62.4 million in the second quarter of 2020.

Income tax expenses

Income tax expenses were RMB291.5 million (US$45.1 million) in the second quarter of 2021, decreasing from RMB443.6 million in the second quarter of 2020. The decrease in income tax expenses was mainly due to (a) the lower profit in the second quarter of 2021; and (b) less payment of withholding income tax on dividends distributed by our wholly-foreign owned enterprise ("WFOE") in China to our offshore entity in the second quarter of 2021. The dividends of RMB1,300.0 million (US$201.3 million) and withholding income tax of RMB130.0 million (US$20.1 million) were paid in the second quarter of 2021.

Net income

Net income was RMB461.5 million (US$71.5 million) in the second quarter of 2021, compared to RMB455.5 million during the same period of 2020. Net income from the Momo segment was RMB481.3 million (US$74.5 million) in the second quarter of 2021, which decreased from RMB586.7 million in the second quarter of 2020. Net loss from the Tantan segment was RMB6.7 million (US$1.0 million) in the second quarter of 2021, compared to net loss of RMB124.3 million in the second quarter of 2020.

Non-GAAP net income (note 1) was RMB548.3 million (US$84.9 million) in the second quarter of 2021, compared to RMB668.9 million during the same period of 2020. Non-GAAP net income from the Momo segment was RMB605.8 million (US$93.8 million) in the second quarter of 2021, which decreased from RMB744.0 million in the second quarter of 2020. Non-GAAP net loss of the Tantan segment was RMB44.5 million (US$6.9 million) in the second quarter of 2021, compared to non-GAAP net loss of RMB70.8 million in the second quarter of 2020.

Net income attributable to Hello Group Inc.

Net income attributable to Hello Group Inc. was RMB464.2 million (US$71.9 million) in the second quarter of 2021, compared to RMB456.4 million during the same period of 2020.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB551.0 million (US$85.3 million) in the second quarter of 2021, compared to RMB669.8 million during the same period of 2020.

Net income per ADS

Diluted net income per ADS was RMB2.15 (US$0.33) in the second quarter of 2021, compared to RMB2.11 in the second quarter of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB2.54 (US$0.39) in the second quarter of 2021, compared to RMB3.05 in the second quarter of 2020.

Cash and cash flow

As of June 30, 2021, the Company's cash, cash equivalents, short-term deposits, long-term deposits, short-term restricted cash and long-term restricted cash totaled RMB15,450.0 million (US$2,392.9 million), compared to RMB16,482.3 million as of December 31, 2020. Net cash used in operating activities in the second quarter of 2021 was RMB167.8 million (US$26.0 million), compared to a net cash provided by operating activities of RMB807.3 million in the second quarter of 2020. The decrease in net cash provided by operating activities was mainly due to the cash payment of RMB678.2 million (US$105.0 million) we made to Tantan's founders to settle the previously granted liability-classified share options upon their termination of services with Tantan in the second quarter of 2021.

First Half of 2021 Financial Results

Net revenues for the first half of 2021 were RMB7,142.3 million (US$1,106.2 million), a decrease of 4.3% from RMB7,462.3 million in the same period of 2020.

Net income attributable to Hello Group Inc. was RMB925.8 million (US$143.4 million) for the first half of 2021, compared to RMB995.3 million during the same period of 2020.

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,184.6 million (US$183.5 million) for the first half of 2021, compared to RMB1,406.0 million during the same period of 2020.

Diluted net income per ADS was RMB4.29 (US$0.66) during the first half of 2021, compared to RMB4.57 in the same period of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB5.45 (US$0.84) during the first half of 2021, compared to RMB6.39 in the same period of 2020.

Net cash provided by operating activities was RMB333.8 million (US$51.7 million) during the first half of 2021, compared to RMB1,350.7 million in the same period of 2020.

Recent Developments

Execution of share repurchase program

On September 3, 2020, the Company's board of directors authorized a share repurchase program under which the Company may repurchase up to US$300 million of its shares over the next 12 months. As of August 26, 2021, the Company has repurchased 13.46 million ADSs for US$173.4 million on the open market under this program, at an average purchase price of US$12.87 per ADS.

Business Outlook

For the third quarter of 2021, the Company expects total net revenues to be between RMB3.65 billion to RMB3.75 billion, representing a decrease of 3.1% to 0.4% 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 use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation and 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 attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation, 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, 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 a significant recurring expense in our results of operations. We compensate for these limitations 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 26, 2021, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on August 26, 2021).

All participants must preregister online prior to the call to receive the dial-in details. Once preregistration has been complete, participants will receive dial-in numbers, direct event passcode, and a unique registrant ID.

PRE-REGISTER LINK http://apac.directeventreg.com/registration/event/5771017

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your registrant ID, and you will join the conference instantly.

A telephone replay of the call will be available after the conclusion of the conference call through 9:00 a.m. U.S. Eastern Time, September 3, 2021. The dial-in details for the replay are as follows:

International:   +61-2-8199-0299
U.S. Toll Free: +1-855-452-5696
Passcode: 5771017

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of the Company's website at http://ir.immomo.com.

About Hello Group Inc. 

We are a leading player in China's online social and entertainment space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions. Momo is a mobile application that connects people and facilitates social interactions based on location, interests and a variety of online recreational activities. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application. It is designed to help its users find and establish romantic connections as well as meet interesting people. We also operate a number of other applications to serve different social and entertainment demands from our users.

For investor and media inquiries, please contact:

Hello Group Inc. 

Investor Relations
Phone: +86-10-5731-0538
Email: ir@immomo.com   

Christensen

In China
Mr. Eric Yuan
Phone: +86-10-5900-1548
E-mail: Eyuan@christensenir.com  

In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@christensenir.com

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 2021, 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 2021 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the third quarter of 2021 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth.  Moreover, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers, the impact of the COVID-19 pandemic on the Company's business operations and the economy in China, the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, general economic conditions, and other factors.  For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission.          

All information provided in this press release and in the attachments is as of the date of the press release. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, after the date of this release, except as required by law. Such information speaks only as of the date of this release.

 

 

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Operations

(All amounts in thousands, except share and per share data)



Three months


First half year

Ended June 30


Ended June 30


2020


2021


2021


2020


2021


2021


RMB


RMB


US$


RMB


RMB


US$

Net revenues:












Live video service

2,602,876


2,101,332


325,455


4,934,880


4,063,427


629,345

Value-added service

1,204,320


1,507,258


233,445


2,380,074


2,962,771


458,875

Mobile marketing

37,964


51,601


7,992


95,119


90,318


13,988

Mobile games

11,564


9,182


1,422


24,255


20,366


3,154

Other services

11,528


2,341


362


28,008


5,428


841

Total net revenues

3,868,252


3,671,714


568,676


7,462,336


7,142,310


1,106,203

Cost and expenses:












Cost of revenues

(2,036,305)


(2,070,329)


(320,653)


(3,913,221)


(4,008,574)


(620,849)

Research and development

(279,002)


(268,325)


(41,558)


(541,161)


(554,818)


(85,930)

Sales and marketing

(651,500)


(650,236)


(100,709)


(1,361,308)


(1,263,809)


(195,739)

General and administrative

(180,061)


(86,747)


(13,435)


(357,310)


(264,709)


(40,998)

Total cost and expenses

(3,146,868)


(3,075,637)


(476,355)


(6,173,000)


(6,091,910)


(943,516)

Other operating income

91,329


90,268


13,981


117,448


116,168


17,992

Income from operations

812,713


686,345


106,302


1,406,784


1,166,568


180,679

Interest income

108,536


94,448


14,628


239,359


191,142


29,604

Interest expense

(20,121)


(18,302)


(2,835)


(39,940)


(36,663)


(5,678)

Other gain or loss, net

-


(10,500)


(1,626)


(6,000)


(18,000)


(2,788)

Income before income tax
   and share of income on
   equity method
   investments

901,128


751,991


116,469


1,600,203


1,303,047


201,817

Income tax expenses

(443,633)


(291,509)


(45,149)


(606,524)


(382,907)


(59,305)

Income before share of
   income on equity method
   investments

457,495


460,482


71,320


993,679


920,140


142,512

Share of (loss) income on
   equity method investments

(1,967)


1,042


161


(440)


2,303


357

Net income

455,528


461,524


71,481


993,239


922,443


142,869

Less: net loss attributable to non-controlling interest

(872)


(2,636)


(408)


(2,067)


(3,376)


(523)

Net income attributable to
   the shareholders of Hello
   Group Inc.

456,400


464,160


71,889


995,306


925,819


143,392













Net income per share
   attributable to ordinary
   shareholders

Basic

1.09


1.13


0.17


2.38


2.25


0.35

Diluted

1.05


1.07


0.17


2.29


2.15


0.33

Weighted average shares
   used in calculating net
   income per ordinary share












Basic

417,559,984


411,540,714


411,540,714


417,427,113


411,753,583


411,753,583

Diluted

452,500,168


449,020,572


449,020,572


452,915,745


448,597,242


448,597,242

 

 

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


2020


2021


2021


2020


2021


2021


RMB


RMB


US$


RMB


RMB


US$

Net income 

455,528


461,524


71,481


993,239


922,443


142,869

Other comprehensive income
   (loss), net of tax:












Foreign currency translation
   adjustment

8,818


(28,396)


(4,398)


7,951


(32,198)


(4,987)

Comprehensive income 

464,346


433,128


67,083


1,001,190


890,245


137,882

Less: comprehensive loss
   attributed to the non-controlling
   interest

(1,423)


(6,162)


(954)


(6,992)


(5,783)


(896)

Comprehensive income
   attributable to Hello Group
   Inc.

465,769


439,290


68,037


1,008,182


896,028


138,778


 

 

Hello Group Inc.

Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands, except share and per share data)








December 31


June 30


June 30


2020


2021


2021

RMB

RMB


US$

Assets






Current assets






Cash and cash equivalents

3,363,942


2,204,455


341,427

Short-term deposits

7,566,250


7,365,886


1,140,830

Restricted cash

2,130


2,133


330

Accounts receivable, net of allowance for doubtful accounts of
   RMB15,390 and RMB15,954 as of December 31, 2020 and June 30, 2021, respectively

200,831


217,063


33,619

Prepaid expenses and other current assets

613,696


733,792


113,650

Total current assets

11,746,849


10,523,329


1,629,856

Long-term deposits

5,550,000


5,800,000


898,306

Long-term restricted cash

-


77,479


12,000

Right-of-use assets, net

278,175


223,901


34,678

Property and equipment, net

265,765


224,964


34,842

Intangible assets, net

687,211


607,411


94,076

Rental deposits

21,794


22,386


3,467

Long-term investments

454,996


733,689


113,634

Other non-current assets

94,868


100,054


15,496

Deferred tax assets

32,495


33,729


5,224

Goodwill

4,088,403


4,045,777


626,611

Total assets

23,220,556


22,392,719


3,468,190

Liabilities and equity






Current liabilities






Accounts payable

699,394


752,474


116,545

Deferred revenue

511,617


517,921


80,216

Accrued expenses and other current liabilities

854,835


752,881


116,606

Amount due to related parties

19,462


12,906


1,999

Lease liabilities due within one year

132,793


129,044


19,986

Income tax payable

236,490


140,111


21,700

Deferred consideration in connection with business acquisitions

62,149


45,443


7,038

Total current liabilities

2,516,740


2,350,780


364,090

Deferred tax liabilities

171,803


151,853


23,519

Convertible senior notes

4,658,966


4,617,465


715,154

Share-based compensation liability

875,616


-


-

Lease liabilities

136,436


99,858


15,466

Other non-current liabilities

25,666


135,050


20,916

Total liabilities

8,385,227


7,355,006


1,139,145

Shareholder's equity (i)

14,835,329


15,037,713


2,329,045

Total liabilities and shareholder's equity

23,220,556


22,392,719


3,468,190







(i): As of June 30, 2021, the number of ordinary shares outstanding was 411,632,190.







 

 

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


2020


2021


2021


2020


2021


2021


RMB


RMB


US$


RMB


RMB


US$

Cash flows from operating activities:












Net income 

455,528


461,524


71,481


993,239


922,443


142,869

Adjustments to reconcile net income to net cash
provided by operating activities:












Depreciation of property and equipment

52,210


40,072


6,206


104,591


82,615


12,795

Amortization of intangible assets

40,288


36,108


5,592


80,170


73,061


11,316

Share-based compensation

184,100


60,658


9,395


352,627


205,915


31,891

Share of loss (income) on equity method investments

1,967


(1,042)


(161)


440


(2,303)


(357)

Loss on long-term investments

-


10,500


1,626


6,000


18,000


2,788

Gain on subsidiary deconsolidation

-


-


-


(6,676)


-


-

Gain on disposal of subsidiaries

-


(15,526)


(2,405)


-


(15,526)


(2,405)

Loss on disposal of property and equipment

(1)


(1,101)


(171)


(1)


(1,079)


(167)

Provision of  losses on receivable and other assets

1,060


169


26


406


564


87

Cash received on investment income distribution

-


-


-


1,153


-


-

Changes in operating assets and liabilities:












Accounts receivable

39,725


(15,162)


(2,348)


1,746


(22,742)


(3,522)

Prepaid expenses and other current assets

42,671


(31,941)


(4,947)


43,833


(118,618)


(18,372)

Amount due from a related party

230


-


-


2,353


-


-

Rental deposits

363


(1,951)


(302)


190


(592)


(92)

Deferred tax assets

435


(627)


(97)


2,473


(1,234)


(191)

Other non-current assets

3,411


36,720


5,687


18,251


49,050


7,597

Accounts payable

63,598


48,889


7,572


(16,475)


47,822


7,407

Income tax payable

44,712


(119,269)


(18,472)


65,056


(96,378)


(14,927)

Deferred revenue

(12,249)


16,464


2,550


(33,272)


16,085


2,491

Accrued expenses and other current liabilities

(59,987)


23,189


3,592


(214,230)


(95,783)


(14,835)

Amount due to related parties

(16,217)


600


93


(11,233)


(6,556)


(1,015)

Deferred tax liability

(10,072)


(9,027)


(1,398)


(20,043)


(18,265)


(2,829)

   Share-based compensation liability

-


(678,153)


(105,033)


-


(678,153)


(105,033)

Other non-current liabilities

(24,522)


(28,877)


(4,472)


(19,852)


(24,517)


(3,797)

Net cash provided by (used in) operating activities

807,250


(167,783)


(25,986)


1,350,746


333,809


51,699

Cash flows from investing activities:












Purchase of property and equipment

(45,803)


(20,020)


(3,101)


(83,970)


(45,203)


(7,001)

Payment for long-term investments

-


(300,000)


(46,464)


(4,500)


(300,000)


(46,464)

Purchase of short-term deposits

(4,941,858)


(1,566,688)


(242,649)


(8,241,858)


(2,476,688)


(383,590)

Cash received on maturity of short-term deposits

8,306,434


2,089,618


323,641


11,285,574


2,658,912


411,813

Payment for short-term investments

-


-


-


(10,000)


-


-

Cash received from sales of short-term investment

-


-


-


10,000


-


-

Cash received on investment income distribution

-


-


-


-


5,610


869

Cash of disposed subsidiaries

-


(8,750)


(1,355)


-


(8,750)


(1,355)

Purchase of long-term deposits

(2,800,000)


(250,000)


(38,720)


(2,800,000)


(250,000)


(38,720)

Other investing activities

15


2,390


370


(776)


2,393


371

Net cash provided by (used in) investing activities

518,788


(53,450)


(8,278)


154,470


(413,726)


(64,077)

Cash flows from financing activities:












Deferred payment for business acquisition

(18,355)


-


-


(18,355)


(12,907)


(1,999)

Proceeds from exercise of share options

1


310


48


1


310


48

Repurchase of ordinary shares

-


(103,072)


(15,964)


-


(106,151)


(16,441)

Repurchase of subsidiary's share options

-


(2,780)


(431)


-


(5,561)


(861)

Dividends payment

(1,123,983)


(852,743)


(132,073)


(1,123,983)


(852,743)


(132,073)

Net cash used in financing activities

(1,142,337)


(958,285)


(148,420)


(1,142,337)


(977,052)


(151,326)

Effect of exchange rate changes

(5,332)


(28,952)


(4,484)


1,961


(25,036)


(3,877)

Net increase (decrease) in cash and cash equivalents 

178,369


(1,208,470)


(187,168)


364,840


(1,082,005)


(167,581)

Cash, cash equivalents and restricted cash at the beginning
   of period

2,799,214


3,492,537


540,925


2,612,743


3,366,072


521,338

Cash, cash equivalents and restricted cash at the end of
   period

2,977,583


2,284,067


353,757


2,977,583


2,284,067


353,757

 

 


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, 2020

Ended June 30, 2021


Ended June 30, 2021


GAAP

Amortization
of intangible
assets from
business
acquisitions 

Share-
based
compensation

Tax
impacts

Non-
GAAP


GAAP

Amortization
of intangible
assets from
business
acquisitions 

Share-
based
compensation

Tax
impacts

Non-GAAP


GAAP

Amortization
of intangible
assets from
business
acquisitions 

Share-
based
compensation

Tax
impacts

Non-GAAP




(ii)





(ii)





(ii)


RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

US$

US$

US$

US$

US$

Cost of revenues

(2,036,305)

18,929

2,804

-

(2,014,572)


(2,070,329)

17,256

4,201

-

(2,048,872)


(320,653)

2,673

651

-

(317,329)

Research and
   development

(279,002)

2,404

49,985

-

(226,613)


(268,325)

1,461

33,965

-

(232,899)


(41,558)

226

5,261

-

(36,071)

Sales and marketing

(651,500)

17,702

43,123

-

(590,675)


(650,236)

16,137

14,588

-

(619,511)


(100,709)

2,499

2,259

-

(95,951)

General and
   administrative

(180,061)

-

88,188

-

(91,873)


(86,747)

-

7,904

-

(78,843)


(13,435)

-

1,224

-

(12,211)

Cost and operating
   expenses

(3,146,868)

39,035

184,100

-

(2,923,733)


(3,075,637)

34,854

60,658

-

(2,980,125)


(476,355)

5,398

9,395

-

(461,562)

Income from operations

812,713

39,035

184,100

-

1,035,848


686,345

34,854

60,658

-

781,857


106,302

5,398

9,395

-

121,095

Net income attributable to
   Hello Group Inc.

456,400

39,035

184,100

(9,759)

669,776


464,160

34,854

60,658

(8,714)

550,958


71,889

5,398

9,395

(1,351)

85,331

 

 

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, 2020

Ended June 30, 2021


Ended June 30, 2021


GAAP

Amortization
of intangible
assets from
business
acquisitions

Share-
based
compensation

Tax
impacts

Non-GAAP


GAAP

Amortization
of intangible
assets from
business
acquisitions

Share-
based
compensation

Tax
impacts

Non-GAAP


GAAP

Amortization
of intangible
assets from
business
acquisitions 

Share-
based
compensation

Tax
impacts

Non-GAAP




(ii)





(ii)





(ii)


RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

US$

US$

US$

US$

US$

Cost of revenues

(3,913,221)

37,574

9,773

-

(3,865,874)


(4,008,574)

34,567

7,925

-

(3,966,082)


(620,849)

5,354

1,227

-

(614,268)

Research and
   development

(541,161)

4,772

92,745

-

(443,644)


(554,818)

3,660

74,174

-

(476,984)


(85,930)

567

11,488

-

(73,875)

Sales and marketing

(1,361,308)

35,138

90,197

-

(1,235,973)


(1,263,809)

32,326

32,144

-

(1,199,339)


(195,739)

5,007

4,978

-

(185,754)

General and
   administrative

(357,310)

-

159,912

-

(197,398)


(264,709)

-

91,672

-

(173,037)


(40,998)

-

14,198

-

(26,800)

Cost and operating
   expenses

(6,173,000)

77,484

352,627

-

(5,742,889)


(6,091,910)

70,553

205,915

-

(5,815,442)


(943,516)

10,928

31,891

-

(900,697)

Income from
   operations

1,406,784

77,484

352,627

-

1,836,895


1,166,568

70,553

205,915

-

1,443,036


180,679

10,928

31,891

-

223,498

Net income attributable
   to Hello Group Inc.

995,306

77,484

352,627

(19,371)

1,406,046


925,819

70,553

205,915

(17,639)

1,184,648


143,392

10,928

31,891

(2,732)

183,479









































































(ii) Includes tax impacts related to the amortization of intangible assets from business acquisition. 













 

 

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands, except share and per share data)


Three months

  Ended June 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Net revenues:










Live video service

1,884,821


216,511


-


2,101,332


325,455

Value-added service

1,210,220


297,038


-


1,507,258


233,445

Mobile marketing

51,601


-


-


51,601


7,992

Mobile games

9,182


-


-


9,182


1,422

Other services

1,706


-


635


2,341


362

Total net revenues

3,157,530


513,549


635


3,671,714


568,676

Cost and expenses (iii):










Cost of revenues

(1,796,504)


(266,197)


(7,628)


(2,070,329)


(320,653)

Research and development

(195,371)


(72,954)


-


(268,325)


(41,558)

Sales and marketing

(378,938)


(270,266)


(1,032)


(650,236)


(100,709)

General and administrative

(140,905)


59,205


(5,047)


(86,747)


(13,435)

Total cost and expenses

(2,511,718)


(550,212)


(13,707)


(3,075,637)


(476,355)

Other operating income

65,445


24,798


25


90,268


13,981

Income (loss) from operations

711,257


(11,865)


(13,047)


686,345


106,302

Interest income

94,112


291


45


94,448


14,628

Interest expense

(18,302)


-


-


(18,302)


(2,835)

Other gain or loss, net

(10,500)


-


-


(10,500)


(1,626)

Income (loss) before income tax and
   share of income on equity method
   investments

776,567


(11,574)


(13,002)


751,991


116,469

Income tax (expenses) benefits

(296,344)


4,835


-


(291,509)


(45,149)

Income (loss) before share of income
   on equity method investments

480,223


(6,739)


(13,002)


460,482


71,320

Share of income on equity method investments

1,042


-


-


1,042


161

Net income (loss)

481,265


(6,739)


(13,002)


461,524


71,481






















(iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:


























Three months


Ended June 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Cost of revenues

2,640


1,561


-


4,201


651

Research and development

29,663


4,302


-


33,965


5,261

Sales and marketing

12,971


1,617


-


14,588


2,259

General and administrative

79,308


(71,404)


-


7,904


1,224

Total cost and expenses

124,582


(63,924)


-


60,658


9,395

 

 

Hello Group Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

(All amounts in thousands, except share and per share data)


Three months


Ended June 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Income (loss) from operations

711,257


(11,865)


(13,047)


686,345


106,302

Share-based compensation

124,582


(63,924)


-


60,658


9,395

Amortization of intangible assets from business
   acquisitions

-


34,854


-


34,854


5,398

Non-GAAP income (loss) from operations

835,839


(40,935)


(13,047)


781,857


121,095











Net income (loss)

481,265


(6,739)


(13,002)


461,524


71,481

Share-based compensation

124,582


(63,924)


-


60,658


9,395

Amortization of intangible assets from business
   acquisitions

-


34,854


-


34,854


5,398

Tax impacts

-


(8,714)


-


(8,714)


(1,351)

Non-GAAP net income (loss)

605,847


(44,523)


(13,002)


548,322


84,923

 

 

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands, except share and per share data)


Three months

Ended June 30, 2020


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$[1]

Net revenues:










Live video service

2,411,223


191,653


-


2,602,876


368,413

Value-added service

878,804


325,516


-


1,204,320


170,460

Mobile marketing

37,964


-


-


37,964


5,373

Mobile games

11,564


-


-


11,564


1,637

Other services

1,163


-


10,365


11,528


1,633

Total net revenues

3,340,718


517,169


10,365


3,868,252


547,516

Cost and expenses (iv):










Cost of revenues

(1,792,442)


(232,445)


(11,418)


(2,036,305)


(288,220)

Research and development

(202,774)


(76,228)


-


(279,002)


(39,490)

Sales and marketing

(337,196)


(314,293)


(11)


(651,500)


(92,214)

General and administrative

(154,161)


(19,828)


(6,072)


(180,061)


(25,486)

Total cost and expenses

(2,486,573)


(642,794)


(17,501)


(3,146,868)


(445,410)

Other operating income

91,190


-


139


91,329


12,927

Income (loss) from operations

945,335


(125,625)


(6,997)


812,713


115,033

Interest income

107,776


689


71


108,536


15,362

Interest expense

(20,121)


-


-


(20,121)


(2,848)

Income (loss) before income tax and
   share of income on equity method
   investments

1,032,990


(124,936)


(6,926)


901,128


127,547

Income tax (expenses) benefits

(444,278)


645


-


(443,633)


(62,792)

Income (loss) before share of income
   on equity method investments

588,712


(124,291)


(6,926)


457,495


64,755

Share of loss on equity method
   investments

(1,967)


-


-


(1,967)


(278)

Net income (loss)

586,745


(124,291)


(6,926)


455,528


64,477





















(iv)            Share-based compensation was allocated in cost of revenues and operating expenses as follows:

















Three months


Ended June 30, 2020


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Cost of revenues

3,396


(592)


-


2,804


397

Research and development

36,670


13,315


-


49,985


7,075

Sales and marketing

38,905


4,218


-


43,123


6,104

General and administrative

78,250


7,280


2,658


88,188


12,482

Total cost and expenses

157,221


24,221


2,658


184,100


26,058



















































[1] All translations from RMB to U.S. dollars are made at a rate of RMB7.0651 to US$1.00, the effective noon buying rate for June 30, 2020 a
s 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, 2020


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Income (loss) from operations

945,335


(125,625)


(6,997)


812,713


115,033

Share-based compensation

157,221


24,221


2,658


184,100


26,058

Amortization of intangible assets from
business acquisitions

-


39,035


-


39,035


5,525

Non-GAAP income (loss) from operations

1,102,556


(62,369)


(4,339)


1,035,848


146,616











Net income (loss)

586,745


(124,291)


(6,926)


455,528


64,477

Share-based compensation

157,221


24,221


2,658


184,100


26,058

Amortization of intangible assets from
business acquisitions

-


39,035


-


39,035


5,525

Tax impacts

-


(9,759)


-


(9,759)


(1,381)

Non-GAAP net income (loss)

743,966


(70,794)


(4,268)


668,904


94,679

 

 

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands, except share and per share data)



First half year

Ended June 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Net revenues:










Live video service

3,595,710


467,717


-


4,063,427


629,345

Value-added service

2,349,235


613,536


-


2,962,771


458,875

Mobile marketing

90,318


-


-


90,318


13,988

Mobile games

20,366


-


-


20,366


3,154

Other services

3,674


-


1,754


5,428


841

Total net revenues

6,059,303


1,081,253


1,754


7,142,310


1,106,203

Cost and expenses (v):










Cost of revenues

(3,453,399)


(547,186)


(7,989)


(4,008,574)


(620,849)

Research and development

(400,701)


(154,117)


-


(554,818)


(85,930)

Sales and marketing

(705,767)


(556,976)


(1,066)


(1,263,809)


(195,739)

General and administrative

(300,356)


45,084


(9,437)


(264,709)


(40,998)

Total cost and expenses

(4,860,223)


(1,213,195)


(18,492)


(6,091,910)


(943,516)

Other operating income

85,406


30,736


26


116,168


17,992

Income (loss) from operations

1,284,486


(101,206)


(16,712)


1,166,568


180,679

Interest income

190,455


596


91


191,142


29,604

Interest expense

(36,663)


-


-


(36,663)


(5,678)

Other gain or loss, net

(18,000)


-


-


(18,000)


(2,788)

Income (loss) before income tax and
   share of income on equity method
   investments

1,420,278


(100,610)


(16,621)


1,303,047


201,817

Income tax (expenses) benefits

(389,946)


7,039


-


(382,907)


(59,305)

Income (loss) before share of income
   on equity method investments

1,030,332


(93,571)


(16,621)


920,140


142,512

Share of income on equity method
   investments

2,303


-


-


2,303


357

Net income (loss)

1,032,635


(93,571)


(16,621)


922,443


142,869











(v) Share-based compensation was allocated in cost of revenues and operating expenses as follows:























First half year


Ended June 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Cost of revenues

4,965


2,960


-


7,925


1,227

Research and development

60,188


13,986


-


74,174


11,488

Sales and marketing

25,877


6,267


-


32,144


4,978

General and administrative

160,792


(69,120)


-


91,672


14,198

Total cost and expenses

251,822


(45,907)


-


205,915


31,891

 

 

Hello Group Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

(All amounts in thousands, except share and per share data)






















First half year


ended June 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB