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

BEIJING, Aug. 31, 2023 /PRNewswire/ -- Hello Group Inc. (NASDAQ: MOMO) ("Hello Group" or the "Company"), a leading mobile social and entertainment platform in China, today announced its unaudited financial results for the second quarter of 2023.   

Second Quarter of 2023 Highlights

  • Net revenues increased by 0.9% year over year to RMB3,137.7 million (US$432.7 million*) in the second quarter of 2023.
  • Net income attributable to Hello Group Inc. increased to RMB568.4 million (US$78.4 million) in the second quarter of 2023, from RMB345.6 million in the same period of 2022.
  • Non-GAAP net income attributable to Hello Group Inc. (note 1) increased to RMB632.1 million (US$87.2 million) in the second quarter of 2023, from RMB463.5 million in the same period of 2022.
  • Diluted net income per American Depositary Share ("ADS") was RMB2.82 (US$0.39) in the second quarter of 2023, compared to RMB1.68 in the same period of 2022.
  • Non-GAAP diluted net income per ADS (note 1) was RMB3.14 (US$0.43) in the second quarter of 2023, compared to RMB2.22 in the same period of 2022.
  • Monthly Active Users ("MAU") on Tantan application were 17.3 million in June 2023, compared to 24.8 million in June 2022.
  • For the Momo app total paying users was 7.9 million for the second quarter of 2023, compared to 8.6 million for the same period last year. Tantan had 1.4 million paying users for the second quarter of 2023 compared to 2.2 million from the year ago period.

First Half of 2023 Highlights

  • Net revenues decreased by 4.8% year over year to RMB5,956.5 million (US$821.4 million) for the first half of 2023.
  • Net income attributable to Hello Group Inc. was RMB958.7 million (US$132.2 million) for the first half of 2023, compared to RMB635.5 million during the same period of 2022.
  • Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,104.1 million (US$152.3 million) for the first half of 2023, compared to RMB862.0 million during the same period of 2022.
  • Diluted net income per ADS was RMB4.78 (US$0.66) for the first half of 2023, compared to RMB3.11 during the same period of 2022.
  • Non-GAAP diluted net income per ADS (note 1) was RMB5.49 (US$0.76) for the first half of 2023, compared to RMB4.16 during the same period of 2022.

"We delivered solid results in the second quarter, with strong financial performance and good progress on the execution of our various strategic priorities." Commented Yan Tang, Chairman and CEO of Hello Group.

"We celebrated Momo's 12th anniversary recently. I am glad to see how we have grown from a single-function app to a multi-brand listed company with a presence in several countries and regions. In Q2 we achieved the first year on year topline growth since the beginning of the pandemic three years ago, thanks to the stabilization and recovery of Momo's cash cow business. The Group level profitability improved significantly both year on year and from the previous quarter, mainly due to our effective cost control initiatives, which led to Tantan's break-even and the stable performance of Momo." Commented Sichuan Zhang, COO of Hello Group.

Second Quarter of 2023 Financial Results

Net revenues

Total net revenues were RMB3,137.7 million (US$432.7 million) in the second quarter of 2023, an increase of 0.9% from RMB3,110.4 million in the second quarter of 2022.

Live video service revenues were RMB1,588.8 million (US$219.1 million) in the second quarter of 2023, an increase of 4.5% from RMB1,520.0 million during the same period of 2022. The increase was primarily attributable to the increase in average revenues per paying user ("ARPPU") driven by new operational events and gamified features.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,499.5 million (US$206.8 million) in the second quarter of 2023, a decrease of 2.4% from RMB1,536.4 million during the same period of 2022. The decrease was mainly due to a decline in Momo and Tantan's paying user, which put pressure on respective businesses value-added service revenues. However, the decrease was partially offset by the rapid revenue growth from the new standalone apps.

Mobile marketing revenues were RMB37.0 million (US$5.1 million) in the second quarter of 2023, an increase of 3.0% from RMB35.9 million during the same period of 2022.

Mobile games revenues were RMB2.6 million (US$0.4 million) in the second quarter of 2023, a decrease of 84.8% from RMB17.2 million in the second quarter of 2022. The decrease in mobile game revenues was mainly due to the Company's strategic decision to pivot away from game distribution business.

Net revenues from the Momo segment increased from RMB2,779.5 million in the second quarter of 2022 to RMB2,816.6 million (US$388.4 million) in the second quarter of 2023, primarily due to the increase in net revenues from live video service and the new standalone apps. The increase completely offset the decrease of value-added service on Momo application. Net revenues from the Tantan segment decreased from RMB330.8 million in the second quarter of 2022 to RMB320.7 million (US$44.2 million) in the second quarter of 2023, due to the decrease in net revenues from membership subscription.

Cost and expenses

Cost and expenses were RMB2,515.5 million (US$346.9 million) in the second quarter of 2023, a decrease of 10.3% from RMB2,804.8 million in the second quarter of 2022. The decrease was primarily attributable to: (a) a decrease in sales and marketing expenses due to our initiatives to control cost and optimize Tantan's channel marketing strategy and our reduction of marketing costs of new apps; (b) a decrease in salary expenses and share-based compensation expenses, due to our continuous optimization in personnel costs and the decreased fair value of newly granted share options. The decrease was partially offset by the increase in revenue sharing with broadcasters related to our live video service and with virtual gift recipients for new standalone apps.

Non-GAAP cost and expenses (note 1) were RMB2,451.8 million (US$338.1 million) in the second quarter of 2023, a decrease of 8.7% from RMB2,686.9 million during the same period of 2022.

Other operating income

Other operating income was RMB22.9 million (US$3.2 million) in the second quarter of 2023, a decrease from RMB40.6 million during the second quarter of 2022. The other operating income mainly consisted of government incentives and additional input VAT deduction.

Income from operations

Income from operations was RMB645.1 million (US$89.0 million) in the second quarter of 2023, compared to RMB346.2 million during the same period of 2022. Income from operations of the Momo segment was RMB618.8 million (US$85.3 million) in the second quarter of 2023, which increased from RMB483.5 million in the second quarter of 2022. Income from operations of the Tantan segment was RMB30.2 million (US$4.2 million) in the second quarter of 2023, compared to a loss from operations of RMB131.3 million in the second quarter of 2022.

Non-GAAP income from operations (note 1) was RMB708.8 million (US$97.8 million) in the second quarter of 2023, compared to RMB464.1 million during the same period of 2022. Non-GAAP income from operations of the Momo segment was RMB680.8 million (US$93.9 million) in the second quarter of 2023, which increased from RMB589.2 million in the second quarter of 2022. Non-GAAP income from operations of the Tantan segment was RMB31.9 million (US$4.4 million) in the second quarter of 2023, compared to a non-GAAP loss from operations of RMB119.0 million in the second quarter of 2022.  

Income tax expenses

Income tax expenses were RMB166.0 million (US$22.9 million) in the second quarter of 2023, compared to RMB146.0 million in the second quarter of 2022. The increase was primarily due to the higher profit from Momo segment in the second quarter of 2023.

Net income

Net income was RMB567.6 million (US$78.3 million) in the second quarter of 2023, compared to RMB344.3 million during the same period of 2022. Net income from the Momo segment was RMB542.4 million (US$74.8 million) in the second quarter of 2023, compared to RMB482.0 million in the same period of 2022. Net income from the Tantan segment was RMB29.1 million (US$4.0 million) in the second quarter of 2023, compared to a net loss of RMB131.7 million in the second quarter of 2022.

Non-GAAP net income (note 1) was RMB631.3 million (US$87.1 million) in the second quarter of 2023, compared to RMB462.3 million during the same period of 2022. Non-GAAP net income from the Momo segment was RMB604.4 million (US$83.4million) in the second quarter of 2023, which increased from RMB587.6 million in the second quarter of 2022. Non-GAAP net income of the Tantan segment was RMB30.8 million (US$4.3 million) in the second quarter of 2023, compared to a non-GAAP net loss of RMB119.4 million in the second quarter of 2022.

Net income attributable to Hello Group Inc.

Net income attributable to Hello Group Inc. was RMB568.4 million (US$78.4 million) in the second quarter of 2023, compared to RMB345.6 million during the same period of 2022.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB632.1 million (US$87.2 million) in the second quarter of 2023, compared to RMB463.5 million during the same period of 2022.

Net income per ADS

Diluted net income per ADS was RMB2.82 (US$0.39) in the second quarter of 2023, compared to RMB1.68 in the second quarter of 2022.

Non-GAAP diluted net income per ADS (note 1) was RMB3.14 (US$0.43) in the second quarter of 2023, compared to RMB2.22 in the second quarter of 2022.

Cash and cash flow

As of June 30, 2023, the Company's cash, cash equivalents, short-term deposits, long-term deposits, short-term investments, short-term restricted cash and long-term restricted cash totaled RMB11,267.4 million (US$1,553.9 million), compared to RMB13,398.8 million as of December 31, 2022. In the second quarter of 2023, we paid an equivalent of RMB937.2 million (US$129.3 million) cash dividend to our shareholders, and in late June we prepaid an equivalent of RMB2,258.5 million (US$322.1 million) cash to repurchase our convertible senior notes, which was settled in early July.

Net cash provided by operating activities in the second quarter of 2023 was RMB827.7 million (US$114.2 million), compared to RMB200.3 million in the second quarter of 2022.

First Half of 2023 Financial Results

Net revenues for the first half of 2023 were RMB5,956.5 million (US$821.4 million), a decrease of 4.8% from RMB6,258.5 million in the same period of 2022.

Net income attributable to Hello Group Inc. was RMB958.7 million (US$132.2 million) for the first half of 2023, compared to RMB635.5 million during the same period of 2022.

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,104.1 million (US$152.3 million) for the first half of 2023, compared to RMB862.0 million during the same period of 2022.

Diluted net income per ADS was RMB4.78 (US$0.66) during the first half of 2023, compared to RMB3.11 in the same period of 2022.

Non-GAAP diluted net income per ADS (note 1) was RMB5.49 (US$0.76) during the first half of 2023, compared to RMB4.16 in the same period of 2022.

Net cash provided by operating activities was RMB1,278.8 million (US$176.4 million) during the first half of 2023, compared to RMB243.7 million in the same period of 2022.

Recent Development

Execution of share repurchase program

On June 7, 2022, Hello Group's board of directors authorized a share repurchase program under which the Company may repurchase up to US$200 million of its shares over the next 24 months. As of August 31, 2023, the Company has repurchased 12.1 million ADSs for US$57.2 million on the open market under this program, at an average purchase price of US$4.72 per ADS.

Business Outlook

For the third quarter of 2023, the Company expects total net revenues to be between RMB2.9 billion to RMB3.0 billion, representing a decrease of 10.3% to 7.2% year over year. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.

Note 1: Non-GAAP measures

To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we, Hello Group, use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation.

Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures.

Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to the GAAP results. In addition, our calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Our non-GAAP information (including non-GAAP cost and operating expenses, income (loss) from operations, net income (loss), net income attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation. A limitation of using these non-GAAP financial measures is that share-based compensation has been and will continue to be for the foreseeable future significant recurring expenses in our results of operations. We compensate for such limitation by providing reconciliations of our non-GAAP measures to our U.S. GAAP measures. Please see the reconciliation tables at the end of this earnings release.

Conference Call

Hello Group's management will host an earnings conference call on Thursday, August 31, 2023, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on August 31, 2023).

Participants can register for the conference call by navigating to:

https://s1.c-conf.com/diamondpass/10033114-tr54ev.html 

Upon registration, each participant will receive details for the conference call, including dial-in numbers, conference call passcode and a unique access PIN. Please dial in 10 minutes before the call is scheduled to begin.

A telephone replay of the call will be available after the conclusion of the conference call through September 7, 2023. The dial-in details for the replay are as follows:

U.S. / Canada: 1-855-883-1031

Hong Kong:      800-930-639
Passcode:        10033114

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of Hello Group's website at https://ir.hellogroup.com.

About Hello Group Inc. 

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

For investor and media inquiries, please contact:

Hello Group Inc. 

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

Christensen

In China
Mr. Eric Yuan
Phone: +86-10-5900-1548
E-mail: eric.yuan@christensencomms.com 

In U.S.

Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.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 2023, as well as the amount of, timing, methods and funding sources for repurchases of our shares under the share repurchase program.

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the second quarter of 2023 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the third quarter of 2023 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth.  Moreover, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers, the impact of the COVID-19 pandemic on the Company's business operations and the economy in China, the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, general economic conditions, and other factors.  For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission.

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

* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB7.2513 to US$1.00, the effective noon buying rate for June 30, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

 

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Operations

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


Three months


First half year

Ended June 30


Ended June 30


2022


2023


2023


2022


2023


2023


RMB


RMB


US$


RMB


RMB


US$

Net revenues:












Live video service

1,519,978


1,588,849


219,112


3,128,701


3,018,189


416,227

Value-added service

1,536,384


1,499,482


206,788


3,019,815


2,860,951


394,543

Mobile marketing

35,913


36,986


5,101


63,786


58,057


8,006

Mobile games

17,200


2,606


359


42,697


6,305


869

Other services

940


9,763


1,347


3,494


13,042


1,800

Total net revenues

3,110,415


3,137,686


432,707


6,258,493


5,956,544


821,445

Cost and expenses:












Cost of revenues

(1,797,846)


(1,819,559)


(250,929)


(3,619,234)


(3,483,747)


(480,431)

Research and development

(238,262)


(214,649)


(29,601)


(488,457)


(451,452)


(62,258)

Sales and marketing

(610,953)


(356,525)


(49,167)


(1,199,530)


(736,311)


(101,542)

General and administrative

(157,746)


(124,787)


(17,209)


(317,581)


(263,085)


(36,281)

Total cost and expenses

(2,804,807)


(2,515,520)


(346,906)


(5,624,802)


(4,934,595)


(680,512)

Other operating income, net

40,570


22,919


3,161


64,501


59,313


8,180

Income from operations

346,178


645,085


88,962


698,192


1,081,262


149,113

Interest income

93,630


115,321


15,903


191,487


215,108


29,665

Interest expense

(28,231)


(11,963)


(1,650)


(47,565)


(22,378)


(3,086)

Other gain or loss, net

66,303


4,565


630


77,922


4,565


630

Income before income tax and share of income on equity method

investments

477,880


753,008


103,845


920,036


1,278,557


176,322

Income tax expenses

(146,045)


(165,969)


(22,888)


(296,819)


(288,582)


(39,797)

Income before share of income on equity method investments

331,835


587,039


80,957


623,217


989,975


136,525

Share of income (loss) on equity method investments

12,513


(19,439)


(2,681)


9,913


(32,914)


(4,539)

Net income 

344,348


567,600


78,276


633,130


957,061


131,986

Less: net loss attributable to non-controlling interest

(1,221)


(795)


(110)


(2,324)


(1,623)


(224)

Net income attributable to the shareholders of Hello Group Inc.

345,569


568,395


78,386


635,454


958,684


132,210

Net income per share attributable to ordinary shareholders












Basic

0.87


1.50


0.21


1.60


2.54


0.35

Diluted

0.84


1.41


0.19


1.56


2.39


0.33

Weighted average shares used in calculating net income per ordinary share












Basic

396,777,496


377,920,901


377,920,901


396,013,164


377,471,487


377,471,487

Diluted

434,212,413


409,201,815


409,201,815


432,896,998


409,151,850


409,151,850

 

 

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

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







Three months


First half year

Ended June 30


Ended June 30


2022


2023


2023


2022


2023


2023


RMB


RMB


US$


RMB


RMB


US$

Net income 

344,348


567,600


78,276


633,130


957,061


131,986

Other comprehensive (loss) income, net of tax:












Foreign currency translation adjustment

(151,539)


107,975


14,890


(140,489)


110,156


15,191

Comprehensive income 

192,809


675,575


93,166


492,641


1,067,217


147,177

Less: comprehensive income attributed to the non-controlling interest

8,915


10,188


1,405


6,879


8,518


1,175

Comprehensive income attributable to Hello Group Inc.

183,894


665,387


91,761


485,762


1,058,699


146,002

 

 

Hello Group Inc.

Unaudited Condensed Consolidated Balance Sheets

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








December 31


June 30


June 30


2022


2023


2023

RMB

RMB


US$

Assets






Current assets






Cash and cash equivalents

5,018,129


4,615,319


636,482

Short-term deposits

5,300,000


3,250,000


448,195

Restricted cash

97,706


9,379


1,293

Short-term investments

300,240


305,730


42,162

Accounts receivable, net of allowance for doubtful accounts of

RMB5,870 and RMB13,498 as of December 31, 2022 and June

30, 2023, respectively

188,711


203,239


28,028

Amounts due from related parties

55


-


-

Prepaid expenses and other current assets

819,706


2,953,856


407,355

Total current assets

11,724,547


11,337,523


1,563,515

Long-term deposits

2,600,000


3,000,000


413,719

Long-term restricted cash

82,766


87,016


12,000

Right-of-use assets, net

115,520


78,302


10,798

Property and equipment, net

172,984


141,230


19,477

Intangible assets, net

22,203


19,645


2,709

Rental deposits

20,737


19,786


2,729

Long-term investments

893,988


874,202


120,558

Other non-current assets

162,499


176,777


24,379

Deferred tax assets

34,343


33,885


4,673

Total assets

15,829,587


15,768,366


2,174,557

Liabilities and equity






Current liabilities






Accounts payable

617,022


638,944


88,116

Deferred revenue

484,775


462,636


63,800

Accrued expenses and other current liabilities

797,504


657,012


90,606

Amounts due to related parties

9,178


12,076


1,665

Lease liabilities due within one year

88,352


46,121


6,360

Income tax payable

68,765


65,048


8,971

Dividends payable

-


20,884


2,879

Deferred consideration in connection with business acquisitions

26,483


27,842


3,840

Convertible senior notes-current

2,646,168


2,425,857


334,541

Total current liabilities

4,738,247


4,356,420


600,778

Deferred tax liabilities

22,011


103,994


14,341

Lease liabilities

33,281


31,106


4,290

Other non-current liabilities

105,410


103,817


14,317

Total liabilities

4,898,949


4,595,337


633,726

Shareholder's equity (i)

10,930,638


11,173,029


1,540,831

Total liabilities and shareholder's equity

15,829,587


15,768,366


2,174,557







(i): As of June 30, 2023, the number of ordinary shares outstanding was 379,047,992.




 

 

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

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


Three months


First half year


Ended June 30


Ended June 30


2022


2023


2023


2022


2023


2023


RMB


RMB


US$


RMB


RMB


US$

Cash flows from operating activities:












Net income 

344,348


567,600


78,276


633,130


957,061


131,986

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












Depreciation of property and equipment

28,081


18,787


2,591


56,060


41,631


5,741

Amortization of intangible assets

1,279


1,279


176


2,558


2,558


353

Share-based compensation

117,948


63,748


8,792


226,564


145,405


20,053

Share of (income) loss on equity method investments

(12,513)


19,439


2,681


(9,913)


32,914


4,539

Gain on repurchase of convertible senior notes

(66,303)


(4,565)


(630)


(77,922)


(4,565)


(630)

Cash received on distributions from equity method investments

1,708


1,349


186


1,708


1,349


186

Gain or loss on disposal of property and equipment

180


(527)


(73)


140


(460)


(63)

Provision of loss on receivable and other assets

365


1,022


141


367


10,204


1,407

Changes in operating assets and liabilities:












Accounts receivable

(9,927)


(20,117)


(2,774)


(7,278)


(20,665)


(2,850)

Prepaid expenses and other current assets

(13,584)


170,514


23,515


(57,562)


194,866


26,873

Amounts due from related parties

-


-


-


-


55


8

Rental deposits

3,136


951


131


683


951


131

Deferred tax assets

-


17


2


(1,576)


457


63

Other non-current assets

19,075


30,424


4,196


60,690


22,939


3,163

Accounts payable

(16,996)


11,459


1,580


(105,954)


31,838


4,391

Income tax payable

(30,714)


2,674


369


(35,288)


(3,719)


(513)

Deferred revenue

(11,921)


(14,062)


(1,939)


(54,535)


(22,873)


(3,154)

Accrued expenses and other current liabilities

(63,615)


(54,827)


(7,561)


(195,833)


(187,560)


(25,866)

Amount due to related parties

(3,240)


(272)


(38)


(3,397)


2,897


400

Deferred tax liabilities

(61,942)


48,397


6,674


(157,327)


82,517


11,380

Other non-current liabilities

(25,016)


(15,548)


(2,144)


(31,656)


(8,984)


(1,239)

Net cash provided by operating activities

200,349


827,742


114,151


243,659


1,278,816


176,359

Cash flows from investing activities:












Purchase of property and equipment

(21,694)


(11,010)


(1,518)


(43,341)


(21,244)


(2,930)

Payment for long-term investments

(55,343)


(9,000)


(1,241)


(55,343)


(9,000)


(1,241)

Purchase of short-term deposits

-


-


-


-


(497,342)


(68,587)

Cash received on maturity of short-term deposits

100,000


2,609,820


359,911


1,010,000


3,509,820


484,026

Cash received on investment income distribution

-


1,517


209


3,523


1,517


209

Purchase of long-term deposits

(400,000)


(1,350,000)


(186,174)


(1,550,000)


(1,350,000)


(186,174)

Cash received on maturity of long-term deposits

1,200,000


-


-


1,200,000


-


-

Other investing activities

318


947


131


322


1,685


232

Net cash provided by investing activities

823,281


1,242,274


171,318


565,161


1,635,436


225,535

Cash flows from financing activities:












Deferred payment for business acquisition

-


-


-


(5,563)


-


-

Proceeds from exercise of share options

2


16


2


33


19


3

Repurchase of ordinary shares

(2,335)


-


-


(2,335)


(3,237)


(446)

Repurchase of subsidiary's share options

(21,110)


(2,557)


(353)


(25,537)


(4,096)


(565)

Dividends payment

(840,997)


(937,249)


(129,253)


(840,997)


(937,249)


(129,253)

Payment in relation to redemption of convertible bonds

(1,002,537)


(2,114,224)


(291,565)


(1,112,544)


(2,593,010)


(357,592)

Net cash used in financing activities

(1,866,977)


(3,054,014)


(421,169)


(1,986,943)


(3,537,573)


(487,853)

Effect of exchange rate changes

93,897


145,860


20,115


78,286


136,434


18,814

Net decrease in cash and cash equivalents 

(749,450)


(838,138)


(115,585)


(1,099,837)


(486,887)


(67,145)

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

5,296,647


5,549,852


765,360


5,647,034


5,198,601


716,920

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

4,547,197


4,711,714


649,775


4,547,197


4,711,714


649,775

 

 

Hello Group Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands, except per share data)








1.

Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures.








Three months


Three months


Three months

Ended June 30, 2022


Ended June 30, 2023


Ended June 30, 2023


GAAP

Share-

based

compensation

Non-GAAP


GAAP

Share-based

compensation

Non-GAAP


GAAP

Share-

based

compensation

Non-GAAP

RMB

RMB

RMB

RMB

RMB 

RMB

US$

US$

US$

Cost of revenues

(1,797,846)

7,914

(1,789,932)


(1,819,559)

1,552

(1,818,007)


(250,929)

214

(250,715)

Research and development

(238,262)

23,965

(214,297)


(214,649)

13,821

(200,828)


(29,601)

1,906

(27,695)

Sales and marketing

(610,953)

10,894

(600,059)


(356,525)

6,813

(349,712)


(49,167)

940

(48,227)

General and administrative

(157,746)

75,175

(82,571)


(124,787)

41,562

(83,225)


(17,209)

5,732

(11,477)

Cost and operating expenses

(2,804,807)

117,948

(2,686,859)


(2,515,520)

63,748

(2,451,772)


(346,906)

8,792

(338,114)

Income from operations

346,178

117,948

464,126


645,085

63,748

708,833


88,962

8,792

97,754

Net income attributable to Hello Group Inc.

345,569

117,948

463,517


568,395

63,748

632,143


78,386

8,792

87,178

 

 

Hello Group Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands, except per share data)








1.

Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures-continued.








First half year


First half year


First half year

Ended June 30, 2022


Ended June 30, 2023


Ended June 30, 2023


GAAP

Share-based

compensation

Non-GAAP


GAAP

Share-based

compensation

Non-GAAP


GAAP

Share-based

compensation

Non-GAAP

RMB

RMB

RMB

RMB

RMB 

RMB

US$

US$

US$

Cost of revenues

(3,619,234)

10,992

(3,608,242)


(3,483,747)

3,187

(3,480,560)


(480,431)

440

(479,991)

Research and development

(488,457)

44,939

(443,518)


(451,452)

36,193

(415,259)


(62,258)

4,991

(57,267)

Sales and marketing

(1,199,530)

21,499

(1,178,031)


(736,311)

14,559

(721,752)


(101,542)

2,008

(99,534)

General and administrative

(317,581)

149,134

(168,447)


(263,085)

91,466

(171,619)


(36,281)

12,614

(23,667)

Cost and operating expenses

(5,624,802)

226,564

(5,398,238)


(4,934,595)

145,405

(4,789,190)


(680,512)

20,053

(660,459)

Income from operations

698,192

226,564

924,756


1,081,262

145,405

1,226,667


149,113

20,053

169,166

Net income attributable to Hello Group Inc.

635,454

226,564

862,018


958,684

145,405

1,104,089


132,210

20,053

152,263

 

 

Hello Group Inc.


Unaudited Condensed Segment Report


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



Three months


  Ended June 30, 2023



Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Net revenues:










Live video service

1,443,602


145,247


-


1,588,849


219,112

Value-added service

1,329,310


170,172


-


1,499,482


206,788

Mobile marketing

31,670


5,316


-


36,986


5,101

Mobile games

2,606


-


-


2,606


359

Other services

9,459


-


304


9,763


1,347

Total net revenues

2,816,647


320,735


304


3,137,686


432,707

Cost and expenses (ii):










Cost of revenues

(1,658,335)


(160,651)


(573)


(1,819,559)


(250,929)

Research and development

(163,040)


(51,609)


-


(214,649)


(29,601)

Sales and marketing

(282,903)


(72,378)


(1,244)


(356,525)


(49,167)

General and administrative

(116,197)


(6,198)


(2,392)


(124,787)


(17,209)

Total cost and expenses

(2,220,475)


(290,836)


(4,209)


(2,515,520)


(346,906)

Other operating income, net

22,648


271


-


22,919


3,161

Income (loss) from operations

618,820


30,170


(3,905)


645,085


88,962

Interest income

114,946


358


17


115,321


15,903

Interest expense

(11,963)


-


-


(11,963)


(1,650)

Other gain or loss, net

4,565


-


-


4,565


630

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

investments

726,368


30,528


(3,888)


753,008


103,845

Income tax expenses

(164,541)


(1,428)


-


(165,969)


(22,888)

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

561,827


29,100


(3,888)


587,039


80,957

Share of loss on equity method investments

(19,439)


-


-


(19,439)


(2,681)

Net income (loss)

542,388


29,100


(3,888)


567,600


78,276























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






















Three months



Ended June 30, 2023



Momo


Tantan


QOOL


Total


Total



RMB


RMB


RMB


RMB


US$


Cost of revenues

1,437


115


-


1,552


214


Research and development

12,222


1,599


-


13,821


1,906


Sales and marketing

6,813


-


-


6,813


940


General and administrative

41,554


8


-


41,562


5,732


Total cost and expenses

62,026


1,722


-


63,748


8,792


 

 

Hello Group Inc.

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

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



Three months


Ended June 30, 2023


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Income (loss) from operations

618,820


30,170


(3,905)


645,085


88,962

Share-based compensation

62,026


1,722


-


63,748


8,792

Non-GAAP income (loss) from

operations

680,846


31,892


(3,905)


708,833


97,754











Net income (loss)

542,388


29,100


(3,888)


567,600


78,276

Share-based compensation

62,026


1,722


-


63,748


8,792

Non-GAAP net income (loss)

604,414


30,822


(3,888)


631,348


87,068

 

 

Hello Group Inc.


Unaudited Condensed Segment Report


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



Three months


  Ended June 30, 2022



Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$[1]

Net revenues:










Live video service

1,403,596


116,382


-


1,519,978


226,927

Value-added service

1,321,967


214,417


-


1,536,384


229,376

Mobile marketing

35,913


-


-


35,913


5,362

Mobile games

17,200


-


-


17,200


2,568

Other services

782


-


158


940


140

Total net revenues

2,779,458


330,799


158


3,110,415


464,373

Cost and expenses (iii):










Cost of revenues

(1,631,584)


(165,696)


(566)


(1,797,846)


(268,411)

Research and development

(171,614)


(66,648)


-


(238,262)


(35,572)

Sales and marketing

(386,496)


(223,311)


(1,146)


(610,953)


(91,213)

General and administrative

(144,574)


(8,685)


(4,487)


(157,746)


(23,551)

Total cost and expenses

(2,334,268)


(464,340)


(6,199)


(2,804,807)


(418,747)

Other operating income

38,344


2,225


1


40,570


6,057

Income (loss) from operations

483,534


(131,316)


(6,040)


346,178


51,683

Interest income

93,506


52


72


93,630


13,979

Interest expense

(28,231)


-


-


(28,231)


(4,215)

Other gain or loss, net

66,303


-


-


66,303


9,899

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

615,112


(131,264)


(5,968)


477,880


71,346

Income tax expenses

(145,628)


(417)


-


(146,045)


(21,804)

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

469,484


(131,681)


(5,968)


331,835


49,542

Share of income on equity method investments

12,513


-


-


12,513


1,868

Net income (loss)

481,997


(131,681)


(5,968)


344,348


51,410














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























Three months





Ended June 30, 2022





Momo


Tantan


QOOL


Total


Total





RMB


RMB


RMB


RMB


US$




Cost of revenues

2,152


5,762


-


7,914


1,182




Research and development

17,659


6,306


-


23,965


3,578




Sales and marketing

10,693


201


-


10,894


1,626




General and administrative

75,134


41


-


75,175


11,223




Total cost and expenses

105,638


12,310


-


117,948


17,609






























[1] All translations from RMB to U.S. dollars are made at a rate of RMB6. 6981 to US$1.00, the effective noon buying rate for June 30, 2022 as set forth in the H.10

statistical release of the Federal Reserve Board.

 

 

Hello Group Inc.

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

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



Three months


Ended June 30, 2022


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Income (loss) from operations

483,534


(131,316)


(6,040)


346,178


51,683

Share-based compensation

105,638


12,310


-


117,948


17,609

Non-GAAP income (loss) from

operations

589,172


(119,006)


(6,040)


464,126


69,292











Net income (loss)

481,997


(131,681)


(5,968)


344,348


51,410

Share-based compensation

105,638


12,310


-


117,948


17,609

Non-GAAP net income (loss)

587,635


(119,371)


(5,968)


462,296


69,019

 

 

Hello Group Inc.

Unaudited Condensed Segment Report

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


First half year

Ended June 30, 2023


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Net revenues:










Live video service

2,733,320


284,869


-


3,018,189


416,227

Value-added service

2,522,854


338,097


-


2,860,951


394,543

Mobile marketing

51,691


6,366


-


58,057


8,006

Mobile games