Form 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2021

Commission File Number: 001-36765

 

 

Hello Group Inc.

 

 

20th Floor, Block B

Tower 2, Wangjing SOHO

No. 1 Futongdong Street

Chaoyang District, Beijing 100102

People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒                Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Hello Group Inc.
By   :  

/s/ Jonathan Xiaosong Zhang

Name

  :  

Jonathan Xiaosong Zhang

Title

  :  

Chief Financial Officer

Date: August 26, 2021


Exhibit Index

Exhibit 99.1—Press Release

EX-99.1

Exhibit 99.1

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

BEIJING, CHINA, August 26, 2021 – 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.

 

1


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.

 

2


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.

 

3


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.

 

4


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.

 

5


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

 

6


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.                

 

7


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  

 

8


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  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

9


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.

 

10


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  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

11


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
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
     Share-based
compensation
RMB
     Tax
impacts
(ii)
RMB
    Non-GAAP
RMB
    GAAP
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
     Share-based
compensation
RMB
     Tax
impacts
(ii)
RMB
    Non-GAAP
RMB
    GAAP
US$
    Amortization
of intangible
assets from
business
acquisitions
US$
     Share-based
compensation
US$
     Tax
impacts
(ii)
US$
    Non-GAAP
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  

 

12


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
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
    Share-based
compensation
RMB
    Tax
impacts
(ii)
RMB
    Non-GAAP
RMB
    GAAP
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
    Share-based
compensation
RMB
    Tax
impacts
(ii)
RMB
    Non-GAAP
RMB
    GAAP
US$
    Amortization
of intangible
assets from
business
acquisitions
US$
    Share-based
compensation
US$
    Tax
impacts
(ii)
US$
    Non-GAAP
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.

 

13


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  

 

14


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  

 

15


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 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

16


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  

 

17


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  

 

18


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     RMB     US$  

Operating income (loss)

     1,284,486        (101,206     (16,712     1,166,568       180,679  

Share-based compensation

     251,822        (45,907     —         205,915       31,891  

Amortization of intangible assets from business acquisitions

     —          70,553       —         70,553       10,928  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income (loss)

     1,536,308        (76,560     (16,712     1,443,036       223,498  

Net income (loss)

     1,032,635        (93,571     (16,621     922,443       142,869  

Share-based compensation

     251,822        (45,907     —         205,915       31,891  

Amortization of intangible assets from business acquisitions

     —          70,553       —         70,553       10,928  

Tax impacts

     —          (17,639     —         (17,639     (2,732
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     1,284,457        (86,564     (16,621     1,181,272       182,956  

 

19


Hello Group Inc.

Unaudited Condensed Segment Report

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

 

     First half year  
   Ended June 30, 2020  
     Momo     Tantan     QOOL     Total     Total  
     RMB     RMB     RMB     RMB     US$  

Net revenues:

          

Live video service

     4,737,168       197,712       —         4,934,880       698,487  

Value-added service

     1,678,907       701,167       —         2,380,074       336,878  

Mobile marketing

     95,119       —         —         95,119       13,463  

Mobile games

     24,255       —         —         24,255       3,433  

Other services

     7,358       —         20,650       28,008       3,964  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     6,542,807       898,879       20,650       7,462,336       1,056,225  

Cost and expenses (vi):

          

Cost of revenues

     (3,528,959     (364,723     (19,539     (3,913,221     (553,880

Research and development

     (386,674     (154,487     —         (541,161     (76,596

Sales and marketing

     (731,560     (629,714     (34     (1,361,308     (192,681

General and administrative

     (297,296     (47,508     (12,506     (357,310     (50,574
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (4,944,489     (1,196,432     (32,079     (6,173,000     (873,731

Other operating income

     117,309       —         139       117,448       16,624  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     1,715,627       (297,553     (11,290     1,406,784       199,118  

Interest income

     237,054       2,161       144       239,359       33,879  

Interest expense

     (39,940     —         —         (39,940     (5,653

Other gain or loss, net

     (6,000     —         —         (6,000     (849
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     1,906,741       (295,392     (11,146     1,600,203       226,495  

Income tax (expenses) benefits

     (612,490     5,966       —         (606,524     (85,848
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     1,294,251       (289,426     (11,146     993,679       140,647  

Share of loss on equity method investments

     (440     —         —         (440     (62
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     1,293,811       (289,426     (11,146     993,239       140,585  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(vi)

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

 

     First half year  
     ended June 30, 2020  
     Momo      Tantan      QOOL      Total      Total  
     RMB      RMB      RMB      RMB      US$  

Cost of revenues

     9,007        766        —          9,773        1,383  

Research and development

     63,472        29,273        —          92,745        13,127  

Sales and marketing

     84,346        5,851        —          90,197        12,767  

General and administrative

     133,234        21,401        5,277        159,912        22,634  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total cost and expenses

     290,059        57,291        5,277        352,627        49,911  

 

20


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, 2020  
     Momo      Tantan     QOOL     Total     Total  
     RMB      RMB     RMB     RMB     US$  

Operating income (loss)

     1,715,627        (297,553     (11,290     1,406,784       199,118  

Share-based compensation

     290,059        57,291       5,277       352,627       49,911  

Amortization of intangible assets from business acquisitions

     —          77,484       —         77,484       10,966  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income (loss)

     2,005,686        (162,778     (6,013     1,836,895       259,995  

Net income (loss)

     1,293,811        (289,426     (11,146     993,239       140,585  

Share-based compensation

     290,059        57,291       5,277       352,627       49,911  

Amortization of intangible assets from business acquisitions

     —          77,484       —         77,484       10,966  

Tax impacts

     —          (19,371     —         (19,371     (2,742
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     1,583,870        (174,022     (5,869     1,403,979       198,720  

 

21