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 March 2022

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: March 24, 2022


Exhibit Index

Exhibit 99.1—Press Release

EX-99.1

Exhibit 99.1

Hello Group Inc. Announces Unaudited Financial Results for the Fourth Quarter and Fiscal Year 2021

BEIJING, CHINA, March 24, 2022 – 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 fourth quarter and the full year ended December 31, 2021.

Fourth Quarter of 2021 Highlights

 

   

Net revenues decreased by 3.2% year over year to RMB3,674.2 million (US$576.6 million*) in the fourth quarter of 2021.

 

   

Net loss attributable to Hello Group Inc. was RMB4,242.7 million (US$665.8 million) in the fourth quarter of 2021, compared to a net income of RMB651.5 million in the same period of 2020. Due to the fact that the Group’s fair market value as indicated by its market capitalization was significantly below its net book value of equity, the Group determined that a triggering event had occurred for impairment. The Group conducted a detailed impairment analysis and recorded RMB4,397.0 million (US$690.0 million) as impairment loss, which represented the total value of all the goodwill and intangible assets with the exception of its operational licenses and permits on the consolidated statement of operations for the year ended December 31, 2021.

 

   

Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB280.9 million (US$44.1 million) in the fourth quarter of 2021, from RMB836.4 million in the same period of 2020. Non-GAAP net income attributable to Hello Group Inc. included an accrual of withholding income tax of RMB207.4 million (US$32.5 million) on undistributed earnings generated in 2021 by our wholly-foreign owned enterprise (“WFOE”), due to our plan to remit WFOE’s earnings to its offshore parent company in the foreseeable future to fund its demand on US dollar in business operations, payments of dividends, potential investments, etc.. Without this item, non-GAAP net income attributable to Hello Group Inc. would have been RMB488.3 million (US$76.6 million) in the fourth quarter of 2021.

 

   

Diluted net loss per American Depositary Share (“ADS”) was RMB21.50 (US$3.37) in the fourth quarter of 2021, compared to a diluted net income per ADS of RMB2.98 in the same period of 2020.

 

   

Non-GAAP diluted net income per ADS (note 1) was RMB1.38 (US$0.22) in the fourth quarter of 2021, compared to RMB3.80 in the same period of 2020.

 

   

Monthly Active Users (“MAU”) on Momo application were 114.1 million in December 2021, compared to 113.8 million in December 2020. MAU on Tantan application were 27.0 million in December 2021.

 

   

Total paying users of live video service and value-added service, without double counting the overlap and including 2.5 million paying users of Tantan Limited (“Tantan”), were 11.4 million for the fourth quarter of 2021, compared to 12.8 million for the fourth quarter of 2020, which included 3.8 million paying users of Tantan.

 

 

*

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 RMB6.3726 to US$1.00, the effective noon buying rate for December 30, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

1


Full Year 2021 Highlights

 

   

Net revenues decreased 3.0% year over year to RMB14,575.7 million (US$2,287.2 million) for the full year of 2021.

 

   

Net loss attributable to Hello Group Inc. was RMB2,913.7 million (US$457.2 million) for the full year of 2021, compared to a net income of RMB2,103.5 million during the same period of 2020.

 

   

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB2,037.1 million (US$319.7 million) for the full year of 2021, compared with RMB2,896.2 million during the same period of 2020.

 

   

Diluted net loss per ADS was RMB14.40 (US$2.26) for the full year of 2021, compared to a diluted net income per ADS of RMB9.65 during the same period of 2020.

 

   

Non-GAAP diluted net income per ADS (note 1) was RMB9.56 (US$1.50) for the full year of 2021, compared with RMB13.16 during the same period of 2020.

“2021 was a busy year for us. Despite a variety of external challenges, our team was able to methodically execute our strategic priorities and delivered solid results. I am confident that we’ll continue to navigate through the challenges ahead and capitalize on the growth opportunities down the road.” commented Li Wang, CEO of Hello Group.

Fourth Quarter of 2021 Financial Results

Net revenues

Total net revenues were RMB3,674.2 million (US$576.6 million) in the fourth quarter of 2021, a decrease of 3.2% from RMB3,795.2 million in the fourth quarter of 2020.

Live video service revenues were RMB2,148.8 million (US$337.2 million) in the fourth quarter of 2021, a decrease of 7.7% from RMB2,327.9 million during the same period of 2020. The decrease was primarily attributable to the decrease in Tantan’s live streaming revenues due to the shift of our strategic focus. The live steaming revenues on Momo application increased 1% year over year in the fourth quarter of 2021.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,475.7 million (US$231.6 million) in the fourth quarter of 2021, an increase of 5.3% from RMB1,401.3 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 the introduction of innovative features and operational events in the audio and video social entertainment experiences, and the rapid growth in the revenues generated by new standalone apps. The increase was partially offset by the decrease in the value-added service revenues of Tantan, due to our strategy to lower the monetization level to improve user experience and retention.

Mobile marketing revenues were RMB25.4 million (US$4.0 million) in the fourth quarter of 2021, a decrease of 51.8% from RMB52.7 million during the same period of 2020. The decrease in mobile marketing revenues was due to our product adjustment to address new regulation requirement.

Mobile games revenues were RMB19.3 million (US$3.0 million) in the fourth quarter of 2021, an increase of 163.1% from RMB7.3 million in the fourth quarter of 2020.

 

2


Net revenues from the Momo segment increased from RMB3,051.3 million in the fourth quarter of 2020 to RMB3,235.6 million (US$507.7 million) in the fourth quarter of 2021, primarily due to the increase in net revenues from value-added service. Net revenues from the Tantan segment decreased from RMB740.5 million in the fourth quarter of 2020 to RMB437.2 million (US$68.6 million) in the fourth quarter of 2021, due to our strategy to lower the monetization level in order to improve user experience and retention.

Cost and expenses

Cost and expenses were RMB7,729.4 million (US$1,212.9 million) in the fourth quarter of 2021, an increase of 134.9% from RMB3,290.0 million in the fourth quarter of 2020. The increase was primarily attributable to: (a) an increase in impairment loss on goodwill and intangible assets amounting to RMB4,397.0 million (US$690.0 million); and (b) an increase in revenue sharing with broadcasters related to Momo’s core live video service, and virtual gift recipients for our virtual gift service. These increases were partially offset by a decrease in revenue sharing with broadcasters related to Tantan’s live video service, and a decrease in personnel related costs including share-based compensation expenses resulting from the decreased number of employees and the decreased fair value of the share options granted during the period.

Non-GAAP cost and expenses (note 1) were RMB3,205.8 million (US$503.1 million) in the fourth quarter of 2021, an increase of 3.6% from RMB3,095.9 million during the same period of 2020.

Other operating income

Other operating income was RMB38.6 million (US$6.1 million) in the fourth quarter of 2021, a decrease from RMB88.4 million during the fourth quarter of 2020. The other operating income mainly consisted of government incentives.

Income (loss) from operations

Loss from operations was RMB4,016.6 million (US$630.3 million) in the fourth quarter of 2021, compared to an income from operations of RMB593.6 million during the same period of 2020. Income from operations of the Momo segment was RMB549.3 million (US$86.2 million) in the fourth quarter of 2021, which decreased from RMB650.9 million in the fourth quarter of 2020. Loss from operations of the Tantan segment was RMB162.5 million (US$25.5 million) in the fourth quarter of 2021, compared to loss from operations of RMB53.1 million in the fourth quarter of 2020.

Non-GAAP income from operations (note 1) was RMB507.0 million (US$79.6 million) in the fourth quarter of 2021, compared to RMB787.7 million during the same period of 2020. Non-GAAP income from operations of the Momo segment was RMB658.4 million (US$103.3 million) in the fourth quarter of 2021, which decreased from RMB791.8 million in the fourth quarter of 2020. Non-GAAP loss from operations of the Tantan segment was RMB145.0 million (US$22.8 million) in the fourth quarter of 2021, compared to non-GAAP loss from operations of RMB2.3 million in the fourth quarter of 2020.

Income tax expenses

Income tax expenses were RMB296.5 million (US$46.5 million) in the fourth quarter of 2021, compared to RMB5.5 million in the fourth quarter of 2020. The increase was primarily due to the following reasons: (a) in the fourth quarter of 2021, we accrued withholding income tax of RMB207.4 million (US$32.5 million) on undistributed earnings generated in 2021 by our WFOE, because we plan to remit WFOE’s earnings to its offshore parent company in the foreseeable future to fund its demand on US dollar in business operations, payments of dividends, potential investments, etc.; (b) in the fourth quarter of 2020, we reversed the over-accrued income tax expenses of RMB113.4 million, due to the preferential tax rate adjustment from 12.5% to 10.0% for WFOE, resulting from the fact that the application of the Key Software Enterprise for the fiscal year of 2019 was approved in 2020.

 

3


Net income (loss)

Net loss was RMB4,244.0 million (US$666.0 million) in the fourth quarter of 2021, compared to a net income of RMB651.1 million during the same period of 2020. Net income from the Momo segment was RMB306.7 million (US$48.1 million) in the fourth quarter of 2021, which decreased from RMB705.8 million in the fourth quarter of 2020. Net loss from the Tantan segment was RMB147.3 million (US$23.1 million) in the fourth quarter of 2021, compared to net loss of RMB50.5 million in the fourth quarter of 2020.

Non-GAAP net income (note 1) was RMB279.6 million (US$43.9 million) in the fourth quarter of 2021, compared to RMB836.1 million during the same period of 2020. Non-GAAP net income from the Momo segment was RMB415.8 million (US$65.3 million) in the fourth quarter of 2021, which decreased from RMB846.7 million in the fourth quarter of 2020. Non-GAAP net loss of the Tantan segment was RMB129.9 million (US$20.4 million) in the fourth quarter of 2021, compared to non-GAAP net loss of RMB8.8 million in the fourth quarter of 2020.

Net income (loss) attributable to Hello Group Inc.

Net loss attributable to Hello Group Inc. was RMB4,242.7 million (US$665.8 million) in the fourth quarter of 2021, compared to a net income of RMB651.5 million during the same period of 2020.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB280.9 million (US$44.1 million) in the fourth quarter of 2021, compared to RMB836.4 million during the same period of 2020.

Net income (loss) per ADS

Diluted net loss per ADS was RMB21.50 (US$3.37) in the fourth quarter of 2021, compared to a diluted net income per ADS of RMB2.98 in the fourth quarter of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB1.38 (US$0.22) in the fourth quarter of 2021, compared to RMB3.80 in the fourth quarter of 2020.

Cash and cash flow

As of December 31, 2021, the Company’s cash, cash equivalents, short-term deposits, long-term deposits and long-term restricted cash totaled RMB15,707.0 million (US$2,464.8 million), compared to RMB16,482.3 million as of December 31, 2020. Net cash provided by operating activities in the fourth quarter of 2021 was RMB665.5 million (US$104.4 million), compared to RMB1,039.1 million in the fourth quarter of 2020.

Full Year 2021 Financial Results

Net revenues for the full year of 2021 were RMB14,575.7 million (US$2,287.2 million), a decrease of 3.0% from RMB15,024.2 million in the same period of 2020.

 

4


Net loss attributable to Hello Group Inc. was RMB2,913.7 million (US$457.2 million) for the full year of 2021, compared to a net income of RMB2,103.5 million during the same period of 2020.

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB2,037.1 million (US$319.7 million) for the full year of 2021, compared to RMB2,896.2 million during the same period of 2020.

Diluted net loss per ADS was RMB14.40 (US$2.26) during the full year of 2021, compared to a diluted net income per ADS of RMB9.65 in the same period of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB9.56 (US$1.50) during the full year of 2021, compared to RMB13.16 in the same period of 2020.

Net cash provided by operating activities was RMB1,559.2 million (US$244.7 million) during the full year of 2021, compared to RMB3,080.9 million in the same period of 2020.

Recent Development

Declaration of a special cash dividend

Hello Group’s board of directors has declared a special cash dividend in the amount of US$0.64 per ADS, or US$0.32 per ordinary share. The cash dividend will be paid on April 29, 2022 to shareholders of record at the close of business on April 13, 2022. The ex-dividend date will be April 12, 2022. The aggregate amount of cash dividends to be paid is approximately US$127 million, which will be funded by surplus cash on the Company’s balance sheet.

CFO Transition

The Company today announced that Jonathon Zhang, Chief Financial Officer, will retire effective June 30, 2022. Cathy Hui Peng, Senior Vice President of corporate finance, will assume the role of chief financial officer following Mr. Zhang’s retirement and Mr. Zhang will remain with the Company as a senior advisor.

“My tenure with Hello Group was such a gratifying journey. I consider the past 8 years with the Company as the most exciting part of my long career life. It has been an absolute privilege to work with the team and have built a great business.” said Jonathon Zhang. “I’m also pleased to pass the baton to Cathy. A long time deputy of mine, she is the right person to lead the team to continue their success.”

“Jonathon has made tremendous contribution to the Company over the past 8 years. He has been playing an indispensable role in transforming the company and guiding the team to enable our success. On behalf of the company, I want to thank Jonathon for his leadership and dedication and wish him much happiness in his next chapter.” said Li Wang, Chief Executive Officer of the Company. “At the same time, we are delighted that Cathy will transition into the CFO role. Her deep capital market experience, demonstrated financial acumen and leadership skills will serve her well in her new role.”

 

5


Prior to this expanded role, Ms. Peng serves as the Company’s Senior Vice President of corporate finance. In this role she is responsible for the company’s financial planning and analysis, strategic investment and acquisitions, as well as corporate strategy and investor communications. Ms. Peng joined the Company in 2015 as vice president of investor relations. Since then, she has played a key role in driving the company’s success in various capital market transactions. From 2007 to 2015, Ms. Peng worked for SINA Corporation as director of investor relations and a corporate treasurer. Prior to that, she worked for several public and private companies in TMT space where she served various roles in accounting, financial planning and analysis, M&As and corporate communications. Ms. Peng started her career in auditing at Ernst &Young from 2001. Ms. Peng received her bachelor degree in Economics from Peking University in 2001.

Business Outlook

For the first quarter of 2022, the Company expects total net revenues to be between RMB3.1 billion to RMB3.2 billion, representing a decrease of 10.7% to 7.8% 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, impairment loss on goodwill and intangible assets, 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 (loss) attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation, impairment loss on goodwill and intangible assets, 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, impairment loss on goodwill and intangible assets, 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 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.

 

6


Conference Call

Hello Group’s management will host an earnings conference call on Thursday, March 24, 2022, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on March 24, 2022).

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/1244109

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 8:00 a.m. U.S. Eastern Time, April 1, 2022. The dial-in details for the replay are as follows:

International: +61-2- 9003- 4211

U.S. Toll Free: +1-855- 4525-696

Passcode: 1244109

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

About Hello Group Inc.

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

For investor and media inquiries, please contact:

Hello Group Inc.

Investor Relations

Phone: +86-10-5731-0538

Email: ir@immomo.com

Christensen

In China

Mr. Eric Yuan

Phone: +86-10-5900-1548

E-mail: Eyuan@christensenir.com

In US

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: lbergkamp@christensenir.com

 

7


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 first quarter of 2022, 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 fourth quarter of 2021 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the first quarter of 2022 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.                

 

8


Hello Group Inc.

Unaudited Condensed Consolidated Statement of Operations

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

 

     Three months
Ended December 31
    Year
Ended December 31
 
     2020
RMB
    2021
RMB
    2021
US$
    2020
RMB
    2021
RMB
    2021
US$
 

Net revenues:

            

Live video service

     2,327,875       2,148,785       337,191       9,637,579       8,378,945       1,314,839  

Value-added service

     1,401,269       1,475,733       231,575       5,112,182       5,971,792       937,104  

Mobile marketing

     52,663       25,369       3,981       198,197       159,010       24,952  

Mobile games

     7,334       19,294       3,028       39,564       47,712       7,487  

Other services

     6,060       5,048       792       36,666       18,260       2,866  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     3,795,201       3,674,229       576,567       15,024,188       14,575,719       2,287,248  

Cost and expenses:

            

Cost of revenues

     (2,042,781     (2,191,520     (343,897     (7,976,781     (8,383,431     (1,315,543

Research and development

     (327,295     (316,024     (49,591     (1,167,677     (1,131,781     (177,601

Sales and marketing

     (697,722     (659,604     (103,506     (2,813,922     (2,604,309     (408,673

General and administrative

     (222,191     (165,257     (25,932     (763,150     (624,700     (98,029

Impairment loss on goodwill and intangible assets

     —         (4,397,012     (689,987     —         (4,397,012     (689,987
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (3,289,989     (7,729,417     (1,212,913     (12,721,530     (17,141,233     (2,689,833

Other operating income

     88,385       38,558       6,051       228,777       175,947       27,610  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     593,597       (4,016,630     (630,295     2,531,435       (2,389,567     (374,975

Interest income

     100,880       99,573       15,625       444,471       384,279       60,302  

Interest expense

     (19,047     (18,444     (2,894     (78,872     (73,776     (11,577

Other gain or loss, net

     7,500       2,000       314       1,500       (16,000     (2,511
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     682,930       (3,933,501     (617,250     2,898,534       (2,095,064     (328,761

Income tax expenses

     (5,481     (296,491     (46,526     (755,620     (822,556     (129,077
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     677,449       (4,229,992     (663,776     2,142,914       (2,917,620     (457,838

Share of loss on equity method investments

     (26,319     (14,045     (2,204     (42,522     (8,084     (1,269
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     651,130       (4,244,037     (665,980     2,100,392       (2,925,704     (459,107
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less: net loss attributable to non-controlling interest

     (320     (1,319     (207     (3,092     (11,996     (1,882
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to the shareholders of Hello Group Inc.

     651,450       (4,242,718     (665,773     2,103,484       (2,913,708     (457,225
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share attributable to ordinary shareholders

            

Basic

     1.57       (10.75     (1.69     5.05       (7.20     (1.13

Diluted

     1.49       (10.75     (1.69     4.83       (7.20     (1.13

Weighted average shares used in calculating net income (loss) per ordinary share

            

Basic

     414,839,350       394,694,993       394,694,993       416,914,898       404,701,910       404,701,910  

Diluted

     449,683,596       394,694,993       394,694,993       452,081,642       404,701,910       404,701,910  

 

9


Hello Group Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

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

 

     Three months     Year  
   Ended December 31     Ended December 31  
     2020     2021     2021     2020     2021     2021  
     RMB     RMB     US$     RMB     RMB     US$  

Net income (loss)

     651,130       (4,244,037     (665,980     2,100,392       (2,925,704     (459,107

Other comprehensive loss, net of tax:

            

Foreign currency translation adjustment

     (69,010     (7,331     (1,150     (141,677     (39,161     (6,145
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

     582,120       (4,251,368     (667,130     1,958,715       (2,964,865     (465,252

Less: comprehensive loss attributed to the non-controlling interest

     (9,059     (3,280     (515     (26,004     (16,603     (2,605
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss) attributable to Hello Group Inc.

     591,179       (4,248,088     (666,615     1,984,719       (2,948,262     (462,647
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

10


Hello Group Inc.

Unaudited Condensed Consolidated Balance Sheets

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

 

     December 31      December 31      December 31  
     2020      2021      2021  
   RMB      RMB      US$  

Assets

        

Current assets

        

Cash and cash equivalents

     3,363,942        5,570,563        874,143  

Short-term deposits

     7,566,250        2,860,000        448,796  

Restricted cash

     2,130        —          —    

Accounts receivable, net of allowance for doubtful accounts of RMB15,390 and RMB15,127 as of December 31, 2020 and 2021, respectively

     200,831        205,225        32,204  

Prepaid expenses and other current assets

     613,696        775,072        121,626  
  

 

 

    

 

 

    

 

 

 

Total current assets

     11,746,849        9,410,860        1,476,769  

Long-term deposits

     5,550,000        7,200,000        1,129,837  

Long-term restricted cash

     —          76,471        12,000  

Right-of-use assets, net

     278,175        257,934        40,475  

Property and equipment, net

     265,765        180,664        28,350  

Intangible assets, net

     687,211        27,320        4,287  

Rental deposits

     21,794        19,204        3,014  

Long-term investments

     454,996        820,006        128,677  

Other non-current assets

     94,868        83,930        13,170  

Deferred tax assets

     32,495        34,849        5,469  

Goodwill

     4,088,403        —          —    
  

 

 

    

 

 

    

 

 

 

Total assets

     23,220,556        18,111,238        2,842,048  
  

 

 

    

 

 

    

 

 

 

Liabilities and equity

        

Current liabilities

        

Accounts payable

     699,394        726,207        113,957  

Deferred revenue

     511,617        539,967        84,733  

Accrued expenses and other current liabilities

     854,835        911,050        142,964  

Amount due to related parties

     19,462        5,016        787  

Lease liabilities due within one year

     132,793        162,950        25,570  

Income tax payable

     236,490        125,773        19,737  

Deferred consideration in connection with business acquisitions

     62,149        44,802        7,030  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     2,516,740        2,515,765        394,778  

Deferred tax liabilities

     171,803        213,384        33,485  

Convertible senior notes

     4,658,966        4,565,292        716,394  

Share-based compensation liability

     875,616        —          —    

Lease liabilities

     136,436        103,105        16,179  

Other non-current liabilities

     25,666        128,095        20,101  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     8,385,227        7,525,641        1,180,937  

Shareholder’s equity (i)

     14,835,329        10,585,597        1,661,111  
  

 

 

    

 

 

    

 

 

 

Total liabilities and shareholder’s equity

     23,220,556        18,111,238        2,842,048  
  

 

 

    

 

 

    

 

 

 

 

(i):

As of December 31, 2021, the number of ordinary shares outstanding was 395,200,884.

 

11


Hello Group Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

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

 

     Three months
Ended December 31
    Year
Ended December 31
 
     2020
RMB
    2021
RMB
    2021
US$
    2020
RMB
    2021
RMB
    2021
US$
 

Cash flows from operating activities:

            

Net income (loss)

     651,130       (4,244,037     (665,980     2,100,392       (2,925,704     (459,107

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

            

Depreciation of property and equipment

     55,375       34,226       5,371       208,990       155,537       24,407  

Amortization of intangible assets

     37,741       1,279       201       157,258       109,062       17,114  

Share-based compensation

     157,584       126,576       19,862       678,686       475,771       74,658  

Share of loss on equity method investments

     26,319       14,045       2,204       42,522       8,084       1,269  

Impairment loss on goodwill and intangible assets

     —         4,397,012       689,987       —         4,397,012       689,987  

Gain or loss on long-term investments

     (7,500     (2,000     (314     (1,500     16,000       2,511  

Gain on subsidiary deconsolidation

     —         —         —         (6,676     —         —    

Gain on disposal of subsidiaries

     —         —         —         —         (15,526     (2,436

Loss or gain on disposal of property and equipment

     3       (36     (6     (282     1,236       194  

Provision of losses (income) on receivable and other assets

     19,663       (505     (79     46,075       (263     (41

Cash received on investment income distribution

     —         —         —         1,153       —         —    

Changes in operating assets and liabilities:

            

Accounts receivable

     34,533       13,984       2,194       52,247       (10,374     (1,628

Prepaid expenses and other current assets

     104,636       52,504       8,239       (59,117     (151,162     (23,721

Amount due from a related party

     —         —         —         4,382       —         —    

Rental deposits

     (4,372     1,171       184       (4,265     (343     (54

Deferred tax assets

     1,535       (338     (53     4,569       (2,354     (369

Other non-current assets

     (166,665     42,125       6,610       (138,484     34,075       5,347  

Accounts payable

     66,948       11,053       1,734       (11,716     30,475       4,782  

Income tax payable

     (95,341     (39,285     (6,165     82,514       (110,716     (17,374

Deferred revenue

     24,740       9,652       1,515       8,910       35,106       5,509  

Accrued expenses and other current liabilities

     41,048       99,497       15,613       (120,363     60,668       9,520  

Amount due to related parties

     (12,406     (9,751     (1,530     (10,144     (14,447     (2,267

Deferred tax liability

     (9,435     207,114       32,501       (39,315     180,173       28,273  

Share-based compensation liability

     —         —         —         —         (678,153     (106,417

Other non-current liabilities

     113,553       (48,777     (7,654     85,053       (34,959     (5,486
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     1,039,089       665,509       104,434       3,080,889       1,559,198       244,671  

Cash flows from investing activities:

            

Purchase of property and equipment

     (16,095     (19,201     (3,013     (124,143     (95,323     (14,958

Payment for long-term investments

     (9,000     (115,052     (18,054     (13,500     (415,052     (65,131

Purchase of short-term deposits

     (3,654,500     (400,000     (62,769     (14,949,665     (4,976,688     (780,951

Cash received on maturity of short-term deposits

     3,954,500       3,550,000       557,072       19,577,159       9,667,570       1,517,053  

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       880  

Cash of disposed subsidiaries

     —         —         —         —         (8,750     (1,373

Cash received from sales of long term investment

     12,000       20,000       3,138       12,000       20,000       3,138  

Purchase of long-term deposits

     (900,000     (1,600,000     (251,075     (5,250,000     (1,850,000     (290,305

Cash received on maturity of long term deposits

     —         200,000       31,384       —         200,000       31,384  

Other investing activities

     2       569       89       (317     2,975       467  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash (used in) provided by investing activities

     (613,093     1,636,316       256,772       (748,466     2,550,342       400,204  

Cash flows from financing activities:

            

Deferred payment for business acquisition

     —         (50     (8     (18,355     (12,957     (2,033

Proceeds from exercise of share options

     171       5       1       226       776       122  

Repurchase of ordinary shares

     (197,799     —         —         (330,206     (862,865     (135,402

Repurchase of subsidiary’s share options

     (932     (5,070     (796     (25,832     (59,120     (9,277

Dividends payment

     —         —         —         (1,123,983     (852,743     (133,814
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (198,560     (5,115     (803     (1,498,150     (1,786,909     (280,404

Effect of exchange rate changes

     (37,770     (12,972     (2,035     (80,944     (41,669     (6,538
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     189,666       2,283,738       358,368       753,329       2,280,962       357,933  

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

     3,176,406       3,363,296       527,775       2,612,743       3,366,072       528,210  

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

     3,366,072       5,647,034       886,143       3,366,072       5,647,034       886,143  

 

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.

 

     Three months     Three months     Three months  
   Ended December 31, 2020     Ended December 31, 2021     Ended December 31, 2021  
     GAAP
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
     Share-based
compensation
RMB
     Tax
impacts
(ii)
RMB
    Non-GAAP
RMB
    GAAP
RMB
    Impairment loss
on goodwill and
intangible
assets
RMB
     Share-based
compensation
RMB
     Non-GAAP
RMB
    GAAP
US$
    Impairment
loss on
goodwill and
intangible
assets
US$
     Share-based
compensation
US$
     Non-GAAP
US$
 

Cost of revenues

     (2,042,781     17,694        4,242        —         (2,020,845     (2,191,520     —          3,393        (2,188,127     (343,897     —          532        (343,365

Research and development

     (327,295     2,247        38,515        —         (286,533     (316,024     —          36,303        (279,721     (49,591     —          5,697        (43,894

Sales and marketing

     (697,722     16,547        27,122        —         (654,053     (659,604     —          11,024        (648,580     (103,506     —          1,730        (101,776

General and administrative

     (222,191     —          87,705        —         (134,486     (165,257     —          75,856        (89,401     (25,932     —          11,903        (14,029

Impairment loss on goodwill and intangible assets

     —         —          —          —         —         (4,397,012     4,397,012        —          —         (689,987     689,987        —          —    
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Cost and operating expenses

     (3,289,989     36,488        157,584        —         (3,095,917     (7,729,417     4,397,012        126,576        (3,205,829     (1,212,913     689,987        19,862        (503,064

Income (loss) from operations

     593,597       36,488        157,584        —         787,669       (4,016,630     4,397,012        126,576        506,958       (630,295     689,987        19,862        79,554  

Net income (loss) attributable to Hello Group Inc.

     651,450       36,488        157,584        (9,122     836,400       (4,242,718     4,397,012        126,576        280,870       (665,773     689,987        19,862        44,076  

 

13


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.

 

    Year     Year     Year  
  Ended December 31, 2020     Ended December 31, 2021     Ended December 31, 2021  
    GAAP
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
    Share-
based
compensation
RMB
    Tax
impacts
(ii)
RMB
    Non-GAAP
RMB
    GAAP
RMB
    Impairment
loss on
goodwill and
intangible
assets
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
    Share-based
compensation
RMB
    Tax
impacts
(ii)
RMB
    Non-GAAP
RMB
    GAAP
US$
    Impairment
loss on
goodwill and
intangible
assets
US$
    Amortization
of intangible
assets from
business
acquisitions
US$
    Share-based
compensation
US$
    Tax
impacts
(ii)
US$
    Non-GAAP
US$
 

Cost of revenues

    (7,976,781     73,740       18,449       —         (7,884,592     (8,383,431     —         51,853       17,941       —         (8,313,637     (1,315,543     —         8,137       2,815       —         (1,304,591

Research and development

    (1,167,677     9,365       175,870       —         (982,442     (1,131,781     —         3,660       139,571       —         (988,550     (177,601     —         574       21,902       —         (155,125

Sales and marketing

    (2,813,922     68,960       158,902       —         (2,586,060     (2,604,309     —         48,491       70,821       —         (2,484,997     (408,673     —         7,609       11,113       —         (389,951

General and administrative

    (763,150     —         325,465       —         (437,685     (624,700     —         —         247,438       —         (377,262     (98,029     —         —         38,828       —         (59,201

Impairment loss on goodwill and intangible assets

    —         —         —         —         —         (4,397,012     4,397,012       —         —         —         —         (689,987     689,987       —         —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost and operating expenses

    (12,721,530     152,065       678,686       —         (11,890,779     (17,141,233     4,397,012       104,004       475,771       —         (12,164,446     (2,689,833     689,987       16,320       74,658       —         (1,908,868

Income (loss) from operations

    2,531,435       152,065       678,686       —         3,362,186       (2,389,567     4,397,012       104,004       475,771       —         2,587,220       (374,975     689,987       16,320       74,658       —         405,990  

Net income (loss) attributable to Hello Group Inc.

    2,103,484       152,065       678,686       (38,016     2,896,219       (2,913,708     4,397,012       104,004       475,771       (26,002     2,037,077       (457,225     689,987       16,320       74,658       (4,080     319,660  

 

(ii)

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

 

14


Hello Group Inc.

Unaudited Condensed Segment Report

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

 

     Three months
Ended December 31, 2021
 
     Momo     Tantan     QOOL     Unallocated1     Total     Total  
     RMB     RMB     RMB     RMB     RMB     US$  

Net revenues:

           —        

Live video service

     1,947,958       200,827       —         —         2,148,785       337,191  

Value-added service

     1,239,351       236,382       —         —         1,475,733       231,575  

Mobile marketing

     25,369       —         —         —         25,369       3,981  

Mobile games

     19,294       —         —         —         19,294       3,028  

Other services

     3,667       —         1,381       —         5,048       792  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     3,235,639       437,209       1,381       —         3,674,229       576,567  

Cost and expenses (iii):

            

Cost of revenues

     (1,962,718     (228,290     (512     —         (2,191,520     (343,897

Research and development

     (233,512     (82,512     —         —         (316,024     (49,591

Sales and marketing

     (377,672     (281,534     (398     —         (659,604     (103,506

General and administrative

     (147,957     (10,362     (6,938     —         (165,257     (25,932

Impairment loss on goodwill and intangible assets

     —         —         —         (4,397,012     (4,397,012     (689,987
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (2,721,859     (602,698     (7,848     (4,397,012     (7,729,417     (1,212,913

Other operating income

     35,532       3,023       3       —         38,558       6,051  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     549,312       (162,466     (6,464     (4,397,012     (4,016,630     (630,295

Interest income

     99,399       139       35       —         99,573       15,625  

Interest expense

     (18,444     —         —         —         (18,444     (2,894

Other gain or loss, net

     2,000       —         —         —         2,000       314  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     632,267       (162,327     (6,429     (4,397,012     (3,933,501     (617,250

Income tax (expenses) benefits

     (311,479     14,988       —         —         (296,491     (46,526
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     320,788       (147,339     (6,429     (4,397,012     (4,229,992     (663,776

Share of loss on equity method investments

     (14,045     —         —         —         (14,045     (2,204
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     306,743       (147,339     (6,429     (4,397,012     (4,244,037     (665,980
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(iii)

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

 

     Three months
Ended December 31, 2021
 
     Momo
RMB
     Tantan
RMB
     QOOL
RMB
     Total
RMB
     Total
US$
 

Cost of revenues

     2,729        664        —          3,393        532  

Research and development

     19,569        16,734        —          36,303        5,697  

Sales and marketing

     10,997        27        —          11,024        1,730  

General and administrative

     75,808        48        —          75,856        11,903  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total cost and expenses

     109,103        17,473        —          126,576        19,862  

 

 

1 

The impairment loss on goodwill and intangible assets is presented as an unallocated item in the segment information because our management does not consider this as part of the segment operating performance measure.

 

15


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 December 31, 2021
 
     Momo
RMB
     Tantan
RMB
    QOOL
RMB
    Unallocated
RMB
    Total
RMB
    Total
US$
 

Income (loss) from operations

     549,312        (162,466     (6,464     (4,397,012     (4,016,630     (630,295

Share-based compensation

     109,103        17,473       —         —         126,576       19,862  

Impairment loss on goodwill and intangible assets

     —          —         —         4,397,012       4,397,012       689,987  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income (loss) from operations

     658,415        (144,993     (6,464     —         506,958       79,554  

Net income (loss)

     306,743        (147,339     (6,429     (4,397,012     (4,244,037     (665,980

Share-based compensation

     109,103        17,473       —         —         126,576       19,862  

Impairment loss on goodwill and intangible assets

     —          —         —         4,397,012       4,397,012       689,987  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     415,846        (129,866     (6,429     —         279,551       43,869  

 

16


Hello Group Inc.

Unaudited Condensed Segment Report

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

 

     Three months
Ended December 31, 2020
 
     Momo
RMB
    Tantan
RMB
    QOOL
RMB
    Total
RMB
    Total
US$
 

Net revenues:

          

Live video service

     1,923,544       404,331       —         2,327,875       356,762  

Value-added service

     1,065,062       336,207       —         1,401,269       214,754  

Mobile marketing

     52,663       —         —         52,663       8,071  

Mobile games

     7,334       —         —         7,334       1,124  

Other services

     2,743       —         3,317       6,060       929  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     3,051,346       740,538       3,317       3,795,201       581,640  

Cost and expenses (iv):

          

Cost of revenues

     (1,676,071     (365,350     (1,360     (2,042,781     (313,070

Research and development

     (243,555     (83,740     —         (327,295     (50,160

Sales and marketing

     (361,115     (336,558     (49     (697,722     (106,931

General and administrative

     (202,831     (11,891     (7,469     (222,191     (34,052
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (2,483,572     (797,539     (8,878     (3,289,989     (504,213

Other operating income

     83,110       3,945       1,330       88,385       13,546  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     650,884       (53,056     (4,231     593,597       90,973  

Interest income

     100,347       486       47       100,880       15,461  

Interest expense

     (19,047     —         —         (19,047     (2,919

Other gain or loss, net

     7,500       —         —         7,500       1,149  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     739,684       (52,570     (4,184     682,930       104,664  

Income tax (expenses) benefits

     (7,565     2,084       —         (5,481     (840
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     732,119       (50,486     (4,184     677,449       103,824  

Share of loss on equity method investments

     (26,319     —         —         (26,319     (4,034
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     705,800       (50,486     (4,184     651,130       99,790  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(iv)

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

 

     Three months
Ended December 31, 2020
 
     Momo
RMB
     Tantan
RMB
     QOOL
RMB
     Total
RMB
     Total
US$
 

Cost of revenues

     2,844        1,398        —          4,242        650  

Research and development

     31,946        6,569        —          38,515        5,903  

Sales and marketing

     21,452        5,670        —          27,122        4,157  

General and administrative

     84,706        644        2,355        87,705        13,441  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total cost and expenses

     140,948        14,281        2,355        157,584        24,151  

 

 

2 

All translations from RMB to U.S. dollars are made at a rate of RMB6.525 to US$1.00, the effective noon buying rate for December 31, 2020 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

17


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 December 31, 2020
 
     Momo
RMB
     Tantan
RMB
    QOOL
RMB
    Total
RMB
    Total
US$
 

Income (loss) from operations

     650,884        (53,056     (4,231     593,597       90,973  

Share-based compensation

     140,948        14,281       2,355       157,584       24,151  

Amortization of intangible assets from business acquisitions

     —          36,488       —         36,488       5,592  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income (loss) from operations

     791,832        (2,287     (1,876     787,669       120,716  

Net income (loss)

     705,800        (50,486     (4,184     651,130       99,790  

Share-based compensation

     140,948        14,281       2,355       157,584       24,151  

Amortization of intangible assets from business acquisitions

     —          36,488       —         36,488       5,592  

Tax impacts

     —          (9,122     —         (9,122     (1,398
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     846,748        (8,839     (1,829     836,080       128,135  

 

18


Hello Group Inc.

Unaudited Condensed Segment Report

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

 

     Year
Ended December 31, 2021
 
     Momo
RMB
    Tantan
RMB
    QOOL
RMB
    Unallocated
RMB
    Total
RMB
    Total
US$
 

Net revenues:

           —        

Live video service

     7,475,809       903,136       —         —         8,378,945       1,314,839  

Value-added service

     4,845,744       1,126,048       —         —         5,971,792       937,104  

Mobile marketing

     159,010       —         —         —         159,010       24,952  

Mobile games

     47,712       —         —         —         47,712       7,487  

Other services

     12,930       —         5,330       —         18,260       2,866  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     12,541,205       2,029,184       5,330       —         14,575,719       2,287,248  

Cost and expenses (v):

            

Cost of revenues

     (7,301,048     (1,044,852     (37,531     —         (8,383,431     (1,315,543

Research and development

     (828,688     (303,093     —         —         (1,131,781     (177,601

Sales and marketing

     (1,420,130     (1,180,146     (4,033     —         (2,604,309     (408,673

General and administrative

     (619,922     18,401       (23,179     —         (624,700     (98,029

Impairment loss on goodwill and intangible assets

     —         —         —         (4,397,012     (4,397,012     (689,987
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (10,169,788     (2,509,690     (64,743     (4,397,012     (17,141,233     (2,689,833

Other operating income

     138,884       37,029       34       —         175,947       27,610  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     2,510,301       (443,477     (59,379     (4,397,012     (2,389,567     (374,975

Interest income

     383,028       1,091       160       —         384,279       60,302  

Interest expense

     (73,776     —         —         —         (73,776     (11,577

Other gain or loss, net

     (16,000     —         —         —         (16,000     (2,511
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     2,803,553       (442,386     (59,219     (4,397,012     (2,095,064     (328,761

Income tax (expenses) benefits

     (844,987     22,431       —         —         (822,556     (129,077
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     1,958,566       (419,955     (59,219     (4,397,012     (2,917,620     (457,838

Share of loss on equity method investments

     (8,084     —         —         —         (8,084     (1,269
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     1,950,482       (419,955     (59,219     (4,397,012     (2,925,704     (459,107
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(v)

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

 

     Year
Ended December 31, 2021
 
     Momo
RMB
     Tantan
RMB
    QOOL
RMB
     Total
RMB
     Total
US$
 

Cost of revenues

     10,541        7,400       —          17,941        2,815  

Research and development

     97,828        41,743       —          139,571        21,902  

Sales and marketing

     48,154        22,667       —          70,821        11,113  

General and administrative

     314,216        (66,778     —          247,438        38,828  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total cost and expenses

     470,739        5,032       —          475,771        74,658  

 

19


Hello Group Inc.

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

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

 

     Year
Ended December 31, 2021
 
     Momo
RMB
     Tantan
RMB
    QOOL
RMB
    Unallocated
RMB
    Total
RMB
    Total
US$
 

Income (loss) from operations

     2,510,301        (443,477     (59,379     (4,397,012     (2,389,567     (374,975

Share-based compensation

     470,739        5,032       —         —         475,771       74,658  

Impairment loss on goodwill and intangible assets

     —          —         —         4,397,012       4,397,012       689,987  

Amortization of intangible assets from business acquisitions

     —          104,004       —         —         104,004       16,320  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income (loss) from operations

     2,981,040        (334,441     (59,379     —         2,587,220       405,990  

Net income (loss)

     1,950,482        (419,955     (59,219     (4,397,012     (2,925,704     (459,107

Share-based compensation

     470,739        5,032       —         —         475,771       74,658  

Impairment loss on goodwill and intangible assets

     —          —         —         4,397,012       4,397,012       689,987  

Amortization of intangible assets from business acquisitions

     —          104,004       —         —         104,004       16,320  

Tax impacts

     —          (26,002     —         —         (26,002     (4,080
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     2,421,221        (336,921     (59,219     —         2,025,081       317,778  

 

20


Hello Group Inc.

Unaudited Condensed Segment Report

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

 

     Year  
   Ended December 31, 2020  
     Momo     Tantan     QOOL     Total     Total  
     RMB     RMB     RMB     RMB     US$  

Net revenues:

          

Live video service

     8,638,810       998,769       —         9,637,579       1,477,024  

Value-added service

     3,742,637       1,369,545       —         5,112,182       783,476  

Mobile marketing

     198,197       —         —         198,197       30,375  

Mobile games

     39,564       —         —         39,564       6,063  

Other services

     11,911       —         24,755       36,666       5,620  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     12,631,119       2,368,314       24,755       15,024,188       2,302,558  

Cost and expenses (vi):

          

Cost of revenues

     (6,865,836     (1,088,816     (22,129     (7,976,781     (1,222,495

Research and development

     (844,826     (322,851       (1,167,677     (178,954

Sales and marketing

     (1,454,123     (1,359,709     (90     (2,813,922     (431,252

General and administrative

     (664,458     (73,019     (25,673     (763,150     (116,958
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (9,829,243     (2,844,395     (47,892     (12,721,530     (1,949,659

Other operating income

     223,312       3,945       1,520       228,777       35,062  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     3,025,188       (472,136     (21,617     2,531,435       387,961  

Interest income

     440,878       3,353       240       444,471       68,118  

Interest expense

     (78,872     —         —         (78,872     (12,088

Other gain or loss, net

     1,500       —         —         1,500       230  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     3,388,694       (468,783     (21,377     2,898,534       444,221  

Income tax (expenses) benefits

     (770,333     14,713       —         (755,620     (115,804
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     2,618,361       (454,070     (21,377     2,142,914       328,417  

Share of loss on equity method investments

     (42,522     —         —         (42,522     (6,517
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     2,575,839       (454,070     (21,377     2,100,392       321,900  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(vi)

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

 

     Year  
     Ended December 31, 2020  
     Momo      Tantan      QOOL      Total      Total  
     RMB      RMB      RMB      RMB      US$  

Cost of revenues

     15,189        3,260        —          18,449        2,827  

Research and development

     127,714        48,156        —          175,870        26,953  

Sales and marketing

     142,908        15,994        —          158,902        24,353  

General and administrative

     292,356        22,882        10,227        325,465        49,880  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total cost and expenses

     578,167        90,292        10,227        678,686        104,013  

 

21


Hello Group Inc.

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

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

 

     Year  
     Ended December 31, 2020  
     Momo
RMB
     Tantan
RMB
    QOOL
RMB
    Total
RMB
    Total
US$
 

Income (loss) from operations

     3,025,188        (472,136     (21,617     2,531,435       387,961  

Share-based compensation

     578,167        90,292       10,227       678,686       104,013  

Amortization of intangible assets from business acquisitions

     —          152,065       —         152,065       23,305  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income (loss) from operations

     3,603,355        (229,779     (11,390     3,362,186       515,279  

Net income (loss)

     2,575,839        (454,070     (21,377     2,100,392       321,900  

Share-based compensation

     578,167        90,292       10,227       678,686       104,013  

Amortization of intangible assets from business acquisitions

     —          152,065       —         152,065       23,305  

Tax impacts

     —          (38,016     —         (38,016     (5,826
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     3,154,006        (249,729     (11,150     2,893,127       443,392  

 

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