Hello Group (MOMO) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was RMB 2.52 billion, down 1.5% year-over-year but above guidance, with overseas revenue surging 71.9% to RMB 415 million, now 16% of total revenue, offsetting domestic declines.

• Net income attributable to shareholders rose to RMB 358 million, with non-GAAP net income at RMB 403.8 million, up sharply from last year.

• Adjusted operating income was RMB 350 million, down 33% year-over-year, with a margin of 14%.

• Paying users on Momo and TanTan declined significantly year-over-year, while overseas app monetization and localization drove international growth.

• Strategic focus remains on maintaining Momo's cash flow, improving TanTan's profitability, and expanding overseas brands.

Financial highlights

• Total revenue: RMB 2.52 billion, down 2% year-over-year and 4% quarter-over-quarter.

• Value added services revenue: RMB 2.49 billion, down 1.7% year-over-year, mainly due to soft consumer sentiment and a shrinking user base in China, partially offset by overseas growth.

• Non-GAAP net income: RMB 403.8 million, up from RMB 59.9 million last year, but adjusted for one-offs, down from RMB 508.5 million.

• Non-GAAP gross margin: 37.9%, down 3.5 percentage points year-over-year.

• Non-GAAP operating income: RMB 345.3 million, margin 13.7% (down from 20.1% last year).

Outlook and guidance

• Q2 2025 revenue guidance: RMB 2.57–2.67 billion, a 0.8%–4.5% year-over-year decrease.

• Domestic revenue expected to decline by mid to low teens percent, while overseas revenue is projected to grow over 80% year-over-year.

• Full-year domestic revenue decline expected to be around 10%, a narrowing from previous years.

• Group-level top line may turn positive in the second half as overseas growth accelerates.

• Management anticipates continued overseas growth and a meaningful contribution from international products in coming quarters.