Hello Group (MOMO) Q2 2024 earnings summary

Executive summary

• Q2 2024 total revenue was RMB 2.69 billion, down 14.2% year-over-year but up 5% sequentially, reflecting challenging macro conditions and operational adjustments.

• Adjusted operating income was RMB 477 million, down 33% year-over-year and 7% sequentially.

• Net income attributable to shareholders dropped to RMB 397.8 million from RMB 568.4 million a year ago; non-GAAP net income was RMB 449.2 million.

• Profit margin was 17.7%, declining 4.9 percentage points year-over-year and 2.4 sequentially.

• Strategic focus remains on maintaining Momo's cash cow productivity, improving Tantan's dating experience, and expanding new apps, especially overseas.

Financial highlights

• Live broadcasting/video service revenue was RMB 1.30 billion, down 18% year-over-year but up 5% sequentially, mainly due to reduced competition events and soft consumer sentiment.

• Value-added services revenue was RMB 1.35 billion, down 10.3% year-over-year but up 4% sequentially, impacted by product adjustments and a decline in Tantan's user base.

• Non-GAAP net income was RMB 449.2 million, down from RMB 632.1 million year-over-year; Q1 included a one-off non-cash tax provision.

• Non-GAAP gross margin was 40.8%, down 1.3 percentage points year-over-year.

• Cost and expenses decreased 9.6% to RMB 2,275.2 million, driven by lower revenue sharing and personnel costs.

Outlook and guidance

• Q3 2024 revenue is expected between RMB 2.58–2.68 billion, a year-over-year decrease of 15.2%–11.9% and a sequential decrease of 4.1%–0.4%.

• Momo segment revenues for 2024 are projected to decline 10–12% year-over-year.

• Overseas business is expected to continue growing, though YoY growth may slow to mid-30s as localization efforts ramp up.

• Tantan is expected to remain profitable for 2024, though profit will likely decrease in the second half.

• Guidance reflects current market and operational conditions and is subject to change.