Momo Stock Earnings Reports

Hello Group reported Q2 2025 revenue of RMB 2.62 billion (down 3% YoY; up 4% QoQ). Domestic revenue declined (RMB 2.18 billion, -11% YoY) while overseas revenue grew strongly (RMB 442 million, +73% YoY) and now represents a larger share of the business (17% of group revenue vs. 10% YoY). Adjusted operating income was RMB 448 million (17.1% margin). Key strategic priorities remain: preserve Momo's cash‑cow productivity (product tweaks, AI greeting and AI chat assistant to improve icebreaking and retention), improve Tantan's core dating experience while protecting profitability (product upgrade temporarily pressured paying ratio but ARPPU rose), and prudent, ROI‑focused overseas expansion emphasizing ARPPU and acquisition cost optimization. Management implemented cost controls (headcount and marketing reductions) and saw non‑GAAP R&D and SG&A trend lower; non‑GAAP net loss was RMB 96.0 million in Q2, but excluding a one‑time withholding tax accrual the company would have reported non‑GAAP net income of RMB 451.9 million. The quarter includes a one‑time RMB 547.9 million withholding tax accrual related to a reinterpretation of the applicable dividend withholding rate (moving from 5% to 10%), which management says they complied with and will accrue going forward. Cash and equivalents were RMB 12.39 billion at quarter end after repaying a RMB 1.76 billion bank loan and paying RMB 346 million in dividends. Third‑quarter revenue guidance is RMB 2.59–2.69 billion (–3.2% to +0.6% YoY); management expects overseas growth to remain strong (mid‑60s YoY in Q3) while domestic revenue faces mid‑ to low‑teens declines. Gross margin pressured by mix shift and elevated payout ratios; management now expects 2025 adjusted gross margin toward the lower end of prior guidance and operating margin near the low end of the prior 13%–14% range.