Momo Stock Earnings Reports

Hello Group reported Q1 2026 revenue of RMB 2.39 billion, down 5% year‑over‑year. Domestic revenue was weak (RMB 1.79 billion, -15% YoY) due to heightened tax scrutiny on agency-driven live entertainment and some payment-policy headwinds for Tantan; overseas revenue was strong (RMB 597 million, +44% YoY) and now accounts for 25% of group revenue. Adjusted operating income was RMB 349 million (margin 14.6%). Cash and equivalents totaled RMB 8.56 billion. Key operational notes: Momo focused on product improvements (AI features, voice/video, recommendation refinements) to stabilize retention and mid/long‑tail monetization; Tantan saw modest paying‑user decline and was affected by Alipay auto‑renewal rule changes but is implementing product and payment fixes; overseas expansion is driving growth with two newer apps delivering triple‑digit revenue growth and narrowing losses, and management expects overseas revenue to reach about RMB 3 billion in 2026 (± ~RMB 100m). Q2 revenue guidance: RMB 2.45–2.55 billion (implying a YoY decline of ~6.5% to 2.7%); management expects domestic revenue decline to moderate to mid‑teens for the full year (vs prior low‑teens guidance) and still targets adjusted operating margin in the low teens. Management highlighted AI as a driver of user experience and monetization and is balancing selective marketing spend for overseas scale with margin optimization. Near‑term risks include continued tax enforcement on agencies, regional regulatory/seasonal headwinds (e.g., Turkey, Ramadan) and temporary payment channel impacts, but management expects agency recovery by Q3 and steady overseas recovery.