Hello Group Inc. Announces Second Quarter 2024 Unaudited Financial Results
Company Overview
Hello Group Inc. (NASDAQ: MOMO), a key player in China's online social networking space, recently disclosed its unaudited financial results for the second quarter of 2024. The company continues to influence the market through its flagship products, Momo and Tantan, along with a portfolio of emerging apps.
Financial Highlights for Q2 2024
Net Revenues
Hello Group reported total net revenues of RMB2,691.4 million (US$370.3 million) for the second quarter of 2024. This marks a 14.2% decrease from RMB3,137.7 million during the same period in 2023.
- Live Video Service Revenues: Decreased by 18.0% to RMB1,303.0 million (US$179.3 million) due to operational adjustments and a challenging macroeconomic environment.
- Value-Added Service Revenues: Fell by 10.3% to RMB1,345.3 million (US$185.1 million), impacted by product adjustments and a decline in Tantan's user base.
- Mobile Marketing Revenues: Increased by 13.5% to RMB42.0 million (US$5.8 million), showing growth despite broader declines.
Segment Performance
- Momo Segment: Revenues dropped to RMB2,457.2 million (US$338.1 million), primarily due to decreased revenues from live video and value-added services.
- Tantan Segment: Revenues decreased to RMB233.7 million (US$32.2 million), driven by declines in live video and value-added services.
Cost and Expenses
Hello Group's total cost and expenses were RMB2,275.2 million (US$313.1 million) in Q2 2024, reflecting a 9.6% decrease from RMB2,515.5 million in Q2 2023. The reduction is attributed to lower revenue sharing and personnel costs.
Non-GAAP Cost and Expenses
Non-GAAP cost and expenses stood at RMB2,223.8 million (US$306.0 million), a 9.3% decrease compared to RMB2,451.8 million in Q2 2023.
Income from Operations
Income from operations was RMB425.0 million (US$58.5 million), down from RMB645.1 million in the same period last year.
- Momo Segment: Operating income fell to RMB409.4 million (US$56.3 million) from RMB618.8 million in Q2 2023.
- Tantan Segment: Operating income decreased to RMB16.4 million (US$2.3 million) from RMB30.2 million in the previous year.
Non-GAAP Income from Operations
Non-GAAP income from operations reached RMB476.5 million (US$65.6 million), down from RMB708.8 million in Q2 2023.
Net Income
Net income for the quarter was RMB397.8 million (US$54.7 million), a decrease from RMB567.6 million in Q2 2023.
- Momo Segment: Net income dropped to RMB382.8 million (US$52.7 million) from RMB542.4 million in the previous year.
- Tantan Segment: Net income was RMB15.8 million (US$2.2 million), down from RMB29.1 million in Q2 2023.
Non-GAAP Net Income
Non-GAAP net income for Q2 2024 was RMB449.2 million (US$61.8 million), compared to RMB631.3 million in the same period last year.
Earnings Per ADS
- Diluted Earnings Per ADS: RMB2.11 (US$0.29) in Q2 2024, down from RMB2.82 in Q2 2023.
- Non-GAAP Diluted Earnings Per ADS: RMB2.38 (US$0.33), compared to RMB3.14 in Q2 2023.
Cash and Cash Flow
As of June 30, 2024, Hello Group held RMB14,316.4 million (US$1,970.0 million) in cash and equivalents, compared to RMB13,478.5 million as of December 31, 2023. Net cash provided by operating activities in Q2 2024 was RMB475.2 million (US$65.4 million), down from RMB827.7 million in Q2 2023.
First Half of 2024 Financial Results
Net Revenues
For the first half of 2024, net revenues were RMB5,251.8 million (US$722.7 million), a decline of 11.8% from RMB5,956.5 million in the first half of 2023.
Net Income
Net income attributable to Hello Group for the first half of 2024 was RMB403.0 million (US$55.5 million), down from RMB958.7 million in the same period last year.
Non-GAAP Net Income
Non-GAAP net income for the first half of 2024 was RMB509.1 million (US$70.1 million), compared to RMB1,104.1 million in the first half of 2023.
Earnings Per ADS
- Diluted Earnings Per ADS: RMB2.10 (US$0.29) for the first half of 2024, compared to RMB4.78 in the same period of 2023.
- Non-GAAP Diluted Earnings Per ADS: RMB2.65 (US$0.37), down from RMB5.49 in the first half of 2023.
Cash Flow
Net cash provided by operating activities for the first half of 2024 was RMB875.4 million (US$120.5 million), compared to RMB1,278.8 million in the first half of 2023.
Share Repurchase Program
In June 2022, Hello Group's board authorized a share repurchase program of up to US$200 million. In March 2024, the board extended the program to June 2026 and increased the authorized amount to US$286.1 million. As of September 3, 2024, the company has repurchased 30.9 million ADSs for US$174.6 million.
Business Outlook for Q3 2024
Hello Group anticipates Q3 2024 net revenues between RMB2.58 billion and RMB2.68 billion, representing a year-over-year decrease of 15.2% to 11.9%. These projections reflect current market conditions and may change.
Conclusion
Hello Group Inc. faces a challenging market, reflected in its declining revenues and net income. However, the company remains committed to innovation and exploring new growth opportunities, particularly in overseas markets. The strategic adjustments in its core products and operations demonstrate its adaptability in a shifting economic landscape.
Frequently Asked Questions
What were Hello Group's net revenues for the second quarter of 2024?
Hello Group's net revenues for the second quarter of 2024 were RMB2,691.4 million (US$370.3 million), marking a 14.2% decrease from the same period in 2023.
How did Hello Group's net income change in Q2 2024 compared to Q2 2023?
In Q2 2024, Hello Group's net income decreased to RMB397.8 million (US$54.7 million) from RMB567.6 million in Q2 2023, reflecting a significant decline.
What caused the decrease in Hello Group's live video service revenues?
The 18.0% decrease in live video service revenues was due to operational adjustments, such as reducing large-scale competition events on the Momo app, and weaker consumer sentiment in the current macroeconomic environment.
How did the Tantan app perform in terms of monthly active users (MAU) in Q2 2024?
Tantan's monthly active users (MAU) dropped to 12.9 million in June 2024, down from 17.3 million in June 2023, indicating a notable decline in user engagement.
What is Hello Group's business outlook for the third quarter of 2024?
For Q3 2024, Hello Group expects net revenues to be between RMB2.58 billion and RMB2.68 billion, reflecting a year-over-year decrease of 15.2% to 11.9%, based on current market conditions.
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