Hello Group Inc. Announces Unaudited Financial Results for the Third Quarter of 2023
BEIJING, Dec. 8, 2023 /PRNewswire/ -- Hello Group Inc. (NASDAQ: MOMO) ("Hello Group" or the "Company"), a leading mobile social and entertainment platform in China, today announced its unaudited financial results for the third quarter of 2023.
*Third** Quarter of 2023 Highlights*
· Net revenues decreased by 5.9% year over year to RMB3,042.8 million (US$417.1 million*) in the third quarter of 2023.
· Net income attributable to Hello Group Inc. increased to RMB546.4 million (US$74.9 million) in the third quarter of 2023, from RMB450.8 million in the same period of 2022.
· Non-GAAP net income attributable to Hello Group Inc. (note 1) increased to RMB605.9 million (US$83.0 million) in the third quarter of 2023, from RMB535.8 million in the same period of 2022.
· Diluted net income per American Depositary Share ("ADS") was RMB2.75 (US$0.38) in the third quarter of 2023, compared to RMB2.20 in the same period of 2022.
· Non-GAAP diluted net income per ADS (note 1) was RMB3.05 (US$0.42) in the third quarter of 2023, compared to RMB2.60 in the same period of 2022.
· Monthly Active Users ("MAU") on Tantan application were 15.7 million in September 2023, compared to 20.9 million in September 2022.
· For the Momo app total paying users was 7.8 million for the third quarter of 2023, compared to 8.4 million for the same period last year. Tantan had 1.4 million paying users for the third quarter of 2023 compared to 2.0 million from the year ago period.
*First **Nine Months** of 2023 Highlights*
· Net revenues decreased by 5.2% year over year to RMB8,999.4 million (US$1,233.5 million) for the first nine months of 2023.
· Net income attributable to Hello Group Inc. was RMB1,505.1 million (US$206.3 million) for the first nine months of 2023, compared to RMB1,086.3 million during the same period of 2022.
· Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,710.0 million (US$234.4 million) for the first nine months of 2023, compared to RMB1,397.8 million during the same period of 2022.
· Diluted net income per ADS was RMB7.52 (US$1.03) for the first nine months of 2023, compared to RMB5.30 during the same period of 2022.
· Non-GAAP diluted net income per ADS (note 1) was RMB8.53 (US$1.17) for the first nine months of 2023, compared to RMB6.75 during the same period of 2022.
*"*We are pleased to report strong financial results for the third quarter and steady progress on various strategic priorities across all business lines." commented Yan Tang, Chairman and CEO of Hello Group. "The group level profitability continued to grow from the prior year period, thanks to our effective cost optimization and efficiency improvement initiatives, which enabled us to maintain the stability of Momo cash cow business, turn Tantan profitable as well as support the development of new endeavors."
* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rate solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB7.2960 to US$1.00, the effective noon buying rate for September 29, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board.
*Third** Quarter of 2023 Financial Results *
*Net revenues *
Total net revenues were RMB3,042.8 million (US$417.1 million) in the third quarter of 2023, a decrease of 5.9% from RMB3,233.0 million in the third quarter of 2022.
Live video service revenues were RMB1,530.8 million (US$209.8 million) in the third quarter of 2023, a decrease of 7.6% from RMB1,657.5 million during the same period of 2022. The decrease was primarily attributable to a soft consumer sentiment in the current macro environment, and to a lesser degree, Tantan pivoting away from the live video service which we deem not the priority for Tantan at this point for the dating service.
Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,466.7 million (US$201.0 million) in the third quarter of 2023, a decrease of 4.6% from RMB1,537.7 million during the same period of 2022. The decrease was primarily due to the impact of the macro economy on consumer sentiment as well as our proactive product adjustments to improve Momo app's ecosystem, and to a lesser extent, the decline in Tantan's paying user as we reduced marketing spending. However, the decrease was partially offset by the rapid revenue growth from the new standalone apps.
Mobile marketing revenues were RMB30.7 million (US$4.2 million) in the third quarter of 2023, an increase of 8.7% from RMB28.2 million during the same period of 2022.
Mobile games revenues were RMB7.9 million (US$1.1 million) in the third quarter of 2023, an increase of 1.9% from RMB7.7 million in the third quarter of 2022.
Net revenues from the Momo segment decreased from RMB2,891.0 million in the third quarter of 2022 to RMB2,743.1 million (US$376.0 million) in the third quarter of 2023, primarily due to the decrease in net revenues from value-added service and live video service on Momo application. The decrease was partially offset by the revenue growth of the new standalone apps. Net revenues from the Tantan segment decreased from RMB341.3 million in the third quarter of 2022 to RMB295.0 million (US$40.4 million) in the third quarter of 2023, mainly due to the decrease in net revenues from value-added service, and to a lesser extent, the decrease from live video service.
*Cost and expenses *
Cost and expenses were RMB2,461.1 million (US$337.3 million) in the third quarter of 2023, a decrease of 10.0% from RMB2,734.2 million in the third quarter of 2022. The decrease was primarily attributable to: (a) a decrease in revenue sharing with broadcasters related to live video service and with virtual gift recipients of virtual gift service on the Momo application. The decrease was partially offset by an increase in revenue sharing with virtual gift recipients for new standalone apps; (b) a decrease in salary expenses and share-based compensation expenses, due to our continuous optimization in personnel costs and the newly granted share options which had lower fair value; (c) a decrease in sales and marketing expenses due to our initiatives to control cost and optimize Tantan's channel marketing strategy and, to a lesser extent, Momo's strategy to trim inefficient channel marketing spend.
Non-GAAP cost and expenses (note 1) were RMB2,401.6 million (US$329.2 million) in the third quarter of 2023, a decrease of 9.3% from RMB2,649.2 million during the same period of 2022.
*Income **from operations*
Income from operations was RMB621.8 million (US$85.2 million) in the third quarter of 2023, compared to RMB520.1 million during the same period of 2022. Income from operations of the Momo segment was RMB618.6 million (US$84.8 million) in the third quarter of 2023, which increased from RMB569.4 million in the third quarter of 2022. Income from operations of the Tantan segment was RMB24.0 million (US$3.3 million) in the third quarter of 2023, compared to a loss from operations of RMB44.5 million in the third quarter of 2022.
Non-GAAP income from operations (note 1) was RMB681.2 million (US$93.4 million) in the third quarter of 2023, compared to RMB605.1 million during the same period of 2022. Non-GAAP income from operations of the Momo segment was RMB674.5 million (US$92.4 million) in the third quarter of 2023, which increased from RMB648.2 million in the third quarter of 2022. Non-GAAP income from operations of the Tantan segment was RMB27.6 million (US$3.8 million) in the third quarter of 2023, compared to a non-GAAP loss from operations of RMB38.3 million in the third quarter of 2022.
*Income tax expenses *
Income tax expenses were RMB158.1 million (US$21.7 million) in the third quarter of 2023, compared to RMB156.0 million in the third quarter of 2022. The increase in income tax expenses was primarily due to the higher profit in the third quarter of 2023.
*Net **income *
Net income was RMB542.2 million (US$74.3 million) in the third quarter of 2023, compared to RMB449.9 million during the same period of 2022. Net income from the Momo segment was RMB540.0 million (US$74.0 million) in the third quarter of 2023, compared to RMB499.6 million in the same period of 2022. Net income from the Tantan segment was RMB23.0 million (US$3.2 million) in the third quarter of 2023, compared to a net loss of RMB45.0 million in the third quarter of 2022.
Non-GAAP net income (note 1) was RMB601.6 million (US$82.5 million) in the third quarter of 2023, compared to RMB534.8 million during the same period of 2022. Non-GAAP net income from the Momo segment was RMB595.9 million (US$81.7million) in the third quarter of 2023, which increased from RMB578.4 million in the third quarter of 2022. Non-GAAP net income of the Tantan segment was RMB26.6 million (US$3.6 million) in the third quarter of 2023, compared to a non-GAAP net loss of RMB38.8 million in the third quarter of 2022.
*Net **income attributable to Hello Group Inc.*
Net income attributable to Hello Group Inc. was RMB546.4 million (US$74.9 million) in the third quarter of 2023, compared to RMB450.8 million during the same period of 2022.
Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB605.9 million (US$83.0 million) in the third quarter of 2023, compared to RMB535.8 million during the same period of 2022.
*Net **income** per ADS*
Diluted net income per ADS was RMB2.75 (US$0.38) in the third quarter of 2023, compared to RMB2.20 in the third quarter of 2022.
Non-GAAP diluted net income per ADS (note 1) was RMB3.05 (US$0.42) in the third quarter of 2023, compared to RMB2.60 in the third quarter of 2022.
*Cash and cash flow*
As of September 30, 2023, the Company's cash, cash equivalents, short-term deposits, long-term deposits, short-term investments, short-term restricted cash and long-term restricted cash totaled RMB13,644.6 million (US$1,870.1 million), compared to RMB13,398.8 million as of December 31, 2022.
Net cash provided by operating activities in the third quarter of 2023 was RMB582.5 million (US$79.8 million), compared to RMB444.5 million in the third quarter of 2022.
*F**irst Nine Months of 2023** Financial Results *
Net revenues for the first nine months of 2023 were RMB8,999.4 million (US$1,233.5 million), a decrease of 5.2% from RMB9,491.5 million in the same period of 2022.
Net income attributable to Hello Group Inc. was RMB1,505.1 million (US$206.3 million) for the first nine months of 2023, compared to RMB1,086.3 million during the same period of 2022.
Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,710.0 million (US$234.4 million) for the first nine months of 2023, compared to RMB1,397.8 million during the same period of 2022.
Diluted net income per ADS was RMB7.52 (US$1.03) during the first nine months of 2023, compared to RMB5.30 in the same period of 2022.
Non-GAAP diluted net income per ADS (note 1) was RMB8.53 (US$1.17) during the first nine months of 2023, compared to RMB6.75 in the same period of 2022.
Net cash provided by operating activities was RMB1,861.3 million (US$255.1 million) during the first nine months of 2023, compared to RMB688.2 million in the same period of 2022.
*Recent Development*
Execution of share repurchase program
On June 7, 2022, Hello Group's board of directors authorized a share repurchase program under which the Company may repurchase up to US$200 million of its shares over the next 24 months. As of December 8, 2023, the Company has repurchased 16.2 million ADSs for US$86.1 million on the open market under this program, at an average purchase price of US$5.31 per ADS.
*Business Outlook*
For the fourth quarter of 2023, the Company expects total net revenues to be between RMB2.9 billion to RMB3.0 billion, representing a decrease of 9.7% to 6.6% year over year. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.
*Note 1: Non-GAAP measures*
To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we, Hello Group, use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation.
Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures.
Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to the GAAP results. In addition, our calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.
Our non-GAAP information (including non-GAAP cost and operating expenses, income (loss) from operations, net income (loss), net income attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation. A limitation of using these non-GAAP financial measures is that share-based compensation has been and will continue to be for the foreseeable future significant recurring expenses in our results of operations. We compensate for such limitation by providing reconciliations of our non-GAAP measures to our U.S. GAAP measures. Please see the reconciliation tables at the end of this earnings release.
*Conference Call *
Hello Group's management will host an earnings conference call on Friday, December 8, 2023, at 7:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on December 8, 2023).
Participants can register for the conference call by navigating to:
https://s1.c-conf.com/diamondpass/10035226-k7h0xo.html.
Upon registration, each participant will receive details for the conference call, including dial-in numbers, conference call passcode and a unique access PIN. Please dial in 10 minutes before the call is scheduled to begin.
A telephone replay of the call will be available after the conclusion of the conference call through December 15, 2023. The dial-in details for the replay are as follows:
U.S. / Canada: 1-855-883-1031
Hong Kong: 800-930-639
Passcode: 10035226
Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of Hello Group's website at https://ir.hellogroup.com.
*About Hello Group Inc. *
We are a leading player in China's online social and entertainment space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions. Momo is a mobile application that connects people and facilitates social interactions based on location, interests and a variety of online recreational activities. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application. Tantan is designed to help its users find and establish romantic connections as well as meet interesting people. We also operate a number of other applications to serve different social and entertainment demands from our users.
For investor and media inquiries, please contact:
*Hello Group Inc. *
Investor Relations
Phone: +86-10-5731-0538
Email: ir@hellogroup.com
*Christensen *
In China
Ms. Xiaoyan Su
Phone: +86-10-5900-1548
E-mail: Xiaoyan.Su@christensencomms.com
In U.S.
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com
*Safe Harbor Statement*
This news release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to our management quotes, our financial outlook for the fourth quarter of 2023, as well as the amount of, timing, methods and funding sources for repurchases of our shares under the share repurchase program.
Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the third quarter of 2023 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the fourth quarter of 2023 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth. Moreover, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers, the impact of the COVID-19 pandemic on the Company's business operations and the economy in China, the market price of the Company's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, general economic conditions, and other factors. For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission.
All information provided in this press release and in the attachments is as of the date of the press release. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, after the date of this release, except as required by law. Such information speaks only as of the date of this release.
*Hello Group Inc.*
*Unaudited Condensed Consolidated Statement of **Operations*
(All amounts in thousands, except share and per share data) Three months
First nine months
Ended September 30
Ended September 30
2022
2023
2023
2022
2023
2023
RMB
RMB
US$
RMB
RMB
US$
Net revenues:
Live video service
1,657,531
1,530,797
209,813
4,786,232
4,548,986
623,490
Value-added service
1,537,666
1,466,727
201,031
4,557,481
4,327,678
593,158
Mobile marketing
28,243
30,705
4,208
92,029
88,762
12,166
Mobile games
7,719
7,864
1,078
50,416
14,169
1,942
Other services
1,862
6,754
927
5,356
19,796
2,713
*Total net revenues*
*3,233,021*
*3,042,847*
*417,057*
*9,491,514*
*8,999,391*
*1,233,469*
Cost and expenses:
Cost of revenues
(1,886,135)
(1,771,530)
(242,808)
(5,505,369)
(5,255,277)
(720,296)
Research and development
(245,105)
(201,693)
(27,644)
(733,562)
(653,145)
(89,521)
Sales and marketing
(467,012)
(373,942)
(51,253)
(1,666,542)
(1,110,253)
(152,173)
General and administrative
(135,933)
(113,896)
(15,611)
(453,514)
(376,981)
(51,670)
*Total cost and expenses*
*(2,734,185)*
*(2,461,061)*
*(337,316)*
*(8,358,987)*
*(7,395,656)*
*(1,013,660)*
Other operating income, net
21,289
39,971
5,478
85,790
99,284
13,608
*Income from operations*
*520,125*
*621,757*
*85,219*
*1,218,317*
*1,703,019*
*233,417*
Interest income
89,274
96,791
13,266
280,761
311,899
42,749
Interest expense
(25,010)
(19,293)
(2,644)
(72,575)
(41,671)
(5,711)
Other gain or loss, net
40,403
-
-
118,325
4,565
626
*Income before income tax and share of income on equity method investments*
*624,792*
*699,255*
*95,841*
*1,544,828*
*1,977,812*
*271,081*
Income tax expenses
(156,041)
(158,064)
(21,664)
(452,860)
(446,646)
(61,218)
*Income before share of income on equity method investments*
*468,751*
*541,191*
*74,177*
*1,091,968*
*1,531,166*
*209,863*
Share of (loss) income on equity method investments
(18,880)
974
133
(8,967)
(31,940)
(4,378)
*Net income *
*449,871*
*542,165*
*74,310*
*1,083,001*
*1,499,226*
*205,485*
Less: net loss attributable to non-controlling interest
(964)
(4,263)
(584)
(3,288)
(5,886)
(807)
*Net income attributable to the shareholders of Hello Group Inc.*
*450,835*
*546,428*
*74,894*
*1,086,289*
*1,505,112*
*206,292*
Net income per share
attributable to ordinary
shareholders
Basic
1.15
1.44
0.20
2.75
3.98
0.55
Diluted
1.10
1.37
0.19
2.65
3.76
0.52
Weighted average shares used
in calculating net income per
ordinary share
Basic
391,027,485
379,292,110
379,292,110
394,333,009
378,085,030
378,085,030
Diluted
423,608,050
398,296,690
398,296,690
429,765,849
405,490,366
405,490,366
*Hello Group Inc.*
*Unaudited Condensed Consolidated Statement of **Comprehensive Income*
(All amounts in thousands, except share and per share data)
Three months
First nine months
Ended September 30
Ended September 30
2022
2023
2023
2022
2023
2023
RMB
RMB
US$
RMB
RMB
US$
*Net income *
*449,871*
*542,165*
*74,310*
*1,083,001*
*1,499,226*
*205,485*
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment
(188,343)
6,032
827
(328,832)
116,188
15,925
*Comprehensive** income *
*261,528*
*548,197*
*75,137*
*754,169*
*1,615,414*
*221,410*
Less: comprehensive income (loss) attributed to the non-controlling interest
10,831
(3,141)
(431)
17,710
5,377
737
*Comprehensive income attributable to Hello Group Inc.*
*250,697*
*551,338*
*75,568*
*736,459*
*1,610,037*
*220,673*
*Hello Group Inc.*
*Unaudited Condensed Consolidated Balance Sheets*
(All amounts in thousands, except share and per share data) December 31
September 30
September 30 2022
2023
2023
RMB
RMB
US$
Assets
Current assets
Cash and cash equivalents
5,018,129
4,994,558
684,561
Short-term deposits
5,300,000
1,885,005
258,361
Restricted cash
97,706
9,245
1,267
Short-term investments
300,240
308,550
42,290
Accounts receivable, net of allowance for doubtful accounts of RMB5,870 and RMB13,365 as of December 31, 2022 and September 30, 2023, respectively
188,711
192,849
26,432
Amounts due from related parties
55
7,114
975
Prepaid expenses and other current assets
819,706
712,236
97,620
Total current assets
11,724,547
8,109,557
1,111,506
Long-term deposits
2,600,000
3,809,200
522,094
Long-term restricted cash
82,766
2,638,015
361,570
Right-of-use assets, net
115,520
127,804
17,517
Property and equipment, net
172,984
358,361
49,117
Intangible assets, net
22,203
18,365
2,517
Rental deposits
20,737
18,486
2,534
Long-term investments
893,988
860,306
117,915
Amounts due from RPT-non current
-
20,000
2,741
Other non-current assets
162,499
177,853
24,377
Deferred tax assets
34,343
33,470
4,587
*Total assets*
*15,829,587*
*16,171,417*
*2,216,475*
Liabilities and equity
Current liabilities
Accounts payable
617,022
642,886
88,113
Deferred revenue
484,775
474,647
65,056
Accrued expenses and other current liabilities
797,504
648,156
88,837
Amounts due to related parties
9,178
3,675
504
Lease liabilities due within one year
88,352
56,681
7,769
Income tax payable
68,765
89,263
12,235
Dividends payable
-
21,012
2,879
Deferred consideration in connection with business acquisitions
26,483
28,014
3,840
Long-term borrowings, current portion
-
215,615
29,552
Convertible senior notes-current
2,646,168
-
-
Total current liabilities
4,738,247
2,179,949
298,785
Deferred tax liabilities
22,011
151,578
20,775
Convertible Senior Notes
-
20,094
2,754
Long-term borrowings
-
1,938,385
265,678
Lease liabilities
33,281
66,285
9,085
Other non-current liabilities
105,410
95,958
13,152
Total liabilities
4,898,949
4,452,249
610,229
Shareholder's equity (i)
10,930,638
11,719,168
1,606,246
*Total liabilities and shareholder's equity*
*15,829,587*
*16,171,417*
*2,216,475*
(i): As of September 30, 2023, the number of ordinary shares outstanding was 379,881,912.
*Hello Group Inc.*
*Unaudited Condensed Consolidated Statement of Cash Flows*
(All amounts in thousands, except share and per share data) Three months
First nine months
Ended September 30
Ended September 30
2022
2023
2023
2022
2023
2023
RMB
RMB
US$
RMB
RMB
US$
Cash flows from operating activities:
Net income
449,871
542,165
74,310
1,083,001
1,499,226
205,485
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation of property and equipment
27,047
17,467
2,394
83,107
59,098
8,100
Amortization of intangible assets
1,279
1,279
175
3,837
3,837
526
Share-based compensation
84,976
59,472
8,151
311,540
204,877
28,081
Share of loss (income) on equity method investments
18,880
(974)
(133)
8,967
31,940
4,378
Gain on repurchase of convertible senior notes
(51,653)
-
-
(129,575)
(4,565)
(626)
Loss on long-term investments
11,250
-
-
11,250
-
-
Cash received on distributions from equity method investments
-
718
98
1,708
2,067
283
Gain or loss on disposal of property and equipment
(923)
(60)
(8)
(783)
(520)
(71)
Provision of (income) loss on receivable and other assets
(820)
(133)
(18)
(453)
10,071
1,380
Changes in operating assets and liabilities:
Accounts receivable
22,973
10,749
1,473
15,695
(9,916)
(1,359)
Prepaid expenses and other current assets
41,418
(96,572)
(13,236)
(16,144)
98,294
13,472
Amounts due from related parties
-
(27,114)
(3,716)
-
(27,059)
(3,709)
Rental deposits
716
1,301
178
1,399
2,252
309
Deferred tax assets
590
415
57
(986)
872
120
Other non-current assets
16,130
(50,578)
(6,932)
76,820
(27,639)
(3,788)
Accounts payable
(438)
6,987
958
(106,392)
38,825
5,321
Income tax payable
(15,635)
24,215
3,319
(50,923)
20,496
2,809
Deferred revenue
(19,356)
11,736
1,609
(73,891)
(11,137)
(1,526)
Accrued expenses and other current liabilities
(108,513)
15,374
2,107
(304,346)
(172,186)
(23,600)
Amount due to related parties
7,824
(8,401)
(1,151)
4,427
(5,504)
(754)
Deferred tax liabilities
(14,425)
47,681
6,535
(171,752)
130,198
17,845
Other non-current liabilities
(26,655)
26,741
3,665
(58,311)
17,757
2,434
*Net cash provided by operating activities*
*444,536*
*582,468*
*79,835*
*688,195*
*1,861,284*
*255,110*
Cash flows from investing activities:
Purchase of property and equipment
(27,051)
(238,219)
(32,651)
(70,392)
(259,463)
(35,562)
Payment for long-term investments
-
-
-
(55,343)
(9,000)
(1,234)
Purchase of short-term deposits
(1,700,000)
(531,214)
(72,809)
(1,700,000)
(1,028,556)
(140,975)
Cash received on maturity of short-term deposits
2,700,000
1,900,000
260,417
3,710,000
5,409,820
741,478
Cash received on investment income distribution
-
-
-
3,523
1,517
208
Purchase of long-term deposits
(1,000,000)
(2,498,860)
(342,497)
(2,550,000)
(3,848,860)
(527,530)
Cash received on maturity of long-term deposits
-
1,700,000
233,004
1,200,000
1,700,000
233,004
Cash received from sales of long-term investment
-
15,000
2,056
-
15,000
2,056
Other investing activities
2,781
137
19
3,103
1,822
250
*Net cash (used in) provided by investing activities*
*(24,270)*
*346,844*
*47,539*
*540,891*
*1,982,280*
*271,695*
Cash flows from financing activities:
Deferred payment for business acquisition
(15,858)
-
-
(21,421)
-
*-*
Proceeds from exercise of share options
18
551
76
51
570
78
Repurchase of ordinary shares
(285,355)
(58,767)
(8,055)
(287,690)
(62,004)
(8,498)
Repurchase of subsidiary's share options
(14,330)
(223)
(31)
(39,867)
(4,319)
(592)
Dividends payment
-
-
-
(840,997)
(937,249)
(128,461)
Proceeds from long-term borrowings
-
2,154,000
295,230
-
2,154,000
295,230
Payment for redemption of convertible bonds
(1,024,443)
(86,932)
(11,915)
(2,136,987)
(2,679,942)
(367,317)
*Net cash (used in) provided by financing activities*
*(1,339,968)*
*2,008,629*
*275,305*
*(3,326,911)*
*(1,528,944)*
*(209,560)*
Effect of exchange rate changes
(6,190)
(7,837)
(1,075)
72,096
128,597
17,625
*Net (decrease) increase in cash and cash equivalents *
*(925,892)*
*2,930,104*
*401,604*
*(2,025,729)*
*2,443,217*
*334,870*
Cash, cash equivalents and restricted cash at the beginning of period
4,547,197
4,711,714
645,794
5,647,034
5,198,601
712,528
Cash, cash equivalents and restricted cash at the end of period
3,621,305
7,641,818
1,047,398
3,621,305
7,641,818
1,047,398
*Hello Group Inc.*
*Reconciliation of Non-GAAP financial measures to comparable GAAP measures*
(All amounts in thousands, except per share data)
1.
Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures.
Three months
Three months
Three months
Ended September 30, 2022
Ended September 30, 2023
Ended September 30, 2023 GAAP
RMB
Share-based
compensation
RMB
Non-GAAP
RMB
GAAP
RMB
Share-based
compensation
RMB
Non-GAAP
RMB
GAAP
US$
Share-based
compensation
US$
Non-GAAP
US$
Cost of revenues
(1,886,135)
1,496
(1,884,639)
(1,771,530)
1,211
(1,770,319)
(242,808)
166
(242,642)
Research and development
(245,105)
21,713
(223,392)
(201,693)
14,993
(186,700)
(27,644)
2,055
(25,589)
Sales and marketing
(467,012)
8,453
(458,559)
(373,942)
5,854
(368,088)
(51,253)
802
(50,451)
General and administrative
(135,933)
53,314
(82,619)
(113,896)
37,414
(76,482)
(15,611)
5,128
(10,483)
*Cost and operating expenses*
*(2,734,185)*
*84,976*
*(2,649,209)*
*(2,461,061)*
*59,472*
*(2,401,589)*
*(337,316)*
*8,151*
*(329,165)*
Income from operations
520,125
84,976
605,101
621,757
59,472
681,229
85,219
8,151
93,370
Net income attributable to Hello Group Inc.
450,835
84,976
535,811
546,428
59,472
605,900
74,894
8,151
83,045
*Hello Group Inc.*
*Reconciliation of Non-GAAP financial measures to comparable GAAP measures*
(All amounts in thousands, except per share data)
1.
Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures-continued.
First nine months
First nine months
First nine months
Ended September 30, 2022
Ended September 30, 2023
Ended September 30, 2023 GAAP
RMB
Share-based
compensation
RMB
Non-GAAP
RMB
GAAP
RMB
Share-based
compensation
RMB
Non-GAAP
RMB
GAAP
US$
Share-based
compensation
US$
Non-GAAP
US$
Cost of revenues
(5,505,369)
12,488
(5,492,881)
(5,255,277)
4,398
(5,250,879)
(720,296)
603
(719,693)
Research and development
(733,562)
66,652
(666,910)
(653,145)
51,186
(601,959)
(89,521)
7,016
(82,505)
Sales and marketing
(1,666,542)
29,952
(1,636,590)
(1,110,253)
20,413
(1,089,840)
(152,173)
2,798
(149,375)
General and administrative
(453,514)
202,448
(251,066)
(376,981)
128,880
(248,101)
(51,670)
17,664
(34,006)
*Cost and operating expenses*
*(8,358,987)*
*311,540*
*(8,047,447)*
*(7,395,656)*
*204,877*
*(7,190,779)*
*(1,013,660)*
*28,081*
*(985,579)*
Income from operations
1,218,317
311,540
1,529,857
1,703,019
204,877
1,907,896
233,417
28,081
261,498
Net income attributable to Hello Group Inc.
1,086,289
311,540
1,397,829
1,505,112
204,877
1,709,989
206,292
28,081
234,373
*Hello Group Inc.*
*Unaudited Condensed Segment Report*
(All amounts in thousands, except share and per share data) Three months
Ended September 30, 2023 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Net revenues:
Live video service
1,410,844
119,953
-
1,530,797
209,813
Value-added service
1,298,329
168,398
-
1,466,727
201,031
Mobile marketing
24,039
6,666
-
30,705
4,208
Mobile games
7,864
-
-
7,864
1,078
Other services
1,981
-
4,773
6,754
927
*Total net revenues*
*2,743,057*
*295,017*
*4,773*
*3,042,847*
*417,057*
Cost and expenses (ii):
Cost of revenues
(1,606,261)
(145,346)
(19,923)
(1,771,530)
(242,808)
Research and development
(151,649)
(50,044)
-
(201,693)
(27,644)
Sales and marketing
(298,919)
(71,978)
(3,045)
(373,942)
(51,253)
General and administrative
(105,339)
(5,656)
(2,901)
(113,896)
(15,611)
*Total cost and expenses*
*(2,162,168)*
*(273,024)*
*(25,869)*
*(2,461,061)*
*(337,316)*
Other operating income, net
37,750
1,985
236
39,971
5,478
*Income (loss) from operations*
*618,639*
*23,978*
*(20,860)*
*621,757*
*85,219*
Interest income
96,680
94
17
96,791
13,266
Interest expense
(19,293)
-
-
(19,293)
(2,644)
*Income (loss) before income tax and share of income on equity method investments*
*696,026*
*24,072*
*(20,843)*
*699,255*
*95,841*
Income tax expenses
(156,992)
(1,072)
-
(158,064)
(21,664)
*Income (loss) before share of income on equity method investments*
*539,034*
*23,000*
*(20,843)*
*541,191*
*74,177*
Share of loss on equity method investments
974
-
-
974
133
*Net income (loss)*
*540,008*
*23,000*
*(20,843)*
*542,165*
*74,310*
(ii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three months Ended September 30, 2023 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Cost of revenues
1,207
4
-
1,211
166
Research and development
11,401
3,592
-
14,993
2,055
Sales and marketing
5,854
-
-
5,854
802
General and administrative
37,406
8
-
37,414
5,128
*Total cost and expenses*
*55,868*
*3,604*
*-*
*59,472*
*8,151*
*Hello Group Inc.*
*Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report*
(All amounts in thousands, except share and per share data)
Three months Ended September 30, 2023 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Income (loss) from operations
618,639
23,978
(20,860)
621,757
85,219
Share-based compensation
55,868
3,604
-
59,472
8,151
*Non-GAAP income (loss) from operations*
*674,507*
*27,582*
*(20,860)*
*681,229*
*93,370*
Net income (loss)
540,008
23,000
(20,843)
542,165
74,310
Share-based compensation
55,868
3,604
-
59,472
8,151
*Non-GAAP net income (loss)*
*595,876*
*26,604*
*(20,843)*
*601,637*
*82,461*
*Hello Group Inc.*
*Unaudited Condensed Segment Report*
(All amounts in thousands, except share and per share data) Three months
Ended September 30, 2022 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$^[1]
Net revenues:
Live video service
1,517,872
139,659
-
1,657,531
233,012
Value-added service
1,336,050
201,616
-
1,537,666
216,162
Mobile marketing
28,243
-
-
28,243
3,970
Mobile games
7,719
-
-
7,719
1,085
Other services
1,126
-
736
1,862
262
*Total net revenues*
*2,891,010*
*341,275*
*736*
*3,233,021*
*454,491*
Cost and expenses (iii):
Cost of revenues
(1,704,934)
(180,277)
(924)
(1,886,135)
(265,149)
Research and development
(176,727)
(68,378)
-
(245,105)
(34,456)
Sales and marketing
(335,350)
(130,222)
(1,440)
(467,012)
(65,652)
General and administrative
(124,184)
(8,574)
(3,175)
(135,933)
(19,109)
*Total cost and expenses*
*(2,341,195)*
*(387,451)*
*(5,539)*
*(2,734,185)*
*(384,366)*
Other operating income
19,563
1,722
4
21,289
2,993
*Income (loss) from operations*
*569,378*
*(44,454)*
*(4,799)*
*520,125*
*73,118*
Interest income
89,003
187
84
89,274
12,550
Interest expense
(25,010)
-
-
(25,010)
(3,516)
Other gain or loss, net
40,403
-
-
40,403
5,680
*Income (loss) before income tax and share of income on equity method investments*
*673,774*
*(44,267)*
*(4,715)*
*624,792*
*87,832*
Income tax expenses
(155,328)
(713)
-
(156,041)
(21,936)
*Income (loss) before share of income on equity method investments*
*518,446*
*(44,980)*
*(4,715)*
*468,751*
*65,896*
Share of loss on equity method investments
(18,880)
-
-
(18,880)
(2,654)
*Net income (loss)*
*499,566*
*(44,980)*
*(4,715)*
*449,871*
*63,242*
(iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three months Ended September 30, 2022 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Cost of revenues
1,478
18
-
1,496
210
Research and development
15,640
6,073
-
21,713
3,052
Sales and marketing
8,446
7
-
8,453
1,188
General and administrative
53,272
42
-
53,314
7,495
*Total cost and expenses*
*78,836*
*6,140*
*-*
*84,976*
*11,945*
[1] All translations from RMB to U.S. dollars are made at a rate of RMB7.1135 to US$1.00, the effective noon buying rate for September 30, 2022 as set forth in the H.10 statistical release of the Federal Reserve Board.
*Hello Group Inc.*
*Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report*
(All amounts in thousands, except share and per share data)
Three months Ended September 30, 2022 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Income (loss) from operations
569,378
(44,454)
(4,799)
520,125
73,118
Share-based compensation
78,836
6,140
-
84,976
11,945
*Non-GAAP income (loss) from operations*
*648,214*
*(38,314)*
*(4,799)*
*605,101*
*85,063*
Net income (loss)
499,566
(44,980)
(4,715)
449,871
63,242
Share-based compensation
78,836
6,140
-
84,976
11,945
*Non-GAAP net income (loss)*
*578,402*
*(38,840)*
*(4,715)*
*534,847*
*75,187*
*Hello Group Inc.*
*Unaudited Condensed Segment Report*
(All amounts in thousands, except share and per share data) First nine months
Ended September 30, 2023 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Net revenues:
Live video service
4,144,164
404,822
-
4,548,986
623,490
Value-added service
3,821,183
506,495
-
4,327,678
593,158
Mobile marketing
75,730
13,032
-
88,762
12,166
Mobile games
14,169
-
-
14,169
1,942
Other services
14,577
-
5,219
19,796
2,713
*Total net revenues*
*8,069,823*
*924,349*
*5,219*
*8,999,391*
*1,233,469*
Cost and expenses (iv):
Cost of revenues
(4,765,127)
(469,111)
(21,039)
(5,255,277)
(720,296)
Research and development
(483,997)
(169,148)
-
(653,145)
(89,521)
Sales and marketing
(894,462)
(210,208)
(5,583)
(1,110,253)
(152,173)
General and administrative
(349,614)
(19,600)
(7,767)
(376,981)
(51,670)
*Total cost and expenses*
*(6,493,200)*
*(868,067)*
*(34,389)*
*(7,395,656)*
*(1,013,660)*
Other operating income
95,876
3,110
298
99,284
13,608
*Income (loss) from operations*
*1,672,499*
*59,392*
*(28,872)*
*1,703,019*
*233,417*
Interest income
311,157
656
86
311,899
42,749
Interest expense
(41,671)
-
-
(41,671)
(5,711)
Other gain or loss, net
4,565
-
-
4,565
626
*Income (loss) before income tax and share of income on equity method investments*
*1,946,550*
*60,048*
*(28,786)*
*1,977,812*
*271,081*
Income tax expenses
(443,175)
(3,471)
-
(446,646)
(61,218)
*Income (loss) before share of income on equity method investments*
*1,503,375*
*56,577*
*(28,786)*
*1,531,166*
*209,863*
Share of income on equity method investments
(31,940)
-
-
(31,940)
(4,378)
*Net income (loss)*
*1,471,435*
*56,577*
*(28,786)*
*1,499,226*
*205,485*
(iv) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
First nine months Ended September 30, 2023 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Cost of revenues
4,262
136
-
4,398
603
Research and development
36,793
14,393
-
51,186
7,016
Sales and marketing
20,408
5
-
20,413
2,798
General and administrative
128,856
24
-
128,880
17,664
*Total cost and expenses*
*190,319*
*14,558*
*-*
*204,877*
*28,081*
*Hello Group Inc.*
*Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report*
(All amounts in thousands, except share and per share data)
First nine months ended September 30, 2023 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Operating income (loss)
1,672,498
59,392
(28,871)
1,703,019
233,417
Share-based compensation
190,319
14,558
-
204,877
28,081
*Non-GAAP operating income (loss)*
*1,862,817*
*73,950*
*(28,871)*
*1,907,896*
*261,498*
Net income (loss)
1,471,435
56,577
(28,786)
1,499,226
205,485
Share-based compensation
190,319
14,558
-
204,877
28,081
*Non-GAAP net income (loss)*
*1,661,754*
*71,135*
*(28,786)*
*1,704,103*
*233,566*
*Hello Group Inc.*
*Unaudited Condensed Segment Report*
(All amounts in thousands, except share and per share data) First nine months
Ended September 30, 2022 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Net revenues:
Live video service
4,404,991
381,241
-
4,786,232
672,838
Value-added service
3,917,609
639,872
-
4,557,481
640,681
Mobile marketing
92,029
-
-
92,029
12,937
Mobile games
50,416
-
-
50,416
7,087
Other services
4,298
-
1,058
5,356
753
*Total net revenues*
*8,469,343*
*1,021,113*
*1,058*
*9,491,514*
*1,334,296*
Cost and expenses (v):
Cost of revenues
(4,981,345)
(522,188)
(1,836)
(5,505,369)
(773,933)
Research and development
(536,640)
(196,922)
-
(733,562)
(103,123)
Sales and marketing
(1,039,526)
(623,680)
(3,336)
(1,666,542)
(234,279)
General and administrative
(415,954)
(25,335)
(12,225)
(453,514)
(63,754)
*Total cost and expenses*
*(6,973,465)*
*(1,368,125)*
*(17,397)*
*(8,358,987)*
*(1,175,089)*
Other operating income
76,253
9,491
46
85,790
12,060
*Income (loss) from operations*
*1,572,131*
*(337,521)*
*(16,293)*
*1,218,317*
*171,267*
Interest income
280,252
291
218
280,761
39,469
Interest expense
(72,575)
-
-
(72,575)
(10,202)
Other gain or loss, net
118,325
-
-
118,325
16,634
*Income (loss) before income tax and share of income on equity method investments*
*1,898,133*
*(337,230)*
*(16,075)*
*1,544,828*
*217,168*
Income tax expenses
(451,061)
(1,799)
-
(452,860)
(63,662)
*Income (loss) before share of income on equity method investments*
*1,447,072*
*(339,029)*
*(16,075)*
*1,091,968*
*153,506*
Share of loss on equity method investments
(8,967)
-
-
(8,967)
(1,261)
*Net income (loss)*
*1,438,105*
*(339,029)*
*(16,075)*
*1,083,001*
*152,245*
(v) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
First nine months Ended September 30, 2022 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Cost of revenues
5,477
7,011
-
12,488
1,756
Research and development
51,752
14,900
-
66,652
9,370
Sales and marketing
29,729
223
-
29,952
4,211
General and administrative
202,319
129
-
202,448
28,460
*Total cost and expenses*
*289,277*
*22,263*
*-*
*311,540*
*43,797*
*Hello Group Inc.*
*Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report*
(All amounts in thousands, except share and per share data)
First nine months ended September 30, 2022 Momo
Tantan
QOOL
Total
Total RMB
RMB
RMB
RMB
US$
Operating income (loss)
1,572,131
(337,521)
(16,293)
1,218,317
171,267
Share-based compensation
289,277
22,263
-
311,540
43,797
*Non-GAAP operating income (loss)*
*1,861,408*
*(315,258)*
*(16,293)*
*1,529,857*
*215,064*
Net income (loss)
1,438,105
(339,029)
(16,075)
1,083,001
152,245
Share-based compensation
289,277
22,263
-
311,540
43,797
*Non-GAAP net income (loss)*
*1,727,382*
*(316,766)*
*(16,075)*
*1,394,541*
*196,042*