Hello Group Inc. Announces Unaudited Financial Results for the Fourth Quarter and Fiscal Year 2023
BEIJING, March 14, 2024 /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 fourth quarter and the full year ended December 31, 2023.
Fourth Quarter of 2023 Highlights
-- Net revenues decreased by 6.5% year over year to RMB3,002.9 million
(US$423.0 million*) in the fourth quarter of 2023.
-- Net income attributable to Hello Group Inc. increased to RMB452.5
million (US$63.7 million) in the fourth quarter of 2023, from RMB398.0
million in the same period of 2022.
-- Non-GAAP net income attributable to Hello Group Inc. (note 1) increased
to RMB514.7 million (US$72.5 million) in the fourth quarter of 2023,
from RMB487.9 million in the same period of 2022.
-- Diluted net income per American Depositary Share ("ADS") was RMB2.32
(US$0.33) in the fourth quarter of 2023, compared to RMB2.01 in the same
period of 2022.
-- Non-GAAP diluted net income per ADS (note 1) was RMB2.63 (US$0.37) in
the fourth quarter of 2023, compared to RMB2.46 in the same period of
2022.
-- Monthly Active Users ("MAU") on Tantan app were 13.7 million in December
2023, compared to 18.4 million in December 2022.
-- For the Momo app total paying users was 7.4 million for the fourth
quarter of 2023, compared to 7.8 million for the same period last year.
Tantan had 1.2 million paying users for the fourth quarter of 2023
compared to 1.7 million from the year ago period.
Full Year 2023 Highlights
-- Net revenues decreased by 5.5% year over year to RMB12,002.3 million
(US$1,690.5 million) for the full year of 2023.
-- Net income attributable to Hello Group Inc. was RMB1,957.6 million
(US$275.7 million) for the full year of 2023, compared to RMB1,484.3
million during the same period of 2022.
-- Non-GAAP net income attributable to Hello Group Inc. (note 1) was
RMB2,224.7 million (US$313.3 million) for the full year of 2023,
compared to RMB1,885.8 million during the same period of 2022.
-- Diluted net income per ADS was RMB9.84 (US$1.39) for the full year of
2023, compared to RMB7.31 during the same period of 2022.
-- Non-GAAP diluted net income per ADS (note 1) was RMB11.17 (US$1.57) for
the full year of 2023, compared to RMB9.20 during the same period of
2022.
"2023 was a busy, yet fruitful year. Despite many changes and challenges in the external environment, our team made steady progress against our strategic priorities." Commented Yan Tang, Chairman and CEO of Hello Group. "With solid improvement in cost efficiency, we were able to meaningfully improve the profitability of the company against economic headwinds. I am also pleased to see that our new endeavors in the overseas market have started bearing fruits, which gives us more confidence to invest more resources and take bigger strides to explore wider markets abroad."
* 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 RMB7.0999 to US$1.00, the effective noon buying rate for December 29, 2023 as set forth in the H.10 statistical release of the Federal
Reserve Board.
Fourth Quarter of 2023 Financial Results
Net revenues
Total net revenues were RMB3,002.9 million (US$423.0 million) in the fourth quarter of 2023, a decrease of 6.5% from RMB3,212.7 million in the fourth quarter of 2022.
Live video service revenues were RMB1,523.9 million (US$214.6 million) in the fourth quarter of 2023, a decrease of 11.6% from RMB1,724.2 million during the same period of 2022. The decrease was primarily attributable to a soft consumer sentiment in the current macro environment and our proactive operation adjustments to de-emphasise large scale competition events in the Momo app, and to a lesser degree, Tantan pivoting away from the less dating-centric live video service.
Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,424.9 million (US$200.7 million) in the fourth quarter of 2023, a decrease of 1.7% from RMB1,449.5 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 product adjustments to improve Momo app's ecosystem, and to a lesser extent, the decline in Tantan's paying users that resulted from a reduction in channel investment, the anti-spam campaign and the adjustments to subscription renewals. The decrease was partially offset by the rapid revenue growth from the new standalone apps.
Mobile marketing revenues were RMB44.9 million (US$6.3 million) in the fourth quarter of 2023, an increase of 36.4% from RMB32.9 million during the same period of 2022.
Mobile games revenues were RMB5.4 million (US$0.8 million) in the fourth quarter of 2023, an increase of 2.4% from RMB5.3 million in the fourth quarter of 2022.
Net revenues from the Momo segment decreased from RMB2,865.8 million in the fourth quarter of 2022 to RMB2,728.7 million (US$384.3 million) in the fourth quarter of 2023, primarily due to the decrease in net revenues from value-added service and live video service on Momo app. The decrease was partially offset by the revenue growth of the new standalone apps. Net revenues from the Tantan segment decreased from RMB346.7 million in the fourth quarter of 2022 to RMB272.2 million (US$38.3 million) in the fourth quarter of 2023, mainly due to the decrease in net revenues from live video service, and to a lesser extent, the decrease from value-added service.
Cost and expenses
Cost and expenses were RMB2,431.8 million (US$342.5 million) in the fourth quarter of 2023, a decrease of 11.2% from RMB2,738.3 million in the fourth quarter of 2022. The decrease was primarily attributable to: (a) a decrease in revenue sharing with broadcasters related to live video service on the Momo app and on the Tantan app, and a decrease in revenue sharing with virtual gift recipients of virtual gift service on the Momo app. 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 RMB2,369.5 million (US$333.7 million) in the fourth quarter of 2023, a decrease of 10.5% from RMB2,648.3 million during the same period of 2022.
Other operating income (loss), net
Other operating income was RMB30.8 million (US$4.3 million) in the fourth quarter of 2023, compared to a loss of RMB65.2 million during the fourth quarter of 2022. The other operating loss in the fourth quarter of 2022 mainly included a contingent loss accrual of RMB92.9 million related to an ongoing investigation of the alleged illegal activity on the source of the funding consumed on Momo's platform.
Income from operations
Income from operations was RMB602.0 million (US$84.8 million) in the fourth quarter of 2023, compared to RMB409.2 million during the same period of 2022. Income from operations of the Momo segment was RMB576.9 million (US$81.3 million) in the fourth quarter of 2023, which increased from RMB435.8 million in the fourth quarter of 2022. Income from operations of the Tantan segment was RMB26.8 million (US$3.8 million) in the fourth quarter of 2023, compared to a loss from operations of RMB21.7 million in the fourth quarter of 2022.
Non-GAAP income from operations (note 1) was RMB664.2 million (US$93.6 million) in the fourth quarter of 2023, compared to RMB499.2 million during the same period of 2022. Non-GAAP income from operations of the Momo segment was RMB638.9 million (US$90.0 million) in the fourth quarter of 2023, which increased from RMB519.2 million in the fourth quarter of 2022. Non-GAAP income from operations of the Tantan segment was RMB27.0 million (US$3.8 million) in the fourth quarter of 2023, compared to a non-GAAP loss from operations of RMB15.2 million in the fourth quarter of 2022.
Income tax expenses
Income tax expenses were RMB183.4 million (US$25.8 million) in the fourth quarter of 2023, compared to RMB109.4 million in the fourth quarter of 2022. The increase in income tax expenses was primarily due to the higher profit in the fourth quarter of 2023.
Net income
Net income was RMB452.5 million (US$63.7 million) in the fourth quarter of 2023, compared to RMB397.0 million during the same period of 2022. Net income from the Momo segment was RMB430.0 million (US$60.6 million) in the fourth quarter of 2023, compared to RMB397.1 million in the same period of 2022. Net income from the Tantan segment was RMB24.2 million (US$3.4 million) in the fourth quarter of 2023, compared to RMB4.7 million in the fourth quarter of 2022.
Non-GAAP net income (note 1) was RMB514.7 million (US$72.5 million) in the fourth quarter of 2023, compared to RMB487.0 million during the same period of 2022. Non-GAAP net income from the Momo segment was RMB492.1 million (US$69.3 million) in the fourth quarter of 2023, which increased from RMB480.5 million in the fourth quarter of 2022. Non-GAAP net income of the Tantan segment was RMB24.4 million (US$3.4 million) in the fourth quarter of 2023, compared to RMB11.3 million in the fourth quarter of 2022.
Net income attributable to Hello Group Inc.
Net income attributable to Hello Group Inc. was RMB452.5 million (US$63.7 million) in the fourth quarter of 2023, compared to RMB398.0 million during the same period of 2022.
Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB514.7 million (US$72.5 million) in the fourth quarter of 2023, compared to RMB487.9 million during the same period of 2022.
Net income per ADS
Diluted net income per ADS was RMB2.32 (US$0.33) in the fourth quarter of 2023, compared to RMB2.01 in the fourth quarter of 2022.
Non-GAAP diluted net income per ADS (note 1) was RMB2.63 (US$0.37) in the fourth quarter of 2023, compared to RMB2.46 in the fourth quarter of 2022.
Cash and cash flow
As of December 31, 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 RMB13,478.5 million (US$1,898.4 million), compared to RMB13,398.8 million as of December 31, 2022.
Net cash provided by operating activities in the fourth quarter of 2023 was RMB415.9 million (US$58.6 million), compared to RMB538.7 million in the fourth quarter of 2022.
Full Year 2023 Financial Results
Net revenues for the full year of 2023 were RMB12,002.3 million (US$1,690.5 million), a decrease of 5.5% from RMB12,704.2 million in the same period of 2022.
Net income attributable to Hello Group Inc. was RMB1,957.6 million (US$275.7 million) for the full year of 2023, compared to RMB1,484.3 million during the same period of 2022.
Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB2,224.7 million (US$313.3 million) for the full year of 2023, compared to RMB1,885.8 million during the same period of 2022.
Diluted net income per ADS was RMB9.84 (US$1.39) during the full year of 2023, compared to RMB7.31 in the same period of 2022.
Non-GAAP diluted net income per ADS (note 1) was RMB11.17 (US$1.57) during the full year of 2023, compared to RMB9.20 in the same period of 2022.
Net cash provided by operating activities was RMB2,277.2 million (US$320.7 million) during the full year of 2023, compared to RMB1,226.9 million in the same period of 2022.
Recent Development
Declaration of a special cash dividend
Hello Group's board of directors has declared a special cash dividend in the amount of US$0.54 per ADS, or US$0.27 per ordinary share. The cash dividend will be paid on April 30, 2024 to shareholders of record at the close of business on April 12, 2024. The ex-dividend date will be April 11, 2024. The aggregate amount of cash dividends to be paid is approximately US$103 million, which will be funded by available cash on the Company's balance sheet.
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 up to June 6, 2024 (the "Share Repurchase Program"). As of March 14, 2024, 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.
On March 14, 2024, Hello Group's board of directors approved to amend the Share Repurchase Program to (i) extend the term of the Share Repurchase Program up to June 30, 2026, and (ii) upsize the Share Repurchase Program so that the Company is authorized to, from time to time, acquire up to an aggregate of US$286.1 million worth of its shares in the form of ADSs and/or the ordinary shares of the Company in the open market and through privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations.
Business Outlook
For the first quarter of 2024, the Company expects total net revenues to be between RMB2.45 billion to RMB2.55 billion, representing a decrease of 13.1% to 9.5% 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 Thursday, March 14, 2024, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on March 14, 2024).
Participants can register for the conference call by navigating to:
https://s1.c-conf.com/diamondpass/10037219-7ww6gf.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 March 21, 2024. The dial-in details for the replay are as follows:
U.S. / Canada: 1-855-883-1031
Hong Kong: 800-930-639
Passcode: 10037219
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 first quarter of 2024, 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 fourth quarter of 2023 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the first quarter of 2024 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 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
Year
Ended December 31
Ended December 31
2022 2023 2023 2022 2023 2023
RMB RMB US$ RMB RMB US$
Net revenues:
Live video service 1,724,228 1,523,885 214,635 6,510,460 6,072,871 855,346
Value-added service 1,449,537 1,424,893 200,692 6,007,018 5,752,571 810,233
Mobile marketing 32,927 44,915 6,326 124,956 133,677 18,828
Mobile games 5,316 5,441 766 55,732 19,610 2,762
Other services 650 3,798 535 6,006 23,594 3,323
Total net revenues 3,212,658 3,002,932 422,954 12,704,172 12,002,323 1,690,492
Cost and expenses:
Cost of revenues (1,916,050) (1,770,117) (249,316) (7,421,419) (7,025,394) (989,506)
Research and development (272,657) (231,445) (32,598) (1,006,219) (884,590) (124,592)
Sales and marketing (407,075) (304,696) (42,916) (2,073,617) (1,414,949) (199,291)
General and administrative (142,492) (125,498) (17,676) (596,006) (502,479) (70,773)
Total cost and expenses (2,738,274) (2,431,756) (342,506) (11,097,261) (9,827,412) (1,384,162)
Other operating (loss) income, net (65,158) 30,821 4,341 20,632 130,105 18,325
Income from operations 409,226 601,997 84,789 1,627,543 2,305,016 324,655
Interest income 88,118 124,354 17,515 368,879 436,253 61,445
Interest expense (10,955) (20,552) (2,895) (83,530) (62,223) (8,764)
Other gain or loss, net - (31,250) (4,401) 118,325 (26,685) (3,759)
Income before income tax and share of income on equity method 486,389 674,549 95,008 2,031,217 2,652,361 373,577
investments
Income tax expenses (109,421) (183,377) (25,828) (562,281) (630,023) (88,737)
Income before share of income on equity method investments 376,968 491,172 69,180 1,468,936 2,022,338 284,840
Share of income (loss) on equity method investments 20,040 (38,703) (5,451) 11,073 (70,643) (9,950)
Net income 397,008 452,469 63,729 1,480,009 1,951,695 274,890
Less: net loss attributable to non-controlling interest (986) (4,274) (5,886) (829)
Net income attributable to the shareholders of Hello Group Inc. 397,994 452,469 63,729 1,484,283 1,957,581 275,719
Net income per share attributable to ordinary shareholders
Basic 1.05 1.2 0.17 3.8 5.18 0.73
Diluted 1.01 1.16 0.16 3.65 4.92 0.69
Weighted average shares used in calculating net income per ordinary share
Basic 377,841,986 376,317,036 376,317,036 390,176,367 377,639,399 377,639,399
Diluted 406,152,757 390,956,175 390,956,175 423,810,279 401,833,328 401,833,328
Hello Group Inc.
Unaudited Condensed Consolidated Statement of
Comprehensive Income
(All amounts in thousands, except share and per share data)
Three months
Year
Ended December 31
Ended December 31
2022 2023 2023 2022 2023 2023
RMB RMB US$ RMB RMB US$
Net income 397,008 452,469 63,729 1,480,009 1,951,695 274,890
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 54,041 (95,774) (13,489) (274,791) 20,414 2,875
Comprehensive income 451,049 356,695 50,240 1,205,218 1,972,109 277,765
Less: comprehensive (loss) income attributed to the non-controlling (7,154) (5,020) (707) 10,556 357 50
interest
Comprehensive income attributable to Hello Group Inc. 458,203 361,715 50,947 1,194,662 1,971,752 277,715
Hello Group Inc.
Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands, except share and per share data)
December 31 December 31 December 31
2022 2023 2023
RMB RMB US$
Assets
Current assets
Cash and cash equivalents 5,018,129 5,620,466 791,626
Short-term deposits 5,300,000 1,270,626 178,964
Restricted cash 97,706 10,147 1,429
Short-term investments 300,240
Accounts receivable, net of allowance for doubtful accounts of 188,711 201,517 28,383
RMB5,870 and RMB12,780 as of December 31, 2022 and 2023,
respectively
Amounts due from related parties 55 7,258 1,022
Prepaid expenses and other current assets 819,706 723,364 101,884
Total current assets 11,724,547 7,833,378 1,103,308
Long-term deposits 2,600,000 3,924,975 552,821
Long-term restricted cash 82,766 2,652,299 373,569
Right-of-use assets, net 115,520 109,572 15,433
Property and equipment, net 172,984 659,033 92,823
Intangible assets, net 22,203 17,086 2,407
Rental deposits 20,737 12,962 1,826
Long-term investments 893,988 786,911 110,834
Amounts due from RPT-non current - 20,000 2,817
Other non-current assets 162,499 180,052 25,360
Deferred tax assets 34,343 31,741 4,471
Total assets 15,829,587 16,228,009 2,285,669
Liabilities and equity
Current liabilities
Accounts payable 617,022 616,681 86,857
Deferred revenue 484,775 442,805 62,368
Accrued expenses and other current liabilities 797,504 630,617 88,821
Amounts due to related parties 9,178 4,314 608
Lease liabilities due within one year 88,352 60,008 8,452
Income tax payable 68,765 94,719 13,341
Deferred consideration in connection with business acquisitions 26,483 27,261 3,840
Long-term borrowings, current portion - 215,615 30,369
Convertible senior notes-current 2,646,168
Total current liabilities 4,738,247 2,092,020 294,656
Deferred tax liabilities 22,011 24,987 3,519
Convertible Senior Notes - 19,571 2,757
Long-term borrowings - 1,938,385 273,016
Lease liabilities 33,281 52,171 7,348
Other non-current liabilities 105,410 114,085 16,069
Total liabilities 4,898,949 4,241,219 597,365
Shareholder's equity (i) 10,930,638 11,986,790 1,688,304
Total liabilities and shareholder's equity 15,829,587 16,228,009 2,285,669
(i): As of December 31, 2023, the number of ordinary shares outstanding was 375,085,192.
Hello Group Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(All amounts in thousands, except share and per share data)
Three months
Year
Ended December 31
Ended December 31
2022 2023 2023 2022 2023 2023
RMB RMB US$ RMB RMB US$
Cash flows from operating activities:
Net income 397,008 452,469 63,729 1,480,009 1,951,695 274,890
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation of property and equipment 23,908 15,394 2,168 107,015 74,492 10,492
Amortization of intangible assets 1,279 1,279 180 5,116 5,116 721
Share-based compensation 89,944 62,224 8,765 401,484 267,101 37,620
Share of (income) loss on equity method investments (20,040) 38,703 5,451 (11,073) 70,643 9,950
Gain on repurchase of convertible senior notes - (129,575) (4,565) (643)
Loss on long-term investments - 31,250 4,401 11,250 31,250 4,401
Cash received on distributions from equity method investments - 1,708 2,067 291
Gain or loss on disposal of property and equipment 4 2 (779) (518) (73)
Provision of (income) loss on receivable and other assets (75) 1,553 219 (528) 11,624 1,637
Changes in operating assets and liabilities:
Accounts receivable 4,643 (11,392) (1,605) 20,338 (21,308) (3,001)
Prepaid expenses and other current assets (36,784) (13,492) (1,900) (52,928) 84,802 11,944
Amounts due from related parties (55) (144) (20) (55) (27,203) (3,831)
Rental deposits - 5,524 778 1,399 7,776 1,095
Deferred tax assets 1,493 1,728 243 507 2,600 366
Other non-current assets (15,907) 16,033 2,258 60,913 (11,606) (1,635)
Accounts payable (8,992) (25,118) (3,538) (115,384) 13,707 1,931
Income tax payable (6,081) 5,456 768 (57,004) 25,952 3,655
Deferred revenue 17,504 (31,253) (4,402) (56,387) (42,390) (5,971)
Accrued expenses and other current liabilities 121,638 (11,586) (1,632) (182,708) (183,772) (25,884)
Amount due to related parties (265) 639 90 4,162 (4,865) (685)
Deferred tax liabilities (15,367) (130,345) (18,359) (187,119) (147) (21)
Other non-current liabilities (15,159) 6,953 979 (73,470) 24,710 3,480
Net cash provided by operating activities 538,696 415,877 58,573 1,226,891 2,277,161 320,729
Cash flows from investing activities:
Purchase of property and equipment (10,053) (316,847) (44,627) (80,445) (576,310) (81,172)
Payment for long-term investments (15,000) (9,750) (1,373) (70,343) (18,750) (2,641)
Purchase of short-term deposits - (1,700,000) (1,028,556) (144,869)
Cash received on maturity of short-term deposits 1,700,000 800,000 112,678 5,410,000 6,209,820 874,635
Payment for short term investments (300,000) (300,000)
Cash received from sales of short-term investment - 308,550 43,458 308,550 43,458
Cash received on investment income distribution - 3,523 1,517 214
Purchase of long-term deposits (200,000) (361,165) (50,869) (2,750,000) (4,210,025) (592,970)
Cash received on maturity of long-term deposits - 1,200,000 1,700,000 239,440
Cash received from sales of long-term investment - 10,000 1,408 25,000 3,521
Other investing activities 7 1 3,110 1,823 257
Net cash provided by investing activities 1,174,954 430,789 60,675 1,715,845 2,413,069 339,873
Cash flows from financing activities:
Deferred payment for business acquisition - (21,421)
Proceeds from exercise of share options 112 31 4 163 601 85
Repurchase of ordinary shares (104,684) (150,191) (21,154) (392,374) (212,195) (29,887)
Repurchase of subsidiary's share options (1,076) (40,943) (4,319) (608)
Dividends payment - (20,803) (2,930) (840,997) (958,052) (134,939)
Proceeds from long-term borrowings - 2,154,000 303,385
Payment for redemption of convertible bonds - (2,136,987) (2,679,942) (377,462)
Net cash used in financing activities (105,648) (170,963) (24,080) (3,432,559) (1,699,907) (239,426)
Effect of exchange rate changes (30,706) (34,609) (4,872) 41,390 93,988 13,240
Net increase (decrease) in cash and cash equivalents 1,577,296 641,094 90,296 (448,433) 3,084,311 434,416
Cash, cash equivalents and restricted cash at the beginning of period 3,621,305 7,641,818 1,076,328 5,647,034 5,198,601 732,208
Cash, cash equivalents and restricted cash at the end of period 5,198,601 8,282,912 1,166,624 5,198,601 8,282,912 1,166,624
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 December 31, 2022 Ended December 31, 2023 Ended December 31, 2023
GAAP Share-based Non-GAAP GAAP Share-based Non-GAAP GAAP Share-based Non-GAAP
compensation compensation compensation
RMB RMB RMB RMB RMB RMB US$ US$ US$
Cost of revenues (1,916,050) 1,707 (1,914,343) (1,770,117) 1,909 (1,768,208) (249,316) 269 (249,047)
Research and development (272,657) 22,145 (250,512) (231,445) 13,375 (218,070) (32,598) 1,884 (30,714)
Sales and marketing (407,075) 8,480 (398,595) (304,696) 8,653 (296,043) (42,916) 1,219 (41,697)
General and administrative (142,492) 57,612 (84,880) (125,498) 38,287 (87,211) (17,676) 5,393 (12,283)
Cost and operating expenses (2,738,274) 89,944 (2,648,330) (2,431,756) 62,224 (2,369,532) (342,506) 8,765 (333,741)
Income from operations 409,226 89,944 499,170 601,997 62,224 664,221 84,789 8,765 93,554
Net income attributable to Hello Group Inc. 397,994 89,944 487,938 452,469 62,224 514,693 63,729 8,765 72,494
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.
Year
Year
Year
Ended December 31, 2022
Ended December 31, 2023
Ended December 31, 2023
GAAP Share-based Non-GAAP GAAP Share-based Non-GAAP GAAP Share-based Non-GAAP
compensation compensation compensation
RMB RMB RMB RMB RMB RMB US$ US$ US$
Cost of revenues (7,421,419) 14,195 (7,407,224) (7,025,394) 6,307 (7,019,087) (989,506) 888 (988,618)
Research and development (1,006,219) 88,797 (917,422) (884,590) 64,561 (820,029) (124,592) 9,093 (115,499)
Sales and marketing (2,073,617) 38,432 (2,035,185) (1,414,949) 29,066 (1,385,883) (199,291) 4,094 (195,197)
General and administrative (596,006) 260,060 (335,946) (502,479) 167,167 (335,312) (70,773) 23,545 (47,228)
Cost and operating expenses (11,097,261) 401,484 (10,695,777) (9,827,412) 267,101 (9,560,311) (1,384,162) 37,620 (1,346,542)
Income from operations 1,627,543 401,484 2,029,027 2,305,016 267,101 2,572,117 324,655 37,620 362,275
Net income attributable to Hello Group Inc. 1,484,283 401,484 1,885,767 1,957,581 267,101 2,224,682 275,719 37,620 313,339
Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
Three months
Ended December 31, 2023
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Net revenues:
Live video service 1,423,730 100,155 1,523,885 214,635
Value-added service 1,264,358 160,535 1,424,893 200,692
Mobile marketing 33,395 11,520 44,915 6,326
Mobile games 5,441 5,441 766
Other services 1,760 2,038 3,798 535
Total net revenues 2,728,684 272,210 2,038 3,002,932 422,954
Cost and expenses (ii):
Cost of revenues (1,638,915) (130,237) (965) (1,770,117) (249,316)
Research and development (180,343) (51,102) (231,445) (32,598)
Sales and marketing (244,043) (58,444) (2,209) (304,696) (42,916)
General and administrative (117,923) (6,882) (693) (125,498) (17,676)
Total cost and expenses (2,181,224) (246,665) (3,867) (2,431,756) (342,506)
Other operating income 29,442 1,301 78 30,821 4,341
Income (loss) from operations 576,902 26,846 (1,751) 601,997 84,789
Interest income 124,294 57 3 124,354 17,515
Interest expense (20,552) (20,552) (2,895)
Other gain or loss, net (31,250) (31,250) (4,401)
Income (loss) before income tax and share of income on equity method 649,394 26,903 (1,748) 674,549 95,008
investments
Income tax expenses (180,669) (2,708) (183,377) (25,828)
Income (loss) before share of income on equity method investments 468,725 24,195 (1,748) 491,172 69,180
Share of loss on equity method investments (38,703) (38,703) (5,451)
Net income (loss) 430,022 24,195 (1,748) 452,469 63,729
(ii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three months
Ended December 31, 2023
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Cost of revenues 1,905 4 1,909 269
Research and development 13,194 181 13,375 1,884
Sales and marketing 8,653 8,653 1,219
General and administrative 38,279 8 38,287 5,393
Total cost and expenses 62,031 193 62,224 8,765
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 December 31, 2023
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Income (loss) from operations 576,902 26,846 (1,751) 601,997 84,789
Share-based compensation 62,031 193 62,224 8,765
Non-GAAP income (loss) from operations 638,933 27,039 (1,751) 664,221 93,554
Net income (loss) 430,022 24,195 (1,748) 452,469 63,729
Share-based compensation 62,031 193 62,224 8,765
Non-GAAP net income (loss) 492,053 24,388 (1,748) 514,693 72,494
Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
Three months
Ended December 31, 2022
Momo Tantan QOOL Total Total
RMB RMB RMB
RMB US$[1]
Net revenues:
Live video service 1,561,332 162,896 1,724,228 249,990
Value-added service 1,265,693 183,844 1,449,537 210,164
Mobile marketing 32,927 32,927 4,774
Mobile games 5,316 5,316 771
Other services 483 167 650 93
Total net revenues 2,865,751 346,740 167 3,212,658 465,792
Cost and expenses (iii):
Cost of revenues (1,722,675) (192,748) (627) (1,916,050) (277,801)
Research and development (200,740) (71,917) (272,657) (39,532)
Sales and marketing (307,166) (98,209) (1,700) (407,075) (59,020)
General and administrative (131,844) (7,899) (2,749) (142,492) (20,659)
Total cost and expenses (2,362,425) (370,773) (5,076) (2,738,274) (397,012)
Other operating (loss) income, net (67,499) 2,339 2 (65,158) (9,447)
Income (loss) from operations 435,827 (21,694) (4,907) 409,226 59,333
Interest income 87,799 253 66 88,118 12,776
Interest expense (10,955) (10,955) (1,588)
Income (loss) before income tax and share of income on equity 512,671 (21,441) (4,841) 486,389 70,521
method investments
Income tax (expenses) benefits (135,602) 26,181 (109,421) (15,865)
Income (loss) before share of income on equity method investments 377,069 4,740 (4,841) 376,968 54,656
Share of income on equity method investments 20,040 20,040 2,906
Net income (loss) 397,109 4,740 (4,841) 397,008 57,562
(iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three months
Ended December 31, 2022
Momo Tantan QOOL Total Total
RMB RMB RMB
RMB US$
Cost of revenues 1,689 18 1,707 247
Research and development 15,907 6,238 22,145 3,211
Sales and marketing 8,473 7 8,480 1,229
General and administrative 57,350 262 57,612 8,353
Total cost and expenses 83,419 6,525 89,944 13,040
[1] All translations from RMB to U.S. dollars are made at a rate of RMB6.8972 to US$1.00, the effective noon buying rate for December 30, 2022 as set forth in the H.10 statistical release of the Federal Reserve Board.
Hello Group Inc.
Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report
(All amounts in thousands, except share and per share data)
Three months
Ended December 31, 2022
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Income (loss) from operations 435,827 (21,694) (4,907) 409,226 59,333
Share-based compensation 83,419 6,525 89,944 13,040
Non-GAAP income (loss) from 519,246 (15,169) (4,907) 499,170 72,373
operations
Net income (loss) 397,109 4,740 (4,841) 397,008 57,562
Share-based compensation 83,419 6,525 89,944 13,040
Non-GAAP net income (loss) 480,528 11,265 (4,841) 486,952 70,602
Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
Year
Ended December 31, 2023
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Net revenues:
Live video service 5,567,894 504,977 6,072,871 855,346
Value-added service 5,085,541 667,030 5,752,571 810,233
Mobile marketing 109,125 24,552 133,677 18,828
Mobile games 19,610 19,610 2,762
Other services 16,337 7,257 23,594 3,323
Total net revenues 10,798,507 1,196,559 7,257 12,002,323 1,690,492
Cost and expenses (iv):
Cost of revenues (6,404,042) (599,348) (22,004) (7,025,394) (989,506)
Research and development (664,340) (220,250) (884,590) (124,592)
Sales and marketing (1,138,505) (268,652) (7,792) (1,414,949) (199,291)
General and administrative (467,537) (26,482) (8,460) (502,479) (70,773)
Total cost and expenses (8,674,424) (1,114,732) (38,256) (9,827,412) (1,384,162)
Other operating income 125,318 4,411 376 130,105 18,325
Income (loss) from operations 2,249,401 86,238 (30,623) 2,305,016 324,655
Interest income 435,451 713 89 436,253 61,445
Interest expense (62,223) (62,223) (8,764)
Other gain or loss, net (26,685) (26,685) (3,759)
Income (loss) before income tax and share of income on 2,595,944 86,951 (30,534) 2,652,361 373,577
equity method investments
Income tax expenses (623,844) (6,179) (630,023) (88,737)
Income (loss) before share of income on equity method 1,972,100 80,772 (30,534) 2,022,338 284,840
investments
Share of loss on equity method investments (70,643) (70,643) (9,950)
Net income (loss) 1,901,457 80,772 (30,534) 1,951,695 274,890
(iv) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Year
Ended December 31, 2023
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Cost of revenues 6,167 140 6,307 888
Research and development 49,987 14,574 64,561 9,093
Sales and marketing 29,061 5 29,066 4,094
General and administrative 167,135 32 167,167 23,545
Total cost and expenses 252,350 14,751 267,101 37,620
Hello Group Inc.
Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report
(All amounts in thousands, except share and per share data)
Year
Ended December 31, 2023
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Income (loss) from operations 2,249,401 86,238 (30,623) 2,305,016 324,655
Share-based compensation 252,350 14,751 267,101 37,620
Non-GAAP income (loss) from operations 2,501,751 100,989 (30,623) 2,572,117 362,275
Net income (loss) 1,901,457 80,772 (30,534) 1,951,695 274,890
Share-based compensation 252,350 14,751 267,101 37,620
Non-GAAP net income (loss) 2,153,807 95,523 (30,534) 2,218,796 312,510
Hello Group Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
Year
Ended December 31, 2022
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Net revenues:
Live video service 5,966,323 544,137 6,510,460 943,928
Value-added service 5,183,302 823,716 6,007,018 870,936
Mobile marketing 124,956 124,956 18,117
Mobile games 55,732 55,732 8,080
Other services 4,781 1,225 6,006 871
Total net revenues 11,335,094 1,367,853 1,225 12,704,172 1,841,932
Cost and expenses (v):
Cost of revenues (6,704,020) (714,936) (2,463) (7,421,419) (1,076,005)
Research and development (737,380) (268,839) (1,006,219) (145,888)
Sales and marketing (1,346,692) (721,889) (5,036) (2,073,617) (300,646)
General and administrative (547,798) (33,234) (14,974) (596,006) (86,413)
Total cost and expenses (9,335,890) (1,738,898) (22,473) (11,097,261) (1,608,952)
Other operating income 8,753 11,830 49 20,632 2,991
Income (loss) from operations 2,007,957 (359,215) (21,199) 1,627,543 235,971
Interest income 368,051 544 284 368,879 53,482
Interest expense (83,530) (83,530) (12,111)
Other gain or loss, net 118,325 118,325 17,156
Income (loss) before income tax and share of income on equity method 2,410,803 (358,671) (20,915) 2,031,217 294,498
investments
Income tax (expenses) benefits (586,663) 24,382 (562,281) (81,523)
Income (loss) before share of income on equity method investments 1,824,140 (334,289) (20,915) 1,468,936 212,975
Share of income on equity method investments 11,073 11,073 1,605
Net income (loss) 1,835,213 (334,289) (20,915) 1,480,009 214,580
(v) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Year
Ended December 31, 2022
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Cost of revenues 7,166 7,029 14,195 2,058
Research and development 67,659 21,138 88,797 12,874
Sales and marketing 38,202 230 38,432 5,572
General and administrative 259,669 391 260,060 37,705
Total cost and expenses 372,696 28,788 401,484 58,209
Hello Group Inc.
Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report
(All amounts in thousands, except share and per share data)
Year
Ended December 31, 2022
Momo Tantan QOOL Total Total
RMB RMB RMB RMB US$
Income (loss) from operations 2,007,957 (359,215) (21,199) 1,627,543 235,971
Share-based compensation 372,696 28,788 401,484 58,209
Non-GAAP income (loss) from 2,380,653 (330,427) (21,199) 2,029,027 294,180
operations
Net income (loss) 1,835,213 (334,289) (20,915) 1,480,009 214,580
Share-based compensation 372,696 28,788 401,484 58,209
Non-GAAP net income (loss) 2,207,909 (305,501) (20,915) 1,881,493 272,789
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SOURCE Hello Group Inc.
