Shares dropped 6% as investors reacted negatively to a clear deceleration in domestic revenue and an ongoing decline in Momo's core business, despite growth overseas and stable margins.
- Total group revenue declined 5% year-over-year to RMB 2.39 billion, driven primarily by a 15% decline in domestic revenue to RMB 1.79 billion.
- Overseas revenue grew 44% year-over-year to RMB 597 million, now comprising 25% of total revenue, up from 16% last year.
- Adjusted operating income was RMB 349 million, up slightly by 1%, with a stable margin of 14.6%, indicating limited margin improvement.
- Momo’s gross revenue slid 15% year-over-year and 9% quarter-over-quarter, weighed down by regulatory headwinds, tax changes, and seasonal softness, with paying users decreasing by 200,000 to 3.7 million.
- The company acknowledged user activity was impacted by Chinese New Year, but ongoing regulatory challenges and consumer softness suggest more significant structural pressures domestically.
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