Momo Inc. Earnings Recaps
Hello Group’s stock fell 2.1% after earnings, reflecting a mixed quarter rather than a clear upside surprise: group revenue declined 5% year over year, domestic revenue fell 17%, and Momo’s VAS business remained pressured by tax-related disruption and softer consumer spending. Overseas growth and early product improvements provided offsets, but monetization pressure and higher revenue sharing/subsidy costs weighed on the outlook.
Key takeaways
- Q2 revenue was RMB 2.49 billion, down 5% year over year but up 4% quarter over quarter; adjusted operating income was RMB 276 million, representing an 11% margin.
- Domestic revenue fell 17% year over year to RMB 1.81 billion, while overseas revenue increased 52% to RMB 673 million and rose to 27% of group revenue from 17% a year earlier.
- Momo VAS revenue declined 16% year over year to RMB 1.54 billion. Tax compliance pressure on agencies and broadcasters, softer consumer spending, and weaker seasonal sequential growth were key headwinds.
- Momo paying users increased by 200,000 quarter over quarter to 3.9 million, supported by audio/video events and product initiatives, but revenue sharing rose by a low-single-digit percentage-point range year over year and quarter over quarter.
- Tantan paying users declined by 40,000 quarter over quarter to 0.5 million, primarily due to Alipay changes to auto-renewal deductions; management said domestic user scale was stable with a slight Q2 uptick.
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.
Key takeaways
- 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.
Hello Group, Inc. reported a mixed performance in Q2 2025, with total revenue of RMB 2.62 billion, reflecting a year-over-year decline, while overseas revenue surged by 73%, signaling growth potential in international markets.
Key takeaways
- Domestic revenue fell 11% year-over-year, primarily due to soft spending among high-paying users amid a challenging macroeconomic environment.
- Overseas business grew by 73% year-over-year, contributing RMB 442 million, demonstrating successful expansion efforts.
- Adjusted operating income decreased 6% to RMB 448 million, with a margin of 17%, influenced by a reduction in user acquisition costs and improved profitability.
- Momo app saw a stable user retention despite a decrease in paying users, while Tantan implemented budget cuts on marketing channels to prioritize ROI, resulting in a slight decline in user numbers but steady organic growth.