Financial Data and Key Metrics Changes - Total group revenue for Q1 2025 was RMB2.52 billion, slightly down 1.5% year over year, but exceeded the high end of guidance [8][30] - Domestic revenue reached RMB2.11 billion, down 9% year over year, while overseas revenue was RMB415 million, showing accelerated growth of 72% year over year [8][20] - Adjusted operating income was RMB315 million, down 33% year over year, with a margin of 14%, down six percentage points from the previous year [8][30] Business Line Data and Key Metrics Changes - Momo's value-added services revenue totaled RMB1.78 billion, down less than 10% year over year, attributed to operational adjustments completed by the end of 2024 [14] - Tantan's revenue from the onshore business was close to RMB100 million, down 19% year over year, with a decrease in paying user accounts [17][31] - Overseas revenue from value-added services was RMB4 million, up 73% year over year, driven by the expansion of Sochill and initial monetization of emerging brands [31][20] Market Data and Key Metrics Changes - Overseas revenue accounted for 16% of total group revenue, up from 9% in Q1 2024, indicating a significant growth in international operations [7][20] - Sochill generated close to RMB300 million in overseas revenue, representing a year-on-year growth of nearly 40% despite challenges from political unrest and Ramadan [24][58] - Tantan's overseas business is expected to grow significantly, with a strong focus on the dating market in developed regions [49][56] Company Strategy and Development Direction - The company aims to deepen its presence in overseas markets, enhance brand portfolios, and build long-term growth engines [9][26] - A focus on improving user experience through technology, such as AI-generated greetings, is part of the strategy to stabilize user engagement [12][62] - The company plans to maintain strict control over channel ROI while reinvesting profits into user acquisition channels [44][78] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic factors and regulatory environments are key influences on domestic revenue performance [66][68] - The outlook for Q2 2025 anticipates a year-over-year decline in domestic revenue in the low teens percentage, but overall stabilization is expected [65][70] - The company is optimistic about the potential for group-level revenue growth in the second half of the year, driven by overseas business acceleration [70] Other Important Information - The company has introduced geographical breakdowns of revenue to reflect the growing significance of overseas business [28] - Non-GAAP gross margin for Q1 was 37.9%, down 3.5 percentage points year over year, primarily due to a higher contribution from overseas revenue [32][77] - The company ended Q1 with a total of 1,336 employees, a decrease from the previous year, reflecting ongoing personnel optimization [34] Q&A Session Summary Question: Concerns about Sochill's revenue slowdown - Management attributed the slowdown to a high base effect and political unrest affecting user sentiment, but noted efforts to enhance user engagement and retention [41][42][43] Question: Growth plans for overseas products - Management confirmed that Sochill is the largest overseas product, with other products also showing significant growth potential, particularly in the dating market [47][48][49] Question: Outlook for Momo and Tantan in 2025 - Management emphasized the importance of stabilizing user engagement and profitability for mature brands, with ongoing product enhancements to improve user experience [61][62] Question: Profit outlook and expense management - Management expects a decline in gross margin due to increased overseas revenue contribution but anticipates improvements in operating expenses through personnel optimization [75][77][78]

Financial Data and Key Metrics Changes - First quarter revenue declined by 9% year-over-year, primarily due to $8.5 million in barter transactions and a $3.4 million benefit from a change in loyalty rewards accruals in the previous year. Excluding these items, revenue increased by 4% [17] - Adjusted EBITDA declined by $11.6 million compared to the first quarter of the previous year, totaling approximately $1 million for Q1 2025 [21] - Gross margin decreased by 680 basis points to 36% of sales, impacted by increased trade investment, green coffee inflation, and changes in loyalty rewards [20] Business Line Data and Key Metrics Changes - The wholesale segment, which sells packaged coffee and ready-to-drink beverages, declined by 6% year-over-year. However, excluding non-recurring revenue from the previous year, sales in this segment grew by 9% [17] - Direct-to-consumer (DTC) revenue declined by 15% in the first quarter, but adjusting for last year's loyalty reserve, the decline was closer to 5% [19] - The Outpost segment grew revenue by 2%, driven by higher franchise revenue and increased average order value [19] Market Data and Key Metrics Changes - In the U.S. Food, Drug, and Mass channels, the coffee category declined in unit volume during the first quarter, but Black Rifle Coffee Company achieved 21% sales growth, significantly outpacing the category's 4% increase [6] - The ready-to-drink coffee business saw first-quarter sales up 7% in a category that declined by 6%, maintaining the company's position as the third-largest RTD coffee brand in the U.S. [11] Company Strategy and Development Direction - The company is focused on long-term growth by scaling the brand, deepening retail partnerships, and ensuring efficient investment in the business [5] - The launch of Black Rifle Energy is a key initiative, with plans to expand distribution and marketing efforts in priority markets [12][13] - The company is committed to cost reduction and efficiency initiatives, aiming for annualized cost savings of $8 million to $10 million [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging operating environment but expressed confidence in the company's positioning for growth in 2025 and beyond [4] - The impact of tariffs and green coffee inflation was highlighted, with an estimated $5 million impact on EBITDA in 2025 [24] - The company maintains its full-year revenue guidance of $395 million to $425 million, expecting sequential growth throughout the year [22] Other Important Information - The company continues to make monetary and product donations to military units and first responder organizations, emphasizing its mission-driven approach [14][15] - The company has implemented a price increase to offset rising green coffee prices, which have more than doubled since early 2024 [25] Q&A Session Summary Question: How does the business react to an economic slowdown? - Management noted that during economic slowdowns, consumers tend to shift from coffee shops to at-home coffee, which can benefit premium brands like Black Rifle [33] Question: What is the outlook on guidance, particularly regarding gross margin? - Management indicated that increased trade spending and coffee inflation have impacted gross margin expectations, but they remain confident in achieving their EBITDA range [36][37] Question: Can you share early feedback on the energy drink launch? - Early feedback has been positive, with strong distribution and marketing efforts planned to support the launch [41][43] Question: What strategies are being implemented to stabilize the DTC business? - The company is focusing on improving conversion rates, particularly through its mobile app, while reallocating resources towards wholesale and energy initiatives [52][55] Question: How is pricing being managed in light of inflation and tariffs? - Management stated that pricing actions are being taken strategically to remain competitive while managing the impact of tariffs and inflation on costs [60][62]

Hello Group (MOMO) Q4 2024 Earnings Call March 12, 2025 08:00 AM ET Company Participants Ashley Jing - Head, IRSichuan Zhang - COO & DirectorCathy Peng - Chief Financial OfficerThomas Chong - Managing DirectorJennifer Huang - Director, Group Corporate Services Conference Call Participants Xueqing Zhang - Media AnalystLeo Chiang - Analyst Operator Ladies and gentlemen, thank you for standing by and welcome to Fourth Quarter and Fiscal Year twenty twenty four Hello Group Inc. Earnings Conference Call. Please ...