Hello (US:MOMO)2020-03-19 20:31Financial Data and Key Metrics Changes - For Q4 2019, total revenue reached RMB 4.69 billion, up 22% year-on-year, and adjusted operating income was RMB 1.46 billion, up 42% from the same period last year [6][7] - For fiscal year 2019, total revenue was RMB 17 billion, a 27% increase year-over-year, and adjusted operating income reached RMB 5.12 billion, up 30% year-on-year, with a 30.1% operating margin [7][49] - Non-GAAP net income attributable to Momo for 2019 was RMB 4.49 billion, an increase of 30% year-on-year [49] Business Line Data and Key Metrics Changes - Live broadcasting revenue for Q4 was RMB 3.38 billion, an increase of 14% year-on-year, and total live broadcasting revenue for fiscal 2019 was RMB 12.4 billion, up 16% from last year [24][25] - VAS revenue for Q4, excluding Tantan, reached RMB 819.3 million, a 64% increase year-on-year, and for fiscal 2019, VAS revenue totaled RMB 2.85 billion, up 94% year-on-year [28][29] - Tantan's paying users were 4.5 million in Q4, flat from the previous quarter, while total revenue for Tantan was RMB 369.8 million, up 66% year-over-year [10][39] Market Data and Key Metrics Changes - The core Momo app had 114.5 million monthly active users in Q4, up 1% year-on-year, with total paying users reaching 9.3 million, a net addition of 400,000 from the last quarter [8][9] - Tantan experienced downward pressure on user retention starting from late Q3, attributed to changes in subscription management policy and social distancing measures due to COVID-19 [10][11] Company Strategy and Development Direction - The company aims to improve user growth by enhancing social experiences, targeting lower-tier cities, and increasing marketing efficiency at Tantan [15][17][18] - New product innovations include a video-dating experience and virtual community services, which are expected to improve user engagement and retention [12][13] - The company plans to introduce new experiences to counteract revenue pressures caused by COVID-19 and maintain a focus on effective product and operational initiatives [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of COVID-19 on user engagement and revenue, but expressed confidence in the team's ability to navigate challenges and drive growth [20][21][60] - The company expects Q1 to be the low point of the year, with a gradual recovery starting in Q2 and a positive outlook for the second half of 2020 [61][62] Other Important Information - The board declared a cash dividend of USD 0.76 per ADS, totaling approximately USD 161 million, representing over 25% of adjusted net income for 2019 [22] - The company ended Q4 with cash, cash equivalents, and term deposits totaling RMB 14.93 billion, compared to RMB 11.29 billion at the end of 2018 [53] Q&A Session Summary Question: What is the impact of COVID-19 on traffic and revenue recovery? - Management noted that traffic and revenue are gradually recovering in March, with expectations for Q1 to be the lowest point of the year, and a rebound anticipated in Q2 [57][59][61] Question: What are the plans for cost management and profitability? - Management indicated that overall costs may rise as a percentage of revenue, but they will maintain marketing spending to support user recovery while aiming for a 30% operating margin for the year [66][68] Question: Can you provide details on the new non-subscription feature for Tantan? - Management stated that the new feature is under testing and aims to enhance user experience and engagement, with expectations for user growth to ramp up in Q2 [69][72]