Hello (US:MOMO)2019-11-26 19:24Financial Data and Key Metrics Changes - Total revenue for Q3 2019 reached RMB4.45 billion, up 22% year-over-year, and grew 28% year-over-year when excluding non-recurring revenue from Phanta City [6][7] - Adjusted operating income for the quarter was RMB1.2 billion, up 41% year-over-year, representing a 27% adjusted operating margin [6][7] - Core Momo's adjusted operating income was RMB1.36 billion, up 38% year-over-year, with an adjusted operating margin of 33%, up from 28% in the same period last year [7] Business Line Data and Key Metrics Changes - Core Momo application had 114.1 million monthly active users, a 3% increase year-over-year, with 600,000 net additions from the previous quarter [7] - Total paying users for the core Momo platform reached 8.9 million, a net addition of 300,000 from the last quarter [8] - Tantan ended the quarter with 4.5 million paying users, up from 3.2 million a quarter ago, reflecting recovery trends after the lift of download and payment suspensions [10][32] Market Data and Key Metrics Changes - Revenue from live broadcasting business was RMB3.28 billion, an increase of 18% from the same period last year [19] - Revenue from Value Added Services (VAS) reached RMB1.06 billion, an 86% increase year-over-year, with core Momo's VAS generating RMB755 million, an increase of 84% from the same period last year [26][27] Company Strategy and Development Direction - The company aims to grow the user base and engagement through product innovations and effective marketing approaches [11] - Focus on driving steady growth from live broadcasting and cultivating paying potential from middle cohorts and long-tail users [11][18] - The company is enhancing user experience through new features and optimizing existing premium features to drive monetization growth [11][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of Tantan's user base and the effectiveness of new product initiatives to improve user retention [54] - The company is committed to maintaining a balance between shareholder returns and investments for future growth [7][55] - Management noted that competitive pressure in the live streaming space has not significantly impacted their ecosystem, with healthy growth indicators [23][25] Other Important Information - Non-GAAP gross margin for Q3 2019 was up 2.5% year-over-year due to lower payout ratios from live streaming and VAS businesses [44] - The company ended the quarter with RMB13.7 billion in cash and cash equivalents, up from RMB11.3 billion at the end of 2018 [46] Q&A Session Summary Question: Tantan's user recovery and future strategies - Management indicated that internal metrics show a significant increase in paying users for Tantan, reflecting a recovery in MAU and DAU after the suspension [52][53] - Strategies include enriching product offerings and improving marketing efficiency to drive user growth [54] Question: Dividend considerations - The company has strong intentions to return cash to shareholders in the form of dividends, but prefers to keep dividends under a special form rather than regular dividends [55][56] Question: Industry outlook for social networking services - Management believes the competitive landscape will resemble Western markets, with opportunities for multiple players in the open social space [60][61] Question: Overseas expansion initiatives - The company is exploring diverse opportunities in overseas markets, with Tantan being a key focus, while also considering new applications [65][66] Question: New product ZAO and year-end gala plans - Management plans to enhance user stickiness with the ZAO app and aims to make the year-end gala a more engaging experience without revenue pressure [70][73]