Hello (US:MOMO)2025-09-09 13:00Financial Data and Key Metrics Changes - Total group revenue for Q2 2025 was RMB 2.62 billion, down 3% year-over-year but up 4% quarter-over-quarter [20] - Domestic revenue reached RMB 2.18 billion, down 11% year-over-year, while overseas business revenue was RMB 442 million, up 17.3% year-over-year [5][20] - Adjusted operating income was RMB 448 million, down 6% from Q2 last year, with a margin of 17% [5][24] - Non-GAAP net loss was RMB 96 million compared to RMB 449.2 million from the same period of 2024 [20] Business Line Data and Key Metrics Changes - MoMo app value-added service revenue was RMB 1.85 billion, down 11% year-over-year due to soft spending sentiment among high-paying users [10] - Tang Tang's revenue from the onshore business in Q2 was RMB 116 million, down 18% year-over-year [12] - Overseas revenue from value-added services was RMB 440.7 million, up 73% year-over-year [21] Market Data and Key Metrics Changes - Overseas revenue accounted for 17% of total group revenue compared to 10% in the same period last year [16] - Tang Tang's MAU reached 10.2 million, down 5% from last quarter [12] - The RP pool for Tang Tang increased 18% year-over-year, partially offsetting revenue pressure [13] Company Strategy and Development Direction - Key priorities for 2025 include maintaining MoMo's productivity, improving Tang Tang's core dating experience, and deepening overseas market presence [5] - The company aims to balance growth and profitability, especially in overseas markets, while being cautious about user acquisition costs [17][18] - The focus on AI applications includes enhancing user experience and developing new products, such as a standalone AI character role-playing chat app in Japan [36][38] Management Comments on Operating Environment and Future Outlook - Management expects the second half of the year to be relatively controllable for MoMo, with no significant deterioration in consumer sentiment [33][35] - The company anticipates a year-over-year decline in domestic revenue in the low teens, while overseas revenue is expected to grow around 70% for the year [55] - Recent tax scrutiny may impact revenue and gross margins, but adjustments in revenue sharing policies are being made to mitigate these effects [54][56] Other Important Information - The company accrued an additional withholding income tax of RMB 547.9 million related to dividends, which is a one-off item [25][26] - Cash reserves decreased to RMB 12.39 billion as of June 30, 2025, primarily due to loan repayments and cash dividends [27] Q&A Session Summary Question: Can management discuss the second half outlook for MoMo and the strategy on AI application? - Management indicated that the situation for MoMo is controllable, with a stable consumer sentiment and regulatory environment [33][34] Question: What measures have been taken to mitigate the impact of the product upgrade on Tang Tang's paying ratios? - Management explained that user classification and tailored monetization strategies were implemented to address revenue pressure from the product upgrade [42][43] Question: What are the expectations for the sustainability of overseas revenue growth? - Management noted that while growth may moderate slightly, overseas business is expected to continue delivering robust growth, particularly from new brands [48][50] Question: Will there be changes in profit margins due to the withholding tax issue? - Management stated that there could be fluctuations in revenue and gross margins, but overall effects should remain manageable [54][56]