Hello (US:MOMO)2025-12-10 13:02Financial Data and Key Metrics Changes - Total group revenue for Q3 2025 was RMB 2.65 billion, down 1% year-over-year but up 1% quarter-over-quarter [4][17] - Domestic revenue reached RMB 2.12 billion, down 10% year-over-year, while overseas revenue was RMB 535 million, up 69% year-over-year [4][18] - Adjusted operating income was RMB 404 million, down 11% from Q3 last year, with a margin of 15.2% [4][22] Business Line Data and Key Metrics Changes - Momo's value-added service revenue reached RMB 1.79 billion, down 11% year-over-year and 3% quarter-over-quarter [9] - Tantan's revenue from the onshore business in Q3 was RMB 150 million, down 15% year-over-year and 5% quarter-over-quarter, but ARPU increased by 25% year-over-year [11][12] - Overseas revenue accounted for 20% of the group's revenue, compared to 12% in the same period last year [13] Market Data and Key Metrics Changes - Overseas revenue growth mainly came from audio and video social products in the MENA region, with significant contributions from YoHo and Ahlan [13][14] - Tantan International returned to substantial growth for the first time in nearly a year, aided by the acquisition of Happn [15] Company Strategy and Development Direction - Key priorities for 2025 include maintaining Momo's productivity, improving Tantan's core dating experience, and deepening overseas market presence [4][5] - The company aims to optimize the chat experience on Momo and enhance user engagement through AI technologies [6][8] - The acquisition of Happn is expected to enrich the diversity of the overseas dating product portfolio [15] Management Comments on Operating Environment and Future Outlook - Management acknowledged external challenges impacting business but noted proactive responses leading to good results in user and financial measures [4] - The company expects domestic revenue to decline by mid- to low-teens percentage-wise in 2026, while overseas revenue is anticipated to maintain growth [24][32] - Management emphasized the importance of platform fundamentals, macroeconomic conditions, and regulatory environments in shaping future performance [36][37] Other Important Information - Non-GAAP net income attributable to the company was RMB 404.5 million, compared to RMB 493.3 million in the same period of 2024 [17] - The company ended Q3 with cash reserves totaling RMB 8.86 billion, down from RMB 14.73 billion at the end of 2024 [23] Q&A Session Summary Question: Impact of tax issues on Momo's revenue and margin - Management explained that tax scrutiny affected mid-tier broadcasters, leading to revenue pressure, but adjustments in revenue sharing policy resulted in a modest recovery [27][29] Question: Overseas revenue growth and its components - Management noted that the majority of overseas revenue growth came from audio and video products in the MENA region, with Tantan International also contributing positively [40][43] Question: M&A strategy and focus areas - Management highlighted that M&A targets are evaluated based on product value, team capability, and sustainable profitability, with varying levels of post-acquisition involvement [51][56] Question: Profit margin outlook and shareholder returns - Management indicated that domestic gross margins are expected to decline, while overseas products are seeing stable or improving margins, with overall profitability under pressure [60][63]