Hello (US:MOMO)2025-12-10 13:02Financial Data and Key Metrics Changes - For Q3 2025, total group revenue 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][17] - Adjusted operating income was RMB 404 million, down 11% from Q3 last year, with a margin of 15.2% [4][17] Business Line Data and Key Metrics Changes - Momo's value-added service revenue was RMB 1.79 billion, down 11% year-over-year and 3% quarter-over-quarter [9] - Tantan's revenue from the onshore business was RMB 150 million, down 15% year-over-year and 5% quarter-over-quarter, but ARPU increased by 25% year-over-year [11] - Overseas revenue from value-added services was RMB 533.1 million, up 69% year-over-year and 21% quarter-over-quarter [18] Market Data and Key Metrics Changes - Overseas revenue accounted for 20% of the group's revenue, compared to 12% in the same period last year [13] - The growth in overseas revenue was primarily driven by audio and video social products in the MENA region [13][14] 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][7] - The acquisition of Happn is expected to enrich the company's overseas dating product portfolio and enhance growth potential in the Asia-Pacific region [15] Management's 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][38] - Management emphasized the importance of platform fundamentals, macroeconomic conditions, and regulatory environments in shaping future performance [37][66] Other Important Information - The company ended Q3 with cash reserves totaling RMB 8.86 billion, down from RMB 14.73 billion at the end of 2024, primarily due to loan repayments and tax payments [23] - Non-GAAP gross margin for Q3 was 37.6%, down 1.7 percentage points from the previous year [19] Q&A Session Summary Question: Impact of tax issues on Momo's revenue and margin - Management explained that recent tax changes affected mid-tier broadcasters, leading to revenue pressure, but adjustments in revenue sharing policy have shown some recovery [30] Question: Overseas revenue growth and its sustainability - Management highlighted that overseas revenue growth was driven by audio and video products in the MENA region and the acquisition of Happn is expected to enhance future performance [45] Question: M&A strategy and focus areas - Management stated that M&A targets are evaluated based on product value, team capability, and sustainable profitability, with varying levels of post-acquisition involvement [59] Question: Profit margin outlook and shareholder returns - Management indicated that domestic gross margins are expected to decline, while overseas products are seeing stable margins, with overall profitability under pressure but not significantly impacted by overseas business [66]