Hello (US:MOMO)2023-08-31 17:23Financial Data and Key Metrics Changes - Total group revenue for Q2 2023 was RMB3.14 billion, up 1% year-over-year and 11% sequentially, marking the first year-on-year growth since the pandemic began [8][28] - Adjusted operating income was RMB709 million, a substantial increase of 53% from Q2 last year and up 37% quarter-over-quarter, with a margin of 22.6%, up 8 percentage points year-over-year and 4 percentage points quarter-over-quarter [8][28] - Non-GAAP net income attributable to the company was RMB632.1 million, up 36% year-over-year and 34% from the previous quarter [28] Business Line Data and Key Metrics Changes - Revenue from the Momo app and standalone new apps was RMB2.82 billion, up 1% year-over-year and 12% sequentially, with adjusted operating income of RMB777 million, up 60% year-over-year [9][28] - Tantan's total revenue was RMB321 million, down 3% year-over-year but up 4% quarter-over-quarter, with adjusted operating income of RMB31.89 million, compared to an adjusted operating loss of RMB119 million in Q2 last year [9][19] - Momo's live streaming revenue was RMB1.44 billion, up 3% year-over-year and 12% sequentially, while VAS revenue, excluding Tantan, totaled RMB1.33 billion, up 1% year-over-year and 11% sequentially [14][15][29] Market Data and Key Metrics Changes - Momo's paying users increased by 100,000 to 7.9 million from the previous quarter, indicating a recovery in user engagement [12] - Tantan's user base decreased by 11% to 17.3 million in June due to anti-spam measures, with a net decrease of 200,000 paying users from the previous quarter [18][19] Company Strategy and Development Direction - The strategic priority for Momo is to stabilize user scale, optimize costs, and ensure commercial productivity, shifting focus from MAU growth to profitable user growth [10][13] - Tantan aims to achieve overall breakeven for the year and develop monetization models suitable for the Asian dating culture, with a focus on improving ARPU and retention [17][24] - The company is exploring new markets and optimizing existing products to drive long-term growth, particularly in the Middle East and North Africa [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the operating environment, noting a softening consumer sentiment and potential revenue declines in Q3 due to macroeconomic factors and product adjustments [36][46] - The company anticipates Q3 revenue to range from RMB2.9 billion to RMB3.0 billion, representing a decrease of 10.3% to 7.2% year-over-year [37] Other Important Information - The company has reduced its total employees from 1,825 to 1,470 year-over-year, with a significant decrease in sales and marketing expenses [32] - The company paid RMB937 million in cash dividends to shareholders and prepaid RMB2.26 billion to repurchase convertible senior notes [34] Q&A Session Summary Question: User recovery trend and macro impact on Momo - Management highlighted the focus on stabilizing the user base and increasing productivity, noting that consumer sentiment has softened in Q3, impacting revenue expectations [41][44][46] Question: Updates on new apps and revenue guidance - Management indicated that new domestic apps are maturing, while overseas business is showing satisfactory growth, with expectations for new apps to contribute to revenue in 2024 [48][50][53] Question: Tantan's initiatives and revenue outlook - Management stated that Tantan has achieved breakeven and is focusing on improving ARPU and retention, with a projected sequential decrease in revenue for Q3 due to macro impacts [56][60]