Hello (US:MOMO)2023-06-06 17:20Financial Performance and Key Metrics - Total revenue for Q1 2023 was RMB2.82 billion, down 10% year-over-year and 12% sequentially, but better than expectations as the year-on-year decline narrowed compared to the previous quarter [5][33] - Adjusted operating income was RMB518 million, up 12% year-over-year and 4% sequentially, with a margin of 18%, up 4 percentage points year-over-year and 3 percentage points quarter-over-quarter [6][39] - Non-GAAP net income attributable to the company was RMB471.9 million, up 18% from the year-ago period, despite a decrease in top line [33] Business Line Performance - Revenue from the Momo app and standalone new apps was RMB2.51 billion, down 10% year-over-year and 12% quarter-over-quarter [6] - Tantan's total revenue was RMB309 million, down 12% year-over-year and 11% sequentially, but achieved its first quarterly profit at the operating level with an adjusted operating income of RMB14.48 million [7][22] - Momo's live-streaming revenue was RMB1.29 billion, down 13% year-over-year and 17% sequentially, impacted by COVID and regulatory adjustments [11][34] Market Performance - MAUs for Momo increased by 13% sequentially to 106.5 million in March, recovering after the Chinese New Year [15] - Tantan's MAUs increased by 6% sequentially to 19.5 million, showing recovery after the pandemic and Chinese New Year [19] - The user engagement metrics for Momo showed a strong rebound post-holiday, indicating a recovery in social sentiment [58] Company Strategy and Industry Competition - The company aims to maintain stability in the mature Momo app while optimizing cost structure and enhancing monetization features [9][10] - Tantan's strategic goal is to achieve breakeven for the year and develop monetization models suitable for the Asian dating culture [24][27] - The company is focusing on enriching its product portfolio and developing long-term growth engines through new standalone apps [30] Management Commentary on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the macroeconomic environment in China, anticipating a mid to high-single-digit year-over-year growth for the ex-Tantan part [61] - The company expects Q2 revenue to range from RMB3.0 billion to RMB3.1 billion, indicating a potential recovery in consumer spending [41] - Management highlighted the importance of improving marketing ROI and user acquisition efficiency to drive future growth [25][50] Other Important Information - The company has decided to stop disclosing MAU data on a quarterly basis from Q2 onwards, suggesting a focus on paying user trends instead [18] - Non-GAAP gross margin for Q1 was 40.0%, down 1.2% year-over-year but up 0.6% from the previous quarter [36] Q&A Session Summary Question: Update on Tantan's MAU recovery and financial outlook for 2023 - Management noted Tantan's first-ever quarterly profit and emphasized the need to improve user growth and ARPU through new features and cost reduction strategies [44][45] Question: Insights on Tantan's overseas business development - Management highlighted the growth of SoulChill in the Middle East and plans to focus marketing efforts there while cautiously exploring other Southeast Asian markets [49][50] Question: User scale and engagement outlook for Momo app - Management reported a strong rebound in Momo's user engagement post-holiday and expressed confidence in maintaining productivity despite external pressures [56][58]