Hello Group Clocks 15% Revenue Decline In Q2 Due To Weak MAUs

  • Hello Group Inc MOMO reported a second-quarter FY22 net revenue decline of 15.3% year-on-year to $464.4 million, beating the consensus of $445.3 million.
  • Drivers: Monthly Active Users (MAU) on Momo application were 111.2 million in June 2022, down from 115.6 million in June 2021.
  • Total paying users of its Momo app declined from 9.3 million in Q2 FY21 to 8.6 million in Q2 FY22. Tantan had 2.2 million paying users for Q2 2022 versus 3.1 million in Q2 FY21.
  • Segments: Revenues from the Live video service declined 27.7% Y/Y to $226.9 million, Total value-added service increased 1.9% Y/Y to $229.4 million, Mobile marketing fell 30.4% Y/Y to $5.4 million, and Mobile games rose 87.3% Y/Y to $2.6 million.
  • Net revenues from the Momo segment fell 12% Y/Y to $415 million, while the Tantan segment revenues decreased 36% to $49.4 million.
  • Non-GAAP income from operations deteriorated to $69.3 million. Non-GAAP net income per ADS of $0.33 beat the consensus of $0.25.
  • Hello Group held $2.1 billion in cash and equivalents and generated $29.9 million in operating cash flow.
  • "The COVID resurgence in the first half of 2022 has brought many challenges and uncertainties to the overall market environment and our execution of strategic goals," commented Li Wang, CEO.
  • Outlook: Hello sees a Q3 revenue decrease of 14.9% - 17.5% Y/Y, representing $469.64 million - $484.79 million, above the consensus of $443.94 million.
  • Price Action: MOMO shares traded lower by 0.97% at $5.10 in the premarket session on the last check Thursday.
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