Hello Group Stock Surges As Q3 Earnings Exceed Expectations

  • Hello Group Inc MOMO reported a third-quarter FY22 net revenue decline of 14% year-on-year to $454.5 million, beating the consensus of $445.8 million.
  • Drivers: Monthly Active Users (MAU) on the Momo application were 108.8 million in September 2022, down from 115.5 million in September 2021.
  • Total paying users of its Momo app declined from 9.3 million in Q3 FY21 to 8.4 million in Q3 FY22. Tantan had 2.0 million paying users for Q3 FY22 versus 2.9 million in Q3 FY21.
  • Also Read: Hello Group CEO Li Wang Resigns On Health Grounds; Chair Yan Tang Takes Over Reins
  • Segments: Revenues from the Live video service declined 23.5% Y/Y to $233.0 million, Total value-added service increased 0.3% Y/Y to $216.2 million, Mobile marketing fell 34.8% Y/Y to $4.0 million, and Mobile games fell 4.1% Y/Y to $1.1 million.
  • Net revenues from the Momo segment fell 10.9% Y/Y to $406.4 million, while the Tantan segment revenues decreased 33.2% to $48 million.
  • Non-GAAP income from operations deteriorated to $85.1 million. Non-GAAP net income per ADS of $0.37 beat the consensus of $0.30.
  • Hello Group held $1.83 billion in cash and equivalents and generated $62.5 million in operating cash flow.
  • Outlook: Hello sees a Q4 revenue decrease of 11.5% - 14.3% Y/Y, representing $460.5 million - $475.1 million, above the consensus of $454.3 million.
  • Price Action: MOMO shares traded higher by 17.5% at $6.17 in the premarket session on the last check Thursday.
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