Hello Group Inc. ((MOMO)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Hello Group Inc. presented a mixed sentiment, highlighting growth in overseas markets and standalone new apps, while also addressing significant declines in the core Momo app and Tantan revenues, as well as an overall decrease in group revenue. Despite strategic plans to tackle these challenges, the company maintains a cautious outlook with a focus on profitability and cost optimization.
Overseas Business Growth
Hello Group Inc. reported robust growth in its overseas business, which has become a significant contributor to the company’s financial health. Notably, Soulchill’s revenue surged by 50% from 2023, nearing RMB1 billion and surpassing the earnings of Tantan. This growth underscores the company’s successful expansion strategies in international markets.
Growth in Standalone New Apps
The company experienced a 37% year-over-year increase in revenue from standalone new apps in Q4, and a 40% rise for fiscal 2024. This growth was primarily driven by the company’s strategic focus on expanding its presence in overseas markets, which has proven to be a lucrative avenue.
Special Cash Dividend
In a move to reward shareholders, Hello Group Inc. announced a special cash dividend of $0.30 per ADS, amounting to approximately $50 million. This marks the seventh consecutive year the company has issued dividends, reflecting its commitment to returning value to its shareholders.
Decrease in Total Group Revenue
The total group revenue for fiscal 2024 was reported at RMB10.6 billion, a decrease from RMB12 billion the previous year. This decline highlights the challenges faced by the company in maintaining its revenue streams amidst a challenging macroeconomic environment.
Decline in Momo App Revenue
Revenue from the Momo app saw a 16% year-over-year decline, attributed to proactive product adjustments and broader macroeconomic factors. This decrease indicates the challenges the app faces in sustaining its user base and revenue generation.
Significant Decrease in Tantan Revenue
Tantan’s revenue for Q4 totaled RMB213 million, marking a 22% year-over-year decline. For fiscal 2024, the revenue was RMB900 million, down 25% from the previous year. These figures reflect the ongoing struggles of the app in a competitive market.
Overall Decline in Paying Users
The Momo app experienced a sequential decrease of 1.2 million paying users, bringing the total to 5.7 million. This decline is part of the company’s strategy to reduce costs and improve efficiency, although it poses challenges for revenue growth.
Forward-Looking Guidance
Looking ahead, Hello Group Inc. aims to maintain stable operations for the Momo app, achieve profitability for Tantan, and continue expanding overseas. The company reported a total group revenue of RMB2.64 billion for Q4, reflecting a 12% year-over-year decrease. Despite these challenges, the CEO expressed satisfaction with the financial and operational results and emphasized the company’s commitment to driving growth in international markets.
In summary, Hello Group Inc.’s earnings call painted a picture of mixed sentiment, with notable growth in overseas markets and standalone new apps, countered by significant declines in the Momo and Tantan apps. The company remains focused on profitability and cost optimization as it navigates a challenging economic landscape. Shareholders can take solace in the continued issuance of dividends, while the company’s strategic focus on international expansion offers a promising avenue for future growth.