Hello Group Inc. Announces Unaudited Financial Results for the Third Quarter of 2021

<br /> Hello Group Inc. Announces Unaudited Financial Results for the Third Quarter of 2021<br />

PR Newswire


BEIJING

,

Nov. 30, 2021

/PRNewswire/ — Hello Group Inc. (NASDAQ: MOMO) (“Hello Group” or the “Company”), a leading mobile social and entertainment platform in

China

, today announced its unaudited financial results for the third quarter of 2021.


Third


Quarter of 2021 Highlights

  • Net revenues decreased by 0.2% year over year to

    RMB3,759.2 million

    (

    US$583.4 million

    *) in the third quarter of 2021.
  • Net income attributable to Hello Group Inc. decreased to

    RMB403.2 million

    (

    US$62.6 million

    ) in the third quarter of 2021 from

    RMB456.7 million

    in the same period of 2020.
  • Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to

    RMB571.6 million

    (

    US$88.7 million

    ) in the third quarter of 2021, from

    RMB653.8 million

    in the same period of 2020.
  • Diluted net income per American Depositary Share (“ADS”) was

    RMB1.93


    (US$0.30)

    in the third quarter of 2021, compared to

    RMB2.11

    in the same period of 2020.
  • Non-GAAP diluted net income per ADS (note 1) was

    RMB2.70


    (US$0.42)

    in the third quarter of 2021, compared to

    RMB2.98

    in the same period of 2020.
  • Monthly Active Users (“MAU”) on Momo application were 115.5 million in

    September 2021

    , compared to 113.6 million in

    September 2020

    .
  • Total paying users of live video service and value-added service, without double counting the overlap and including 2.9 million paying users of Tantan Limited (“Tantan”), were 12.2 million for the third quarter of 2021, compared to 13.1 million for the third quarter of 2020, which included 4.1 million paying users of Tantan.


First


Nine Months


of 2021 Highlights

  • Net revenues decreased 2.9% year over year to

    RMB10,901.5 million

    (

    US$1,691.9 million

    ) for the first nine months of 2021.
  • Net income attributable to Hello Group Inc. was

    RMB1,329.0 million

    (

    US$206.3 million

    ) for the first nine months of 2021, compared with

    RMB1,452.0 million

    during the same period of 2020.
  • Non-GAAP net income attributable to Hello Group Inc. (note 1) was

    RMB1,756.2 million

    (

    US$272.6 million

    ) for the first nine months of 2021, compared with

    RMB2,059.8 million

    during the same period of 2020.
  • Diluted net income per ADS was

    RMB6.22


    (US$0.97)

    for the first nine months of 2021, compared with

    RMB6.68

    during the same period of 2020.
  • Non-GAAP diluted net income per ADS (note 1) was

    RMB8.14


    (US$1.26)

    for the first nine months of 2021, compared with

    RMB9.36

    during the same period of 2020.


* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.4434 to US$1.00, the effective noon buying rate for September 30, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board.

“The third quarter of 2021 was a good quarter with solid financial results.” commented

Li Wang

, CEO of Hello Group. “We continued to push forward with all of our strategic goals. For the first time since the beginning of the COVID-19 pandemic, core Momo revenue has achieved year-over-year growth. Although we still have many hard work to do at Tantan, I am glad that we are finally on track to make concrete progresses on the product fronts.”


Third


Quarter of 2021 Financial Results



Net revenues

Total net revenues were

RMB3,759.2 million

(

US$583

.4 million) in the third quarter of 2021, a decrease of 0.2% from

RMB3,766.7 million

in the third quarter of 2020.

Live video service revenues were

RMB2,166.7 million

(

US$336.3 million

) in the third quarter of 2021, a decrease of 8.8% from

RMB2,374.8 million

during the same period of 2020. The decrease was primarily attributable to (a) the decrease in Tantan’s live streaming revenue due to the shift of our strategic focus; (b) our structural reform on the Company’s core live video business.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were

RMB1,533.3 million

(

US$238

.0 million) in the third quarter of 2021, an increase of 15.2% from

RMB1,330.8 million

during the same period of 2020. The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by the introduction of innovative features and operational events in the audio and video social entertainment experiences, and to a lesser extent, incremental revenues contributed by new standalone apps. The increase was partially offset by the decrease in the value-added service revenues of Tantan, due to our demonetization measures to improve user experience and retention.

Mobile marketing revenues were

RMB43.3 million

(

US$6.7 million

) in the third quarter of 2021, a decrease of 14.1% from

RMB50.4 million

during the same period of 2020. The decrease in mobile marketing revenues was due to our strategy to underweight the line in terms of resource allocation, and to a lesser extent, our product adjustment to address new regulation requirement.

Mobile games revenues were

RMB8.1 million

(

US$1.3 million

) in the third quarter of 2021, an increase of 1.0% from

RMB8.0 million

in the third quarter of 2020.

Net revenues from the Momo segment increased from

RMB3,037.0 million

in the third quarter of 2020 to

RMB3,246.3 million

(

US$503.8 million

) in the third quarter of 2021, primarily due to the increase in net revenues from value-added service, partially offset by the decrease in net revenues from live video service. Net revenues from the Tantan segment decreased from

RMB728.9 million

in the third quarter of 2020 to

RMB510.7 million

(

US$79.3 million

) in the third quarter of 2021, due to the shift of our strategic focus from driving paying conversion to lowering the monetization level in order to improve user experience and drive overall user growth.



Cost and expenses

Cost and expenses were

RMB3,319.9 million

(

US$515.2 million

) in the third quarter of 2021, an increase of 1.9% from

RMB3,258.5 million

in the third quarter of 2020. The increase was primarily attributable to: (a) an increase in revenue sharing with virtual gift recipients for our virtual gift service, and broadcasters related to Momo’s core live video service; (b) an increase of

RMB48.5 million

(

US$7.5 million

) in production costs in connection with a television program and a film. These increases were partially offset by a decrease in revenue sharing with broadcasters related to Tantan’s live video service, a decrease in marketing and promotional expenses to attract users on Tantan platforms, and a decrease in personnel related costs including share-based compensation expenses resulting from the decreased number of employees and the decreased fair value of the share options granted during the period.

Non-GAAP cost and expenses (note 1) were

RMB3,143.2 million

(

US$487.8 million

) in the third quarter of 2021, an increase of 3.0% from

RMB3,052.0 million

during the same period of 2020.



Income




from operations

Income from operations was

RMB460.5 million

(

US$71.5 million

) in the third quarter of 2021, compared to

RMB531.1 million

during the same period of 2020. Income from operations of the Momo segment was RMB676.5 million (

US$105.0 million

) in the third quarter of 2021, which increased from

RMB658.7 million

in the third quarter of 2020. Loss from operations of the Tantan segment was

RMB179.8 million

(

US$27.9 million

) in the third quarter of 2021, compared to loss from operations of

RMB121.5 million

in the third quarter of 2020.

Non-GAAP income from operations (note 1) was

RMB637.2 million

(

US$98

.9 million) in the third quarter of 2021, compared to

RMB737.6 million

during the same period of 2020. Non-GAAP income from operations of the Momo segment was RMB786.3 million (

US$122.0 million

) in the third quarter of 2021, which decreased from

RMB805.8 million

in the third quarter of 2020. Non-GAAP loss from operations of the Tantan segment was

RMB112.9 million

(

US$17.5 million

) in the third quarter of 2021, compared to non-GAAP loss from operations of

RMB64.7 million

in the third quarter of 2020.



Income tax expenses

Income tax expenses were

RMB143.2 million

(

US$22.2 million

) in the third quarter of 2021, compared to

RMB143.6 million

in the third quarter of 2020.



Net




income

Net income was

RMB395.9 million

(

US$61.4 million

) in the third quarter of 2021, compared to RMB456.0 million during the same period of 2020. Net income from the Momo segment was

RMB611.1 million

(

US$94.8 million

) in the third quarter of 2021, which increased from RMB576.2 million in the third quarter of 2020. Net loss from the Tantan segment was

RMB179.0 million

(

US$27.8 million

) in the third quarter of 2021, compared to net loss of

RMB114.2 million

in the third quarter of 2020.

Non-GAAP net income (note 1) was

RMB564.3 million

(

US$87

.6 million) in the third quarter of 2021, compared to

RMB653.1 million

during the same period of 2020. Non-GAAP net income from the Momo segment was RMB720.9 million (

US$111.9 million

) in the third quarter of 2021, which decreased from RMB723.4 million in the third quarter of 2020. Non-GAAP net loss of the Tantan segment was

RMB120.5 million

(

US$18.7 million

) in the third quarter of 2021, compared to non-GAAP net loss of

RMB66.9 million

in the third quarter of 2020.



Net




income attributable to Hello Group Inc.

Net income attributable to Hello Group Inc. was

RMB403.2 million

(

US$62.6 million

) in the third quarter of 2021, compared to RMB456.7 million during the same period of 2020.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was

RMB571.6 million

(

US$88

.7 million) in the third quarter of 2021, compared to

RMB653.8 million

during the same period of 2020.



Net




income




per ADS

Diluted net income per ADS was

RMB1.93


(US$0.30)

in the third quarter of 2021, compared to RMB2.11 in the third quarter of 2020.

Non-GAAP diluted net income per ADS (note 1) was

RMB2.70


(US$0.42)

in the third quarter of 2021, compared to

RMB2.98

in the third quarter of 2020.



Cash and cash flow

As of

September 30, 2021

, the Company’s cash, cash equivalents, short-term deposits, long-term deposits, short-term restricted cash and long-term restricted cash totaled

RMB15,173.3 million

(

US$2,354

.9 million), compared to

RMB16,482

.3 million as of

December 31, 2020

. Net cash provided by operating activities in the third quarter of 2021 was

RMB559.9 million

(

US$86

.9 million), compared to

RMB691.1 million

in the third quarter of 2020.


F


irst Nine Months of 2021


Financial Results

Net revenues for the first nine months of 2021 were

RMB10,901.5 million

(

US$1,691.9 million

), a decrease of 2.9% from

RMB11,229.0 million

in the same period of 2020.

Net income attributable to Hello Group Inc. was

RMB1,329.0 million

(

US$206.3 million

) for the first nine months of 2021, compared to

RMB1,452.0 million

during the same period of 2020.

Non-GAAP net income attributable to Hello Group Inc. (note 1) was

RMB1,756.2 million

(

US$272.6 million

) for the first nine months of 2021, compared to

RMB2,059.8 million

during the same period of 2020.

Diluted net income per ADS was

RMB6.22


(US$0.97)

during the first nine months of 2021, compared to

RMB6.68

in the same period of 2020.

Non-GAAP diluted net income per ADS (note 1) was

RMB8.14


(US$1.26)

during the first nine months of 2021, compared to

RMB9

.36 in the same period of 2020.

Net cash provided by operating activities was

RMB893.7 million

(

US$138.7 million

) during the first nine months of 2021, compared to

RMB2,041.8 million

in the same period of 2020.


Execution of share repurchase program

On

September 3, 2020

, the Company’s board of directors authorized a share repurchase program under which the Company may repurchase up to

US$300 million

of its shares over the next 12 months. As of

September 2, 2021

, the Company had repurchased 14.15 million ADSs for a total consideration of

US$182.4 million

on the open market under this program, at an average purchase price of

US$12.87

per ADS.


Business Outlook

For the fourth quarter of 2021, the Company expects total net revenues to be between

RMB3.60 billion

to

RMB3.75 billion

, representing a decrease of 5.1% to 1.2% year-over-year. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.


Note 1: Non-GAAP measures

To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we, Hello Group, use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation and amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions.

Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures.

Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors’ overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to the GAAP results. In addition, our calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Our non-GAAP information (including non-GAAP cost and operating expenses, income (loss) from operations, net income (loss),net income attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions. A limitation of using these non-GAAP financial measures is that share-based compensation, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions have been and will continue to be for the foreseeable future significant recurring expenses in our results of operations. We compensate for such limitation by providing reconciliations of our non-GAAP measures to our U.S. GAAP measures. Please see the reconciliation tables at the end of this earnings release.


Conference Call

Hello Group’s management will host an earnings conference call on

Tuesday, November 30

, 2021, at 8:00 a.m. U.S. Eastern Time (

9:00 p.m.

Beijing / Hong Kong Time on

November 30, 2021

).

All participants must preregister online prior to the call to receive the dial-in details. Once preregistration has been complete, participants will receive dial-in numbers, direct event passcode, and a unique registrant ID.


PRE-REGISTER LINK


http://apac.directeventreg.com/registration/event/7139276

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your registrant ID, and you will join the conference instantly.

A telephone replay of the call will be available after the conclusion of the conference call through 8:00 a.m. U.S. Eastern Time, December 8, 2021. The dial-in details for the replay are as follows:

International:   +61-2-8199-0299

U.S. Toll Free: +1-855-452-5696

Passcode: 7139276

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of the Company’s website at

http://ir.immomo.com

.


About Hello Group Inc.

We are a leading player in

China’s

online social and entertainment space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions. Momo is a mobile application that connects people and facilitates social interactions based on location, interests and a variety of online recreational activities. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application. It is designed to help its users find and establish romantic connections as well as meet interesting people. We also operate a number of other applications to serve different social and entertainment demands from our users.

For investor and media inquiries, please contact:


Hello Group Inc.

Investor Relations

Phone: +86-10-5731-0538

Email:

[email protected]


Christensen

In

China


Mr.

Eric Yuan


Phone: +86-10-5900-1548

E-mail:

[email protected]

In US

Ms.

Linda Bergkamp


Phone: +1-480-614-3004

Email:

[email protected]


Safe Harbor Statement

This news release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to our management quotes, our financial outlook for the fourth quarter of 2021, as well as the amount of, timing, methods and funding sources for repurchases of our shares under the share repurchase program.

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the third quarter of 2021 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the fourth quarter of 2021 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth.  Moreover, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers, the impact of the COVID-19 pandemic on the Company’s business operations and the economy in

China

, the market price of the Company’s stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company’s cash flows from operations, general economic conditions, and other factors.  For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission.

All information provided in this press release and in the attachments is as of the date of the press release. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, after the date of this release, except as required by law. Such information speaks only as of the date of this release.



Hello Group Inc.



Unaudited Condensed Consolidated Statement of

Operations



(All amounts in thousands, except share and per share data)


Three months


First nine months


Ended September 30


Ended September 30


2020


2021


2021


2020


2021


2021


RMB


RMB


US$


RMB


RMB


US$


Net revenues:


Live video service


2,374,824


2,166,733


336,272


7,309,704


6,230,160


966,906


Value-added service


1,330,839


1,533,288


237,962


3,710,913


4,496,059


697,777


Mobile marketing


50,415


43,323


6,724


145,534


133,641


20,741


Mobile games


7,975


8,052


1,250


32,230


28,418


4,410


Other services


2,598


7,784


1,208


30,606


13,212


2,051



Total net revenues



3,766,651



3,759,180



583,416



11,228,987



10,901,490



1,691,885


Cost and expenses:


Cost of revenues


(2,020,779)


(2,183,337)


(338,849)


(5,934,000)


(6,191,911)


(960,970)


Research and development


(299,221)


(260,939)


(40,497)


(840,382)


(815,757)


(126,604)


Sales and marketing


(754,892)


(680,896)


(105,673)


(2,116,200)


(1,944,705)


(301,813)


General and administrative


(183,649)


(194,734)


(30,222)


(540,959)


(459,443)


(71,304)



Total cost and expenses



(3,258,541)



(3,319,906)



(515,241)



(9,431,541)



(9,411,816)



(1,460,691)


Other operating income


22,944


21,221


3,293


140,392


137,389


21,322



Income from operations



531,054



460,495



71,468



1,937,838



1,627,063



252,516


Interest income


104,232


93,564


14,521


343,591


284,706


44,186


Interest expense


(19,885)


(18,669)


(2,897)


(59,825)


(55,332)


(8,587)


Other gain or loss, net








(6,000)


(18,000)


(2,794)



Income before income tax and share of income on equity method

investments



615,401



535,390



83,092



2,215,604



1,838,437



285,321


Income tax expenses


(143,615)


(143,158)


(22,218)


(750,139)


(526,065)


(81,644)



Income before share of income on equity method investments



471,786



392,232



60,874



1,465,465



1,312,372



203,677


Share of (loss) income on equity method investments


(15,763)


3,658


568


(16,203)


5,961


925



Net income



456,023



395,890



61,442



1,449,262



1,318,333



204,602


Less: net loss attributable to non-controlling interest


(705)


(7,301)


(1,133)


(2,772)


(10,677)


(1,657)



Net income attributable to the shareholders of Hello Group Inc.



456,728



403,191



62,575



1,452,034



1,329,010



206,259


Net income per share attributable to ordinary shareholders


Basic


1.09


1.01


0.16


3.48


3.26


0.51


Diluted


1.05


0.96


0.15


3.34


3.11


0.48


Weighted average shares used in calculating net income per ordinary share


Basic


417,884,266


400,835,428


400,835,428


417,580,609


408,074,205


408,074,205


Diluted


452,724,863


437,639,164


437,639,164


452,854,314


444,906,615


444,906,615



Hello Group Inc.



Unaudited Condensed Consolidated Statement of

Comprehensive Income



(All amounts in thousands, except share and per share data)


Three months


First nine months


Ended September 30


Ended September 30


2020


2021


2021


2020


2021


2021


RMB


RMB


US$


RMB


RMB


US$



Net income



456,023



395,890



61,442



1,449,262



1,318,333



204,602


Other comprehensive (loss) income, net of tax:


Foreign currency translation adjustment


(80,618)


368


57


(72,667)


(31,830)


(4,940)



Comprehensive income



375,405



396,258



61,499



1,376,595



1,286,503



199,662


Less: comprehensive loss attributed to the non-

controlling interest


(9,953)


(7,540)


(1,170)


(16,945)


(13,323)


(2,068)



Comprehensive income attributable to Hello Group

Inc.



385,358



403,798



62,669



1,393,540



1,299,826



201,730



Hello Group Inc.



Unaudited Condensed Consolidated Balance Sheets


(All amounts in thousands, except share and per share data)


December 31


September 30


September 30


2020


2021


2021


RMB


RMB


US$


Assets


Current assets


Cash and cash equivalents


3,363,942


3,283,840


509,644


Short-term deposits


7,566,250


6,010,000


932,737


Restricted cash


2,130


2,135


331


Accounts receivable, net of allowance for doubtful accounts of RMB15,390

and RMB15,633 as of December 31, 2020 and September 30, 2021,

respectively


200,831


218,944


33,980


Prepaid expenses and other current assets


613,696


820,157


127,286


Total current assets


11,746,849


10,335,076


1,603,978


Long-term deposits


5,550,000


5,800,000


900,146


Long-term restricted cash




77,321


12,000


Right-of-use assets, net


278,175


303,623


47,122


Property and equipment, net


265,765


208,529


32,363


Intangible assets, net


687,211


572,687


88,880


Rental deposits


21,794


19,133


2,969


Long-term investments


454,996


737,347


114,434


Other non-current assets


94,868


81,608


12,665


Deferred tax assets


32,495


34,511


5,356


Goodwill


4,088,403


4,037,551


626,618



Total assets



23,220,556



22,207,386



3,446,531


Liabilities and equity


Current liabilities


Accounts payable


699,394


720,107


111,758


Deferred revenue


511,617


530,453


82,325


Accrued expenses and other current liabilities


854,835


803,564


124,711


Amount due to related parties


19,462


14,766


2,292


Lease liabilities due within one year


132,793


164,357


25,508


Income tax payable


236,490


165,058


25,617


Deferred consideration in connection with business acquisitions


62,149


45,350


7,038


Total current liabilities


2,516,740


2,443,655


379,249


Deferred tax liabilities


171,803


142,915


22,180


Convertible senior notes


4,658,966


4,612,019


715,774


Share-based compensation liability


875,616






Lease liabilities


136,436


141,949


22,030


Other non-current liabilities


25,666


141,054


21,891


Total liabilities


8,385,227


7,481,592


1,161,124


Shareholder’s equity (i)


14,835,329


14,725,794


2,285,407



Total liabilities and shareholder’s equity



23,220,556



22,207,386



3,446,531


(i): As of September 30, 2021, the number of ordinary shares outstanding was 393,903,538.



Hello Group Inc.



Unaudited Condensed Consolidated Statement of Cash Flows


(All amounts in thousands, except share and per share data)


Three months


First nine months


Ended September 30


Ended September 30


2020


2021


2021


2020


2021


2021


RMB


RMB


US$


RMB


RMB


US$


Cash flows from operating activities:


Net income


456,023


395,890


61,442


1,449,262


1,318,333


204,602


Adjustments to reconcile net income to net cash provided by operating

activities:


Depreciation of property and equipment


49,024


38,696


6,006


153,615


121,311


18,827


Amortization of intangible assets


39,347


34,722


5,389


119,517


107,783


16,728


Share-based compensation


168,475


143,280


22,237


521,102


349,195


54,194


Share of loss (income) on equity method investments


15,763


(3,658)


(568)


16,203


(5,961)


(925)


Loss on long-term investments








6,000


18,000


2,794


Gain on subsidiary deconsolidation








(6,676)






Gain on disposal of subsidiaries










(15,526)


(2,410)


(Gain) loss on disposal of property and equipment


(284)


2,351


365


(285)


1,272


197


Provision of  losses (income) on receivable and other assets


26,006


(322)


(50)


26,412


242


38


Cash received on investment income distribution








1,153






Changes in operating assets and liabilities:


Accounts receivable


15,968


(1,616)


(251)


17,714


(24,358)


(3,780)


Prepaid expenses and other current assets


(207,586)


(85,048)


(13,199)


(163,753)


(203,666)


(31,608)


Amount due from a related party


2,029






4,382






Rental deposits


(83)


(922)


(143)


107


(1,514)


(235)


Deferred tax assets


561


(782)


(121)


3,034


(2,016)


(313)


Other non-current assets


9,930


(57,100)


(8,862)


28,181


(8,050)


(1,249)


Accounts payable


(62,189)


(28,400)


(4,408)


(78,664)


19,422


3,014


Income tax payable


112,799


24,947


3,872


177,855


(71,431)


(11,086)


Deferred revenue


17,442


9,369


1,454


(15,830)


25,454


3,950


Accrued expenses and other current liabilities


52,819


56,954


8,839


(161,411)


(38,829)


(6,026)


Amount due to related parties


13,495


1,860


289


2,262


(4,696)


(729)


Deferred tax liability


(9,837)


(8,676)


(1,346)


(29,880)


(26,941)


(4,181)


Share-based compensation liability










(678,153)


(105,248)


Other non-current liabilities


(8,648)


38,335


5,949


(28,500)


13,818


2,145



Net cash provided by operating activities



691,054



559,880



86,894



2,041,800



893,689



138,699


Cash flows from investing activities:


Purchase of property and equipment


(24,078)


(30,919)


(4,799)


(108,048)


(76,122)


(11,814)


Payment for long-term investments








(4,500)


(300,000)


(46,559)


Purchase of short-term deposits


(3,053,307)


(2,100,000)


(325,915)


(11,295,165)


(4,576,688)


(710,291)


Cash received on maturity of short-term deposits


4,337,085


3,458,658


536,775


15,622,659


6,117,570


949,432


Payment for short-term investments








(10,000)






Cash received from sales of short-term investment








10,000






Cash received on investment income distribution










5,610


871


Cash of disposed subsidiaries










(8,750)


(1,358)


Purchase of long-term deposits


(1,550,000)






(4,350,000)


(250,000)


(38,799)


Other investing activities


457


13


2


(319)


2,406


373



Net cash  (used in) provided by investing activities



(289,843)



1,327,752



206,063



(135,373)



914,026



141,855


Cash flows from financing activities:


Deferred payment for business acquisition








(18,355)


(12,907)


(2,003)


Proceeds from exercise of share options


54


461


72


55


771


120


Repurchase of ordinary shares


(132,407)


(756,714)


(117,440)


(132,407)


(862,865)


(133,915)


Repurchase of subsidiary’s share options


(24,900)


(48,489)


(7,525)


(24,900)


(54,050)


(8,388)


Dividends payment








(1,123,983)


(852,743)


(132,344)



Net cash used in financing activities



(157,253)



(804,742)



(124,893)



(1,299,590)



(1,781,794)



(276,530)


Effect of exchange rate changes


(45,135)


(3,661)


(571)


(43,174)


(28,697)


(4,455)



Net increase (decrease) in cash and cash equivalents



198,823



1,079,229



167,493



563,663



(2,776)



(431)


Cash, cash equivalents and restricted cash at the beginning of period


2,977,583


2,284,067


354,482


2,612,743


3,366,072


522,406


Cash, cash equivalents and restricted cash at the end of period


3,176,406


3,363,296


521,975


3,176,406


3,363,296


521,975



Hello Group Inc.



Reconciliation of Non-GAAP financial measures to comparable GAAP measures


(All amounts in thousands, except per share data)


1. Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures.


Three months


Three months


Three months


Ended September 30, 2020


Ended September 30, 2021


Ended September 30, 2021


GAAP


Amortization of

intangible assets

from business

acquisitions


Share-based

compensation


Tax impacts


Non-GAAP


GAAP


Amortization of

intangible assets

from business

acquisitions


Share-based

compensation


Tax impacts


Non-GAAP


GAAP


Amortization of

intangible assets

from business

acquisitions


Share-based

compensation


Tax

impacts


Non-GAAP


(ii)


(ii)


(ii)


RMB


RMB


RMB


RMB


RMB


RMB


RMB


RMB


RMB


RMB


US$


US$


US$


US$


US$


Cost of revenues


(2,020,779)


18,472


4,434




(1,997,873)


(2,183,337)


17,286


6,623




(2,159,428)


(338,849)


2,683


1,028




(335,138)


Research and development


(299,221)


2,346


44,610




(252,265)


(260,939)




29,094




(231,845)


(40,497)




4,515




(35,982)


Sales and marketing


(754,892)


17,275


41,583




(696,034)


(680,896)


16,165


27,653




(637,078)


(105,673)


2,509


4,292




(98,872)


General and administrative


(183,649)




77,848




(105,801)


(194,734)




79,910




(114,824)


(30,222)




12,402




(17,820)



Cost and operating expenses



(3,258,541)



38,093



168,475







(3,051,973)



(3,319,906)



33,451



143,280







(3,143,175)



(515,241)



5,192



22,237







(487,812)


Income from operations


531,054


38,093


168,475




737,622


460,495


33,451


143,280




637,226


71,468


5,192


22,237




98,897


Net income attributable to Hello Group

Inc.


456,728


38,093


168,475


(9,523)


653,773


403,191


33,451


143,280


(8,363)


571,559


62,575


5,192


22,237


(1,298)


88,706



Hello Group Inc.



Reconciliation of Non-GAAP financial measures to comparable GAAP measures


(All amounts in thousands, except per share data)


1. Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures-continued.


First nine months


First nine months


First nine months


Ended September 30, 2020


Ended September 30, 2021


Ended September 30, 2021


GAAP


Amortization of

intangible assets

from business

acquisitions


Share-based

compensation


Tax impacts


Non-GAAP


GAAP


Amortization of

intangible assets

from business

acquisitions


Share-based

compensation


Tax impacts


Non-GAAP


GAAP


Amortization of

intangible assets

from business

acquisitions


Share-based

compensation


Tax impacts


Non-GAAP


(ii)


(ii)


(ii)


RMB


RMB


RMB


RMB


RMB


RMB


RMB


RMB


RMB


RMB


US$


US$


US$


US$


US$


Cost of revenues


(5,934,000)


56,046


14,207




(5,863,747)


(6,191,911)


51,853


14,548




(6,125,510)


(960,970)


8,047


2,258




(950,665)


Research and development


(840,382)


7,118


137,355




(695,909)


(815,757)


3,660


103,268




(708,829)


(126,604)


568


16,027




(110,009)


Sales and marketing


(2,116,200)


52,413


131,780




(1,932,007)


(1,944,705)


48,491


59,797




(1,836,417)


(301,813)


7,526


9,280




(285,007)


General and administrative


(540,959)




237,760




(303,199)


(459,443)




171,582




(287,861)


(71,304)




26,629




(44,675)



Cost and operating expenses



(9,431,541)



115,577



521,102







(8,794,862)



(9,411,816)



104,004



349,195







(8,958,617)



(1,460,691)



16,141



54,194







(1,390,356)


Income from operations


1,937,838


115,577


521,102




2,574,517


1,627,063


104,004


349,195




2,080,262


252,516


16,141


54,194




322,851


Net income attributable to Hello Group

Inc.


1,452,034


115,577


521,102


(28,894)


2,059,819


1,329,010


104,004


349,195


(26,002)


1,756,207


206,259


16,141


54,194


(4,035)


272,559


(ii) Includes tax impacts related to the amortization of intangible assets from business acquisition.



Hello Group Inc.



Unaudited Condensed Segment Report


(All amounts in thousands, except share and per share data)


Three months


Ended September 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Net revenues:


Live video service


1,932,141


234,592




2,166,733


336,272


Value-added service


1,257,158


276,130




1,533,288


237,962


Mobile marketing


43,323






43,323


6,724


Mobile games


8,052






8,052


1,250


Other services


5,589




2,195


7,784


1,208



Total net revenues



3,246,263



510,722



2,195



3,759,180



583,416


Cost and expenses (iii):


Cost of revenues


(1,884,931)


(269,376)


(29,030)


(2,183,337)


(338,849)


Research and development


(194,475)


(66,464)




(260,939)


(40,497)


Sales and marketing


(336,691)


(341,636)


(2,569)


(680,896)


(105,673)


General and administrative


(171,609)


(16,321)


(6,804)


(194,734)


(30,222)



Total cost and expenses



(2,587,706)



(693,797)



(38,403)



(3,319,906)



(515,241)


Other operating income


17,946


3,270


5


21,221


3,293



Income (loss) from operations



676,503



(179,805)



(36,203)



460,495



71,468


Interest income


93,174


356


34


93,564


14,521


Interest expense


(18,669)






(18,669)


(2,897)



Income (loss) before income tax and share of income on equity

method investments



751,008



(179,449)



(36,169)



535,390



83,092


Income tax (expenses) benefits


(143,562)


404




(143,158)


(22,218)



Income (loss) before share of income on equity method

investments



607,446



(179,045)



(36,169)



392,232



60,874


Share of income on equity method investments


3,658






3,658


568



Net income (loss)



611,104



(179,045)



(36,169)



395,890



61,442


(iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:


Three months


Ended September 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Cost of revenues


2,847


3,776




6,623


1,028


Research and development


18,071


11,023




29,094


4,515


Sales and marketing


11,280


16,373




27,653


4,292


General and administrative


77,616


2,294




79,910


12,402



Total cost and expenses



109,814



33,466







143,280



22,237



Hello Group Inc.



Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report


(All amounts in thousands, except share and per share data)


Three months


Ended September 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Income (loss) from operations


676,503


(179,805)


(36,203)


460,495


71,468


Share-based compensation


109,814


33,466




143,280


22,237


Amortization of intangible assets from business acquisitions




33,451




33,451


5,192



Non-GAAP income (loss) from operations



786,317



(112,888)



(36,203)



637,226



98,897


Net income (loss)


611,104


(179,045)


(36,169)


395,890


61,442


Share-based compensation


109,814


33,466




143,280


22,237


Amortization of intangible assets from business acquisitions




33,451




33,451


5,192


Tax impacts




(8,363)




(8,363)


(1,298)



Non-GAAP net income (loss)



720,918



(120,491)



(36,169)



564,258



87,573



Hello Group Inc.



Unaudited Condensed Segment Report


(All amounts in thousands, except share and per share data)


Three months


Ended September 30, 2020


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB



US$[1]


Net revenues:


Live video service


1,978,098


396,726




2,374,824


349,774


Value-added service


998,668


332,171




1,330,839


196,012


Mobile marketing


50,415






50,415


7,425


Mobile games


7,975






7,975


1,175


Other services


1,810




788


2,598


382



Total net revenues



3,036,966



728,897



788



3,766,651



554,768


Cost and expenses (iv):


Cost of revenues


(1,660,806)


(358,743)


(1,230)


(2,020,779)


(297,629)


Research and development


(214,597)


(84,624)




(299,221)


(44,070)


Sales and marketing


(361,448)


(393,437)


(7)


(754,892)


(111,184)


General and administrative


(164,331)


(13,620)


(5,698)


(183,649)


(27,049)



Total cost and expenses



(2,401,182)



(850,424)



(6,935)



(3,258,541)



(479,932)


Other operating income


22,893




51


22,944


3,379



Income (loss) from operations



658,677



(121,527)



(6,096)



531,054



78,215


Interest income


103,477


706


49


104,232


15,352


Interest expense


(19,885)






(19,885)


(2,929)



Income (loss) before income tax and share of income on equity

method investments



742,269



(120,821)



(6,047)



615,401



90,638


Income tax (expenses) benefits


(150,278)


6,663




(143,615)


(21,152)



Income (loss) before share of income on equity method investments



591,991



(114,158)



(6,047)



471,786



69,486


Share of loss on equity method investments


(15,763)






(15,763)


(2,322)



Net income (loss)



576,228



(114,158)



(6,047)



456,023



67,164


(iv)            Share-based compensation was allocated in cost of revenues and operating expenses as follows:


Three months


Ended September 30, 2020


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Cost of revenues


3,338


1,096




4,434


653


Research and development


32,296


12,314




44,610


6,570


Sales and marketing


37,110


4,473




41,583


6,125


General and administrative


74,416


837


2,595


77,848


11,466



Total cost and expenses



147,160



18,720



2,595



168,475



24,814


[1] All translations from RMB to U.S. dollars are made at a rate of RMB6.7896 to US$1.00, the effective noon buying rate for September 30, 2020

as set forth in the H.10 statistical release of the Federal Reserve Board.



Hello Group Inc.



Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report


(All amounts in thousands, except share and per share data)


Three months


Ended September 30, 2020


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Income (loss) from operations


658,677


(121,527)


(6,096)


531,054


78,215


Share-based compensation


147,160


18,720


2,595


168,475


24,814


Amortization of intangible assets from business

acquisitions




38,093




38,093


5,611



Non-GAAP income (loss) from operations



805,837



(64,714)



(3,501)



737,622



108,640


Net income (loss)


576,228


(114,158)


(6,047)


456,023


67,164


Share-based compensation


147,160


18,720


2,595


168,475


24,814


Amortization of intangible assets from business

acquisitions




38,093




38,093


5,611


Tax impacts




(9,523)




(9,523)


(1,403)



Non-GAAP net income (loss)



723,388



(66,868)



(3,452)



653,068



96,186



Hello Group Inc.



Unaudited Condensed Segment Report


(All amounts in thousands, except share and per share data)


First nine months


Ended September 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Net revenues:


Live video service


5,527,851


702,309




6,230,160


966,906


Value-added service


3,606,393


889,666




4,496,059


697,777


Mobile marketing


133,641






133,641


20,741


Mobile games


28,418






28,418


4,410


Other services


9,263




3,949


13,212


2,051



Total net revenues



9,305,566



1,591,975



3,949



10,901,490



1,691,885


Cost and expenses (v):


Cost of revenues


(5,338,330)


(816,562)


(37,019)


(6,191,911)


(960,970)


Research and development


(595,176)


(220,581)




(815,757)


(126,604)


Sales and marketing


(1,042,458)


(898,612)


(3,635)


(1,944,705)


(301,813)


General and administrative


(471,965)


28,763


(16,241)


(459,443)


(71,304)



Total cost and expenses



(7,447,929)



(1,906,992)



(56,895)



(9,411,816)



(1,460,691)


Other operating income


103,352


34,006


31


137,389


21,322



Income (loss) from operations



1,960,989



(281,011)



(52,915)



1,627,063



252,516


Interest income


283,629


952


125


284,706


44,186


Interest expense


(55,332)






(55,332)


(8,587)


Other gain or loss, net


(18,000)






(18,000)


(2,794)



Income (loss) before income tax and share of income on

equity method investments



2,171,286



(280,059)



(52,790)



1,838,437



285,321


Income tax (expenses) benefits


(533,508)


7,443




(526,065)


(81,644)



Income (loss) before share of income on equity method

investments



1,637,778



(272,616)



(52,790)



1,312,372



203,677


Share of income on equity method investments


5,961






5,961


925



Net income (loss)



1,643,739



(272,616)



(52,790)



1,318,333



204,602


(v) Share-based compensation was allocated in cost of revenues and operating expenses as follows:


First nine months


Ended September 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Cost of revenues


7,812


6,736




14,548


2,258


Research and development


78,259


25,009




103,268


16,027


Sales and marketing


37,157


22,640




59,797


9,280


General and administrative


238,408


(66,826)




171,582


26,629



Total cost and expenses



361,636



(12,441)







349,195



54,194



Hello Group Inc.



Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report


(All amounts in thousands, except share and per share data)


First nine months


Ended September 30, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Operating income (loss)


1,960,989


(281,011)


(52,915)


1,627,063


252,516


Share-based compensation


361,636


(12,441)




349,195


54,194


Amortization of intangible assets from

business acquisitions




104,004




104,004


16,141



Non-GAAP operating income (loss)



2,322,625



(189,448)



(52,915)



2,080,262



322,851


Net income (loss)


1,643,739


(272,616)


(52,790)


1,318,333


204,602


Share-based compensation


361,636


(12,441)




349,195


54,194


Amortization of intangible assets from

business acquisitions




104,004




104,004


16,141


Tax impacts




(26,002)




(26,002)


(4,035)



Non-GAAP net income (loss)



2,005,375



(207,055)



(52,790)



1,745,530



270,902



Hello Group Inc.



Unaudited Condensed Segment Report


(All amounts in thousands, except share and per share data)


First nine months


Ended September 30, 2020


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Net revenues:


Live video service


6,715,266


594,438




7,309,704


1,076,603


Value-added service


2,677,575


1,033,338




3,710,913


546,559


Mobile marketing


145,534






145,534


21,435


Mobile games


32,230






32,230


4,747


Other services


9,168




21,438


30,606


4,507



Total net revenues



9,579,773



1,627,776



21,438



11,228,987



1,653,851


Cost and expenses (vi):


Cost of revenues


(5,189,765)


(723,466)


(20,769)


(5,934,000)


(873,984)


Research and development


(601,271)


(239,111)




(840,382)


(123,775)


Sales and marketing


(1,093,008)


(1,023,151)


(41)


(2,116,200)


(311,683)


General and administrative


(461,627)


(61,128)


(18,204)


(540,959)


(79,675)



Total cost and expenses



(7,345,671)



(2,046,856)



(39,014)



(9,431,541)



(1,389,117)


Other operating income


140,202




190


140,392


20,678



Income (loss) from operations



2,374,304



(419,080)



(17,386)



1,937,838



285,412


Interest income


340,531


2,867


193


343,591


50,605


Interest expense


(59,825)






(59,825)


(8,811)


Other gain or loss, net


(6,000)






(6,000)


(884)



Income (loss) before income tax and share of

income on equity method investments



2,649,010



(416,213)



(17,193)



2,215,604



326,322


Income tax (expenses) benefits


(762,768)


12,629




(750,139)


(110,484)



Income (loss) before share of income on equity

method investments



1,886,242



(403,584)



(17,193)



1,465,465



215,838


Share of loss on equity method investments


(16,203)






(16,203)


(2,386)



Net income (loss)



1,870,039



(403,584)



(17,193)



1,449,262



213,452


(vi) Share-based compensation was allocated in cost of revenues and operating expenses as follows:


First nine months


Ended September 30, 2020


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Cost of revenues


12,345


1,862




14,207


2,092


Research and development


95,768


41,587




137,355


20,231


Sales and marketing


121,456


10,324




131,780


19,409


General and administrative


207,650


22,238


7,872


237,760


35,019



Total cost and expenses



437,219



76,011



7,872



521,102



76,751



Hello Group Inc.



Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report


(All amounts in thousands, except share and per share data)


First nine months


Ended September 30, 2020


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Operating income (loss)


2,374,304


(419,080)


(17,386)


1,937,838


285,412


Share-based compensation


437,219


76,011


7,872


521,102


76,751


Amortization of intangible assets from business

acquisitions




115,577




115,577


17,023



Non-GAAP operating income (loss)



2,811,523



(227,492)



(9,514)



2,574,517



379,186


Net income (loss)


1,870,039


(403,584)


(17,193)


1,449,262


213,452


Share-based compensation


437,219


76,011


7,872


521,102


76,751


Amortization of intangible assets from business

acquisitions




115,577




115,577


17,023


Tax impacts




(28,894)




(28,894)


(4,255)



Non-GAAP net income (loss)



2,307,258



(240,890)



(9,321)



2,057,047



302,971

Cision
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SOURCE Hello Group Inc.