Hello Group Inc. Announces Unaudited Financial Results for the First Quarter of 2022

<br /> Hello Group Inc. Announces Unaudited Financial Results for the First Quarter of 2022<br />

PR Newswire



BEIJING


,


June 7, 2022


/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 first quarter of 2022.


First


Quarter of 2022 Highlights

  • Net revenues decreased by 9.3% year over year to

    RMB3,148.1 million

    (

    US$496.6 million

    *) in the first quarter of 2022.
  • Net income attributable to Hello Group Inc. decreased to

    RMB289.9 million

    (

    US$45.7 million

    ) in the first quarter of 2022, from

    RMB461.7 million

    in the same period of 2021.
  • Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to

    RMB398.5 million

    (

    US$62.9 million

    ) in the first quarter of 2022, from

    RMB633.7 million

    in the same period of 2021.
  • Diluted net income per American Depositary Share (“ADS”) was

    RMB1.42


    (US$0.22)

    in the first quarter of 2022, compared to

    RMB2.14

    in the same period of 2021.
  • Non-GAAP diluted net income per ADS (note 1) was

    RMB1.94


    (US$0.31)

    in the first quarter of 2022, compared to

    RMB2.91

    in the same period of 2021.
  • Monthly Active Users (“MAU”) on Momo application were 110.9 million in

    March 2022

    , compared to 115.3 million in

    March 2021

    . MAU on Tantan application were 25.6 million in

    March 2022

    .
  • Total paying users of live video service and value-added service, without double counting the overlap and including 2.4 million paying users of Tantan Limited (“Tantan”), were 11.0 million for the first quarter of 2022, compared to 12.6 million for the first quarter of 2021, which included 3.5 million paying users of Tantan.


* 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 RMB6.3393 to US$1.00, the effective noon buying rate for March 31, 2022 as set forth in the H.10 statistical release of the Federal Reserve Board.

“Q1 2022 was a challenging yet fruitful quarter for us. I am pleased that our team was able to focus on our product and operational initiatives to cope with the

headwinds

from the

resurgence of

COVID-19

and related challenges

, getting 2022 off to a good start.” commented

Li Wang

, CEO of Hello Group.


First


Quarter of 2022 Financial Results



Net revenues

Total net revenues were

RMB3,148.1 million

(

US$496

.6 million) in the first quarter of 2022, a decrease of 9.3% from

RMB3,470.6 million

in the first quarter of 2021.

Live video service revenues were

RMB1,608.7 million

(

US$253.8 million

) in the first quarter of 2022, a decrease of 18.0% from

RMB1,962.1 million

during the same period of 2021. The decrease was primarily attributable to consumption softness as a result of the macro headwind, and the strategic decision to scale back from Tantan’s live streaming business.

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

RMB1,483.4 million

(

US$234.0 million

) in the first quarter of 2022, an increase of 1.9% from

RMB1,455.5 million

during the same period of 2021. The year-over-year increase was primarily attributable to the rapid revenue growth from the new standalone apps, and to a lesser extent, the continued growth of the virtual gift business on the Momo application driven by product innovation. The increase was partially offset by the decrease in Tantan’s value-added service as a result of its strategic decision to lower the monetization level in order to improve user experience and retention, as well as COVID’s negative impact on users’ dating sentiment and intention to pay for VAS.

Mobile marketing revenues were

RMB27.9 million

(

US$4.4 million

) in the first quarter of 2022, a decrease of 28.0% from

RMB38.7 million

during the same period of 2021. The decrease in mobile marketing revenues was due to the negative impact of macro headwind on client’s advertising budget, and our product adjustment to address new regulation requirement.

Mobile games revenues were

RMB25.5 million

(

US$4.0 million

) in the first quarter of 2022, an increase of 128.0% from

RMB11.2 million

in the first quarter of 2021, primarily due to one new mobile game launched in the second half of 2021.

Net revenues from the Momo segment decreased from

RMB2,901.8 million

in the first quarter of 2021 to

RMB2,798.9 million

(

US$441.5 million

) in the first quarter of 2022, primarily due to the decrease in net revenues from live video service. Net revenues from the Tantan segment decreased from

RMB567.7 million

in the first quarter of 2021 to

RMB349.0 million

(

US$55.1 million

) in the first quarter of 2022, due to our strategy to lower the monetization level in order to improve user experience and retention, as well as the impact from the elevated COVID situations.



Cost and expenses

Cost and expenses were

RMB2,820.0 million

(

US$444.8 million

) in the first quarter of 2022, a decrease of 6.5% from

RMB3,016.3 million

in the first quarter of 2021. The decrease was primarily attributable to: (a) 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; (b) a decrease in revenue sharing with broadcasters related to Momo’s core live video service and Tantan’s live video service; and (c) a decrease in depreciation and amortization cost due to the impairment of intangible assets in 2021. These decreases were partially offset by an increase in revenue sharing with virtual gift recipients for our virtual gift service.

Non-GAAP cost and expenses (note 1) were

RMB2,711.4 million

(

US$427.7 million

) in the first quarter of 2022, a decrease of 4.4% from

RMB2,835.3 million

during the same period of 2021.



Income




from operations

Income from operations was

RMB352.0 million

(

US$55.5 million

) in the first quarter of 2022, compared to

RMB480.2 million

during the same period of 2021. Income from operations of the Momo segment was RMB519.2 million (

US$81.9 million

) in the first quarter of 2022, which decreased from

RMB573.2 million

in the first quarter of 2021. Loss from operations of the Tantan segment was

RMB161.8 million

(

US$25.5 million

) in the first quarter of 2022, compared to loss from operations of

RMB89.3 million

in the first quarter of 2021.

Non-GAAP income from operations (note 1) was

RMB460.6 million

(

US$72

.7 million) in the first quarter of 2022, compared to

RMB661.2 million

during the same period of 2021. Non-GAAP income from operations of the Momo segment was RMB624.0 million (

US$98.4 million

) in the first quarter of 2022, which decreased from

RMB700.5 million

in the first quarter of 2021. Non-GAAP loss from operations of the Tantan segment was

RMB157.9 million

(

US$24.9 million

) in the first quarter of 2022, compared to non-GAAP loss from operations of

RMB35.6 million

in the first quarter of 2021.



Income tax expenses

Income tax expenses were

RMB150.8 million

(

US$23.8 million

) in the first quarter of 2022, compared to

RMB91.4 million

in the first quarter of 2021. The increase was primarily due to the following reasons: (a) in the first quarter of 2022, we accrued withholding income tax of

RMB44.0 million

(

US$6.9 million

) on undistributed earnings generated in the first quarter of 2022 by our wholly-foreign owned enterprise (“WFOE”), because we plan to remit WFOE’s earnings to its offshore parent company in the foreseeable future to fund its demand on US dollar in business operations, payments of dividends, potential investments, etc.; (b) in the first quarter of 2021, we received tax refund resulted from additional expense deduction related to previous years.



Net




income

Net income was

RMB288.8 million

(

US$45.6 million

) in the first quarter of 2022, compared to

RMB460.9 million

during the same period of 2021. Net income from the Momo segment was

RMB456.5 million

(

US$72.0 million

) in the first quarter of 2022, which decreased from RMB551.4 million in the first quarter of 2021. Net loss from the Tantan segment was

RMB162.4 million

(

US$25.6 million

) in the first quarter of 2022, compared to net loss of

RMB86.8 million

in the first quarter of 2021.

Non-GAAP net income (note 1) was

RMB397.4 million

(

US$62

.7 million) in the first quarter of 2022, compared to

RMB633.0 million

during the same period of 2021. Non-GAAP net income from the Momo segment was RMB561.3 million (

US$88.6 million

) in the first quarter of 2022, which decreased from

RMB678

.6 million in the first quarter of 2021. Non-GAAP net loss of the Tantan segment was

RMB158.6 million

(

US$25.0 million

) in the first quarter of 2022, compared to non-GAAP net loss of

RMB42.0 million

in the first quarter of 2021.



Net




income attributable to Hello Group Inc.

Net income attributable to Hello Group Inc. was

RMB289.9 million

(

US$45.7 million

) in the first quarter of 2022, compared to a net income of RMB461.7 million during the same period of 2021.

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

RMB398.5 million

(

US$62

.9 million) in the first quarter of 2022, compared to

RMB633.7 million

during the same period of 2021.



Net




income




per ADS

Diluted net income per ADS was

RMB1.42


(US$0.22)

in the first quarter of 2022, compared to

RMB2

.14 in the first quarter of 2021.

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

RMB1.94


(US$0.31)

in the first quarter of 2022, compared to

RMB2.91

in the first quarter of 2021.



Cash and cash flow

As of

March 31, 2022

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

RMB15,596.6 million

(

US$2,460.3 million

), compared to

RMB15,707.0 million

as of

December 31, 2021

. Net cash provided by operating activities in the first quarter of 2022 was

RMB43.3 million

(

US$6.8 million

), compared to

RMB501.6 million

in the first quarter of 2021. Included in our cash provided by operating activities is

RMB140.0 million

(

US$22.1 million

) of cash payment to Chinese tax authorities to repatriate RMB1,400.0

million

(

US$220.8 million

) from our WFOE in

China

to our offshore entity. In addition, during the first quarter of 2022, the payment of revenue sharing to content providers were higher than payment during the same period last year as the beginning balance of revenue sharing payable was higher in the first quarter of 2022 than 2021. It has also caused the operating cash flow to decrease to a greater extent on a year over year basis than the non-GAAP Net income of the company.


Recent Development


Authorization of a new share repurchase program

On

June 7, 2022

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

US$200 million

of its shares over the next 24 months.

The Company’s proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The Company’s board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size. The timing and conditions of the share repurchases will be subject to various factors, including the requirements under Rule

10b

-18 and Rule 10b5-1 promulgated pursuant to the Securities Exchange Act of 1934, as amended. The Company plans to fund repurchases from its existing cash balance.


Payment of a special cash dividend

In

March 2022

, Hello Group’s board of directors declared a special cash dividend in the amount of

US$0.64

per ADS, or

US$0.32

per ordinary share. The cash dividend was paid in

April 2022

to shareholders of record at the close of business on

April 13, 2022

. The aggregate amount of cash dividends paid was

US$127.3 million

.


Business Outlook

For the second quarter of 2022, the Company expects total net revenues to be between

RMB3.05 billion

to

RMB3.15 billion

, representing a decrease of 14.2% to 16.9% year-over-year. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change, particularly as to the potential impact of the COVID-19 resurgence on the Chinese and global economies, as well as on users’ paying capabilities.


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, impairment loss on goodwill and intangible assets, 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 (loss) attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation, impairment loss on goodwill and intangible assets, 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, impairment loss on goodwill and intangible assets, 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, June 7

, 2022, at 8:00 a.m. U.S. Eastern Time (

8:00 p.m.

Beijing / Hong Kong Time on

June 7, 2022

).

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/2456379

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 9:00 a.m. U.S. Eastern Time, June 15, 2022. The dial-in details for the replay are as follows:

International:   +61-2- 8199-0299

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

Passcode: 2456379

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

https://ir.hellogroup.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 second quarter of 2022, 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 first quarter of 2022 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the second quarter of 2022 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


Ended March 31


2021


2022


2022


RMB


RMB


US$


Net revenues:


Live video service


1,962,095


1,608,723


253,770


Value-added service


1,455,513


1,483,431


234,006


Mobile marketing


38,717


27,873


4,397


Mobile games


11,184


25,497


4,022


Other services


3,087


2,554


402



Total net revenues



3,470,596



3,148,078



496,597


Cost and expenses:


Cost of revenues


(1,938,245)


(1,821,388)


(287,317)


Research and development


(286,493)


(250,195)


(39,467)


Sales and marketing


(613,573)


(588,577)


(92,846)


General and administrative


(177,962)


(159,835)


(25,213)



Total cost and expenses



(3,016,273)



(2,819,995)



(444,843)


Other operating income


25,900


23,931


3,775



Income from operations



480,223



352,014



55,529


Interest income


96,694


97,857


15,437


Interest expense


(18,361)


(19,334)


(3,050)


Other gain or loss, net


(7,500)


11,619


1,833



Income before income tax and share of income on equity method

investments



551,056



442,156



69,749


Income tax expenses


(91,398)


(150,774)


(23,784)



Income before share of income on equity method investments



459,658



291,382



45,965


Share of income (loss) on equity method investments


1,261


(2,600)


(410)



Net income



460,919



288,782



45,555


Less: net loss attributable to non-controlling interest


(740)


(1,103)


(174)



Net income attributable to the shareholders of Hello Group Inc.



461,659



289,885



45,729


Net income per share attributable to ordinary shareholders


Basic


1.12


0.73


0.12


Diluted


1.07


0.71


0.11


Weighted average shares used in calculating net income per ordinary

share


Basic


411,968,817


395,240,339


395,240,339


Diluted


448,171,493


407,034,988


407,034,988



Hello Group Inc.



Unaudited Condensed Consolidated Statement of

Comprehensive Income



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


Three months


Ended March 31


2021


2022


2022


RMB


RMB


US$



Net income



460,919



288,782



45,555


Other comprehensive (loss) income, net of tax:


Foreign currency translation adjustment


(3,802)


11,050


1,743



Comprehensive income



457,117



299,832



47,298


Less: comprehensive income (loss) attributed to the non-

controlling interest


379


(2,036)


(321)



Comprehensive income attributable to Hello Group Inc.



456,738



301,868



47,619



Hello Group Inc.



Unaudited Condensed Consolidated Balance Sheets


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


December 31


March 31


March 31


2021


2022


2022


RMB


RMB


US$


Assets


Current assets


Cash and cash equivalents


5,570,563


5,125,211


808,482


Short-term deposits


2,860,000


2,650,000


418,027


Restricted cash




95,364


15,043


Accounts receivable, net of allowance for doubtful accounts of

RMB15,127 and RMB15,130 as of December 31, 2021 and March 31, 2022,

respectively


205,225


202,415


31,930


Prepaid expenses and other current assets


775,072


803,768


126,791


Total current assets


9,410,860


8,876,758


1,400,273


Long-term deposits


7,200,000


7,650,000


1,206,758


Long-term restricted cash


76,471


76,072


12,000


Right-of-use assets, net


257,934


216,887


34,213


Property and equipment, net


180,664


194,208


30,636


Intangible assets, net


27,320


26,041


4,108


Rental deposits


19,204


18,971


2,993


Long-term investments


820,006


813,284


128,292


Other non-current assets


83,930


86,048


13,574


Deferred tax assets


34,849


36,425


5,746



Total assets



18,111,238



17,994,694



2,838,593


Liabilities and equity


Current liabilities


Accounts payable


726,207


641,850


101,249


Deferred revenue


539,967


497,253


78,440


Accrued expenses and other current liabilities


911,050


797,523


125,806


Amount due to related parties


5,016


4,859


766


Lease liabilities due within one year


162,950


138,590


21,862


Income tax payable


125,773


121,199


19,119


Dividends payable




806,750


127,262


Deferred consideration in connection with business acquisitions


44,802


39,012


6,154


Total current liabilities


2,515,765


3,047,036


480,658


Deferred tax liabilities


213,384


117,048


18,464


Convertible senior notes


4,565,292


4,424,921


698,014


Lease liabilities


103,105


83,159


13,118


Other non-current liabilities


128,095


138,337


21,822


Total liabilities


7,525,641


7,810,501


1,232,076


Shareholder’s equity (i)


10,585,597


10,184,193


1,606,517



Total liabilities and shareholder’s equity



18,111,238



17,994,694



2,838,593


(i): As of March 31, 2022, the number of ordinary shares outstanding was 396,711,168.



Hello Group Inc.



Unaudited Condensed Consolidated Statement of Cash Flows


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


Three months


Ended March 31


2021


2022


2022


RMB


RMB


US$


Cash flows from operating activities:


Net income


460,919


288,782


45,555


Adjustments to reconcile net income to net cash provided by operating

activities:


Depreciation of property and equipment


42,543


27,979


4,414


Amortization of intangible assets


36,953


1,279


202


Share-based compensation


145,257


108,616


17,135


Share of (income) loss on equity method investments


(1,261)


2,600


410


Gain on repurchase of convertible senior notes




(11,619)


(1,833)


Loss on long-term investments


7,500






Loss or gain on disposal of property and equipment


22


(40)


(6)


Provision of losses on receivable and other assets


395


2




Changes in operating assets and liabilities:


Accounts receivable


(7,580)


2,649


418


Prepaid expenses and other current assets


(86,677)


(43,978)


(6,937)


Rental deposits


1,359


(2,453)


(387)


Deferred tax assets


(607)


(1,576)


(249)


Other non-current assets


12,330


41,615


6,565


Accounts payable


(1,067)


(88,958)


(14,033)


Income tax payable


22,891


(4,574)


(722)


Deferred revenue


(379)


(42,614)


(6,722)


Accrued expenses and other current liabilities


(118,972)


(132,218)


(20,857)


Amount due to related parties


(7,156)


(157)


(25)


Deferred tax liabilities


(9,238)


(95,385)


(15,047)


Other non-current liabilities


4,360


(6,640)


(1,047)



Net cash provided by operating activities



501,592



43,310



6,834


Cash flows from investing activities:


Purchase of property and equipment


(25,183)


(21,647)


(3,415)


Purchase of short-term deposits


(910,000)






Cash received on maturity of short-term deposits


569,294


910,000


143,549


Purchase of long-term deposits




(1,150,000)


(181,408)


Cash received on investment income distribution


5,610


3,523


556


Other investing activities


3


4


1



Net cash used in investing activities



(360,276)



(258,120)



(40,717)


Cash flows from financing activities:


Deferred payment for business acquisition


(12,907)


(5,563)


(878)


Proceeds from exercise of share options




31


5


Repurchase of ordinary shares


(3,079)






Repurchase of subsidiary’s share options


(2,781)


(4,427)


(698)


Payment for redemption of convertible bonds




(110,007)


(17,353)



Net cash used in financing activities



(18,767)



(119,966)



(18,924)


Effect of exchange rate changes


3,916


(15,611)


(2,466)



Net increase (decrease) in cash and cash equivalents



126,465



(350,387)



(55,273)


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


3,366,072


5,647,034


890,798


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


3,492,537


5,296,647


835,525


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 March 31, 2021


Ended March 31, 2022


Ended March 31, 2022


GAAP


Amortization of

intangible assets

from business

acquisitions


Share-based

compensation


Tax impacts


Non-GAAP


GAAP


Share-based

compensation


Non-GAAP


GAAP


Share-based

compensation


Non-GAAP


(ii)


RMB


RMB


RMB


RMB


RMB


RMB


RMB


RMB


US$


US$


US$


Cost of revenues


(1,938,245)


17,311


3,724




(1,917,210)


(1,821,388)


3,078


(1,818,310)


(287,317)


486


(286,831)


Research and development


(286,493)


2,199


40,209




(244,085)


(250,195)


20,974


(229,221)


(39,467)


3,309


(36,158)


Sales and marketing


(613,573)


16,189


17,556




(579,828)


(588,577)


10,605


(577,972)


(92,846)


1,673


(91,173)


General and administrative


(177,962)




83,768




(94,194)


(159,835)


73,959


(85,876)


(25,213)


11,667


(13,546)



Cost and operating expenses



(3,016,273)



35,699



145,257







(2,835,317)



(2,819,995)



108,616



(2,711,379)



(444,843)



17,135



(427,708)


Income from operations


480,223


35,699


145,257




661,179


352,014


108,616


460,630


55,529


17,135


72,664


Net income attributable to Hello Group Inc.


461,659


35,699


145,257


(8,925)


633,690


289,885


108,616


398,501


45,729


17,135


62,864


(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 March 31, 2022


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Net revenues:


Live video service


1,483,523


125,200




1,608,723


253,770


Value-added service


1,259,592


223,839




1,483,431


234,006


Mobile marketing


27,873






27,873


4,397


Mobile games


25,497






25,497


4,022


Other services


2,390




164


2,554


402



Total net revenues



2,798,875



349,039



164



3,148,078



496,597


Cost and expenses (iii):


Cost of revenues


(1,644,827)


(176,215)


(346)


(1,821,388)


(287,317)


Research and development


(188,299)


(61,896)




(250,195)


(39,467)


Sales and marketing


(317,680)


(270,147)


(750)


(588,577)


(92,846)


General and administrative


(147,196)


(8,076)


(4,563)


(159,835)


(25,213)



Total cost and expenses



(2,298,002)



(516,334)



(5,659)



(2,819,995)



(444,843)


Other operating income


18,346


5,544


41


23,931


3,775



Income (loss) from operations



519,219



(161,751)



(5,454)



352,014



55,529


Interest income


97,743


52


62


97,857


15,437


Interest expense


(19,334)






(19,334)


(3,050)


Other gain or loss, net


11,619






11,619


1,833



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

method investments



609,247



(161,699)



(5,392)



442,156



69,749


Income tax (expenses) benefits


(150,105)


(669)




(150,774)


(23,784)



Income (loss) before share of income on equity method

investments



459,142



(162,368)



(5,392)



291,382



45,965


Share of loss on equity method investments


(2,600)






(2,600)


(410)



Net income (loss)



456,542



(162,368)



(5,392)



288,782



45,555


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


Three months


Ended March 31, 2022


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Cost of revenues


1,847


1,231




3,078


486


Research and development


18,453


2,521




20,974


3,309


Sales and marketing


10,590


15




10,605


1,673


General and administrative


73,913


46




73,959


11,667



Total cost and expenses



104,803



3,813







108,616



17,135



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 March 31, 2022


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Income (loss) from operations


519,219


(161,751)


(5,454)


352,014


55,529


Share-based compensation


104,803


3,813




108,616


17,135



Non-GAAP income (loss) from operations



624,022



(157,938)



(5,454)



460,630



72,664


Net income (loss)


456,542


(162,368)


(5,392)


288,782


45,555


Share-based compensation


104,803


3,813




108,616


17,135



Non-GAAP net income (loss)



561,345



(158,555)



(5,392)



397,398



62,690



Hello Group Inc.



Unaudited Condensed Segment Report


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


Three months


Ended March 31, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

[1]


Net revenues:


Live video service


1,710,889


251,206




1,962,095


299,474


Value-added service


1,139,015


316,498




1,455,513


222,155


Mobile marketing


38,717






38,717


5,909


Mobile games


11,184






11,184


1,707


Other services


1,968




1,119


3,087


471



Total net revenues



2,901,773



567,704



1,119



3,470,596



529,716


Cost and expenses (iv):


Cost of revenues


(1,656,895)


(280,989)


(361)


(1,938,245)


(295,834)


Research and development


(205,330)


(81,163)




(286,493)


(43,727)


Sales and marketing


(326,829)


(286,710)


(34)


(613,573)


(93,650)


General and administrative


(159,451)


(14,121)


(4,390)


(177,962)


(27,162)



Total cost and expenses



(2,348,505)



(662,983)



(4,785)



(3,016,273)



(460,373)


Other operating income


19,961


5,938


1


25,900


3,953



Income (loss) from operations



573,229



(89,341)



(3,665)



480,223



73,296


Interest income


96,343


305


46


96,694


14,758


Interest expense


(18,361)






(18,361)


(2,802)


Other gain or loss, net


(7,500)






(7,500)


(1,145)



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

method investments



643,711



(89,036)



(3,619)



551,056



84,107


Income tax (expenses) benefits


(93,602)


2,204




(91,398)


(13,950)



Income (loss) before share of income on equity method

investments



550,109



(86,832)



(3,619)



459,658



70,157


Share of loss on equity method investments


1,261






1,261


192



Net income (loss)



551,370



(86,832)



(3,619)



460,919



70,349


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


Three months


Ended March 31, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Cost of revenues


2,325


1,399




3,724


568


Research and development


30,525


9,684




40,209


6,137


Sales and marketing


12,906


4,650




17,556


2,680


General and administrative


81,484


2,284




83,768


12,785



Total cost and expenses



127,240



18,017







145,257



22,170



[1]

All translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00, the effective noon buying rate for March 31, 2021 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 March 31, 2021


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$


Income (loss) from operations


573,229


(89,341)


(3,665)


480,223


73,296


Share-based compensation


127,240


18,017




145,257


22,170


Amortization of intangible assets from

business acquisitions




35,699




35,699


5,449



Non-GAAP income (loss) from operations



700,469



(35,625)



(3,665)



661,179



100,915


Net income (loss)


551,370


(86,832)


(3,619)


460,919


70,349


Share-based compensation


127,240


18,017




145,257


22,170


Amortization of intangible assets from

business acquisitions




35,699




35,699


5,449


Tax impacts




(8,925)




(8,925)


(1,362)



Non-GAAP net income (loss)



678,610



(42,041)



(3,619)



632,950



96,606

Cision
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SOURCE Hello Group Inc.