Core Viewpoint - Hello Group Inc. has filed its annual report for the fiscal year ended December 31, 2024, with the U.S. Securities and Exchange Commission, highlighting its position as a leading mobile social and entertainment platform in China [1]. Company Overview - Hello Group Inc. is a prominent player in Asia's online social and entertainment sector, operating applications such as Momo and Tantan to facilitate social interactions and connections among users [3]. - Momo is a mobile application designed to connect individuals based on location, interests, and various online recreational activities [3]. - Tantan, acquired in May 2018, is a leading social and dating application aimed at helping users establish romantic connections and meet new people [3]. Investor Relations - The company offers a hard copy of its annual report, including audited consolidated financial statements, free of charge to shareholders and ADS holders upon request [2]. - Requests for the annual report can be made via email or mail to the company's Investor Relations Department [2][4].

Financial Performance - Revenues contributed by the VIEs accounted for 95.7%, 93.3%, and 88.9% of total revenues for the years ended December 31, 2022, 2023, and 2024, respectively[23]. - For the year ended December 31, 2024, Hello Group reported total revenues of RMB 10,562,971,000, a significant increase from RMB 12,002,323,000 in 2023[44]. - The net income attributable to Hello Group's shareholders for 2024 was RMB 1,039,573,000, compared to RMB 1,957,581,000 in 2023, reflecting a decrease of approximately 47%[44]. - The company reported third-party revenues of RMB 9,392,080,000 for 2024, compared to RMB 11,203,950,000 in 2023, showing a decline in revenue generation[44]. - The revenue from live video services was RMB6,510.5 million, RMB6,072.9 million, and RMB5,092.9 million (US$697.7 million) in 2022, 2023, and 2024, respectively, accounting for 51.2%, 50.6%, and 48.2% of net revenues[71]. - Value-added services represented 47.3%, 47.9%, and 50.4% of net revenues in 2022, 2023, and 2024, respectively[74]. Dividends and Cash Flow - For the years ended December 31, 2022, 2023, and 2024, the company declared and distributed cash dividends of US$127.3 million, US$136.6 million, and US$98.9 million, respectively[32]. - Beijing Momo IT declared dividends of RMB3,600.0 million for 2022, RMB1,800.0 million for 2023, and RMB6,000.0 million (US$822.0 million) for 2024[33]. - In 2024, cash dividends received from subsidiaries amounted to RMB 2,020,000 thousand, while cash dividends paid to parent companies were RMB 2,020,000 thousand, indicating a balanced dividend distribution[46]. Costs and Expenses - Total costs and expenses for 2024 were RMB 9,089,204,000, which is a decrease from RMB 9,827,412,000 in 2023, indicating a cost reduction strategy[44]. - Cash and cash equivalents as of December 31, 2024, totaled RMB 4,122,659,000, a decrease from RMB 5,620,466,000 in 2023[45]. - The total assets of Hello Group as of December 31, 2024, were RMB 18,382,970,000, down from RMB 16,228,009,000 in 2023[45]. - Total liabilities for Hello Group as of December 31, 2024, were RMB 6,950,297,000, compared to RMB 4,241,219,000 in 2023, indicating an increase in financial obligations[45]. Regulatory and Compliance Risks - The company may face risks related to the enforceability of contractual arrangements with the VIEs, which could significantly affect financial performance[26]. - The PCAOB has not issued any new determination regarding its ability to inspect or investigate registered public accounting firms in Chinese mainland and Hong Kong since December 2022[30]. - The company must address evolving cybersecurity and data protection regulations, which could increase compliance costs and operational risks[78]. - The company is currently in compliance with applicable laws, regulations, and policies related to cybersecurity, privacy, data protection, and information security[82]. - The company faces risks related to handling and protecting data, with potential material adverse impacts on its business and financial condition due to noncompliance with cybersecurity and privacy laws[85]. User Engagement and Market Competition - The company faces challenges in user retention and engagement, with a declining user base for its Momo and Tantan apps[66]. - The company is dependent on the strength of its brands, "Momo" and "Tantan," for user acquisition and retention[76]. - The mobile social and dating industry in Chinese mainland is highly competitive, with low switching costs and a consistent stream of new entrants[100]. - The company faces significant competition from other providers, which may hinder its ability to attract and retain users[111]. - Future growth relies on the ability to innovate and adapt to rapidly changing technologies and user expectations[116]. Financial and Operational Challenges - The company may incur significant losses if it fails to manage costs effectively while expanding its user base and services[119]. - Negative publicity and legal actions could harm the company's reputation and brand equity, impacting user demand[106]. - The company faces uncertainties regarding the enforceability of contractual arrangements with the VIEs due to potential future actions by the Chinese mainland government[158]. - The company may incur substantial costs if it needs to enforce rights under contractual arrangements with the VIEs[164]. - The company may face significant costs and resource diversion due to defending against intellectual property infringement claims and other allegations from third parties[126]. Tax and Regulatory Compliance - The company may be classified as a "resident enterprise" under PRC tax law, potentially subjecting it to a 25% enterprise income tax on worldwide income[200]. - The company faces uncertainties regarding the tax implications of indirect transfers of equity interests by non-resident investors[210]. - The company may be subject to increased tax costs if the Chinese mainland tax authorities adjust taxable income based on the fair value of transferred equity interests[213]. - The company’s ability to distribute profits may be limited if shareholders do not comply with SAFE registration requirements[216]. - Non-compliance with SAFE regulations could result in fines or legal sanctions, affecting the company's overseas investment activities[217]. Strategic Initiatives and Future Outlook - The company plans to continue exploring new monetization models and broadening revenue sources, although there is no assurance of profitability or sustainability[61]. - The company has launched live video services and plans to continue investing significantly in this area, despite recent revenue declines[71]. - The company has entered into multi-year exclusivity agreements with popular broadcasters and talent agencies, which are crucial for its live video services[73]. - Future strategic alliances and acquisitions may pose risks, including potential negative publicity and the diversion of resources from existing operations[139]. - The company expects to incur share-based compensation expenses of RMB137.4 million, RMB99.6 million, and RMB75.2 million in 2025, 2026, and after 2026, respectively[143].

Investment Rating - The investment rating for the company has been upgraded to "Buy" [4][7][14] Core Insights - The company reported total revenue of 2.64 billion RMB for Q4 2024, a year-over-year decrease of 12.2%, slightly above Bloomberg consensus expectations of 2.60 billion RMB [1] - Non-GAAP operating profit was 280 million RMB, slightly below the consensus estimate of 302 million RMB, with a corresponding profit margin of 10.62% [1] - The company is focusing on transforming its core business while maintaining positive operating cash flow, highlighting its "cash cow" asset characteristics [1][4] - The company has a strong cash position with total cash and cash equivalents reaching 14.7 billion RMB (approximately 1.45 billion USD) at year-end [3] Revenue and User Metrics - The Momo business generated revenue of 2.423 billion RMB in Q4 2024, down 11% year-over-year, with a paid user count of 5.7 million, a decrease of 23% [2] - The company is shifting towards a profit-centered ROI-driven strategy, effectively reducing customer acquisition costs [2] - The Tantan business reported revenue of 213 million RMB in Q4 2024, down 21.6% year-over-year, with a paid user count of 900,000, a decrease of 25% [2] Financial Performance and Shareholder Returns - The company announced a special cash dividend of approximately 50 million USD to be distributed on April 30, 2025, and has a remaining stock buyback plan of 222 million USD [3] - The potential return rate from dividends and buybacks is estimated at 22.67% based on the market capitalization of approximately 1.2 billion USD as of March 17 [3] - The company has adjusted its Non-GAAP net profit forecasts for 2025, 2026, and 2027 to 1.32 billion RMB, 1.39 billion RMB, and 1.46 billion RMB respectively, reflecting a downward adjustment of 30% for 2025 and 2026 [4][12] Valuation Analysis - The target price for the company is set at 11.69 USD, based on a DCF valuation method with a WACC of 16.88% [4][14] - The current market capitalization is significantly below the book net cash, indicating potential undervaluation and room for valuation recovery [4][14]

Core Viewpoint - Hello Group Inc. is experiencing a significant decline in its domestic business, prompting a strategic pivot towards international markets to seek growth opportunities [2][4][12]. Financial Performance - The company reported a revenue of 2.6 billion yuan ($359 million) for the fourth quarter, down 12% year-over-year, marking a continued decline since 2020 [5]. - Net income for the fourth quarter fell 59% to 187.2 million yuan from 452.5 million yuan a year earlier, with a nearly 50% drop for the entire year to 1 billion yuan [6]. - Livestreaming revenue decreased by 16% year-over-year to 5.1 billion yuan in 2024, now accounting for 48% of total revenue, down from 80% in previous years [11]. User Metrics - Tantan's monthly active users decreased by 2.9 million to 10.8 million, while Momo's paying users dropped from 7.4 million to 5.7 million year-over-year [9]. - The decline in paying users is attributed to a regulatory crackdown and increased competition from other platforms [10][12]. International Expansion Strategy - The company aims for overseas revenue growth of up to 100% this year, with a focus on its Soulchill app targeting Middle Eastern markets [7][12]. - New apps launched in late 2023, including Yaahlan and AMAR, are generating stable returns despite initial marketing costs [14]. - CFO Peng Hui projects overseas revenue to grow from 1 billion yuan in 2024 to between 1.7 billion yuan and 2 billion yuan in 2025 [15]. Market Challenges - The company faces competition in the Middle East from other Chinese social media companies and must navigate potential instability in the region [16]. - Entering competitive Western markets may lead to increased marketing costs and challenges against established players [17]. Investor Sentiment - Following the earnings release, Hello Group's shares fell 8%, indicating investor skepticism regarding the sustainability of its domestic services and the capital needed for international expansion [19]. - Despite a 12% increase in stock price over the last six months, it lags behind the 45% rally of the Hang Seng China Enterprises Index, reflecting doubts about the company's turnaround strategy [20].

Investment Rating - The report maintains a neutral rating for MOMO US with a target price adjusted to $7.20, down from $7.40, indicating a potential upside of 0.4% [1][19][22]. Core Insights - The company is focusing on expanding its overseas business while maintaining stable shareholder returns. The revenue forecast for 2025 remains unchanged at RMB 10,015 million, but the adjusted net profit estimate has been reduced by 5% to RMB 1,239 million due to increased overseas product investments [1][6][24]. - The company has announced a special dividend of $0.30 per ADS, representing a payout ratio of 29% and a dividend yield of 4%. Additionally, the share repurchase program has been extended to March 31, 2027, with an increased buyback amount of $200 million [1][6]. Financial Performance - For Q4 2024, the total revenue was RMB 2,636 million, a year-on-year decrease of 12%, while the adjusted net profit was RMB 230 million, down 55% year-on-year, primarily due to a one-time film production cost of RMB 94 million [6][16]. - The adjusted gross profit margin for 2025 is expected to be 36.2%, reflecting a decline due to changes in revenue structure and increased operational costs [5][17]. - The company’s market capitalization is $1.2 billion, which is lower than its net cash of $1.4 billion as of Q4 2024 [1][4]. Revenue and Profit Forecasts - The revenue forecast for 2025 is RMB 10,015 million, with MOMO expected to contribute RMB 9,328 million and Tantan RMB 683 million. The adjusted net profit for 2025 is projected at RMB 1,239 million [5][17]. - The report anticipates a continued decline in revenue for Tantan, with a year-on-year decrease of 20% expected in Q1 2025 [6][17]. Market Position and Trends - The company is experiencing pressure on its main platform and Tantan due to reduced user engagement and a soft social consumption sentiment, leading to a decrease in paid users by 1.2 million [6][16]. - New application revenues have increased by 37% year-on-year, driven by the rapid growth of the overseas social product Soulchill [6][16].

Core Insights - Hello Group (NASDAQ: MOMO) reported Q4 earnings, missing EPS estimates by $0.05 on a GAAP basis and $0.07 on a non-GAAP basis while beating revenue estimates [1] Financial Performance - EPS missed estimates by $0.05 on a GAAP basis and $0.07 on a non-GAAP basis [1] - Revenue estimates were exceeded, indicating a positive performance in terms of sales despite the EPS miss [1]

Investment Rating - The report maintains a neutral rating for MOMO US with a target price adjusted to $7.20, reflecting a potential upside of 0.4% from the current price of $7.17 [1][19][22]. Core Insights - The company is focusing on expanding its overseas business while maintaining stable shareholder returns. The revenue forecast for 2025 remains unchanged at RMB 10,015 million, but the adjusted net profit estimate has been reduced by 5% to RMB 1,239 million due to increased overseas product investments [1][6][24]. - The company announced a special dividend of $0.30 per ADS, representing a payout ratio of 29% and a dividend yield of 4%. Additionally, the share repurchase program has been extended to March 31, 2027, with an increased buyback amount of $200 million [1][6]. Financial Performance - For Q4 2024, the total revenue was RMB 2,636 million, a year-on-year decrease of 12%. The adjusted net profit was RMB 230 million, down 55% year-on-year, primarily due to a one-time film production cost of RMB 94 million [6][16]. - The adjusted gross profit margin for 2025 is expected to be 36%, reflecting a decline due to changes in revenue structure and increased operational costs [6][17]. - The company’s market capitalization is $1.2 billion, which is lower than its net cash of $1.4 billion as of Q4 2024 [1][4]. Earnings Forecast Changes - The revenue forecast for 2025 is maintained at RMB 10,015 million, with adjusted net profit estimates for 2025 and 2026 at RMB 1,239 million and RMB 1,354 million, respectively [5][17]. - The adjusted operating profit for 2025 is projected to be RMB 1,217 million, with an operating profit margin of 12.2% [5][17]. Market Context - The stock has experienced a year-to-date decline of 7%, with a 52-week high of $8.15 and a low of $4.84 [4][24]. - The company’s main platform, Momo, and its subsidiary, Tantan, continue to face challenges due to reduced user engagement and competition in the social networking space [6][16].

Investment Rating - The report maintains a Neutral rating for MOMO US with a target price adjusted to $7.20 from $7.40, indicating a potential upside of 0.4% [1][2][19]. Core Insights - The company is focusing on expanding its overseas business while maintaining stable shareholder returns. The revenue forecast for 2025 remains unchanged, but the adjusted net profit estimate has been reduced by 5% to RMB 1.24 billion due to increased investment in potential new overseas products [1][6]. - The company has announced a special dividend of $0.30 per ADS, with a payout ratio of 29% and a dividend yield of 4%. Additionally, the share repurchase program has been extended to March 31, 2027, with an increased buyback amount of $200 million [1][6]. Financial Performance - For Q4 2024, the total revenue was RMB 2.64 billion, a year-on-year decrease of 12%, while the adjusted net profit was RMB 230 million, down 55% year-on-year, primarily due to a one-time film production cost of RMB 94.1 million [6][16]. - The adjusted net profit margin for Q4 2024 was 12%, a decline of 5 percentage points year-on-year, attributed to the increased proportion of revenue from new overseas applications and rising operational costs [6][16]. - The company expects a 4% year-on-year decline in revenue for Q1 2025, with the main platform's live streaming business under pressure [6][17]. Revenue and Profit Forecasts - The revenue forecast for 2025 is set at RMB 10.015 billion, with the main platform MOMO expected to generate RMB 9.328 billion and Tantan projected at RMB 683 million [5][17]. - The adjusted gross profit for 2025 is estimated at RMB 3.630 billion, with an adjusted gross margin of 36.2% [5][17]. - The adjusted operating profit is forecasted to be RMB 1.217 billion, with an adjusted operating margin of 12.2% [5][17]. Market Position and Valuation - The company's market capitalization is $1.2 billion, which is lower than its net cash of $1.4 billion as of Q4 2024 [1][6]. - The stock has a 52-week high of $8.15 and a low of $4.84, with a year-to-date change of -7% [4][19].

Financial Data and Key Metrics Changes - For Q4 2024, total group revenue was RMB2.64 billion, down 12% year-over-year. Adjusted operating income was RMB280 million, with a margin of 10.6% [9][51]. - For fiscal 2024, total group revenue was RMB10.6 billion, compared to RMB12 billion in the previous year. Adjusted operating income was RMB1.173 billion with a margin of 16.3% [12][13]. Business Line Data and Key Metrics Changes - Revenue from the Momo app and standalone new apps totaled RMB2.42 billion, down 11% year-over-year, with Momo app revenue decreasing by 18% [10][13]. - Tantan's Q4 revenue totaled RMB213 million, down 22% year-over-year due to a decrease in paying users [12][34]. - Revenue from value-added services (VAS), excluding Tantan, totaled RMB1.2 billion in Q4, down 5% year-over-year [26][55]. Market Data and Key Metrics Changes - The overseas business maintained robust growth, contributing significantly to the group's financial standing [8]. - The Momo app had 5.7 million paying users, a sequential decrease of 1.2 million due to cost reduction strategies [22]. Company Strategy and Development Direction - The company aims to maintain the productivity of the Momo app while focusing on improving user experience and optimizing operational efficiency [15][48]. - For Tantan, the strategic goal is to reduce costs and improve efficiency while exploring dating experiences suitable for agents [48][110]. - The company plans to increase investments in overseas markets, particularly in the MENA region, to drive growth and innovation [41][104]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the macroeconomic environment and regulatory changes but expressed confidence in the resilience of the Momo platform [80][83]. - The company expects a revenue decline in Q1 2025 but anticipates a slight rebound in Q2, depending on macroeconomic conditions [68][86]. Other Important Information - The Board approved a special cash dividend of $0.30 per ADS, totaling approximately $50 million, marking the seventh consecutive year of cash dividends [49]. - The company is focusing on optimizing headcount and improving marketing efficiency to absorb top-line pressure while reallocating resources to overseas business [88]. Q&A Session All Questions and Answers Question: What caused the significant drop in paying users for the Momo app? - Management indicated that the drop was due to a strategic shift away from acquiring low-return paying users, which has historically pressured profitability [74][76]. Question: What adjustments have been made to live streaming and VAS products? - Management stated that after improving Momo's content, no further changes to reduce earnings are planned, focusing instead on adding engaging features [77]. Question: What is the outlook for Tantan's revenue and profit in 2025? - Management expects a revenue decline of 20% to 30% year-over-year for Tantan in 2025, but profitability is anticipated to improve due to better ROI from reduced marketing spend [120].

Exhibit 99.1 Hello Group Inc. Announces Unaudited Financial Results for the Fourth Quarter and Fiscal Year 2024 BEIJING, CHINA, March 12, 2025 – Hello Group Inc. (NASDAQ: MOMO) ("Hello Group" or the "Company"), a leading player in mainland China's online social networking space, today announced its unaudited financial results for the fourth quarter and the full year ended December 31, 2024. Fourth Quarter of 2024 Highlights Full Year 2024 Highlights "2024 was a year fraught with challenges and opportunities ...