Hello (MOMO)2024-09-03 16:19Financial Data and Key Metrics - Total group revenue for Q2 2024 was RMB2.69 billion, down 14% YoY but up 5% sequentially [5] - Adjusted operating income was RMB477 million, down 33% YoY and 7% sequentially, with a profit margin of 17.7%, down 4.9 percentage points YoY and 2.4 percentage points sequentially [5] - Non-GAAP net income attributable to the company was RMB449.2 million, compared to RMB632.1 million in Q2 2023 and RMB59.9 million in Q1 2024 [24] Business Segment Performance - Revenue from the Momo app and standalone new apps was RMB2.46 billion, down 30% YoY but up 6% sequentially, driven by overseas business growth [6] - Tantan's revenue was RMB234 million, down 27% YoY and 3% sequentially, with adjusted operating income of RMB20.6 million, representing a margin of 8.8% [7] - Revenue from standalone new apps reached RMB355 million, up 36% YoY and 4% sequentially, primarily driven by overseas business [22] Market Performance - Momo app live streaming revenue was RMB1.22 billion, down 50% YoY but up 6% sequentially, with a focus on maintaining a healthy social ecosystem [12] - Tantan's MAU decreased by 6% sequentially to 12.9 million in June, with 1 million paying users, down 100,000 sequentially [15] - Overseas business showed strong growth, with revenue from new apps increasing 36% YoY and 4% sequentially, driven by localization efforts [22] Strategic Direction and Industry Competition - The company aims to maintain the productivity of the Momo app's cash cow business while improving Tantan's core dating experience and expanding new endeavors [8] - Efforts to optimize the Momo app's community ecosystem and improve female user experience have led to increased two-way chats and matching rates [9] - Tantan is focusing on improving user experience by addressing authenticity and response issues, with short-term commercial sacrifices expected for long-term gains [20][21] Management Commentary on Operating Environment and Future Outlook - The company expects Q3 2024 revenue to be between RMB2.58 billion and RMB2.68 billion, representing a YoY decrease of 15.2% to 11.9% [32] - Management remains confident in the growth potential of the MENA region, with ongoing efforts to strengthen localization and expand product offerings [23][39] - For 2025, revenue growth will depend on macroeconomic and regulatory conditions, with the company prepared to manage costs tightly if revenue pressure persists [36] Other Important Information - The company paid a cash dividend of RMB716 million and repurchased RMB395 million worth of shares in Q2 2024 [31] - Non-GAAP R&D expenses decreased by 11% YoY to RMB179.9 million, with R&D personnel making up 62% of total employees [29] - Non-GAAP sales and marketing expenses increased to RMB360.6 million, or 16% of total revenue, due to an offline gala event [30] Q&A Session Summary Question: Core Momo's revenue and profit strategy - The company has adjusted its live streaming and VAS strategy to reduce revenue-oriented competition events, introducing new interactive features to offset revenue declines [34] - Revenue growth in 2025 will depend on macroeconomic and regulatory conditions, with the company focusing on long-term ecosystem health [34][36] Question: Overseas business progress and financial outlook - The company is accelerating localization efforts and expanding product offerings in the MENA region, with revenue growth expected to slow to mid-30s in H2 2024 before initiatives bear fruit [37][40] Question: Tantan's revamp and financial impact - Tantan is prioritizing user experience over short-term financial targets, with revenue expected to follow Q2's YoY decrease trend in H2 2024 [42][45] - The company believes that improving the dating experience is critical for long-term profitability, even if it results in short-term revenue fluctuations [44][45]