Q2 2024 Hello Group Inc Earnings Call
Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to the second quarter 2024, Hello Group and Corporated Earnings Conference call.
Speaker Change: All participants are in a listen-only mode. They will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key, followed by the number one on your telephone keypad. Please note this conference is being recorded today.
Speaker Change: I would now like to hand the conference over to your first speaker today. Ms Ashley Jing, thank you. Please go ahead, man.
Ashley Jing: Thank you all for your time.
Ashley Jing: Good morning and good evening everyone. Thank you for joining us today for Hello Group 2nd Quarter 2020 for Ernest Conflincol. The company's results will release the earlier today and available on the company's IAR website.
Speaker Change: On the court today, we have Mr. Tang Yan, CEO of the company, Miss Jiang Sichuan, CEO of the company and Miss Peng Hui, CEO of the company.
Speaker Change: Liu discussed the company's business operations and highlights, as well as the financials and guidance. They were all be available to answer your questions during the Q&A session that follows.
Speaker Change: Before the game, I would like to remind you that this colony contains forward-looking statements made under the safe hub a provision of the previous security litigation reform act of 1995.
Speaker Change: [inaudible]
Speaker Change: All of which are difficult to predict and many of which are beyond the company's control, which many cost the company's actual results performance or achievements to differ materialies from those in the forward-looking statements.
Speaker Change: for the information regarding this and other risks and certain design factors is included in the company's fighting with the U.S. Securities and Exchange Commission.
Speaker Change: The company does not undertake any obligation to update any forward-looking statements as the result of new information future events or otherwise except as required under law. And now have to call over to our COO, Ms. Gang Sichuan, Ms. Zhang, please.
Speaker Change: Hello everyone. Thank you for joining our call. I'm not working through the progress we make in the second quarter against our strategic priorities across all businesses.
Speaker Change: I will start with the award, a please overview of our financial performance.
Speaker Change: For the second quarter of 2024, total group revenue was
Speaker Change: 2.60-9 billion R&B, down 14th of January, but up 5th of January.
Speaker Change: are just an operating income with 417,7 million R&B. Down 33% year over year and 7% sequentially.
Speaker Change: President, President of the United States, and the President of the United States.
Speaker Change: In terms of business segment, total revenue from the Momo App and San Antonio App was 2.46 billion R&B. Down 30% year over year, but up 60% sequentially.
Speaker Change: The year we had declined with many due to the decline in revenue from the normal ass. We saw him from spending softness amid the week's Makoic on me.
Speaker Change: and our proactive product and operational adjustments to maintain the healthy community ecosystem since the end of last year.
Speaker Change: The sequential decrease was due to the normality.
Speaker Change: in quarter two.
Speaker Change: Stan and all new artists maintain their growth momentum on both year or year and sequential basis.
Speaker Change: and Bai Hao overseas this month.
Speaker Change: A just operating income from the Momo app and sent a new app with 466 million R&B. Down 33 per senior over years and 6 per cent sequentially.
Speaker Change: May need due to the revenue decline.
Speaker Change: Adjusted operating margin was 18.5% down 5.5 percentage point year over year and 2.4 percentage points equally.
Speaker Change: for 10 times total revenue for the quarter was 234 million R&B, down 27% year over year and 3% the French League.
Speaker Change: May need you to visit the Crete number of paying users.
Speaker Change: I just this operating income was 20.6 million R&B. Compare with 31.9 million R&B a year ago, and 28.8 million R&B a quarter ago.
Speaker Change: Reporting, our margin of 8.8% Downed 1.1 percentage for a year, and 3.1 percentage for a situation.
Speaker Change: Now, I will walk you through the program that makes the Gansai with the teacher priorities for Momo, Tang, Tang, and New Endeavor since the beginning of the year.
Speaker Change: I will be going forward and the moment I have to see her is to maintain the productivity of the cash crowd business with a healthy, social ecosystem.
Speaker Change: Zhang's goal is to continue improving the coordinating experience and view and its efficient business model that drives profitable growth.
Speaker Change: and for our new endeavors, I'll go with the further enriched the brand portfolio, push the business boundaries beyond normal and penthouse.
Bill Long-Tun: and Bill Long-Tun, Dr. of Engine.
Bill Long-Tun: I will now work you through the details of our execution.
Bill Long-Tun: First, on the product and operation of France of Demo Act.
Speaker Change: In the second quarter, our product team focused on optimizing the community ecosystem. Improving the female user experience and increasing the volume of effective social interactions.
Speaker Change: to improve the experience of female users receiving greetings. Our product team approach AI technology to help male users to generate greeting faces.
Speaker Change: which increased the success rate of ice-breaking chest and led to the growth of two-way chest.
Speaker Change: In terms of our rhythm strategy, we increase the matching weight of active female uses to improve the experience for uses with unnatural needs.
Speaker Change: Our optimization of products and recommendations strategy plays a positive role in increasing both the number of matches and the number of 2A chats.
Speaker Change: In addition for the finding partners or Zhao Daizu.
Speaker Change: A pilot program for our online-to-off-line interest group which has been running for years. In the second quarter, we focused on expanding the coverage of our young user base to improve our mobile social brand perception.
Speaker Change: Our efforts to further improve and make breakthroughs in production are already in space on bread home, wife and user preferences are important foundations for more mochesh cloud business to maintain sustainable productivity.
Speaker Change: I'm the Chairman of our user acquisition team, continue to implement our I-O-E-N-Tan strategies and work with our commercial practice.
Speaker Change: to recommend interactive features to users from China with that match that spending capabilities to improve paying conversion.
Speaker Change: in order to increase the proportion of female users.
Speaker Change: We adjusted our advertising materials and channel strategies to focus on female uses and with our product team.
Speaker Change: to Pacific Elite recommends interactive female friendly features, to improve their onboarding experience on our practical.
Speaker Change: As the several years of optimizing channel strategies, the room to further reduce unit X-TX is voluntary limited.
Speaker Change: Accordingly, we have been looking with two hours to leverage new channels to bring in incremental travel.
Speaker Change: and I, by increasing brand exposure with a limited budget and controlling user acquisition cost with a reading of reasonable range.
Speaker Change: In the second quarter, the normal app has 7.2 million paid uses.
Speaker Change: and increase of 100,000 driven by a return of long-towls by use of after the quarter-one load safety and that would take.
Speaker Change: Now, let's talk about the productivity of our Momo Keshe Calvinist.
Speaker Change: In the second quarter, Momo's last streaming revenue was 1.22 billion R&B, down 50% year over year, but up 60% sequentially.
Speaker Change: The year over here, the client was mainly due to our strategy to proactively reduce revenue or we anticipate large-scale competition events, in order to maintain the how-facial ecosystem and spending socking this amid the re-marker we call it.
Speaker Change: On the sequential basis, revenue increased after the seasonal loss, but their growth rate was lower than the previous years.
Speaker Change: This was mainly due to the adjustment to our event operating policy, which we're starting in lower profits for agencies and for castors.
Zhang: Zhang, which in turn cost them to be less motivated.
Zhang: We address the seizures, we have more the re-increase the incentive for non-events operations.
Zhang: and the revenue sharing for racial has increased slightly quarter of a quarter.
Zhang: Our private team also introduced specific interactive features for users at different levels.
Zhang: in prison daily revenue and reducing reliance on the very very new.
Speaker Change: We have introduced pop such as privilege, functions, and host costumes in live streaming children.
Speaker Change: Wished to a no-require of revenue sharing.
Speaker Change: This not only enriches the variety of features and keeps using gauge, but it also plays a positive role in improving the profit level of life streaming.
Speaker Change: Q2, revenue from Red Addis Devices, excluding Tang Zhang's total to 1.21 billion R&B. Down to 9% year over year, but up to 5% sequentially.
Speaker Change: Wast 7 years from the Momo app was over 150 million R&B. Down 20% year over a year, but out 5% to 10% the country's league.
Speaker Change: Wavodnil from...
Speaker Change: Luvenyru from the Sananong Act was 355 million RMB. Up 36% year over year and 64% sequitually.
Speaker Change: The year over here declines in the last seven years from the Momo App with many due to our proactive product and operational adjustments to mitigate the regulatory risk.
Speaker Change: which put the pleasure of number of normal, less pain and use of any of people.
Speaker Change: Additionally, Mako Fettas also waited on Consumer Sentiment. The sequential growth was mainly due to seasonality.
Speaker Change: On the Prada operational front, we launch new gifting features in the audio and video-based commercial channels to help broadcast as effectively interactive with medium and long-term users.
Speaker Change: We also tested interactive light games such as Xiao Xiao Lu and New Catagories such as Love Fortune and Telling in our chat room features. We share the largest user base.
Speaker Change: Our data shows that the pay conversion of the new features was higher than the one existing features.
Speaker Change: I'm turning to Time Time. Let me first talk about its user trends and financial performance.
Speaker Change: Although I'll call it's reception and efficiency improvement strategy in the room over the past 3 years
Speaker Change: I have effectively driven Taiwan to profitability.
Speaker Change: The continued reduction in channel investments has put significant pressure on Zhang Zhang's use ofase.
Speaker Change: Meanwhile, the lack of investments in branding over the years has left you a continuous decline in organic uses.
Speaker Change: At the same time, we haven't been able to find an effective product level solution that can significantly improve user retention.
Speaker Change: The combination of both mentioned factors has resulted in contact MAU decreasing by 6% sequentially to 12.9 million in June.
Speaker Change: As of end of the second quarter, Tang Zeng had more male-and-paying uses, down to 100,000 supring surely.
Speaker Change: The main reason words of decline in M.A.U.
Speaker Change: The Shuachuan Negative Impact on New Pays, a new pay-in-use explosion from the UI of Great.
Speaker Change: and the well-goatory related redesign of the new renewable page.
Speaker Change: Zhang Lin Zhi Tong, Zhang Fan Nanshu
Speaker Change: Toto revenue for the quarter was 234 million R&B, Zhang 27% year over year and 3% secretionally. Many due to the reduction in the number of paying uses.
Speaker Change: [inaudible]
Speaker Change: I'm on which the happy people of the live streaming business increased from the security as a result of our strategy to the time-bassized live streaming, which has a lower of correlation with the dating experience.
Speaker Change: The Wild Appie Pool saw a significant year on year, increased thanks to our efforts to promote regulatory, high-private products such as Black Gold, SVIP membership and additional pay-as-you-go privilege for members.
Speaker Change: in enabling the speeditudes of the overall appie pool.
Speaker Change: In terms of business night, last 7 years was 440 million R&B. It sounds 18% over year and full of sense to country league.
Speaker Change: Well, last year in WWE was 83 million R&B, down to 43% year over year, and 5% secretaries.
Speaker Change: Now I would like to work with you through the efforts we make on the time-to-end product and use the efficient reforms and the challenges free space.
Speaker Change: Zhang, the marketing and use the existing firms.
Speaker Change: to address the issues of week-first awareness among young users, and the significant declining organic uses due to the inner-crisp brain commotion.
Speaker Change: We conducted branding events during the quarter in cooperation with offline waves, such as all the clubs in metropolitan cities with a high density of young people.
Speaker Change: We also leveraged new media channels for online promotion to increase awareness of tantammon young people and overall brand popularity.
Speaker Change: We believe that to compare with the use of physicians through channels.
Speaker Change: Driving use of growth by improving brains of awareness is a relatively long-term initiative that can take time to clear reasonable boost.
Speaker Change: I'm a part of the world in the continuous and stable growth of our organic uses.
Speaker Change: Specialist, as time-time, have graduated to focus on court, we focus on the court-stating experience by, did emphasizing the community-oriented and entertainment and your oriented experience in reading courtes.
Speaker Change: This is important for us to strengthen young people's awareness of time and worry for the dating through long-term friends investments and product improvements.
Speaker Change: Therefore, continuous increasing the opportunities for brand exposure with a controllable range of marketing investments will be a long-term direction for our branding strategy in the future.
Speaker Change: On the use of a physician-browns factors such as the e-commerce festival in June, led to a fierce channel competition. Resulting in the sequential increase in unit acquisition costs.
Speaker Change: which combined with the pressure on the new user Apple from the UI of Great. Let's choose the critical decrease in Channel RR.
Speaker Change: Who addresses our user acquisition and membership product teams work together to recommend Relatory High and Membership, our product to high-level users from China, which help increase and use the output.
Speaker Change: Now, let me give you an update on the progress time time to make on-product and operation of the site.
Speaker Change: In the second quarter, we worked on an upgraded version to improve the dating experience for you this.
Speaker Change: for the Humanary is the interviewer and survey the view to major pain points in user experience.
Speaker Change: First, uncertainty about the authenticity of picture profile and use this identity.
Speaker Change: and second leg of response to chat after magic.
Speaker Change: Since the issue of spamming has been effectively controlled since the beginning of the year.
Operator: 1424 Hello Group Incorporated Earnings Conference Call All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key, followed by the number one on your telephone keypad. Please note this conference is being recorded today.
Speaker Change: News is a feedback on an authentic experience that primarily from issues such as income plateful information, lack of real person authentication and photos that look too good to be true.
Speaker Change: The first phase of our redesigned in Q2 focus on guiding users and come to play their whole style of information and encouraging them to spend more time learning about potential matching before sweating.
Ashley Jing: I would now like to hand the conference over to your first speaker today, Ms Ashley Jing. Thank you. Please go ahead, ma'am. Thank you, operator. Good morning and good evening, everyone. Thank you for joining us today for Hello Group's second quarter 2024 Earnings Conference Call. The company's results will release the earlier today and available on the company's IR website.
Speaker Change: Police data shows that user with a Richard Polzong content has significantly higher post-match commotion rates than those just pictures of Polzong picture and basic information.
Ashley Jing: On the call today, we have Mr Tang Yan, CEO of the company, Ms Zhang Sichuan, CEO of the company, and Ms Peng Hui, CEO of the company. They will discuss the company's business operations and highlights as well as the financials and guidance. They will all be available to answer your questions during the Q&A session that follows.
Speaker Change: However, this improvement in matching experience and different kinds of interaction conflicted with our existing business model, which relied largely on users' quick swiping decisions based solely on looking at post-out pictures.
Unknown Executive: Before we begin, I would like to remind you that this call may contain four looking statements made under the same hyper provision of the Privacy Security Illitigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks and certainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the four-wheel-looking statements.
Speaker Change: The negative impact of this redesign on new user-paying conversion with one of the reasons for the sequential declining townhouse number of paying users.
Unknown Executive: For the information regarding this and other risks and certainties and factors, it is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any four-wheel-looking statements as a result of new information, future events or otherwise, except as required on the law.
Speaker Change: Nevertheless, we believe that making Sichuan commercial sacrifices to improve long-term use experience is a critical foundation for a time-time to ultimately achieve the strategic growth of profitable growth.
Speaker Change: We should monetize product features that improves music experience and at relative and rather than do so at the expense of music experience.
Speaker Change: which can only get us into a dang good cycle.
Johnson Trump: I will now pass the call over to our COO, Ms. Johnson Trump. Ms. Johnson, please. Hello, everyone. Thank you for joining our call. I will now work you through the progress we make in the second quarter against our strategic priorities across all businesses. I will start with an overview of our financial performance. For the second quarter of 2024, total group revenue was 2.69 billion R&B, downed 14% year over year, but up 5% sequentially.
Speaker Change: During the ongoing product of Great and Optimization, our commercial product team will continue to optimize paying experience to increase new user Apple.
Speaker Change: which should potentially offset the negative impact on revenue cost by the product of grace.
Speaker Change: In terms of our new endeavors, in the second quarter, total revenue of the new apps which 365 smoothing R&B.
Speaker Change: Up 36% year over year and 4% sequentially, may be driven by our overseas business.
Johnson Trump: Adjusted operating income was 4177 million R&B, downed 33% year over year, and 7% sequentially. Proper margin was 17.7%, downed 4.9% year over year, and 2.4% percentage point sequentially. In terms of business segment, total revenue from the MOMO app and San Anomal new app was 2.46 billion R&B, downed 30% year over year, but up 6% sequentially. The year over year decline was mainly due to the decline in revenue from the MOMO app, resulting from spending softness amid the weak macro economy, and our proactive product and operational adjustments to maintain a healthy community ecosystem since the end of last year. The sequential decrease was due to seasonality.
Speaker Change: We first stable channel our life, we more than increase channel investments, driving study artwork in M.U. and paying uses. On the product and operational front
Speaker Change: Our team has been accelerating the orbitalization process of overseeing this since the beginning of the year.
Speaker Change: After stretching the localization research on virtual gifts and props, our commercial are teams introduce hot-savs gifts that better, natural food use of preferences.
Minghua: Minghua, our local operation teams with foreign hourly services for high paying users and send a license for price-eye collaboration and KBS.
Minghua: This combined efforts led to a significant increase in number of top care pain users.
Johnson Trump: In order to stand on new ads, maintain their growth momentum on both year and year and sequential basis. Driven by our overseas business, adjusted operating incomes from the Momo app and stand on our new app was 456 million RMB, down 33% year over year and 6% sequential. Mainly due to the revenue decline. Adjusted operating margin was 18.5%, down 55.5% each point year over year and 2.4% each point significantly. For 10 times total revenue for the quarter was 234 million RMB, down 27% year over year and 3% sequential.
Speaker Change: Rich in terms of the happy book rules.
Speaker Change: The San Munteng is increased in paying uses and Apple people has lay a solid foundation for sustainable and stable growth in our overseas business.
Speaker Change: Regarding our extension in the Mina region, we are focusing on two key tasks.
Speaker Change: Regional Extension and extending our offering from more base to live streaming.
Speaker Change: This initiative is a chicken longer than the anticipated at the beginning of the year as we realize that both efforts requiring a highly localized service team as a great risk of criticism.
Speaker Change: We do not own enough in the past couple of years in terms of localization and we are now accelerating our efforts to make up the shortcoming.
Johnson Trump: Mainly due to the decreased number of paying users. Adjusted operating income was 20.6 million RMB, compared with 31.9 million RMB a year ago and 28.8 million RMB a quarter ago. Representing a margin of 8.8%. Downed 1.1% each point year over year and 3.1% each point sequential.
Speaker Change: We remain confident in our growth, our potential in the Nina region.
Speaker Change: I'm Patrick Six months ago, we now have a clear understanding of what we must do to continue to grow and we will continue to invest in this region.
Speaker Change: This concludes my remarks.
Speaker Change: Now let me pass the call over to Cathy for the financial review.
Johnson Trump: Now I will walk you through the program that has made against our strategic priorities for Momo, Canton, and New and Ever since the beginning of the year. Our main goal for the Momo app this year is to maintain the productivity of cash cow business with a healthy social ecosystem. Canton's goal is to continue improving the core dating experience and build efficient business model that drives profitable growth. As for our New and Ever, our goal is to further enrich the brand portfolio, push the business boundaries beyond Momo and Canton, and build a long-term growth engine.
Kevin: Kevin, please
Cathy: Thank you, Zik.
Cathy: Hello, everyone. Thank you for joining our conference call today. Now let me briefly take you through the financial review.
Speaker Change: Hello, we're back to the second quarter of the year, 24 was 2.69 billion人民 be.
Speaker Change: Nanggap Nang in Palmer Tributable to the company was 449.2 million人民 be.
Speaker Change: Comparative 632.1 million人民 be for the same period of 2023 and 59.9 million from the last quarter.
Johnson Trump: I will now walk you through the details of our execution. First, on the product and operational front of the Momo app. In the second quarter, our product team focused on optimizing the community ecosystem, improving the female user experience and increasing the volume of effective social interactions. To improve the experience of female users, receiving greetings. Our product team applied AI technology to help male users to generate greeting faces, which increased the accessory of iceberging chats and led to the growth of two-way chats.
Speaker Change: and Q1, we had a one-off non-cash tax provision. Excluding this non-cash tax item, non-gab net income would have been 588.5 million remindies for last quarter.
Speaker Change: and the Kee revenue items for the quarter.
Speaker Change: First, we are on live broadcasting, total revenue from live broadcasting business for the second quarter of 2024, was 1.30 billion and then down 18% year over year, but up 5% quarter of a quarter.
Johnson Trump: In terms of algorithm strategy, we increased the matching weight of active female users to improve the experience for users with a natural journey. Our Optimization of Product and Recommendation Strategy plays a positive role in increasing both the number of matches and the number of 2H chats. In addition, for Definding Partners or Zhao Daizu, a pilot program for our online to offline interest group which has been running for a year. In the second quarter, we focused on expanding the coverage of our Yao user base to improve Momo's social brand perception.
Speaker Change: The year the year decrease was largely a trigger ball to other clients in the core more life streaming business and to a lesser degree the decrease in tantan.
Speaker Change: The sequential growth was driven by the core, more more life-streaming service.
Speaker Change: and Transuit segments.
Speaker Change: Mo Mo Aplai broadcasting revenue totaled 1.22 billion in beef for the quarter, down 15% year over year, but up to 6% quarter over quarter. The year over year decrease was due to our proactive product and operational adjustments to the emphasized revenue-oriented competition event.
Speaker Change: and Week Consumer Senate.
Speaker Change: The sequential growth was due to a rebound after negative seasonality.
Johnson Trump: Our efforts to further improve and make breakthroughs in product and algorithm based on brand tone, wipe and user preferences are important foundations for Momo Cash Card Business to maintain sustainable productivity. On the channel front, our user acquisition team continue to implement our eye-oriented strategies and work with our commercial product team to recommend interactive features to users from channels that match their spending capabilities to improve paying conversion. In order to increase the proportion of female users, we adjusted our advertising materials and channel strategies to focus on female users and work with our product team to specifically recommend interactive female friendly features to improve their onboarding experience on our platform.
Speaker Change: Contents Library Custing Revenue Amount A to 83.0 million Rmd, down 43% year over year and 5%
Speaker Change: The decrease was due to our strategic decision to keep it away from the last dating central service.
Speaker Change: Raving you from the Battle Added Services for the second quarter of 2024 was 1.35 billion and then be down 10% from Q2 last year but up 4% sequentially.
Speaker Change: The YYD-3 was due to a decline in both mobile and time time. However, the growth of St. Alonue asked partially of said the downward-driven pressure.
Speaker Change: But Saturday at its service revenue grew sequentially driven by the recovery from Momo Vats.
Speaker Change: and continued growth of new applications.
Speaker Change: Raving you from that on an X-time time basis was 1.21 billion in being the second quarter of 2024. Now, 9% from Q2 last year, but up 5% from the previous quarter.
Johnson Trump: As the several years of optimizing channel strategies, the room to further reduce unique experience tasks is relatively limited. Accordingly, we have been working with KOOs to leverage new channels to bring in incremental traffic, thereby increasing brand exposure with limited budgets and control user acquisition costs with a reasonable range. In the second quarter, the Momo app has 7.2 million paying users and increased of 100,000 driven by the return of flown-tailed boss users after the quarter one load seasonality.
Speaker Change: Wang Wang App, Nevada Service, revenue decreased from Q2 last year due to our proactive product adjustments to manage levels with risks, as well as the weak spanning sentiment. And the sequential revenue growth was driven by seasonal recovery.
Speaker Change: Revenue from the standalone new apps continue to grow both on a year, a year and quarter of quarter bases driven by the steady improvement of the overseas business.
Speaker Change: Pop has started at a service revenue amounted to remain the 139.9 million, down 18% of you over year and full percent sequentially.
Speaker Change: The decrease was due to other crime and paying users.
Johnson Trump: Now, let's talk about the productivity of our Momo Cash Card Business. In the second quarter, Momo's last remained revenue was 1.22 billion R&B, down 50% year-over-year, but up 6% sequentially. The year-over-year decline was mainly due to our strategy to proactively reduce revenue-oriented large-scale competition events in order to maintain a healthy social ecosystem and spending softness amid the rate of macroeconomy. On the sequential basis, revenue increased after the seasonal loss, but the growth rate was lower than the previous years.
Speaker Change: which was in turn due to a reduction in channeling lessons, the UI upgrade and the adjustments to subscription renewal policy.
Speaker Change: now turning to cost and expenses.
Speaker Change: Longgap cost is revenue for the second quarter of 2024, which $1.59 billion and then be compared to $1.82 billion for the same period last year. Longgap gross margin for the quarter was $40.8 per cent, down $1.3 per cent is points from the year ago period.
Yang: Yang, the year of the year decreased, was partially due to a number of different facts.
Yang: was primarily due to a number of different factors.
Yang: 1. Higher payout ratio in our overseas endeavors as we expand into new regions and try to launch new
Johnson Trump: This was mainly due to the adjustment to our event operating policy. CCC, which resulting in lower profits for agencies and forcasters, which in turn cost them to be less motivated. To address this issue, we have motherly increased the incentive for non-events operations, and the revenue sharing ratio has increased slightly quarter over quarter. Our project team also introduced specific interactive features for users at different levels, increasing daily revenue and reducing reliance on event revenue.
Yang: Vito Service, as well as the changing revenue makes toward higher payout businesses.
Yang: 2, D-Leverage, where direct personnel and infrastructure costs take up a higher percentage of revenues. 3, payment channel costs represent a higher percentage of revenues as revenue makes shift toward overseas business.
Speaker Change: The pale racial of the Cuomo app remains stable with a slight downward trend due to the reduction in event related bonuses.
Speaker Change: Nonggap R&D Census for the second quarter was 179.9 million人民 B compared to 200.8 million人民 B for the same period last year, or an 11% decrease year over year.
Johnson Trump: Moreover, we have introduced props such as privilege functions and host costumes in live streaming showroom, which to now require revenue sharing. This not only enriches the variety of features and keeps user engaged, but they also plays a positive role in improving the profit level of live streaming. In order to revenue from web added services, excluding downtown total to 1.21 billion RMB, down to 9% year over year, but up 5% sequentially. Last revenue from the Momo app was 850 million RMB, down 20% year over year, but up 5% sequentially.
Speaker Change: The decrease was due to the continuous optimization in personnel and infrastructure costs.
Speaker Change: Nonggap R&D expenses as a percentage of revenue with 7% compared with 6% from the year ago period.
Speaker Change: We ended the quarter with 1,364 total employees of which 282 are from Tantan compared to 1,470 total employees of which 309 from Tantan a year ago.
Speaker Change: The R&D personnel as a percentage of total employees for the group was 62% compared with 63% due to last year.
Speaker Change: Now, in Gap Sales and Marketing, you spend for the second quarter was 360.6 million, remedy, or 16% of total revenue compared to 349.7 million in the or 11% of total revenue for the same period last year.
Johnson Trump: 12% revenue from the Senate on apps was 355 million RMB. Up 36% year over year and 4% sequentially. The year over year declined in last revenue from the Momo app was mainly due to our proactive product and operational adjustments to mitigate the regulatory risk, which put pressure on a number of Momo last paying user and app people. Additionally, macro factors also waited on consumer sentiment. The sequential growth was mainly due to seasonality.
Speaker Change: The year we year increase in absolute German-Diamount was mainly due to an offline gala formal livestreaming service which in 2023 was held in Q1.
Speaker Change: Nonggap JNA expenses was 89.5 million in view for the second quarter of 2024 compared to 83.2 million in view for the same period last year, both representing a 3% of total revenue.
Speaker Change: Wang Gap operating income was 476.5 million in B. It decreased a 33% from Q2 2023, down 7% from the previous quarter.
Johnson Trump: On the product operational front, we launched new gifting features in the audio and video-based commercial channels to help broadcasters effectively interactively with medium and long-tail users. We also tested interactive-like games such as Xiao Xiao Lu and new categories such as love fortune telling in our chat room features, which has the largest number of user-based. Our data shows that the pay conversion of the new features was higher than the one existing features.
Speaker Change: Nonggap operating margin for the quarter was 17.9% 17.7% down 4.9% points.
Speaker Change: from the same period last year and 4.2.4 percentage points from the previous quarter.
Speaker Change: Nonggap Olpads as a percentage of total revenue is 23% and increase from 20% from Q2 2023 and up from 22% in Q1 this year.
Speaker Change: Now, briefly, income tax expenses. Total income tax expense was 102.6 million人民 be for the quarter, with an effective tax rate of 19%.
Johnson Trump: Turning to turn-time, let me first talk about its user trends and financial performance. Although our cost, reduction, and efficiency improvement strategy implemented over the past three years has effectively improved time down to profitability. The continued reduction in channel investments has put significant pressure on time down to use the latest.
Speaker Change: and Q2, the company accooled with holding income tax of 17.3 million RMB, which is 5% of undistributed, profit generated by our wealthy.
Speaker Change: Rihout the withholding tax are estimated non-gabby effective tax rate was around 15% in the second quarter.
Johnson Trump: Lin. Meanwhile, the lack of investments in branding over the years has led to a continuous decline in organic uses. At the same time, we haven't been able to find an effective product-level solution that can significantly improve user retention. The combination of the both mention factors has resulted in Tantan's MAU decreasing by 6% sequentially, to 12.9 million in June. As of end of the second quarter, Tantan had 1 million paying uses down to 100,000 sequentially. The main reason were the decline in MAU. The conversion from the UI upgrade and the relegatory related redesign of the new renewal page.
Zhang: Zhang, now returning to balance sheet and cash flow items.
Speaker Change: As of June 30, 2024, Hello Groups Cash Cash Equivalence, Short Term Deposits, Long Term Deposits, Short Term Investments, and Restricted Cash Totode, 14.32 billion人 in the compared to 13.48 billion人 in the, as of December 31, 2023.
Speaker Change: and Q2 was taking equivalent of 715 million人 in the cash dividends to our shareholders. In the current quarter, we bought that 395 million人 in the, or 54 million US dollar worth of shares in the open market.
Speaker Change: Next cash provided by operating activities in the second quarter 2024 was 475.2 million
Speaker Change: and Disney's Outlook.
Speaker Change: We estimated our third quarter revenue to come in the range from 2.58 billion in the East to 2.68.
Johnson Trump: Turning to Tantan's financial, total revenue for the quarter was 234 million R&B, down 27 per cent year over year, and 3 per cent sequentially, mainly due to the reduction in the number of paying uses. Overall, Apple pool was flat year over year, among which the Apple pool of the live streaming business decreased significantly as a result of our strategy to emphasize live streaming, which has a lower correlation with the dating experience.
Speaker Change: Billion Rm and B, representing a decrease of 15.2% to 11.9% year over year, or a decrease of 4.1% to 0.4% quarter of a quarter.
Speaker Change: at segment level for Q3 2024 on a sequential basis, we expect more more revenue to decrease mid to low single digits on the content side, we expect revenue to decrease high single digits.
Speaker Change: Precise my follow that this forecast represents the company's current and preliminary view on the market and operational conditions which are subject to changes.
Johnson Trump: While the wild Apple pool saw a significant year or a year increase thanks to our efforts to promote relegatory, high price products such as black gold, SBIP membership, and additional pay-as-you-go privilege for our members, enabling the facilities of the overall Apple pool.
Speaker Change: That concluded our prepare portion of today's discussion. With that, let me turn a call back to Ashley to start Janne. Ashley, please.
Ashley Jing: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced.
Speaker Change: If you wish to cancel your request, please press start too. If you're on a speaker phone, please pick up the handset to ask your question.
Johnson Trump: In terms of business night, last revenue was 140 million R&B, down to 80 per cent year over year, and 4 per cent sequentially. While last year, the revenue was 83 million R&B, down to 43 per cent year over year, and 5 per cent sequentially.
Speaker Change: Your first question comes from Su King Zhang, with CICC, please go ahead.
Speaker Change: [inaudible]
Johnson Trump: Now, I would like to work you through the efforts we make on Tantan's product and use the acquisition funds and the challenges free space. First, on the marketing and use the acquisition funds, to address the issues of weak friend awareness among young users and the significant declines in organic uses due to the inadequate friend commotion. We conducted friending events during the quarter in cooperation with offline venues such as bars and clubs in metropolitan cities with a high density of young people. We also leveraged new media channels for online promotion to increase awareness of Tantan among young people and overall brands popular.
Speaker Change: Have also been here and there will still stretch to what I've treated me and the last thing is in the next few years. Last of it, the normal have a chance to achieve top-wide goals in 10-25.
Speaker Change: [inaudible] Last year, we were able to talk about how the English-speaking tradition was formed. It was a long time ago. We were able to continue to live in a different country. We were able to live in a different country.
Johnson Trump: We believe that compared with user acquisition through channels, driving user growth by improving brand awareness is a relatively long-term initiative that can take time to bear with those foods. But over time it plays a positive role in the continuous and stable growth of our organic users, especially as Tang Tang has gradually to focus on core, we focus on the core stating experience by good emphasizing the community oriented and the table and the oriented experience in region quarters.
Speaker Change: But only the Chinese and the Chinese are not able to understand the situation of the Sichuan State.
Speaker Change: [inaudible]
Speaker Change: [inaudible]
Speaker Change: [inaudible]
Johnson Trump: This is important for us to strengthen young people's awareness of Tang Tang's value for the dating through long-term brand investments and product improvements. Therefore, continuous increasing the opportunities for brand exposure with a controllable range of marketing investments will be a long-term direction for our branding strategy in the future.
Speaker Change: So, the interview will be held in a special place. It's a very different atmosphere, especially with the warm atmosphere. Although it will be a few weeks later, we will feel that we will have a chance to meet our guests, to meet a good and healthy environment.
Speaker Change: In 2015, Sichuan Zhang was the first to go to Hongguan Jing, and the second to change the direction of Hongguan Jing. Now, the next question is still going on.
Speaker Change: I'm so sorry that you're in a bad situation.
Johnson Trump: On the user acquisition from factors such as the e-commerce festival in June, lecture fierce channel competition, researching in the sequential increase in unit acquisition cost, which combined with the partial on the new user apple from the UI upgrade, lecture to decrease in channel ROI. To address this, our user acquisition and membership product teams work together to recommend relatively high-end membership product to high value users from channels, which help increase in user apple.
Speaker Change: OK, let me translate first. At the end of our last year, we adjusted our operating strategy for live streaming and audio and video-based battery-added service experiences to reduce revenue-oriented competition events.
Speaker Change: The D-Flying Competition events are related revenue in the past few quarters has indeed had a negative impact on
Speaker Change: and the Kormon War at Revenue. But our life streaming and vast team managed to partially offset the revenue decline by introducing new interactive gamify features.
Speaker Change #100: for example, as Sixth Asmensioned. We have introduced personalized costume props in the live streaming showrooms.
Johnson Trump: Now, let me give you an update on the progress Tang Tang has made on product and operational site. In the second quarter, we worked on an upgraded version to improve the dating experience for users. For a preliminary user interview and survey, we view two major pain points in user experience. First, uncertainty about authenticity of picture profiles and users' identity. Second, lack of response to chat after matching. Since the issue of spamming has been effectively controlled since the beginning of the year, user feedback on an authentic experience stem primarily from issues such as incomplete profile information, lack of real person authentication and photos that look too good to be true.
Speaker Change #100: Also added new categories such as Love Fortune Talent in our Vattery service or Charoem experience which have played a positive role in improving painting conversion.
Speaker Change #100: and the impact of the operating strategy adjustment on WOMO revenue is pretty much in line with our expectations.
Speaker Change #100: and the impact on the profit side is actually indeed better than our expectations for the first half of the year.
Speaker Change #101: and the Chinese Communist Party, therefore, we have decided to continue the operational adjustments to the ecosystem in the second half and further the emphasized agency dominated experiences and features, particularly various competition events.
Speaker Change #101: On the product front, we will leave rich moments of social attributes to introduce richer interactive, gamify features for paying users at different levels.
Johnson Trump: The first phase of our redesigning Q2 focus on guiding users and complete their profile information and encouraging them to spend more time learning about potential matching before swiping. Early data shows that a user with a richer profile content has significantly higher post-match conversation rates than those just profile picture and basic information. However, this improvement in matching experience and different interaction conflicted with our ecosystem business model, which relied largely on users' quick swiping decisions based solely on looking at profile picture. The negative impact of this redesign on new user-paying conversion with one of the reasons for the sequential decline in downtown's number of paying users.
Speaker Change #101: or this will cost some short and financial sacrifice. We believe it will create a positive ecosystem for the stable and healthy development of the cash count business in the long run.
Cassie: As for whether a revenue can grow in 2025, it depends mainly on macroeconomic and regulatory changes. It's a bit too early to tell now. As for the revenue and profit guidance for the second half, I will leave that to Cassie.
Cassie: and the Financial All Look of the Castile Business.
Speaker Change #103: for Helpline last quarter we said.
Speaker Change #104: Q2 would be a good basis to think about the back half of the year.
Cassie: What that means is that if you take a 18% your career degree, you see a mom-a application, life-streaming, and about added service in Q2.
Johnson Trump: Nevertheless, we believe that making short-term commercial sacrifices to improve long-term user experience is a critical foundation for downtown to ultimately achieve the strategic goals of profitable growth. We should monetize product features that improve user experience and add value to them rather than do so at the expense of user experience, which can only get us into a downward cycle. During the ongoing product upgrade and optimization, our commercial product team will continue to optimize paying experience to increase new user Apple, which should partially offset the negative impact on revenue caused by the product upgrade.
Cassie: you can apply that same weight for the back half of the year as well.
Speaker Change #105: A regionally, we thought that second half might be a little bit better because the why a Y comparison could get a little bit easier as we entered into the back half of the year. However...
Speaker Change #106: since the cash cow over delivered on the bottom line for the first half. We decided that we should continue our—we should use this opportunity to continue our operational adjustments to push the ecosystem more toward social and entertainment rather than competition within events.
Speaker Change #106: Zhang, that decision could date the revenue slightly for the second half of 24, but overall the cash cow is on track to deliver the annual profit target we internally set for it at the beginning of the year.
Speaker Change #106: So that's how to think about the cash cow.
Johnson Trump: Lastly, in terms of our new endeavors, in the second quarter, total revenue of the new apps which 355 million RMB. Up 36% year-over-year and 4% sequentially, mainly driven by our overseas business. With a stable channel ROI, we moderate increased channel investment, driving study goals in MAU and paying users. On the product and operational front, our team has been accelerating the localization process of overseas business since the beginning of the year. After strengthening the localization research on virtual gifts and parts, our commercial product team introduced hot sales gifts that better matchable for user preferences.
Speaker Change #107: Other than the cow, within Momo segment, we also have the new applications, mainly the overseaads.
Speaker Change #107: This piece will continue the robust, wild, wild growth momentum.
Speaker Change #108: So, that could partially offset the YYD Chris from the Cal. I think for the whole year for the Momo A segment revenues.
Speaker Change #108: [inaudible]
Speaker Change #108: with regards to 2025, Tang Yan said it's still too early to tell, but the two biggest determining factors here are still going to be macro and regulatory environment.
Speaker Change #108: Um...
Speaker Change #109: Profit-wise, our view remains pretty much the same as last quarter, where still, while on track to hit the same adjusted operating margin of high-teens for the year.
Johnson Trump: Meanwhile, our local operation teams refine our services for high-paying users and standardize supply size collaborations and KPIs. This combined efforts led to a significant increase in number of top-care paying users, which in turn drove the app people growth. The simultaneous increase in paying users and app people has laid a solid foundation for sustainable and stable growth in our overseas business.
Speaker Change #109: also internally, we are actually trying to deliver the same annual profit target in absolute dollar amount.
Speaker Change #109: We do have the flexibility and our...
Speaker Change #109: Also prepared to control the spending more tightly if top line is under a little bit of a pressure down the road. On the other hand, if things turn out to be more positive on the revenue front, we will perhaps invest a little bit more for the future.
Johnson Trump: Regarding our expansion in the Mina region, we are focusing on two key tasks. Regional expansion and expanding our offering from more base to live streaming. This initiative is taking longer than the anticipated at the beginning of the year, as we realize that both efforts require a highly localized service team as a prerequisite group. We do not done enough in the past couple of years in terms of localization, and we are now accelerating our efforts to make up the shortcomings.
Speaker Change #109: In other words, we're trying to manage the cost against the top line so we can deliver the annual profit target we set for ourselves at the beginning of the year.
Speaker Change #109: [inaudible]
Speaker Change #109: So I guess those are the colors I can give at this point on the...
Speaker Change #109: and I'm looking for both South Island Bottom Line. Other than that, I don't want to pin ourselves down too much by promising Bottom Line number at this time of the year. So hopefully that helps.
Speaker Change #110: Hi, I'll pray to a ready for next version, please.
Johnson Trump: Over all, we remained confidence in our growth potential in the middle region. Compared to six months ago, we now have a clear understanding of what we must do to continue to grow, and we will continue to invest in this region.
Speaker Change #111: Thank you, your next question comes from Jenny Yuan with UBS. Please go ahead.
Jenny Yuan: Thank you for your question. I'm from UBS, Jenny. First, I'm very proud of you. I'm also very proud of you. I'm also very proud of you.
Speaker Change #113: We saw Ashley Jing's performance in the first two days.
Johnson Trump: This concludes my remarks.
Kathy: Now, let me pass the call over to Kathy for the financial review. Total revenue for the second quarter, 2024, was 2.69 billion RMB. Down 14% young year, but up 5% quarter of a quarter. Non-gap net income attributable to the company was 449.2 million RMB. Compared to 632.1 million RMB for the same period of 2023, and 59.9 million from the last quarter.
Speaker Change #114: Guangning City, Hong Kong, Wenxiang, we are also going to have a great time today. We are going to have a great time today.
Speaker Change #115: and I will trust in myself, this four of us, thanks for taking my question and congrats on it for the results.
Speaker Change #116: I'm asking you regarding our overseas business with a good revenue growth momentum and new apps, conmanagement objectives with overseas progress so far and do you have any not black financial outlook or guidance for this year that can share with us. Thank you.
Speaker Change #117: Before we introduce, we will discuss about the development of the Chinese-China Group. The first challenge is the development of Jiaqiang. The second is the development of the Chinese-China Group.
Speaker Change #117: The third challenge is to make the Chinese government and the Chinese government continue to work together.
Zhang: Zhang, from the 60s to the 80s, he came out.
Kathy: In Q1, we had a one-off non-cash tax provision, excluding this non-cash tax item, non-gap net income would have been 508.5 million RMB for last quarter.
Zhang: [inaudible]
Zhang: Zhang, as I mentioned before, we believe that the growth in our overseas business depends on three main factors.
Kathy: Looking into the key revenue items for the quarter. Firstly, on live broadcasting, total revenue from live broadcasting business for the second quarter of 2024 was 1.30 billion RMB. Down 18% year over year, but up 5% quarter over quarter. The year over year decrease was largely attributable to a decline in the core Momo live streaming business, and to a lesser degree the decrease in time time. The sequential growth was driven by the core Momo live streaming service.
Speaker Change #118: 1. Strenching localised operations, a number two, expand product offering from a voice-based to live streaming services, and number three, expand our businesses in WALC, GCC region, and other countries in the Middle East.
Speaker Change #119: and Sikters Manjian.
Speaker Change #119: We have accelerated the localization process since the beginning of the year.
Speaker Change #119: and in the first half.
Speaker Change #120: We have made some good progress in future design. We find services offering for high-paying users and supply-side collaboration.
Kathy: In terms of segments, Momo app live broadcasting revenue totaled 1.22 billion RMB for the quarter. Down 15% year over year, but up 6% quarter over quarter. The year over year decrease was due to our proactive product and operational adjustments to de-emphasize revenue-oriented competition events and weak consumer sentiment. The sequential growth was due to a rebound after negative seasonality. Contents live broadcasting revenue amounted to 83.0 million RMB. Down 43% year over year and 5% quarter over quarter.
Speaker Change #120: [inaudible]
Speaker Change #121: This is far from enough. We need to continuously expand our overseas personnel reserves, strengthen localized operations, improve cross-border personnel management plans, and enhance the international perspective of the entire team. This will help us gain a deeper understanding of and meet the social preferences and needs of users from different cultural backgrounds.
Speaker Change #122: This is certainly a far not enough for a group company that has pursues a global expansion. We need to continue to expand our overseas personnel pool, strengthen localised operations and improve our cross-border personnel management practices. Improving the international awareness of our team will help us more deeply understand and better meet the social preferences and needs of users from different culture backgrounds.
Kathy: The decrease was due to our strategic decision to pivot away from the less-stating-centric service. Revenue from the Value Addit Services for the second quarter of 2024 was 1.35 billion RMB, down 10% from Q2 last year but up 4% sequentially. The Y-Y decrease was due to a decline in both Momo and Tang Tang. However, the growth of standalone new ads partially offset the downward revenue pressure. But Value Addit Service Revenue grew sequentially driven by the recovery from Momo Vass and continued growth of new applications.
Speaker Change #122: 上班年直播场景的落地速度略地于我们年初的预期,那主要是由于产品运程面需要更长的时间来解决本地话和公会合作的问题
Speaker Change #122: Beijing总部的产品和技术团队的骨贷成员相机走绑了,手球的多个重点市场
Speaker Change #122: [inaudible]
Speaker Change #123: Hai Wei, Chen Zhe, Zhong Da, Wei推進本地化留設計和UI的改版升級, Jia Da,直播測試,彷彿場景
Kathy: Revenue from Vass on an X-Temperum basis was 1.21 billion RMB in the second quarter of 2024, down 9% from Q2 last year but up 5% from the previous quarter. Momo app value added service revenue decreased from Q2 last year due to our proactive product adjustments to manage regulatory risks, as well as the weak standing sentiment, and the sequential revenue growth was driven by seasonal recovery. Revenue from the standalone new apps continued to grow both on a young year and quarter of quarter basis driven by the steady improvement of the overseas business.
Speaker Change #123: [inaudible] continue to continue
Speaker Change #124: The Royal of the Lifestreamy experience in the first half was slightly slower than our expectations at the beginning of the year. This is mainly because he took longer to resolve localisation and agency cooperation issues on the product and operational front.
Kathy: Thomas value added service revenue amounted to RMB 139.9 million, down 18% year over year and 4% sequentially. The decrease was due to a decline in paying users, which was in turn due to a reduction in channel investment.
Speaker Change #124: A recently, key members of our product and tag team at the Beijing Headquarters visited several key social markets and worked with local teams to sought out user feedback and optimize the product and technical solutions.
Kathy: The UI upgrade and the adjustments to subscription renewal policy.
Speaker Change #124: and the growth of the overseas team has later solid foundations for upgrading localized virtual gift design and users interface.
Kathy: Now, turning to cost and expenses. Non-gab cost of revenue for the second quarter of 2024 was 1.59 billion RMB compared to 1.82 billion for the same period last year. Non-gab growth margin for the quarter was 40.8%, down 1.3% from the year ago period.
Speaker Change #124: and speeding up testing of our life-streaming features to enrich a gamified experiences and deepening our exploration in our GCC countries and Turkish markets.
Speaker Change #124: Zhang, the director of the Chinese Communist Party, after this roundoff visit and joint work with the overseas team, we are more convinced of the revenue growth opportunity in the middle east of the market.
Kathy: The year over year decrease was partially due to a number of different factors, was primarily due to a number of different factors, number one, higher payout ratio in our overseas endeavors as we expand into new regions and try to launch new video service, as well as the changing revenue mix toward higher payout businesses. Number two, the leverage where direct personnel and infrastructure costs take up a higher percentage of revenues. Number three, payment channel costs represent a higher percentage of revenues as revenue makes shift toward overseas business. The payout ratio of the core Momo app remains stable with a slight downward trend due to the reduction in event-related bonuses.
Speaker Change #124: and the strategy of achieving a growth through enhanced localisation. As for the financial part, I will leave that to Cassie.
Speaker Change #125: Q. What's your question? A song he mentioned.
Speaker Change #126: Now it looks like we need to spend some time beefing up our local operations before we could.
Cassie: Perceo larger scale revenue growth in the broader mean area.
Speaker Change #127: with been lagging behind on that front and comparison with some of our...
Speaker Change #128: and in, we've been lagging behind on localization front in comparison with some of our peers who were early into the Middle East market. For example, the senior management paid our first visit to our major markets in Mina only last month.
Kathy: Non-gab R&D expenses for the second quarter was 1.79 billion RMB compared to 200.8 million RMB for the same period last year or in a 11% decrease year over year. The decrease was due to the continuous optimization in personnel and infrastructure costs. Non-gab R&D expenses as a percentage of revenue was 7% compared with 6% from the year ago period.
Speaker Change #128: He was not on clothing that we realized that there is still some basic level of the infrastructures we need to put in place in order to take the revenue to the next level. So I guess we are going to spend the second half of the year playing some catch-up in those areas.
Speaker Change #128: The good news is that after the trip, we are even more convinced that there are still a lot of growth opportunities in Mina, so revenue will continue to grow.
Kathy: We ended the quarter with 1,364 total employees of which 282 are from Tantan, compared to 1,470 total employees of which 339 from Tantan a year ago. The R&B personnel as a percentage of total employee for the group was 62 percent compared with 63 percent Q2 last year.
Speaker Change #129: But before we go full force into, for example, light shun service, the wide-wide growth, we're likely to slow down a little bit from Q1 level as we spent time laying the groundwork for strong localization. In Q2, the overseas piece achieved 40-something percent.
Speaker Change #130: Yorui Yer Grove, a good father's blow to maybe meet 30 in the back half before our initiative in Gulf countries and the live streaming start bearing fruits.
Kathy: Non-Gap sales and marketing expenses for the second quarter was 360.6 million R&B or 16 percent of total revenue, compared to 349.7 million R&B or 11 percent of total revenue for the same period last year. The year-rear increase in absolute R&B amount was mainly due to an offline gala for Momo live streaming service which in 2023 was held in Q1. Non-Gap GNA expenses was 89.5 million R&B for the second quarter of 2024 compared to 83.2 million R&B for the same period last year, both representing a 3 percent of total revenue.
Speaker Change #131: So, that's the color that I can give in terms of financial outlook for the overseas business. Okay, operator, next question please.
Speaker Change #132: Thank you, your next question comes from Thomas Chang with Diffres. Please go ahead.
Speaker Change #132: [inaudible]
Kathy: Non-Gap operating income was 476.5 million R&B. It decrease of 33 percent from Q2, 223 down 7 percent from the previous quarter. Non-Gap operating margin for the quarter was 17.9 percent down 4.9 percentage points from the same period last year and 4.2 percentage points from the previous quarter. Non-Gap op-as as a percentage of total revenue was 23 percent and increased from 20 percent from Q2, 223 and up from 22 percent in Q1 this year.
Speaker Change #133: Minister of Management for today, my question is about time-time. Just in the paper, we must, management talks about...
Speaker Change #134: and the program of our time time, we still in progress. Our management talks about the current situation and our ultimate goal. As well as our health, our reference, and our profitability will be impacted by this review. Thank you.
Speaker Change #135: I'm going to talk to her for two years now.
Speaker Change #136: [inaudible] Zhang Zhang, Fang Mian,取得了不错的成绩.
Speaker Change #136: [inaudible]
Kathy: Now briefly on income taxes. Total income tax expense was 102.6 million R&B for the quarter with an effective tax rate of 19 percent in Q2 the company accrued with holding income tax of 17.3 million R&B which is 5 percent of undistributed profit generated by our wealthy. Without the withholding tax our estimated non-Gap effective tax rate was around 16 percent in the second quarter.
Speaker Change #136: But in the past, I didn't have the opportunity to ask questions.
Speaker Change #136: [inaudible]
Speaker Change #136: Wang An, who was born in the city of China, was born in the city of China.
Speaker Change #137: Henta has achieved a good result over the past two years in terms of reducing the channel investment, improving channel efficiency and driving up-you-go growth, and resulting in six consecutive quarters of profit.
Kathy: Now turning to balance sheet and cash flow items. As of June 30 is 2024, hello groups cash cash equivalent short term deposits, long term deposits, short term investments and restricted cash totaled 14.32 billion R&B compared to 13.48 billion R&B as of December 31st, 2023. In Q2 we're paying equivalent of 716 million R&B cash dividends to our shareholders in the in the current quarter we bought that 395 million R&B or 54 million US dollar worth of shares in the open market net cash provided by operating activities in the second quarter 2024 was 475.2 million R&B.
Speaker Change #137: However, it's used a base has not yet stabilized, and revenues have also shown slow downward trend due to the impact of user scale.
Speaker Change #137: and we believe the fundamental reasons for this is that Tantai has not made significant breakthroughs in the coordinating experience.
Speaker Change #137: and we need to be bolder at the product level to find product solutions that can significantly improve retention and driver organic user growth.
Speaker Change #138: I will show you how to use the Chinese language to express the meaning of the language.
Speaker Change #139: Li Lu Wei,提升用户的真实版,我们会通过发放室用会员全艺的方式机利用户,上传真实的图片级文字信息
Kathy: Lastly, on Business Outlook, we estimated our third quarter revenues would come in the range from 2.58 billion RMB to 2.68 billion RMB, representing a decrease of 15.2% to 11.9% year-over-year, or a decrease of 4.1% to 0.4% quarter over quarter. At segment level for Q3, 2024, on a sequential basis, we expect Momo revenue to decrease mid to low single digit. On the time-time side, we expect revenue to decrease high single digit.
Speaker Change #140: And in the chat session after matching, guide users to complete real-person verification. Another prominent issue is that in order to increase DAU (Daily Active Users), our algorithm tries to improve the experience of some male users who do not easily get matching opportunities. However, one consequence of doing this is...
Speaker Change #141: is a woman who has been living in the past, and has been living in the past, and has been a great role in the development of the Chinese government. Therefore, the Chinese government will have to use the Chinese government to make sure that the Chinese government is well-known.
Speaker Change #141: Um...
Kathy: Previously, my fault that this forecast represents the company's current and preliminary view on the market and operational conditions, which are subject to changes.
Speaker Change #142: In this round-off version upgrade, we aim to fully return to the user experience by adjusting the interface and optimize the user guidance strategy.
Ashley Jing: That concluded our prepared portion of today's discussion. With that, let me turn a call back to Ashley to start DNA. Ashley, please. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speaker phone, please pick up the handset to ask your question.
Speaker Change #143: for example, to enhance a sense of our authenticity of users. We will encourage them to upload real pictures and text information by issuing trial membership benefits.
Speaker Change #143: and guide users to complete real person authentication in the chat session after matching.
Speaker Change #143: and another prominent issue is that in order to improve the AU, our algorithm tries to take care of the experience of some nail users who don't easily get matching opportunities.
Sue King-Zang: Your first question comes from Sue King-Zang with CICC. Please go ahead. CICC, thank you for taking my question. My question is about Momo.
Speaker Change #143: as a result of a small number of high-quality female users got her excessive exposure. Resulting in a large number of matches that could not be converted into chat interactions.
Speaker Change #143: and others. Therefore, our algorithm team will make it easier for women to make up their minds by reducing low quality matches, thereby improving chat conversion.
Speaker Change #144: In order to encourage product merchants to experiment more, the management does not want the team to be constrained by short-term numbers during the revision testing period. Therefore, we will allow some fluctuations in user scale and revenue in the short term. We believe this is the right choice for the product in the long term.
Yan Tang: Conferring a current Michael and the Regulation Environment, how to build the revenue and the profit of the half of the year, and what's your strategy for life streaming and the lifespan is in the next few years. Lastly, the Momo have a chance to achieve top-line goals in 2025. Thank you.
Speaker Change #145: I am very pleased to see the team uphold the spirit of innovation and change in a challenging environment, quietly launching a completely new version. The complete overhaul of Tantan not only demonstrates our insight into the changing needs of users but also shows our strong determination to improve user experience. As for the specific financial issues, let's leave them to Casey.
Speaker Change #145: [inaudible] Hui Peng, Hui Peng, Hui Peng, Hui Peng, [inaudible]
Yan Tang: Let me answer this question. So, my各新化的專門道具在WAS聊天時裏邊增加情感沾補等新的品類對提升付費轉化都起到了積極的作用.整體看運營策略的調整對流水造成的影響基本符合我們的預期,利潤層面甚至是顯著好與我們對上半年的預期,因此我們決定下半年延續生態調整的運營策略進一步會弱化這個公會主導的長期和玩法,利潤層面甚至是顯著好與我們對上半年的預期,因此我們決定下半年延續生態調整的運營策略進一步會弱化這個公會主導的長期和玩法,特別是各種競爭性的賽事活動,那麼這產品上會移脫默默的社交屬性,針對不同成績的付費用戶推出更豐富的互動玩法,這雖然會犧牲一些短期的經濟利益,但我們覺得會為現金流業務的長期穩定健康發展,贏得一個良好的生態環境,但我們覺得會為現金流業務的長期穩定健康發展,贏得一個良好的生態環境, Let me translate first. At the end of our last year, we adjusted our operating strategy for live streaming and audio and video-based value-added service experiences to reduce revenue-oriented competition events. The decline in competition events are related revenue in the past few quarters has indeed had a negative impact on the core Momo app revenue. But our live streaming and vast team managed to partially offset the revenue decline by introducing new interactive gamified features.
Cassie: The redesigned 2010 demonstrates not only our insight into evolving use and needs, but also our strong commitment to improving user experience. I, as for the financial part, I will leave that to Cassie.
Casey: OK, for Kampang, I guess there are three things we're calling out on the financial side. One is what Sikampang am pointing toward in their comments.
Speaker Change #147: After a long period of trial and error, we figured that the only way out for Tantan is to not worry about short-term KPI numbers and do whatever we believe is the right thing to do.
Speaker Change #147: [inaudible]
Speaker Change #147: So, for the coming six months or so, we're going to allow the time time team to put financial targets aside and set top priority on the dating experience.
Speaker Change #148: Well, I do not have full clarity at this point where the revenue would land for the rest of the year. I guess Q2, why why decrease could be a good reference point to project a back half of 2024.
Speaker Change #148: The second point I like to call out here is...
Yan Tang: For example, as Sixth just mentioned, we have introduced personalized costume props in the live streaming showrooms and also added new categories such as love fortune telling in our value-added service chatroom experience, which have played a positive role in improving payment conversion. And overall, the impact of the operating strategy adjustment on Momo revenue is pretty much in line with our expectations. And the impact on the profit side is actually indeed better than our expectations for the first half of the year.
Speaker Change #148: Wang, while Pantan is still not ROI positive in terms of user acquisition, we believe we need to keep the marketing stand at the Q2 level for the coming couple of quarters, so that the skill of Pantan will be maintained.
Speaker Change #148: Um, and...
Speaker Change #148: The third thing I would like to mention here is Dad.
Speaker Change #148: You know, if you put the first thing and the second thing I mentioned just now together and try to think about, you know, the bottom line for time time.
Yan Tang: Therefore, we have decided to continue the operational adjustments to the ecosystem in the second half. And further the emphasized agency-dominated experiences and features, and particularly various competition events. On the product front, we will leverage Momo's social attributes to introduce retail interactive gamified features for paying users at different levels. Although this will cost some short-term financial sacrifice, we believe it will create a positive ecosystem for the stable and healthy development of the cash cow business in the long run. As for whether our revenue can grow in 2025, it depends mainly on macroeconomic and regulatory changes. It's a bit too early to tell now.
Speaker Change #149: I think the profit will likely to decrease from the first half of the year.
Speaker Change #149: But for the whole year 2024, our view is that Tantan is still going to be profitable. So that's...
Speaker Change #150: I think, yeah, this is the perfect timing. So thank you for participating and we'll see you next quarter.
Speaker Change #151: Thank you, this does conclude our conference for today. Thank you for participating, you may now disconnect.
Kathy: As for the revenue and profit guidance for the second half, I will leave that to Cassie. Cassie, please. Okay. On the financial outlook of the cash cow business, for top-line last quarter, we said Q2 would be a good basis to think about the back half of the year. What that means is that if you take the 18 percent year-over-year decrease in Momo application light streaming and value added service in Q2, you can apply that same weight for the back half of the year as well.
Kathy: Originally, we thought that second half might be a little bit better because the Y-Y comparison could get a little bit easier as we entered into the back half of the year. However, since the cash cow actually over-delivered on the bottom line for the first half, we decided that we should continue our, we should use this opportunity to continue our operational adjustments to push the ecosystem more toward social entertainment, rather than competition-driven events.
Kathy: That decision could dip the revenue slightly for the second half of 24, but overall, the cash cow is on track to deliver the annual profit target. We internally set for it at the beginning of the year, so that's for, that's how to think about the cash cow.
Kathy: Other than the cow, within Momo segment, we also have the new applications, mainly the Overseas. This piece will continue the robust Y-Y growth momentum, so that could partially offset the Y-Y decrease from the cow. I think for the whole year for the Momo segment revenues, we will likely to fall into the 10 to maybe 12 percent range in terms of Y-Y decrease, with regards to 2025, as Tang Yan said, it's still too early to tell, but the two biggest determining factors here are still going to be macro and regulatory environment.
Kathy: Profit-wise, our view remains pretty much the same as last quarter, where still while on track to hit the same adjusted operating margin of high teens for the year, also internally we are actually trying to deliver the same annual profit targeting an absolute dollar amount. We do have the flexibility and are also prepared to control the spending more tightly if top line is under a little bit of a pressure down the road.
Kathy: On the other hand, if things turn out to be more positive on the revenue front, we will perhaps invest a little bit more for the future. In other words, we are trying to manage the cost against the top line so we can deliver the annual profit target we set for ourselves at the beginning of the year. So I guess those are the colors I can give at this point on the outlook for both top line and bottom line. Other than that, I don't want to pin ourselves down too much by promising a bottom line number at this time of the year. So hopefully that helps.
Ashley Jing: Back to Ashley for next question. Hi, I'll be ready for next question, please.
Jenny Yuan: Thank you. Your next question comes from Jenny Yuan with UBS. Please go ahead. Thank you for your question. I'm here with UBS Jenny. First of all, the company is very strong in business. My question is about the company's business. We see that the company is very well-developed with UBS. The policy of the company is that the company can share with us and share the financial situation of the company's business. Also, we are looking forward to the future of UBS. So I will trust in myself. The floor, thanks for taking my question and congrats on the floor.
Yan Tang: There is about my question is regarding our overseas business. With a good revenue growth momentum in the new UBS, current management update us with overseas progress so far and do you have any financial outlook or guidance for this year that can share with us? Thank you.
Yan Tang: As I mentioned before, we believe that the growth in our overseas business depends on three main factors. Number one, strengthen localized operation. Number two, expand product offering from a voice-based to a live streaming services. Number three, expand our businesses in wealthy GCC region and other countries in the Middle East. We have accelerated the localization process since the beginning of the year and in the first half we have made some good progress in future design.
Yan Tang: We find services offering for high-paying users and supply side collaboration. [inaudible] We need to continue to expand our overseas personnel crew, strengthen localized operations and improve our cross-border personnel management practices. Improving the international awareness of our team will help us more deeply understand and better meet the social preferences and needs of users from different culture backgrounds.
Yan Tang: [inaudible] This is mainly because it took longer to resolve localization and agency cooperation issues on the product and operational front. Recently, key members of our product and tech team at the Beijing headquarters visited several key social markets and worked with local teams to sort out user feedback and optimize the product and technical solutions. The road of the overseas team has laid a solid foundation for upgrading localized virtual-gift design and user interface and speeding up testing of our life-streaming features to enrich gamified experiences and deepening our exploration in GCC countries and Turkish markets.
Yan Tang: After this round of visit and joint work with the overseas team, we are more convinced of the revenue growth opportunity in the Middle East market and the strategy of achieving growth through enhanced localization. As for the financial part, I will leave that to Kes.
Kathy: Zhang, as I mentioned, now it looks like we need to spend some time beefing up our local operations before we could pursue larger scale revenue growth in the broader Meena area, we've been lagging behind on that front in comparison with some of our, I mean, we've been lagging behind on localization front in comparison with some of our peers who are early into the Middle East market. For example, the senior management paid our first visit to our major markets in Meena only last month.
Kathy: It was not until then that we realized that there was still some basic level of the infrastructures we need to put in place in order to take the revenue to the next level. So, I guess we are going to spend the second half of the year playing some catch-up in those areas. The good news is that after the trip, we are even more convinced that there are still a lot of growth opportunities in Meena, so revenue will continue to grow.
Kathy: But before we go full force into, for example, live shooting service, the wildlife growth will likely to slow down a little bit from two-one level as we spent time laying the groundwork for strong localization. In due to the overseas piece achieved 40-something percent year-over-year growth, it could further slow to maybe need 30-year in the back half before our initiatives in Gulf countries and the live streaming start bearing fruits. So, that's the color that I can give in terms of financial outlook for the overseas business.
Ashley Jing: Okay, I'll put the next question please. Thank you.
Thomas Chong: Your next question comes from Thomas Chong. What's your phrase? Please go ahead. Guangshan Hao. Thank you. Guangshan Hao. Thank you. Guangshan Hao. Thank you. Guangshan Hao. Thank you. Guangshan Hao. Thank you. Guangshan Hao.
Hui Peng: [inaudible] Peng, how do you deal with the situation? We need to be bolder at the product level to find product solutions that can significantly improve retention and drive organic user growth. In this round of version upgrade, we aim to fully return to the user experience by adjusting the interface and optimize the user guidance strategy, for example, to enhance the sense of authenticity of users. We will encourage them to upload real pictures and text information by issuing trial membership benefits and guide users to complete real-person authentication in the chat session after matching.
Hui Peng: Another prominent issue is that, in order to improve DAU, our algorithm tries to take care of the experience of some male users who don't easily get matching opportunities. As a result, a small number of high-quality female users got an excessive exposure, resulting in a large number of matches that could not be converted into chat interactions. Therefore, our algorithm team will make it easier for women to make up their minds by reducing low-quality matches, thereby improving chat conversions, to encourage more exploration on the product side, management does not want the team to be constrained by short-term operational and financial targets during the pilot phase of the upgrade.
Hui Peng: Therefore, we are allowing some fluctuations in user scale and revenue in the short-term. We believe this is the right decision for 10 times the long run. I am very pleased to see that the team is maintaining the spirit of innovation and adoption in the challenging environment. The redesign of 10 times demonstrates not only our insight into evolving user needs, but also our strong commitment to improving user experience.
Kathy: As for the financial part, I will leave that to Cassie. Okay, for Tan Tan, I guess there are three things worth calling out on the financial side. One is what Xi Kuntang pointed toward in their comments. After a long period of trial and error, we figured that the only way out for Tan Tan is to not worry about short-term KPI numbers and do whatever we believe is the right thing to do in order to give the user the best dating experience.
Kathy: So for the coming six months or so, we are going to allow the Tan Tan team to put financial targets aside and set top priority on the dating experience. While I do not have full clarity at this point on where the revenue would land for the rest of the year, I guess Q2YY decrease could be a good reference point to project the back half of 2024. The second point I like to call out here is while Tan Tan is still not ROI positive in terms of user acquisition, we believe we need to keep the marketing stand at the Q2 level for the coming couple of quarters so that the scale of Tan Tan will be maintained.
Kathy: And the third thing I would like to mention here is that if you put the first thing and the second thing I mentioned just now together and try to think about the bottom line for Tan Tan, I think the profit will likely to decrease from the first half of the year, but for the whole year 2024, our view is that Tan Tan is still going to be profitable. So that's Tan Tan's financial outlook.
Ashley Jing: Now I'm handling back to Ashley to make sure to call. I think this is our perfect timing, so thank you for participating and we'll see you next quarter.
Operator: Thank you, this does conclude our conference for today. Thank you for participating, you may now disconnect. [inaudible] and thank you for your time, and thank you for your time,[inaudible] your time, and thank you for your time, and thank you for your time,[inaudible] your time, and thank you for your time, and thank you for your time,