Q2 2025 Hello Group Inc Earnings Call
I need 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 followed by the number one on your telephone keypad.
Please note this conference is being recorded today.
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 second quarter 2025 earnings Conference call. The company's results were released earlier today and are available on the company's IR website on the call today are Mr. Tang Yan CEO of the company <unk> CFO of the company and Mr. <unk> CFO 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 before we begin I would like to remind you that this call may contain forward looking statements made under the safe Harbor provision of the private Securities Litigation Reform Act of 1095.
Such statements are based on management's current expectations on current market and operating conditions I relate to events that involve known or unknown risks uncertainties or other factors.
Aprita: Ladies and gentlemen, thank you for standing by and welcome to the second quarter 2025 Hello Group Inc. 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'll need to press the star key followed by the number one on your telephone keypad. Please note this conference is being recorded today. I would now like to hand the conference over to your first speaker today, Ms. Ashley Jing. Thank you. Please go ahead, ma'am.
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 maturity from those in the forward looking statements.
All participants are in a listen-only mode.
Further information regarding this and other risks uncertainties or factors is included in the company's filings with the U S. <unk> Exchange Commission. The company does not undertake any obligation to update any forward looking statements as a result of new information future events or otherwise except as required under law.
There will be a presentation followed by a question-and-answer session.
If you wish to ask a question, you'll need to press the star key followed by the number 1 on your telephone keypad.
Please note this conference is being recorded today.
I will now pass the call over to our COO Ms. Johnson trends these junky.
I would now like to hand the conference over to your first speaker today, Miss Ashley Jing. Thank you. Please go ahead, ma'am.
Ashley Jing: Thank you, Aprita. Good morning and good evening, everyone. Thank you for joining us today for Hello Group Inc.'s second quarter 2025 earnings conference call. The company's results were released earlier today and are available on the company's IR website. On the call today are Mr. Tang Yan, CEO of the company, Ms. Zhang Sichuan, COO of the company, and Ms. Peng Hui, CFO 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. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provision of the Private Securities Litigation Reform Act of 1995.
Thank you.
Hello, everyone. Thank you for joining our call.
In Q2, both our domestic and overseas business continue to positive trend that began at the start of the year.
Thank you, operator. Good morning and good evening, everyone. Thank you for joining us today for Hello Group's second quarter 2025 earnings conference call. The company's results were released earlier today and are available on the company's IR website.
Achieving this without cause <unk> operational and financial metrics.
Next I will give you an update on execution of our strategic goals.
Starting with the financial performance.
On the call today, I missed the Tang CEO of the company of the company and Miss P, CFO 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.
For Q2, 25 total revenue was $2 62 billion RMB.
Down 3% year over year.
Domestic revenue reached two point 18 billion RMB down 11% year over year, while overseas business was 442 million RMB.
Ashley Jing: 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, uncertainties, 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 forward-looking statements. For the information regarding this and other risks, uncertainties, and factors 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 forward-looking statements as a result of new information, future events, or otherwise, except as required under law. I will now pass the call over to our COO, Ms. Zhang Sichuan. Ms. Zhang Si.
Before we begin, I would like to remind you that this call may contain forward-looking statements, made under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.
Such statements are based on Management's current expectations, as well as current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors.
Up 17, 3% year over year.
Adjusted operating income was 448 million RMB.
Down 6% from Q2 last year with a margin of 17%.
All of which are difficult to protect and many of which are beyond the company's control, which may cause the company's actual results for 4 months, or achievements, to defer materially from those in the forward-looking statements.
Our key priorities for 2025 include the following.
Well Momo the goal is to maintain the productivity of this business with a healthy social ecosystem.
For the information regarding this and other risks, uncertainties, and factors, please refer to the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required under law.
<unk>. The goal is to maintain or improve is coordinating experience and view and efficient business model that drives profitable growth.
Zhang Sichuan: Thank you, Ashley. Hello, everyone. Thank you for joining our call. In Q2, both our domestic and overseas business continued to have positive trends that began at the start of the year, achieving good results across various operational and financial metrics. Next, I will give you an update on the execution of our strategic goals. Starting with the financial performance for Q2 2025, total group revenue was RMB 2.62 billion, down 3% year-over-year. Domestic revenue reached RMB 2.18 billion, down 11% year-over-year, while overseas business was RMB 442 million, up 17.3% year-over-year. Adjusted operating income was RMB 448 million, down 6% from Q2 last year, with a margin of 17%. Our key priorities for 2025 include the following. For MoMo, the goal is to maintain the productivity of this cash cow business with a healthy social ecosystem.
I now pass the call over to our COO, Miss Youngster Miss.
Hello everyone. Thank you for joining our call.
For the new endeavors. Our goal is to continue deploying our presence in overseas market.
In reaching our brand portfolio and building a long term growth engine.
In Q2 both our domestic and overseas business continued to the positive Trends South again at the start of the year.
In the first half of 2005, our domestic business gradually stabilized with both revenue and profit exceeding our initial expectations.
Achieving good results across various operational and financial metrics.
Next, I will give you an update on the execution of our strategic goal.
Starting with the financial performance.
For overseas business, we continued to drive rapid revenue growth with controllable costs and expenses.
For Q2 2025, total group revenue was $2.62 billion.
Down. 3% year-over-year.
And now let me walk you through the details.
First mobile App, all products and user acquisition efforts were focused around the goal of ensuring the productivity of the cash cow business.
Domestic Revenue reached 2.18 billion, R&B down 11% year-over-year. While overseas business, was 442 million R&B
Up 173% year-over-year.
On the product side, the focus was to enhance user experience to ensure long term data policy through a healthy show show ecosystem.
In the income was 448 million R&B.
Down 6% from Q2 last year, with a margin of 17%.
In Q2, we fully roll out the in house developed AI greeting feature.
Our key priorities for 2025 include the following.
Which has no users to generate personalized greeting driver.
Driving the reprice rates up by a high single digit percentage building, our use of AI to enhance ice breaking chat experience.
Zhang Sichuan: For TangTang, the goal is to maintain and improve its core dating experience and build an efficient business model that drives profitable growth. For the new endeavors, our goal is to continue deepening our presence in overseas markets, enriching our brand portfolio, and building a long-term growth engine. In the first half of 2025, our domestic business gradually stabilized, with both revenue and profit exceeding our initial expectations. For overseas business, we continue to drive rapid revenue growth with controllable costs and expenses. Now, let me walk you through the details. First, on MoMo app, all product and user acquisition efforts were focused around the goal of ensuring the productivity of the cash cow business. On the product side, the focus was to enhance user chat experience to ensure long-term data ability through a healthy social ecosystem.
For Momo. The goal is to maintain the productivity of this Catal business with the healthy social ecosystem.
We have also been testing an AI chat assistance feature.
For Tan. The goal is to maintain and improve, its core dating experience, and be an efficient business model that drives profitable growth.
Which provides content suggestions for Mary uses during the ongoing conversation.
For the new endeavors, our goal is to continue dipping our presence in overseas markets.
This feature to drive an increasing number of multi year round conversation and right after the in depth chats.
In reaching our brand portfolio and building a long-term growth engine.
Thereby improving retention and play a positive role in stabilizing momo's user base.
In the first half of 2025, our domestic business gradually stabilized, with both revenue and profits exceeding our initial expectations.
On the user acquisition front, we further refined our approach based on ROI and reduce the budget of efficient channels.
For overseas business, we continue to drive rapid revenue growth with controllable costs and expenses.
And now, let me walk you through the details.
We also optimized.
Acquisition materials for high Apple users and drove sequential growth in Apple by enhancing the onboarding experience for paying futures among users from these channels.
First, on the Momo app, all products and user acquisition efforts were focused around the goal of ensuring the productivity of the cash car business.
The reduction in unit acquisition costs combined with the App useful tools.
Drove Florida improvement in IRI rich.
Zhang Sichuan: In Q2, we fully rolled out the in-house developed AI greetings feature, which helps male users to generate personalized greetings, driving the reply rate up by a high single-digit %, building our use of AI to enhance icebreaking chat experience. We have also been testing an AI chat assistants feature, which provides content suggestions for male users during the ongoing conversation. This feature drives an increase in the number of multi-round conversations and rate of in-depth chats, thereby improving retention and playing a positive role in stabilizing MoMo's user base. On the user acquisition front, we further refined our approach based on ROI and reduced the budget of inefficient channels. We also optimized acquisition materials for high-Apple users and drove sequential growth in Apple by enhancing the onboarding experience for paying features among users from these channels.
On the product side, the focus was to enhance the user experience to ensure long-term stability through a healthy social ecosystem.
Which had already achieved our target greater than 100% in tier one.
The overall use of attention remains stable despite increased channel investments.
In Q2, we fully rolled out the in-house developed AI greeting feature.
Which helps male users to generate personalized greeting.
Thanks, Sue to improve user experience driven by product enhancements and algorithm optimization.
Driving the reply rate up by a high single-digit percentage.
As far as the ability to accommodate chatter users more effectively.
Building our use of AI to enhance ice breaking chat experience.
In Q2, mobile App had $3 5 million paying users.
We have also been testing an AI chat assistance feature.
<unk> decrease of zero point $6 million.
Due to our ongoing efforts to cut user acquisition investments with negative.
This feature drives an increase in the number of multi-round conversations and rates, offering in-depth checks.
Yeah.
Since the actual low paying users that we proactively abandon Nick very limited contribution to the top line.
Thereby improving retention and playing a positive role in stabilizing Momo's user base.
The accident <unk>.
Has had a very minimal negative impact on revenue.
Instead, they're accidents contributed to an improvement in profitability will.
On the user acquisition front, we further refine our approach based on Roi and reduce the budget of inefficient channels.
We believe that the current user acquisition environment in China has fundamentally changed from the pre pandemic period, and our user acquisition strategy to also evolved to achieve ongoing improvements in OE.
Zhang Sichuan: The reduction in unit acquisition costs, combined with the app growth, drove further improvement in ROI, which had already achieved a target greater than 100% in Q1. The overall user retention remained stable despite increased channel investment, thanks to the improved user experience driven by product enhancement and algorithm optimization, as well as the ability to accommodate channel users more effectively. In Q2, MoMo app had 3.5 million paying users, a sequential decrease of 0.6 million due to our ongoing efforts to cut user acquisition investments with negative ROI. Since the ultra-low paying users that we proactively abandoned make very limited contributions to the top line, the absence of this group has had a very minimal negative impact on revenue. Instead, their absence contributed to an improvement in profitability.
We also optimize acquisition materials for High Apple user and drove sequential growth in apple, by enhancing the onboarding experience for paying features among users from these channels.
The reduction in unit acquisition costs combined with the RP growth.
I believe that.
I'm confident that both momo and content.
Grow further improvement in our eyes.
We will have room for continuous improvement in this area.
Which had already achieved a target greater than 100% into Q1.
Now on the productivity of the cash.
Normal cash consequence, and.
The overall user retention may remain stable despite increased channel investments.
In Q2.
<unk> value added service.
<unk> revenue reached 185 billion RMB down 11% year over year.
Thanks to the improved user experience driven by product enhancements and algorithm optimization as well as the ability to accommodate Channel, users more effectively.
The decline was mainly due to the stop spending sentiment among high paying users.
Particularly is live streaming experience.
The weak macro environment.
In Q2, the Momo app has 3.5 million paying users, a sequential decrease of 0.6 million.
In light of this we.
Increased operational efforts in chat room experience.
Due to our ongoing efforts to cut user acquisition investments with negative ROI.
Which is popular amongst many cohort users.
We adjusted the common recommendation algorithm to enhance penetration rates and user scale off the audio and video based experiences.
Since the ultra low paying users that we proactively abandoned, make very limited contribution to the Top Line.
The absence of this group has had a very minimal negative impact on revenue.
Thereby stimulating consumption is diaz amongst meet cohort users.
Zhang Sichuan: We believe that the current user acquisition environment in China has fundamentally changed from the pre-pandemic period, and our user acquisition strategy also evolved to achieve ongoing improvement in ROI. I believe that I'm confident that both MoMo and TangTang still have room for continuous improvement in this area. Now, on the productivity of the MoMo cash cow business, in Q2, MoMo value-added service revenue reached RMB 1.85 billion, down 11% year-over-year. The decline was mainly due to the soft spending sentiment among high-paying users, particularly in live streaming experience amid the weak microenvironment. In light of this, we increased operational efforts in chat room experience, which is popular among mid-cohort users. We adjusted the common recommendation algorithm to enhance penetration rates and user scale of the audio and video-based experiences, thereby stimulating consumption enthusiasm among mid-cohort users.
instead, their absence contribute to an improvement in profitability,
After the seasonal low in Q2 reorganized non bonus driven competition events and live streaming.
We believe that the current user acquisition environment in China has fundamentally changed from the pre-pandemic period.
And increased AC.
As your weight of high quality broadcasters to high paying users in our algorithm.
And our user acquisition strategy has also evolved to achieve ongoing improvements in our life.
On the product side, we introduced new interactive gifts that better facilitate relationship building and paying conversion between users and for our customers.
I believe that, uh, I'm confident that both Momo and tantan.
Still have room for continuous improvement in this area.
Now, on the productivity of the cash, uh, of Momo, cash competitors.
With the joint efforts of our algorithm and product.
Thank you too, Momo value-added service.
Hence our traffic monitor monetization.
Monetization efficiency.
<unk> with our seasonal recovery.
Revenue reached $1.85 billion, with R&B down 11% year-over-year.
<unk> revenue increased 4% from last quarter.
Turning to 10 pounds.
Decline was mainly due to the soft spending sentiment among high-paying users.
In order to maintain profitability revenue pressure the <unk>.
Particularly in live streaming experience.
Amid, the micro environments.
<unk>, our strategy of reducing channel investments in Q2.
Our plan initiated at the start of the year with a target.
In light of this, we increase our operational efforts in chat rooms experience.
Which is popular among many cohort users.
Over 100%.
We sort of scaled back budgets or underperforming channels.
This decrease in China traffic put some pressure on the overall use of scale.
We adjusted the common recommendations algorithms to enhance penetration rates and user scale of the audio and video-based experiences.
However, organic user growth show a positive trend since the beginning of the year.
Zhang Sichuan: After the seasonal load in Q2, we organized non-bonus-driven competition events in live streaming and increased the exposure rate of high-quality broadcasters to high-paying users in our algorithm. On the product side, we introduced new interactive gifts that better facilitate relationship building and paying conversion between users and broadcasters. With the joint efforts of our algorithm and product, we enhanced our traffic monetization efficiency, coupled with our seasonal recovery. Buzz revenue increased 4% from last quarter. Turning to TangTang, in order to maintain profitability amidst revenue pressure, we continue our strategy of reducing channel investment in Q2. A plan initiated at the start of the year with a target ROI of over 100%, we further scaled back the budget for underperforming channels. This decrease in channel traffic puts some pressure on the overall user scale.
Thereby stimulating consumption, enthusiasm, and the amount of MCO uses.
And decreased Sydney over a quarter over quarter.
After the seasonal loads in Q2, we organized non-bonus-driven competition events in live streaming.
Which potentially offset the decline in user numbers caused by the reduction in marketing expense.
In June <unk>, Mou reached $10 2 million down 5% from last quarter.
And increase the exposure rate of high-quality broadcasters to high-paying users in our algorithm.
As of the end of Q2, <unk> has 740000 paying users.
On the product side, we introduced new interactive gifts that better facilitate relationship building and payment conversion between users and forecasters.
A decrease of 80000 from Q1.
In addition to a decrease in Mou.
Another reason for the decline in paying users is the short term pressure on the paying conversion.
With the joint efforts of our algorithm and products, we enhance our traffic monitoring, monetization efficiency, coupled with our seasonal recovery.
Cost side improvements in user experience associated with the product upgrades.
Bus revenue increased 4% from last quarter.
Turning to downtown.
Following the full scale roll out of the pilot projects, there was a slight quarter over quarter decrease in paying ratio.
In order to maintain profitability amidst revenue pressure.
We continue our strategy of reducing channel investments in Q2.
Turning to <unk> financials.
Revenue from the onshore business in Q2 was 116 million RMB.
Our plan initiated at the start of the year with a target ROI of over 100%.
We further scale back budgets for underperforming channels.
Down 18% year over year and 4%.
Quarter over quarter.
Zhang Sichuan: However, organic user growth showed a positive trend since the beginning of the year and increased steadily quarter over quarter, which partially offset the decline in user numbers caused by the reduction in marketing spend. In June, TangTang's MAU reached 10.2 million, down 5% from last quarter. As of the end of Q2, TangTang had 720,000 paying users, a decrease of 80,000 from Q1. In addition to a decrease in MAU, another reason for the decline in paying users is the short-term pressure on the paying conversion caused by the improvement in user experience associated with the product upgrade. Following the full-scale rollout of the pilot project, there was a slight quarter over quarter decrease in paying ratio. Turning to TangTang's financials, revenue from the onshore business in Q2 was RMB 116 million, down 18% year-over-year and 4% quarter over quarter.
This decrease in channel traffic put some pressure on the overall user scale.
The revenue decrease was due to a decline in the number of paying users.
But RP pool increased.
However, organic users growth show a positive trend since the beginning of the year.
2018% year over year, and 8% quarter over quarter.
And increase steadily over a quarter over quarter.
Rich potentially innovated the pressure on revenue.
At the product level to explore stating experiences.
That the client in user numbers caused by the reduction in marketing expense.
For Asian relaunched product upgrades from last year.
On June 10th, Mau reached 10.2 million, down 5% from the last quarter.
Our key efforts include it.
Strengthening view use of application to enhance user authenticity and brand trust.
As of the end of Q2 tan has 720,000 paying users,
a decrease of 80,000 from Q1.
How much you refocusing on the core dating experience by simplifying the UI lay out to focus on key information.
In addition to a decrease in MAU, another reason for the decline in paying users is the short-term pressure on the paying conversion.
Wow downplay a noncore dating features such as fees and group chat.
Caused by the improvements in user experience associated with the product upgrade.
The improvement in user experience had a search and a negative impact.
On paying ratio and use of the pension the upgraded version, which will level out in Q2.
Following the food scale roll out of the pilot project. There was a slight quarter over quarter, decreased in paying ratio.
Turning into 10 times financials.
Currently we are mitigated the negative impact of the new version on use of matrix and monetization through continuous part of fine tuning.
On user acquisition, our goal is to achieve 100% ROI, including personnel costs.
Zhang Sichuan: The revenue decrease was due to a decline in the number of paying users, but ARPU increased 18% year-over-year and 8% quarter over quarter, which partially inhibited the pressure on revenue. At the product level, to explore dating experiences suitable for Asian, we launched product upgrades from last year. Our key efforts included, first, strengthening real user verification to enhance user authenticity and brand trust. Number two, we focused on the core dating experience by simplifying the UI layout to focus on key information while downplaying non-core dating features such as feeds and group chat. The improvement in user experience had a certain negative impact on paying ratio and user retention. The upgraded version was fully rolled out in Q2, and currently, we are mitigating the negative impact of the new version on user metrics and monetization through continuous product fine-tuning.
Revenue from the onshore business in Q2 was ¥160 million, down 18% year-over-year and 4% quarter-over-quarter.
The revenue decrease was due to a decline in the number of paying users.
And to eliminate it but just from the underperforming channels.
But our people increased 18% year-over-year and 8% quarter over quarter.
The Union acquisition cost narrowed significantly and absolute will slightly compared to last quarter.
which partially inhibited the pressure on revenue.
In Q2.
We remained stable at a level that is.
Leaving 100%.
At the product level, we are exporting experiences suitable for Asia. We launched product upgrades from last year.
The improvement in organic traffic and in the channel ally has led to a significant year over year and quarter over quarter growth in content profitability.
Our key efforts included, first, strengthening real user verification to enhance user authenticity and brand trust.
In terms of monetization, we mitigated the impact of the product upgrades on paying ratio by restructuring the membership package and refining the operation of core cities and user groups.
Number 2, we are focusing on the core dating experience.
By simplifying the UI layout.
To focus on key information.
While downplaying non-court dating features such as speed and good chat.
The differentiated product design and pricing schemes has driven a continuous increase in our people.
Improvement in user experience has a certain negative impact on the paying ratio and user retention.
Restarting our revenue decline that is significantly smaller than the decrease in the number of paying users.
Upgraded version was fully rolled out in Q2.
Lastly on the overseas business in Q2 overseas revenue reached 442 million RMB up.
And currently, we are mitigating the negative impacts of the new version on user metrics and monetization through continuous product fine-tuning.
Zhang Sichuan: On user acquisition, our goal was to achieve 100% ROI, including personnel costs, and to eliminate budgets from the underperforming channel. The unit acquisition costs narrowed significantly, and ARPU rose slightly compared to last quarter. In Q2, ROI remained stable at a level far exceeding 100%. The improvement in organic traffic and in the channel ROI has led to a significant year-over-year and quarter-over-quarter growth in TangTang's profitability. In terms of monetization, we mitigated the impact of the product upgrade on paying ratio by restructuring the membership package and refining the operation of core cities and user groups. The differentiated product design and pricing schemes have driven a continuous increase in ARPU, resulting in a revenue decline that is significantly smaller than the decrease in the number of paying users. Lastly, on the overseas business, in Q2, overseas revenue reached RMB 442 million, up 17.3% year-over-year and 7% quarter-over-quarter.
Up 17, 3% year over year, and 7% quarter over quarter.
On user acquisition, our goal is to achieve 100% ROI, including personal cost.
The overseas revenue accounted for 17% of revenue compared to 10% in the same period last year.
And to eliminate it, uh, budgets from the underperforming channels.
In Q2 overseas revenue maintained its rapid growth momentum driven by the audio and video based social product in the Mena region.
The unit acquisition costs Narrows significantly and apple will slightly compared to last quarter.
In Q2, how I remain stable at a level 5 exceeding 100%.
So chill product optimization to the chat room experience.
It's both the paying conversion ratio and the paying user accounts.
Improvement in organic traffic and in the channel ROI has led to a significant year-over-year and quarter-over-quarter growth in Yan Tang's profitability.
Thereby driving sequential revenue growth from a high base.
Yeah, Harlan and Amar their local teams drove growth in both the number of paying users and RP pool by continuously optimizing product features and strictly a hearing to pay.
In terms of monetization, we mitigated the impact of the product upgrade on the paying ratio by restructuring the membership package and refining the operations of Court cities and using the group.
Paying user oriented.
Acquisition strategy.
The differentiated product design and pricing schemes have driven, uh, continuous increase in appeal.
We initiated expected.
The overseas revenue half will even faster.
Regarding a revenue decline that is significantly smaller than the decrease in the number of paying users.
With more aggressive marketing extension reads.
We decided to be more prudent due to the following reasons.
Number one during so choose expansion to an affluent Gulf region, we felt the need for a better segmentation among different user groups.
Lastly, on the overseas business in Q2, overseas revenue reached $442 million.
Zhang Sichuan: The overseas revenue accounted for 17% of the group revenue compared to 10% in the same period last year. In Q2, overseas revenue maintained its rapid growth momentum, driven by the audio and video-based social product in the MENA region. For social product optimization to the core chat room experience, we've developed the paying conversion ratio and the paying user count, thereby driving sequential revenue growth from a high base. For Yahelen and Amaz, their local teams drove growth in both the number of paying users and ARPU by continuously optimizing product features and strictly adhering to a paying user-oriented acquisition strategy. We initially expected the overseas revenue could have grown even faster with more aggressive marketing expansion. We decided to be more prudent due to the following reasons.
Up 173% year-over-year and 7% quarter-over-quarter.
Therefore, we are currently trying to penetrate the market with a stand alone app.
The overseas revenue accounted for 17% of the good revenue compared to 10% in the same period last year.
Which might take a bit more time.
Number two we noticed that the unit acquisition costs increased a bit to that as we increase channel investment into new apps.
In Q2, overseas revenue maintained its rapid growth momentum.
Driven by the audio and video based social product in the Mena region.
Therefore, we decided to move slowly on the marketing pension plans.
Social product optimization to the court chat room experience.
<unk> on improving our pool and optimizing acquisition costs.
Boosted both the pay and conversion ratio and the paying user account.
Thereby driving the screen, show Revenue growth from a high rate.
We will increase our China investment again, once rois, which is a satisfactory level.
The first such kind of prudent model that balances growth and bottom line because it prevents the foods from entering a awkward situation where the rapid top line expansion is achieved through bottom line sacrifice.
People are continuously optimizing product features and strictly adhering to a paying user-oriented acquisition strategy.
It's worth mentioning that our overseas business is not limited to audio and video based social product and the meter market.
We anticipated expected growth. The overseas revenue could have increased even faster with more aggressive marketing extensions.
Another key focus of our overseas business lies in the dating market across developed countries.
Zhang Sichuan: Number one, during social expansion to an affluent growth region, we felt the need for a better segmentation among different user groups. Therefore, we are currently trying to penetrate the market with a standalone app, which might take a bit more time. Number two, we noticed that the unit acquisition costs increased a bit too fast as we increased channel investment in two new apps. Therefore, we decided to move a bit slowly on the marketing expansion plans, focusing on improving ARPU and optimizing acquisition costs first. We will increase our channel investment again once ROI reaches a satisfactory level. We prefer such a kind of prudent model that balances growth and bottom line because it prevents the group from entering an awkward situation where the rapid top-line expansion is achieved through bottom-line sacrifice.
We decided to be more prudent due to the following reasons.
Currently the overseas dating products led by our Singapore team already contribute bill a double digit percentage of our total overseas revenue.
Number one, string socials extension to an affluent Gulf region. We felt the need for a better segmentation among different user groups.
Primary driven by 10 times International.
Therefore, we are currently trying to penetrate the market with a standalone app.
Which might take a bit more time.
After taking over our last year, the Singapore team, we evaluated the breath of sufficiently and product strategy for overseas Chinese and other Asian country uses.
Number 2: We noticed that the unit acquisition cost increased a bit too fast as we increase channel investment into new apps.
Titan International shifted from balancing entertainments and dating to focusing on the court dating experience.
Therefore, we decided to move a bit slowly on the marketing expansion plans.
Focusing on improving apple and optimizing acquisition costs first.
Based on this we have reshaped the product and branding.
After one year's effort.
we will increase our Channel investment again once ouri reaches a satisfactory level,
International revenue has now stabilized.
Moving forward, we will focus on dating and the growth opportunity.
We prefer such kind of food and model that balanced growth and bottom line.
And overseas Chinese communities, and the South East Asia market with.
We plan to take tons on international as the pilot projects to faithfully our presence.
Because it prevents the food from entering, our awkward situation where the rabbit, top line extension, is achieved through bottom line sacrifice.
Zhang Sichuan: It's worth mentioning that our overseas business is not limited to audio and video-based social products in the MENA market. Another key focus of our overseas business lies in the dating market across developed countries. Currently, the overseas dating product led by our Singapore team already contributes a double-digit % of our total overseas revenue, primarily driven by TangTang International. After taking over last year, the Singapore team reevaluated the brand positioning and product strategy for overseas Chinese and other Asian country users. TangTang International shifted from balancing entertainment and dating to focusing on the core dating experience. Based on this, we have reshaped the product and branding. After one year's effort, TangTang International revenue has now stabilized. Moving forward, we will focus on dating and the growth opportunities in overseas Chinese communities and the Southeast Asian market.
In our overseas, stating field.
<unk> user with some more dating brands that facilitates the discovery of <unk>.
It's rough to mention that our overseas business is not limited to audio and video based social product in the mirror Market.
Romantic relationships and effectively establish connection from online to offline.
Another key focus of our overseas business lies in the dating market across developed countries.
This concludes my remarks now.
<unk> pass the call over to Kathy for the financial overview.
Currently, the overseas dating products, led by our Singapore team, already contribute a double-digit percentage of our total overseas revenue.
Kathy.
Primary driven by 10 times International.
Yeah.
[noise]. Thank you <expletive> and Hello, everyone. Thank you for joining our conference call today.
After taking over last year, the Singapore team evaluated the brands of petitioning and product strategy for overseas Chinese and other Asian country users.
Now let me take you through the financial review.
Total revenue for the second quarter, 2005 was 262 billion renminbi down 3% year on year, but up 4% quarter over quarter.
How that International shifted from balancing entertainment and dating to focusing on the court dating experience.
Based on this, we have recreated the product and branding.
non-GAAP net loss was $96 zero million renminbi compared to $449 2 million and then be from the same period of 2024 in the second quarter, we accrued an additional amount of recording income tax of RMB $547 9 million.
Action 1 Year's effort, Townline International Revenue, has now stabilized.
Zhang Sichuan: We plan to take TangTang International as a pilot project to deepen our presence in our overseas dating field, providing users with a more dating brand that facilitates the discovery of romantic relationships and effectively establishes connections from online to offline. This concludes my three minutes. Now, let me pass the call over to Cathy for the financial review. Cathy, please.
Moving forward, we will focus on dating and sick growth opportunities in overseas Chinese communities and the Southeast Asian markets.
And associated with profits generated by our Wuxi in China for prior periods.
We plan to take content international as a pilot project to staple our present.
In our overseas dating field.
I will elaborate on this accounting treatment later.
This tax expense item is one off in nature and did not reflect a normal business operation of the current and future periods.
Providing users with more dating brands that facilitate the discovery of romantic relationships and effectively establish a connection from online to offline.
This concludes my remarks.
Excluding these special items non-GAAP net income for the quarter would have been $451 9 million up 1% from Q2 last year and 12% from last quarter.
Now, let me pass the call over to Cathy for the financial review.
Happy please.
Looking into the key revenue items for Q2.
Peng Hui: Thank you, Dick. Hello, everyone. Thank you for joining our conference call today. Now, let me take you through the financial review. Total revenue for the second quarter 2025 was RMB 2.62 billion, down 3% year-over-year but up 4% quarter over quarter. Non-GAAP net loss was RMB 96.0 million compared to RMB 449.2 million from the same period of 2024. In the second quarter, we accrued an additional amount of withholding income tax of RMB 547.9 million associated with profits generated by our royalty in China for prior periods. I will elaborate on this accounting treatment later. This tax expense item is one-off in nature and did not reflect the normal business operation of the current and future periods. Excluding this special item, non-GAAP net income for the quarter would have been RMB 451.9 million, up 1% from Q2 last year and 12% from last quarter.
Total revenue from Saturday audit services for the second quarter of 2025 was $2 $5 8 billion renminbi down 3% year on year, but up 4% quarter on quarter.
Thank you, everyone. Thank you for joining our conference call today. Now, let me take you through the financial review.
On a user to geography basis PRC mainland fast revenue was $2, one 4 billion renminbi down 11% year on year, but up 3% quarter over quarter.
There were 2.62 billion women. B was down 3% year over year, but up 4% quarter over quarter.
The year over year decrease was primarily due to soft consumer sentiment stemming from the macro factors, which put pressure on our mobile business.
And to a lesser degree a decline in compound paying users the.
The sequential increase was primarily driven by the recovery from Q1 seasonal weakness.
Non-GAAP net loss was $96.0 million. Women B compared to 449.25% of R&B, $547.9 million associated with profits generated by our Wolfie in China.
Back overseas revenue came in at $440 7 million renminbi up 73% year over year, and 7% quarter over quarter.
For prior periods.
I will elaborate on this accounting treatment later.
The year over year and sequential growth was mainly driven by the rapid expansion from multiple social entertainment.
Period.
And stating breadth across our reach portfolio.
Turning to costs and expenses non-GAAP cost of revenue for the second quarter of 2025 was 160 billion renminbi compared to $1 $5 9 billion for the same period last year.
Excluding the special item, non-GAAP net income for the quarter would have been 451.91% from Q2 last year and 12% from last quarter.
Peng Hui: Looking into the key revenue items for Q2, total revenue from value-added services for the second quarter of 2025 was RMB 2.58 billion, down 3% year-over-year but up 4% quarter on quarter. On a user geography basis, PRC mainland BAS revenue was RMB 2.14 billion, down 11% year-over-year but up 3% quarter over quarter. The year-over-year decrease was primarily due to soft consumer sentiment stemming from the macro factors, which put pressure on MoMo business, and to a lesser degree, a decline in TangTang paying users. The sequential increase was primarily driven by the recovery from Q1 seasonal weakness. BAS overseas revenue came in at RMB 440.7 million, up 73% year-over-year and 7% quarter over quarter. The year-over-year and sequential growth was mainly driven by the rapid expansion from multiple social entertainment and dating brands across our rich portfolio.
non-GAAP gross margin for the quarter was 38, 8% down two percentage points from the.
Looking into the key revenue items for Q2.
The year ago period.
The year over year decrease was due to three factors number one and elevated payout ratio driven by structural revenue shifts towards overseas markets, which have a higher payout ratio, especially during fast expansion phases.
Total revenue from Battle added services for the second quarter of 2025 was $2.58 billion, down 3% year on year but up 4% quarter on quarter.
Number two workforce optimization, leading to one off severance payments.
On a user G, geography basis, PRC, Mainland fast. Revenue was $2.14 billion, down 11% year over year, but up 3% quarter over quarter.
Number three payment channel costs and structure infrastructure expenses accounted for a large larger revenue portion proportion due to geographic mix tilting toward international operations.
The year-over-year decrease was primarily due to soft consumer sentiment stemming from the macro factors, which put pressure on the mobile business.
And, to a lesser degree, a decline in tantam paying users.
Where fee structures are Susan systematically hire compared to domestic business.
The sequential increase was primarily driven by the recovery from Q1 seasonal weakness.
non-GAAP R&D expenses for the second quarter was 172.0 million renminbi.
Overseas revenue came in at 440.73% year-over-year and 7% quarter-over-quarter.
Compared to $179 7 million and it would be for the same period last year, representing a 4% decrease year over year.
The year-over-year and sequential growth was mainly driven by the rapid expansion from multiple social entertainment.
The decrease was attributed to personnel optimization non.
Peng Hui: Turning to cost and expenses, non-GAAP cost of revenue for the second quarter of 2025 was RMB 1.60 billion compared to RMB 1.59 billion for the same period last year. Non-GAAP gross margin for the quarter was 38.8%, down 2 percentage points from the year-ago period. The year-over-year decrease was due to three factors. Number one, an elevated payout ratio driven by structural revenue shifts towards overseas markets, which have a higher payout ratio, especially during fast expansion phases. Number two, workforce optimization leading to one-off severance payments. Number three, payment channel costs and infrastructure expenses accounted for a larger revenue proportion due to geographic niche tilting towards international operations, where fee structures are systematically higher compared to domestic business. Non-GAAP R&D expenses for the second quarter were RMB 172.0 million compared to RMB 179.7 million for the same period last year, representing a 4% decrease year-over-year.
And dating brands across our reach portfolio.
non-GAAP R&D expenses remained stable at 7% of revenue consistent with the figure from the previous year.
We ended the quarter with 1268 total employees compared to 1364 from a year ago.
Turning to costs and expenses, non-GAAP cost of revenue for the second quarter of 2025 was $1.60 billion, compared to $1.59 billion for the same period last year.
Non-GAAP gross margin for the quarter was 38.8%, down two percentage points from the year-ago period.
R&D personnel as a percentage of total employees for the group was 58% compared with 62% from Q2 last year.
non-GAAP sales and marketing expenses for the second quarter was $339 7 million compared to $360 6 million renminbi for the same period last year.
The year-over-year decrease was due to three factors. Number one is an elevated payout ratio driven by structural revenue shifts towards overseas markets, which have a higher payout ratio, especially during fast expansion phases.
Number 2: Workforce optimization leading to $1 million in severance payments.
Representing 13% of total revenue.
The year over year decrease in sales and marketing expenses was attributable to the ongoing cost control strategy.
Number 3: Payment channel costs and structured infrastructure expenses accounted for a larger portion of revenue due to geographic distribution. Next, we are tilting toward international operations.
For the PRC mainland businesses.
We're both mobile and <unk> narrowed their marketing spend.
where fee structures are systematically higher compared to domestic business.
This decrease was partially offset by the increase in channel investment for the overseas apps.
non-GAAP G&A expenses was $67 5 million in India for the second quarter compared to $89 five new either maybe for the same quarter last year, both representing 3% of total revenue.
Peng Hui: The decrease was attributed to personnel optimization. Non-GAAP R&D expenses remained stable at 7% of revenue, consistent with the figure from the previous year. We ended the quarter with 1,268 total employees compared to 1,364 from a year ago. The R&D personnel as a percentage of total employees for the group was 58% compared with 62% from Q2 last year. Non-GAAP sales and marketing expenses for the second quarter were RMB 339.7 million compared to RMB 360.6 million for the same period last year, both representing 13% of total revenue. The year-over-year decrease in sales and marketing expenses was attributable to the ongoing cost control strategy for the PRC mainland businesses, where both MoMo and TangTang narrowed their marketing spend. This decrease was partially offset by the increase in channel investment for the overseas apps.
Non-GAAP R&D expenses for the second quarter were $172.0 million, compared to $179.7 million for the same period last year, representing a 4% decrease year-over-year.
The decrease was attributed to personnel optimization.
non-GAAP operating income was 414.
Non-GAAP R&D expenses remained stable at 7% of revenue, consistent with the figure from the previous year.
$447 7 million renminbi with a margin of 17, 1% compared with $476 5 million renminbi with a margin of 17, 7%.
We ended the quarter with 1,268 total employees compared to 1,364 from a year ago.
From the same period last year.
non-GAAP operating expenses as a percentage of total revenue was 22%.
The R&D personnel as a percentage of total employees for the group was 58%, compared with 62% from Q2 last year.
A decrease from 23% from Q2 2024.
Now on income tax expenses.
Total income tax expenses was $638 million or maybe for the quarter.
Non-GAAP sales and marketing expenses for the second quarter were $339.7 million B compared to $360.66 million.
Of total revenue.
In Q2, the company accrued withholding income tax of 578 million Reminbi.
Of which $547 9 million it was a special item a special nonrecurring items related to prior periods, namely.
The year-over-year decrease in sales and marketing expenses was attributable to the ongoing cost-control strategy for the PRC. Mainland businesses, where both mobile and Tantan narrowed their marketing stance.
Namely that in the second quarter of 2025, we accrued an additional withholding tax of RMB $547 9 million related related to dividends paid or payable by our royalty in mainland China. Two is offshore parent company in Hong Kong.
Peng Hui: Non-GAAP G&A expenses were RMB 67.5 million for the second quarter compared to RMB 89.5 million for the same quarter last year, both representing 3% of total revenue. Non-GAAP operating income was RMB 447.7 million with a margin of 17.1% compared with RMB 476.5 million with a margin of 17.7% from the same period last year. Non-GAAP operating expenses as a percentage of total revenue were 22%, a decrease from 23% from Q2 2024. Now, on income tax expenses, total income tax expenses were RMB 638 million for the quarter.
This decrease was partially offset by the increase in channel investment for the overseas apps.
Non-GAAP G&A expenses were $67.5 million for the second quarter, compared to $89.5 million for the same quarter last year, with both representing 3% of total revenue.
This accrual followed a notice received by our <unk> mobile Beijing from the Chinese tax authorities, requiring it to withhold tax at the standard rate of 10% instead of the previously applied preferential rate of 5%.
While the company continues to believe our initial assessment was reasonable.
Non-gaap operating income was 414. Uh, 447.7 million rebbe with a margin of 17.1% compared with 476.5 million million B, with a margin of 17.7%.
From the same period last year.
We note the authorities most recent interpretations and position and have complied accordingly.
Non-GAAP operating expenses as a percentage of total revenue was 22%.
Among the total amount accrued.
From Q2 2024.
RMB $356 1 million.
now, on income tax expenses,
Was related to dividends paid by our royalty in 2024.
Peng Hui: In Q2, the company accrued withholding income tax of RMB 578 million, of which RMB 547.9 million was a special item, a special non-recurring item related to prior periods, namely that in the second quarter of 2025, we accrued an additional withholding tax of RMB 547.9 million related to dividends paid or payable by our royalty in mainland China to its offshore parent company in Hong Kong. This accrual followed a notice received by our royalty, MoMo Beijing, from the Chinese tax authorities requiring it to withhold tax at the standard rate of 10% instead of the previously applied preferential rate of 5%. While the company continues to believe our initial assessment was reasonable, we note the authority's most recent interpretation and position and have complied accordingly.
Total income tax expenses were $638 million, and before the quarter...
In the first half of 2025.
And this amount has been paid in September 2025.
In Q2, the company accrued withholding income tax of $578 million.
The remaining 191 8 million Reminbi was the additional 5% withholding tax accrued for the undistributed retained earnings of more.
Of which $547.9 million was a special item. Uh, special non-recurring items related to prior periods.
Beijing as of March 31, 2025.
Okay.
<unk>.
Q2, 2025 onwards, we will.
Accrued withholding tax rate at 10% for profit generated by our Beijing Wolfie.
Namely, that in the second quarter of 2025, we incurred an additional withholding tax of R&D, $547.9 million, related to dividends paid or payable by our Wolfie in mainland China to its offshore parent company in Hong Kong.
Without the with withholding tax our estimated non-GAAP effected effective tax rate was around 11% in the second quarter.
Now turning to balance sheet and cash flow items.
This ACR followed a notice received by our wealthy Momo Beijing from the Chinese tax authorities, requiring it to withhold tax at the standard rate of 10%, instead of the previously applied preferential rate of 5%.
As of June 32025, Hello, group's cash cash equivalents short term deposits long term deposits and restricted cash totaled 12 point 39 billion renminbi compared to $14 seven 3 billion renminbi as of December 31, 2020 for that.
While the company continues to believe our initial assessment was reasonable.
We note the authorities' most recent interpretation and position, and we have complied accordingly.
Peng Hui: Among the total amount accrued, RMB 356.1 million was related to dividends paid by our royalty in 2024 and in the first half of 2025, and this amount has been paid in September 2025. The remaining RMB 191.8 million was the additional 5% withholding tax accrued for the undistributed retained earnings of MoMo Beijing as of March 31, 2025. From Q2 2025 onwards, we will accrue withholding tax rate at 10% for profit generated by our Beijing royalty. Without the withholding tax, our estimated non-GAAP effective tax rate was around 11% in the second quarter. Now, turning to balance sheet and cash flow items. As of June 30, 2025, Hello Group Inc.'s cash, cash equivalents, short-term deposits, long-term deposits, and restricted cash totaled RMB 12.39 billion compared to RMB 14.73 billion as of December 31, 2024.
Among the total amount of crude.
Decrease in cash reserves was largely attributable to the repayment of a $1 76 billion renminbi banquo, including accrued interest in the first half of 2025.
R&B 356.1.
Million was related to dividends paid by a Wolfie in 2024.
and in the first half of 2025,
Additionally, in Q2, we paid an equivalent of 346 renminbi.
And this amount has been paid in September 2025.
We paid an equivalent of 346 million renminbi cash dividends to our shareholders now.
Net cash provided by operating activities in the second quarter.
The remaining $1,191,191.8 million. The remaining amount was the additional 5% withholding tax on AC crude for the undistributed retained earnings of more than Beijing as of March 31st, 2025.
2025 was.
so, uh, from
$250 1 million.
Q2, 202025 onwards, we will
Lastly, our business outlook, we estimated our third quarter revenue to come in the range from $2 $5 9 billion renminbi to $2 69 billion renminbi, representing a decrease of three 2% to an increase of 0.6% year on year.
ACR with a holding tax rate of 10% for profits generated by our Beijing. Wolfie.
Without the withholding tax, our estimated non-GAAP effective tax rate was around 11% in the second quarter.
This is based on assumption that on a year over year basis, PRC mainland business will decrease mid to low teens.
Now, turning to balance sheet and cash flow items.
While overseas revenue is expected to grow.
In meat six feet.
Please be mindful that this forecast represents the company's current and preliminary view on the market and operational conditions, which.
Peng Hui: The decrease in cash reserves was largely attributable to the repayment of a RMB 1.76 billion bank loan, including accrued interest, in the first half of 2025. Additionally, in Q2, we paid an equivalent of RMB 346 million cash dividends to our shareholders. Net cash provided by operating activities in the second quarter of 2025 was RMB 250.1 million. Lastly, on business outlook, we estimated our third quarter revenue to come in the range from RMB 2.59 billion to RMB 2.69 billion, representing a decrease of 3.2% to an increase of 0.6% year-over-year. This is based on the assumption that on a year-over-year basis, PRC mainland business will decrease mid to low teens, while overseas revenue is expected to grow in mid 60s. Please be mindful that this forecast represents the company's current and preliminary view on the market and operational conditions, which are subject to changes.
As of June 30th, 2025, Hello Group's cash, cash equivalents, short-term deposits, long-term deposits, and restricted cash totaled $12.39 billion, compared to $14.73 billion.
Our subject to changes.
That concluded the prepared portion of today's discussion with that let me turn the call back to Ashley to start Kenny actually please.
The decrease in cash reserves was largely attributable to the repayment of a $1.76 billion bank loan, including accrued interest, in the first half of 2025.
<unk>.
Just before we take your questions for those who can speak Chinese. Please ask your questions in Chinese first followed by English translation by yourself. Thank you al.
Additionally, in Q2, we paid an equivalent of 346 room B.
Uh,
Operator, we're ready to take questions.
Thank you if you wish to ask a question. Please press star one on your telephone and links your name to be announced.
We paid an equivalent of $346 million in remedy cash as dividends to our shareholders.
Net cash provided by operating activities in the second quarter.
If you wish to cancel your request please press star two.
2025 was.
250.1 million.
You're on a speakerphone, please pick up the handset to ask your question.
The first question comes from Thomas Chong from Jefferies. Please go ahead.
Sure.
You bet.
Hi.
Don T ball, all motorized unbundling does Hollywood walnuts.
Lastly on business outlook, we estimated our third quarter revenue to come in the range from $2.59 billion to $2.69 billion, representing an increase of 0.6% year on year.
Thanks will thank you Chi Tung.
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Okay.
This is based on the assumption that, on a year-over-year basis, PRC Mainland business will decrease mid to low tint.
Meanwhile, go Mark I'm going to keep on.
We pulled back.
While overseas revenue is expected to grow.
In Meet 60th.
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So who are you.
To show you, what's going to drive top line.
Ivy jingle ball may emerge.
Or would you hire.
50 m, for that, this forecast represents the company's current and preliminary view on the market and operational conditions.
Peng Hui: That concluded the prepared portion of today's discussion. With that, let me turn the call back to Ashley to start Q&A. Ashley, please.
Evening, Vince <unk> Chairman Paul for taking my question.
Which are subject to changes.
We have seen a more fundamental in first half came in better than expectations such early turns on the five.
Ashley Jing: Thank you. Just before we take the questions, for those who can speak Chinese, please ask your questions in Chinese first, followed by English translation by yourself. Thank you. Aprita, we're ready to take questions, please.
That concluded, the prepared portion of today's discussion with that. Let me turn the call back to Ashley to start Q&A Ashley, please.
Tell me talk about our second half outlook.
Can you just talk about AI tools like AI meetings.
And AI Chatbot Houston.
We'll talk about our thoughts on strategy.
Speaker 5: 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. Your first question comes from Thomas Chong from Jefferies. Please go ahead.
Um, just before we take the questions, for those who can speak Chinese, please ask your questions in Chinese first, followed by your own English translation. Thank you, and Opera, we're ready to take questions, please.
AI application. Thank you.
Oh.
Thanks, Alex.
Aren't you do more sooner.
If you wish to cancel your request, please press *2.
All.
We also TJ Schultz playful.
If you're on a speakerphone, please pick up the handset to ask your question.
So I'll pause to ensure Hudson so far in June to shampoo.
Goldman Sachs at ICSC Jones, Ingalls shown dose that's helpful. Don.
Your first question comes from Thomas Chong from Jeffrey's. Please go ahead.
Thomas Chong: 晚上好, 谢谢管理层介绍我的提问。刚才在 prepared remark 中提到 MoMo 在上半年的财务情况呢, 是好于年初的预期。想请问这个趋势呢, 我们在下半年是否可以延续? 另外的话, 刚刚也是提到不同的 AI 的一些工具, 比方说 AI 的打招呼或者是 AI 的聊天助手以外, 公司在下半年的话, 在 AI 的应用方面呢, 有哪些布局还有想法? Evening, thanks management for taking my question. We have seen MoMo fundamentals in first half came in better than expectations set in early 2023. Can we talk about our second half outlook? On the other hand, we just talked about different AI tools like AI greetings and AI chat assistants. Can we also talk about what are our thoughts and strategy on AI application? Thank you.
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Welcome to the Sovran, So let me see Michelle <unk> hotels and rooms.
Hello, Vincenzo this row Moodys upon for global virtual bauxite Zinczenko Krishna <unk> Tung.
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Meanwhile good evening. Uh thanks management for taking my question. Uh we have seen a more more fundamentals. In first top came in better than expectations set in early uh 2025. Uh can we talk about uh our second half Outlook uh on the other hand. Uh we just talked about a different AI tools like AI. Greetings and AI chat assistance. Uh can we also talk about what are our thoughts and strategy on AI? Uh application. Thank you.
Tang Yan: of MoMo in the second half of the year should be relatively controllable. Industry-wide compliance is also a good thing for the long-term stable development of social entertainment platforms.
oh,
Let me translate this list so.
Mobile revenue achieved sequential growth in the second quarter, primarily due to seasonal recovery. Additionally, we saw relatively stable consumer sentiment and regulatory environment. We took this opportunity to organize a number of our non bonus are rounded competition events.
Offering the windows incentives such as training calls abroad or production of sheet music videos instead of simply cash rewards, we stimulated broadcasters participation in these competition events at a relatively low cost.
Whether this trend can be sustained in the second half.
After after year largely depends on the overall consumer sentiment as well as the enthusiasm of our agency on broadcasters.
Regarding consumer sentiment, we currently do not see any significant deterioration, but you've used rather GB fragile overall.
The other hand due to some new tax regulations agents on broadcasters may be affected in the second half of the year internally. We are adjusting our operational policies to address this issue. The main goal of our policy adjustment is to help the supply side.
Compliance, while maintaining the normal are reasonable.
Ashley Jing: Let me translate this first. MoMo's revenue achieved sequential growth in the second quarter, primarily due to seasonal recovery. Additionally, with the relatively stable consumer sentiment and regulatory environment, we took the opportunity to organize a number of non-bonus-oriented competition events by offering the winners incentives such as training talks abroad or production of hit music videos instead of simply cash rewards. We stimulated broadcasters' participation in these competition events at a relatively low cost. Whether this trend can be sustained in the second half of the year largely depends on the overall consumer sentiment as well as the enthusiasm of agency and broadcasters. Regarding consumer sentiment, we currently do not see any significant deterioration, but it feels relatively fragile overall. On the other hand, due to some new tax regulations, agents and broadcasters may be affected in the second half of the year.
And profit.
This may put some pressure on the platforms revenue on gross margin.
Our team will strive to mitigate this impact through improved product operation currently almost overall revenue and profit in the second half of the year is expected to be a relatively controllable. Moreover tax compliance across the entire industry is also a good thing for the long term stability.
Some of the social entertainment platforms.
How he was going to a items.
Okay.
Hey, guys. This is Joe.
200 <unk> so.
Um let me translate this first. So um Revenue achieved uh sequential growth in the second quarter primarily due to seasonal recovery. Additionally, with some, the relatively stable consumer sentiment and Regulatory environment, we took the opportunity to organize the number of non bonus oriented competition events by offering. Uh the winners incentives such as um training toss abroad or production of heat music. Uh, videos instead of Simply cash rewards. We stimulated broadcaster's participation in this competition events at a relatively low cost.
I think I'll, probably answer will all have the potential of Chongqing.
Geopolitical route.
You want to comment.
This would also have been joined.
Moving over to Europe.
Um, whether this trend can be sustained in the second half of the year largely depends on the overall consumer sentiment, as well as the enthusiasm of agencies and broadcasters.
So I'm holding out here. So did you lose some groceries in bulk.
It's also on the Buildout of XOMA Assortments, one time zone.
Um, regarding consumer sentiments, we currently do not see any significant deterioration, but it feels relatively fragile overall.
So torches.
So if I'm going to finish it off with <unk>.
Israel moments.
Yes.
Ashley Jing: Internally, we are adjusting our operational policies to address this issue. The main goal of our policy adjustment is to help the supply side enhance compliance while maintaining the normal and reasonable income and profits. This may put some pressure on the platform's revenue and gross margin, but our team will strive to mitigate these impacts through improved product operations. Currently, MoMo's overall revenue and profit in the second half of the year is expected to be relatively controllable. Moreover, tax compliance across the entire industry is also a good thing for the long-term stability of the social entertainment platforms. 还有一个是关于 AI 的问题。
The company, John Hopkins and until you do.
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So the political environment Tokyo.
From the EU.
Thank you.
I'm thinking you guys have been popular you acquired <unk>.
On the other hand, due to some new tax regulations, agents and broadcasters may be affected in the second half of the year. Internally, we are adjusting our operational policies to address this issue. The main goal of our policy adjustment is to help the supply side, enhance compliance, while maintaining normal and reasonable income and profits.
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Gotcha.
The program.
This may put some pressure on the platform's revenue and growth margin um but our team was driving to mitigate this impacts through improved product operations.
Our returns are now when we're using cars physician tubular selling your house tungsten.
So what are the signals.
Womens.
Thank you.
So it was on mute.
Got it.
Sure.
So jody.
Good morning.
Currently 1 was overall revenue and profit in the second half of the year is expected to be a relatively controllable. Moreover tax compliance across the entire industry, is also a good thing for the long term stability. Um, of the social entertainment platforms.
Thank you Jonathan.
On top of it.
Tang Yan: OK, 第二个问题是关于 AI 在社交领域的应用，集团从 2024 年开始在这个方面做了很多探索和创新，也有很多布局和投入。目前应用层主要涉及几个方面，一是在已有的社交产品中引入 AI 来提升用户体验。中国用户普遍不擅长破冰聊天，这对建立新关系并保持持续互动造成了比较大的障碍，也是我们从产品运营上一直试图解决的用户痛点。AI 在这方面却能起到非常大的辅助作用。MoMo 之前在 AI 破冰方面的产品实现就很好的印证了这一点。我们觉得 AI 在聊天引导以及提供一些其他类似的辅助功能方面都可以有更加广泛的应用。除了既有应用以外，我们最近也在日本发布了一款独立的 AI 角色聊天应用，用户可以挑选自己喜欢的 IP 和故事主线来进行聊天和角色扮演。目前该款应用在日本的发展前景良好，我们已经开始进行初步的商业化尝试。除了这些应用层面的探索，我们在底层技术和基础设施方面也有相当大的投入。由于市场上没有现成的针对社交领域的 AI 垂类模型，因此集团组建了专门的大模型的应用团队，并不断加大投入力度。基于 MoMo 的语料库，对如何利用 AI 更好地帮助用户更高效地建立并维护关系进行了深入的研究和模型训练。这方面取得的进展将为 MoMo、TangTang 以及海外诸多新的社交项目贡献巨大的产品和商业化价值。
People don't Drydock.
See you tomorrow.
Yes, the bonds, where Yahoo, Google show up with Jim.
Similarly, jewel home worsen from here.
The other thing that Joey more contract in <unk> carcinoma.
Which in 2017 Horizonte on for Josh.
Okay. Let me translate this so the second question is about obligation of AI in the social field.
2022, the group has done a lot of the explorations innovations in these areas with a significant strategic deployment and effort.
At the application level, even me involves several aspects firstly, we are integrating AI into existing social products to enhance user experience.
For me.
Chinese news is generally struggle with the icebreaker conversations, which poses a significant barrier to building new connections and maintaining ongoing interactions.
This has been a key use of pinpoint we have sought to address through.
Product operations, Yeah, However, can play a substantial supporting role in this area.
Most previous product practice in Aoc stayed ice breaking hassle serves as strong evidence of this.
We believe <unk> has broad application potential in this area such as the offering chat advice and providing other similar system functions.
In addition to existing applications, we have recently launched a standalone AI character role clean chop in Japan.
Users can choose they are preferable eyepiece and storylines to engage nagy has a role playing this lease.
Ashley Jing: OK, let me translate this. The second question is about the application of AI in the social field. Since 2022, the group has done a lot of explorations and innovations in this area with significant strategic deployment and efforts. At the application level, it mainly involves several aspects. Firstly, we are integrating AI into existing social products to enhance user experience. Chinese users generally struggle with icebreaking conversations, which poses a significant barrier to building new connections and maintaining ongoing interactions. This has been a key user pain point we have sought to address through product operations. AI, however, can play a substantial supporting role in this area. MoMo's previous product practice in AI-assisted icebreaking has served as strong evidence of this. We believe AI has broad application potential in this area, such as offering chat advice and providing other similar assistance functions.
<unk> is currently doing very well in Japanese market, and we have initiated preliminary monetization effort and beyond visa application level explorations. We have also made significant efforts in underlying technology and infrastructure.
There are no off the shelf AI vertical models are models.
Um, okay, let me translate this. So, um, the second question is about, um, application of AI in the social field. Um, since 2022, the group has done a lot of explorations and, uh, innovations in these areas, uh, with significant strategic deployment and efforts at the application level. It mainly involves several, uh, aspects.
Tailored for the.
Social sector are available on the market.
Firstly, we are integrating AI into existing social products to enhance user experience.
Our group has set up a dedicated team for large model applications and continuous.
Invested resulted in this area.
Based on normal saw Cabos, we are conducting in depth research on model training on how to leverage AI to better help users viewed on maintain new connections more efficiently.
In Chinese users. Uh, generally struggle with ice breaking conversations, which poses a significant barrier to uh, building new connections and maintaining ongoing interactions.
This has been a key user pain point we have sought to address through, um, product operations.
AI, however, can play a substantial supporting role in this area.
Progress achieved in this area will significantly enhance the product and the commercial value to normal onetime time on many of our new social products.
1 was previous uh product practice in AI, assisted ice, breaking have uh served um as strong evidence of this.
The overseas market.
Thomas I think.
That's the answer to your request for your question so.
Ashley Jing: In addition to existing applications, we have recently launched a standalone AI character role-playing chat app in Japan. Users can choose their preferable IPs and storylines to engage in chats and role-playing. This app is currently doing very well in the Japanese market, and we have initiated preliminary monetization efforts. Beyond these application-level explorations, we have also made significant efforts in underlying technology and infrastructure since there are no off-the-shelf AI vertical models tailored for the social sector available on the market. Our group has set up a dedicated team for large model applications and continuously invested resources in this area. Based on MoMo's corpus, we are conducting in-depth research and model training on how to leverage AI to better help users build and maintain new connections more efficiently.
We believe AI has broad application and potential in this area, such as offering chat advice and providing other similar assistance functions.
Operator, we're ready for the next question.
Thank you. Your next question comes from Leo Chiang from Deutsche Bank. Please go ahead.
In addition to existing applications, we have recently launched a standalone AI character roleplay in chat app in Japan.
Oh, excuse me, Glenn and challenges over the Q.
<unk> Hello.
Amit and Digest, all time punch on future <unk>.
Users can choose their preferable IPS and uh, story lines to engage in chats and role-playing this cap. This app is currently doing uh, very well in Japanese market and uh, we have initiated preliminary modernization effort.
Thats Homegoods, Hong Kong fragrance, Gucci Quad <unk>.
Thank you <unk> goodbye and thanks.
And Beyond, uh, this uh, application Level exploration. We have also made significant efforts in underlying technology and infrastructure
And then Paul Cheng Gwen country, TJ salaries, <unk> Sambo Jordan Asher.
Transmits myself.
Thank you management for taking my question.
Management mentioned in the prepared remarks that the company has taken mangers to restructure the membership package and reclined the operations of <unk>.
Since there are no off-the-shelf, uh, AI vertical modules model models. Um, tailored for the, uh, social sector available on the market. Um, our group has, uh, set up a dedicated team for large model applications and, uh, continuously. Um,
Groups too.
To mitigate the impact.
The product upgrade on PE ratios can management.
More details of what majors you have to take it. Thank you.
Ashley Jing: Our progress achieved in this area will significantly enhance the product and the commercial value to MoMo, TangTang, and many of our new social products in the overseas market. Thomas, I think that's the answer to your question. Aprita, we're ready for the next question.
Invested, uh, resources in this area, um, based on more most, uh, copas. We are conducting in-depth research and model training on how to leverage AI to better help users build and maintain new connections more efficiently.
Thank you I'll take this.
So the reason.
Product upgrades has led to an increase in the number of users completing real person verification.
Um, our progress, um, achieved in this area will significantly enhance the product and the commercial value to more and more 1010 and many of our new social products, um, in the overseas markets.
Uh, Thomas, I think, uh, that’s the answer to your question, uh, to your question. So, um,
<unk> profile pages now show more comprehensive information.
Operator, we're ready for the next question.
Speaker 5: Thank you. Your next question comes from Liu Qiang from Deutsche Bank. Please go ahead.
User feedback in shows that it feels like they can see more people on content.
Thank you. Your next question comes from Leo Chang from Deutsche Bank. Please go ahead.
Thomas Chong: 晚上好, 谢谢管理层接受我的提问。我的问题是关于 TangTang 的, 稍早管理层在介绍 TangTang 产品举措的时候有提到, 团队正在通过重构会员体系, 精细化运营核心层次和用户群体来缓解改版对付费率造成的影响。能否请管理层具体介绍一下产品上都做了哪些尝试? I'll translate myself. Thank you, management, for taking my question. Management mentioned in the prepared remark that the company has taken measures to restructure the membership package and refine the operations of core cities and user groups to mitigate the impact of the product upgrade on paying ratio. Can management elaborate more details on what measures you have taken? Thank you.
However, this improvement.
In uses.
Thing last.
Which has put some pressure on revenue.
Adjusted <unk> in Q2, we adopted a user classification approach specifically, we use the base.
Whether they have complete real persons application engagement level paying history and factors such as of periods.
<unk> disciplined user groups, we implemented tailor exposure strategy AD monetization approaches.
For example for users with high paying potential we modestly adjusted they are matching rates and paywall designed to improve the paying conversion and our people.
Additionally, we divided domestic city into Sandro tiers.
Uh management mentioned in a preparing Mark that the company has taken measures to restructure the membership package and reply, the operations of core cities, and user groups, uh to mitigate the impact of the product. Upgrade on Payne ratio can management it. Deliberate more details of what measures you have taken. Thank you.
Speaker 5: Thank you. I will take this. The recent TangTang product upgrade has led to an increase in the number of users completing real-person verification, and profile pages now show more comprehensive information. User feedback shows that it feels like they can see more real people on TangTang. However, this improvement has resulted in users repeating less, which has put some pressure on revenue. To address this in Q2, we adopted a user classification approach. Specifically, we group users based on whether they have complete real-person verification, engagement level, paying history, and factors such as appearance. For different user groups, we implemented tailored exposure strategy and monetization approaches. For example, for users with high paying potential, we moderately adjusted their matching rate and paywall design to improve their paying conversion and app people. Additionally, we divided domestic cities into several tiers based on user engagement level and regional consumption capacity.
Uh, thank you. I will check this.
Based on user engagement level and regional consumption capacity.
We developed suture grow membership packages and pricing plans.
Our goal is to maximize.
um, so the reasons Hong, Kong product upgrade has led to an increase in the number of users completing real person verification
Revenue either by increasing the payout ratio to grow the number of paying users.
And profile Pages now show more comprehensive information.
Or by boosting App, you prove to drive revenue growth.
Use the feedback in um shows that it feels like they can see more real people on downtown.
In terms of UI design, we focus on court seating features by widening the furiously.
However, this Improvement has resulted in users swiping less, which has put some pressure on Revenue.
Quarter images and information on the homepage.
Now highlight the key information such as H on less data and systems.
Revenue pressure caused by the product of play with fully evaluated in Q2.
To adjust this in Q2 we adopted a user classification approach specifically, we group user based on whether they have complete real person, verification engagement, levels paying history and factors such as appearance.
Recent product and algorithm adjustments.
Gradually mitigated the negative impact.
Oh, absolutely on a on the revenue.
For different user groups, we implemented Taylor exposure, strategy, and monetization approaches.
So therefore.
It's worth noting that improve user experience have helped drive organic user growth and user the pension.
For example, for users with high paying potential, we model, the adjusted, their matching rate, and payward design, to improve their paying conversion, and our people.
Previously the vast majority of new users on time for our clients who are paid marketing channels.
Additionally, we are divided domestic cities into several tiers.
However, since the start of this year the number of organic users has been steadily increasing.
Speaker 5: We developed suitable membership packages and pricing plans. Our goal is to maximize revenue either by increasing the paying ratio to grow the number of paying users or by boosting app people to drive revenue growth. In terms of UI design, we focused on core dating features by streamlining the previously quarter images and text information on the homepage. We now highlight the key information such as age, online status, and distance. The revenue pressure caused by the product upgrade was fully evaluated in Q2. Recent product and algorithm adjustments gradually mitigated the negative impact of the upgrade on the revenue. Therefore, it's worth noting that the improved user experience has helped drive organic user growth and boost user retention. Previously, the vast majority of new users on TangTang were acquired through paid marketing channels.
Based on using engagement level and regional consumption capacity.
In Q2, the number of new organic uses significantly bypass.
We developed suitable membership packages and pricing plans.
The acquired through channels.
We believe enhance user experience provided by the product grades has established a solid foundation for <unk>.
Our goal is to maximize revenue, either by increasing the paying ratio to grow the number of paying users or by boosting our people to drive revenue growth.
Covering our user base.
And revenue following a reduction in channel investments.
Yes, that's it for the answer.
Operator ready for the next question please.
Thank you. Your next question comes from Jim Young from UBS. Please go ahead.
Hey, Brian Hoskins declines in the Q and what not.
In terms of UI design, we focused on court stating. It's, uh, features by streamlining. The previously, uh, quarter images and has information on the homepage. We now highlight the key information, such as age on life, status, and systems.
One is volume and the highlight here looking to Shlomo Hawaiian shown with Xinjiang <unk> B.
The revenue pressure caused by the product upgrade was fully evaluated in CO2.
Tc saw.
<unk> and donlin actually consequent refusal deferral and with Napa and yellow Grease Hotlines acquired Shaw.
Recent product and algorithm adjustments, are gradually mitigated the negative impact of the upgrade on, uh, on the revenue.
so, therefore
Pieces of me answer on.
So let me translate myself.
We've seen like overseas revenue grow over all grew by over 70% year over year.
It's worth noting that the improved user experience have helped Drive organic, user growth, and boost user retention.
Oh, two consecutive quarters, so could management share your views on assembly deals is from growth.
Speaker 5: However, since the start of this year, the number of organic users has been steadily increasing. In Q2, the number of new organic users significantly bypassed the acquired through channels. We believe the enhanced user experience provided by the product upgrade has established a solid foundation for recovering our users' rates and revenue following a reduction in channel investment. Yeah, that's it for the answers.
Seriously, the vast majority of new users on tanan were acquired to pay marketing channels.
And what are your expectations for an overseas revenue in the second half. Thank you.
However, since the start of this year, the number of organic users has been steadily increasing.
Thank you for that question I'll take this.
To sum up the rapid growth of the <unk>.
in Q2 the number of new organic users significantly by past uh acquired through channels.
Overseas business in the first half of the year in one line.
That is pretty well across the board.
For the social entertainment business.
<unk> has maintained steady growth momentum.
We believe the enhanced user experience provided by the product of Great has established a solid foundation for recovering our user base and revenue following a reduction in channel investments.
The accelerated growth in the first half of the year, it's mainly driven by continuous breakthrough with Yahoo land and EMR.
Ashley Jing: Aprita, ready for the next question, please.
Yeah, that's it for today. I'm sorry.
Despite the ongoing increase in channel investments.
Speaker 5: Thank you. Your next question comes from UBS. Please go ahead.
Operator ready for the next question, please?
<unk> has constantly.
Constantly met targets, allowing us to achieve revenue growth, while improving profitability.
Thank you. Your next question comes from UBS. Please go ahead.
Speaker 8: second half of the year? Thank you. So let me translate myself. We've seen overseas revenue grow by over 70% year-over-year for two consecutive quarters. Could management please share your views on the sustainability of this strong growth? What are your expectations for the overseas revenue in the second half? Thank you.
This marks our most significant breakthroughs.
Part of the year.
In fact, our social entertainment business could have will even faster.
In Q2 and Q3.
However, giving the strict process requirements set by the group aiming for higher will with sacrifice nonprofit.
Um,
And we are conscious about the risky growth model at the moment.
So in Q2 and Q3, we will focus on increasing actual and optimizing user acquisition costs.
so let me translate myself. So we've seen like overseas. Grab new grow over a grow by over 70% of the year for 2 consecutive quarters for management. Please share your views on sustainability of the strong growth.
Although year on year growth may slow slightly.
And what are your expectations for overseas Revenue in the second half? Thank you.
Speaker 5: Thank you for that question. I will take this. To sum up, the rapid growth of the overseas business in the first half of the year, in one line, that is pretty well across the board. For the social entertainment business, social has maintained steady growth momentum. The accelerated growth in the first half of the year is mainly driven by continuous breakthrough with Yahelen and Amaz. Despite the ongoing increase in channel investment, the ROI has constantly met targets, allowing us to achieve revenue growth while improving profitability. This marks our most significant breakthrough since the start of the year. In fact, our social entertainment business could have grown even faster in Q2 and Q3. However, given the strict profit requirements set by the group, aiming for higher growth would sacrifice some profits. We are conscious about this risky growth model at the moment.
Three apps targeting neenah is expecting to deliver very healthy and robust growth overall.
Thank you. Uh, for that question, I will take this.
So it will be on social entertainment, our overseas saving business has also performed well this year.
To, uh, sum up the rapid growth of the overseas business in the first half of the year in one line, uh, that is pretty well across the board.
This includes the stabilization of ton time overseas operation and Arthur overseas seating products that.
For the social entertainment business, True has maintained steady growth momentum.
That managed by our Singapore team.
We have also recently completed the acquisition.
The Accelerated growth in the first half of the year is mainly driven by continuous breakthrough with yaha land and Amar
B.
despite the ongoing increase in China investment.
<unk>.
Spanning app brands happen.
Although this scout is in larger isn't large compared to our overall overseas business.
The houri has con constantly met targets allowing us to achieve Revenue growth while improving profitability.
This brand has significant untapped potential in terms of user.
This marks our most significant risk since the start of the year.
Use of possession in European market and team capacity.
In fact, our social entertainment business could have slowed even faster in Q2 and Q3
Capabilities.
We believe that this overseas, stating brands will become key growth driver for our international revenue in the future.
however, giving the strict profit requirements set by the group aiming for higher growth would sacrifice some profits.
As for the revenue outlook I will turn it over to Kathy.
Speaker 5: In Q2 and Q3, we'll focus on increasing app pool and optimizing user acquisition costs. Although year-on-year growth may slow slightly, these three apps targeting MENA are still expected to deliver very healthy and robust growth overall. Beyond social entertainment, our overseas dating business has also performed pretty well this year. This includes the stabilization of TangTang's overseas operation and other overseas dating products that are managed by our Singapore team. We have also recently completed the acquisition of the dating app brand Happn. Although this scale isn't large compared to our overall overseas business, this brand has significant untapped potential in terms of user succession in European markets and team capacity. We believe that this overseas dating brand will become a key growth driver for our international revenue in the future. As for the revenue outlook, I will turn it over to Cathy.
And we are conscious about this with the growth model at the moment.
Okay.
So in Q2 and Q3 will focus on increasing apple and optimizing user acquisition costs.
Okay.
Vic.
<unk> has already given pretty clear and.
Detailed answers about the growth dynamics of our overseas business.
Although year on year, growth may slow slightly this 3 apps targeting. Mina is still expecting to deliver very healthy and robust growth overall.
Let me try to translate those comments into more quantifiable terms.
<unk> Mato voters can work with <unk>.
So beyond, uh, social entertainment, our overseas stating business has also performed very well this year.
First of all as you can see in Q1 and Q2, we delivered over 70% overseas growth, which reflect strong momentum across both social and are in some of our emerging brands.
This includes the stabilization of 10 times overseas operations and orders overseas stating products.
That is managed by our Singapore team.
We seek.
We have also recently completed the acquisition of the, uh,
<unk> mentioned, we could have moved a little bit faster in Q2 in terms of top line growth. However, we purposely slowed down a bit toward need Q2. So we didn't have to sacrifice profit for faster top line and market expansion.
Stating app Brands happen.
Although this Scouts isn't large compared to our overall overseas business.
Uh, this brand has significant and tax potential in terms of use.
It was really a decision out of strategic discipline and priority.
On growth with profit rather than growth at the expense of profit and for that same reason in Q3, we expect a temporary moderation maybe toward a year over year growth of around 60% as we deliberately paced marketing spend and focus on improving ROI through.
Use the possession in European markets and team capacity capabilities.
We believe that this overseas staking brand will become a key growth driver for our international revenue in the future.
As for the revenue outlook, I will turn it over to Kathy.
Optimizing user acquisition costs and enhancing our too.
Peng Hui: Okay. Zhang Sichuan has already given pretty clear and detailed answers about the growth dynamics of our overseas business. Let me try to translate those comments into more quantifiable terms that model builders can work with. First of all, as you can see, in Q1 and Q2, we delivered over 70% overseas growth, which reflects strong momentum across both social and some of our emerging brands. As Zhang Sichuan mentioned, we could have moved a little bit faster in Q2 in terms of top-line growth. However, we purposely slowed down a bit toward mid-Q2 so we didn't have to sacrifice profit for faster top-line and market expansion. It was really a decision out of strategic discipline and priority on growth with profit rather than growth at the expense of profit.
That said non social emerging brands as a whole are continuing to accelerate at a triple digit pace and will become an increasingly important growth driver as the year progresses.
Um, okay.
6. Uh, 6 has already given pretty clear and, uh, detailed answers about the growth dynamics of our overseas business.
This is a good thing for the group because a lot of the new brands, our subscription base with higher margins and these brands as these brands mature we could see gradual improvement in our overall margin profile.
Um, let me try to translate those comments into more quantifiable terms.
That model, Builders can work with.
By Q4, as our ROI optimization take effect and with the contribution from some of the newer brands, we expect overseas growth to Reaccelerate again, hopefully that answers your question.
First of all, as you can see in q1 and Q2 we uh, delivered over 70%, overseas growth, which reflects strong momentum across both social and our, some of our emerging brands.
Back to actually to take more questions.
Okay. So in the interest of time, maybe let's just take one last question before we wrap up for todays conference. Please operator, if we have any.
We as sick mentioned we could have moved a little bit faster in Q2 in terms of Topline growth. Uh however we purposely slowed down a bit toward meet Q2 so we didn't have to sacrifice profit for faster Topline and Market expansion.
Thank you. Your final question comes from enjoy Kingdom from CIC. Please go ahead.
Paul.
Thanks, Cam only 10 additional achieva guns have anytime tissue consolidate <unk>.
Peng Hui: For that same reason, in Q3, we expect a temporary moderation, maybe toward a year-over-year growth of around 60% as we deliberately pace marketing spend and focus on improving ROI through optimizing user acquisition costs and enhancing ARPU. That said, non-social emerging brands as a whole are continuing to accelerate at a triple-digit pace and will become an increasingly important growth driver as the year progresses. This is a good thing for the group because a lot of the new brands are subscription-based with higher margins. As these brands mature, we could see gradual improvement in our overall margin profile. By Q4, as ROI optimization takes effect and with the contribution from some of the newer brands, we expect overseas growth to reaccelerate again. Hopefully, that answers your question.
Alexandra <unk> Iot Sugan, along cash as our prepared remarks NT dollar.
Sure.
Moshe for Cleveland <unk>.
Horizontal drilling away from Glen <unk>.
It was really a decision out of strategic discipline and, uh, priority on growth with profit rather than growth at the expense of profit. And for that same reason in Q3 we expect a temporary moderation, uh, maybe toward a year-over-year growth of around. 60%, uh, as we deliberately Pace marketing, spend and focus on improving RI through optimizing user acquisition costs and, uh, enhancing our to
Insurance dahal enhancing the glitch and for the future.
Thanks management for taking my question.
The management just to share the revenue outlook for the second half of this year and I would like to know if Nick will be unchanged in terms of profit margin.
That said non-social emerging Brands as a whole are continuing to accelerate at a triple digit pace and will become an increasingly important growth driver as the year progresses.
Regarding the withholding tax issue that Katherine just mentioned in the prepared remarks commencement share more details I believe investors are quite concerned about whether this is an issue specific to the company itself.
This is a good thing for uh, the group because a lot of the new brands are subscription-based with higher margins.
Movement in our overall margin profiles.
Um,
If it isn't related to changes in industrialized.
Thanks.
Okay.
Speaker 5: Back to Ashley Jing to take more questions.
Ashley Jing: Okay. In the interest of time, maybe let's just take one last question before we wrap up for today's conference. Please, Aprita, if we have any.
Uh, by Q4, as RI optimization takes effect and with the contribution from some of the newer brands, we expect overseas growth to really accelerate again. Hopefully, that, uh, answers your question. Back to Ashley to take more questions.
Um,
Our margins are.
so, in the interest of time,
Hard to separate the discussion.
On margin from our overall top line outlook. So heres a recap on how to think about revenue outlook for 2025 at the group level.
Speaker 5: Thank you. Your final question comes from Xueqing Zhang from CICC. Please go ahead.
Maybe let's just take one last question before we wrap up for today's conference. Uh, please, operator, if we have any.
Thank you. Your final question comes from joy. King Jiang from cic, please go ahead.
Xueqing Zhang: 感谢管理层接受我的提问。那刚才管理层其实分享了对下半年的一个收入预期。我想请教一下, 这样利润率方面是不是会有变化, 尤其是刚刚 Cathy 在 prepared remarks 里面提到了一些税务问题, 那是否可以分享一些具体的情况? 然后我想投资人也会更关心说这是公司个体的变化, 还是涉及到行业性的一个政策的一个改变? 谢谢。 Thanks, management, for taking my question, and the management just shared the revenue outlook for the second half of this year. I would like to know if there will be any changes in terms of profit margin, in particular regarding the withholding tax issue that Cathy just mentioned in the prepared remarks. Could management share more details? I believe investors are quite concerned about whether this is an issue specific to the company itself or if it is related to changes in industry-wide policies. Thanks.
Again.
More quantifiable way.
As Tang Yan mentioned earlier, we expect some pressure on mobile sat or added services in the second half primarily due to recent tightened not being tax scrutiny affecting.
<unk>.
A lot of our performers and agencies and.
And of course macro remains uncertainty factor here as well.
For these reasons.
There could be some fluctuations in revenue on gross margins, particularly in Q3 and Q4.
That said, we think adjusting our revenue sharing policy to offset part of the impact. So the overall effect on topline should remain pretty manageable.
On the other hand, our patents performance as you can see has been a positive surprise after the restructuring at the beginning of the year, where we substantially cut down personnel and marketing costs, despite significantly reducing marketing spend product improvement and monetization.
Thank you for taking my question and the management, just share the revenue outlook for the second half of this year. And I would like to know if there uh, will be any changes in terms of uh profit margin uh, in particular regarding the withholding tax issue that Cassie just mentioned in the prepared Maps, uh, commencement share more details. Uh, I
The investors are quite concerned about whether this is an issue specific to the company itself, or if it is related to a Chinese industrial-wide trend. Uh, prices, uh, thanks.
Peng Hui: Okay. On margins, it's hard to separate the discussion on margins from our overall top-line outlook. Here is a recap on how to think about revenue outlook for 2025 at the group level, again, in a more quantifiable way. As Tang Yan mentioned earlier, we expect some pressure on MoMo's value-added services in the second half, primarily due to recent tightening up in tax scrutiny affecting a lot of our performers and agencies. Of course, macro remains an uncertainty factor here as well. For these reasons, there could be some fluctuations in revenue and gross margins, particularly in Q3 and Q4. That said, we've been adjusting our revenue sharing policies to offset part of the impact. The overall effect on top-line should remain pretty manageable.
<unk> have kept revenue more resilient than expected and the revenue is stabilizing as we move through the back half of the year. So it looks like we've achieved stabilizing revenue trend on top of significant cost savings for contest, which will give us pretty meaningful improvement in <unk> profitability compared to.
Okay. Um,
Compared to last year.
Now moving back to group level revenue outlook for 2025, we continue to see a.
On margins. Uh, it's hard to separate the discussion, uh, on margin from our overall, Topline, our work. So here is a recap on how to think about Revenue outlook for 2025 at the group level. Uh, again, in a, in a more quantifiable way.
um,
Somewhere around the low teens year over year decline for domestic revenue offset by strong growth in overseas, where we anticipate a year over year growth around 70%.
as Tanya mentioned earlier, we expect some pressure on moments better added services in the second half primarily due to recent tightening up in tax scrutiny affecting. Uh,
A lot of our performers and agencies.
For the whole year taken together this implies that group top line in 2025 could either see a slight downtick from or remains flattish versus 2024, that's the current view of my.
And, of course, macro remains an uncertain factor here as well. Um, for these reasons.
Turning to turning to margins.
On the gross margin line there are forces that sometimes oppose why another first we are slightly raising payout ratios to support domestic agencies.
There could be some fluctuations in revenue and growth margins, particularly in Q3, and Q4, uh, that said, within adjusting our Revenue, sharing policies to, uh, offset part of the impact.
Peng Hui: On the other hand, TangTang's performance, as you can see, has been a positive surprise after the restructuring at the beginning of the year, where we substantially cut down personnel and marketing costs. Despite significantly reducing marketing spend, product improvements and monetization enhancements have kept revenue more resilient than expected. The revenue is stabilizing as we move through the back half of the year. It looks like we've achieved a stabilizing revenue trend on top of significant cost savings for TangTang, which will give us pretty meaningful improvement in TangTang's profitability compared to last year. Now, moving back to group-level revenue outlook for 2025, we continue to see somewhere around the low teens year-over-year decline for domestic revenue, offset by strong growth in overseas, where we anticipate a year-over-year growth around 70% for the whole year.
so, the overall effect on Topline should remain pretty manageable,
As well as pro forma as they adapt to the new tax environment.
That could mean, a one to two percentage point increase in overall payout.
Normal.
Second as the overseas revenue contribution becomes increasingly meaningful.
<unk> shift across businesses could swing gross margin, one way or another making it difficult to pin down the group level margin expectations are for.
For example, if the dating brands continue to outperform margin will improve however, if some of our newer entertainment brands grow faster it could shift the margin profile of the other way around that said I can't give you guide my best estimate at this point as a reference point adjusted gross margin was.
On the other hand, uh, 10 times performance, as you can see, has been a positive surprise after the restructuring at the beginning of the year, uh, where we substantially cut down personnel and marketing costs. Despite significantly reducing marketing, spend product improvements and monetization enhancements, have kept Revenue, more resilient than expected and the revenue is stabilizing, uh, as we move through the back half of the year, so it looks like we've achieved stabilizing Revenue trend on top of significant cost-saving for Content, which will give us pretty meaningful Improvement in sometimes profitability compared to uh, compared to last year.
39% in 2024 last quarter, we guided for.
If I remember correctly.
Somewhere around 36, 37% for 2025.
Peng Hui: Taken together, this implies that group top-line in 2025 could either see a slight downtick from or remain flattish versus 2024. That's the current view of mine. Turning to margins, on the gross margin line, there are mixed forces that sometimes oppose one another. First, we are slightly raising payout ratios to support domestic agencies, as well as performers as they adapt to the new tax environment. That could mean a 1% to 2% increase in overall payout on MoMo. Second, as the overseas revenue contribution becomes increasingly meaningful, mix shift across businesses could swing gross margin one way or another, making it difficult to pin down the group-level margin expectations. For example, if the dating brands continue to outperform, margin will improve. However, if some of our newer entertainment brands grow faster, it could shift the margin profile the other way around.
Given the recent developments in the life screening and battery added services.
In China, we now expect 2025 gross margin to land closer to the lower end of that range.
Now, moving back to group level Revenue, outlook for 2025, we continue to see a, uh, somewhere around the low teens year-over-year. Decline for domestic Revenue offset by strong growth in overseas. Where we anticipate a year-over-year growth around 70%, uh, taken for the whole year taken together. This implies that group TopLine in 2025 could either see a slight downtick from or remains flat that she versus 2024. That's the current view of mine. Uh, turning to
So thats why gross margin below the gross margin line R&D will trend.
Turning to margins.
Trend lower in absolute dollar.
The absolute dollar terms as we continue to optimize headcount sales and marketing will increased low teens.
His life, reflecting our investments to drive overseas growth, especially.
On the growth margin line, there are mixed forces that sometimes weigh on each other. First, we are slightly raising payout ratios to support domestic agencies as well as performers as they adapt to the new tax environment.
Some of the newer applications that we are launching in the second half, especially in Q4.
Uh, that could mean a 1 to 2 percentage point increase in overall payout, uh, on normal.
At the operating margin level last quarter, we guided four from 13 to maybe 14% on an adjusted basis for 2025. Our current view is that we will probably land in the lower end of that range, depending on where the top line.
Yeah.
So overall, despite some near term challenges faced by some of our agencies from tax scrutiny.
Peng Hui: That said, I can give you guys my best estimate at this point. As a reference point, adjusted gross margin was 39% in 2024. Last quarter, we guided for, if I remember correctly, somewhere around 36% to 37% for 2025. Given the recent developments in the live streaming and the value-added services space in China, we now expect 2025 gross margin to land closer to the lower end of that range. That's for gross margin. Below the gross margin line, R&D will trend lower in absolute dollar terms as we continue to optimize headcount. Sales and marketing will increase low teens percentage-wise, reflecting our investment to drive overseas growth, especially some of the newer applications that we're launching in the second half, especially in Q4. At the operating margin level, last quarter, we guided for from 13% to maybe 14% on an adjusted basis for 2025.
Our annual margin profile remains broadly stable and I believe aligned with prior guidance as we continue to exercise cost displaying a discipline and fun overseas expansion.
Level margin expectations. Uh, for example, if the dating Brands continue to outperform margin will improve. However, if some of our newer entertainment Brands grow faster, uh it could shift the margin profile, the other way around that said, I can give you guys my best estimate at this point, as a reference point, adjusted gross margin was 39% in 2024. Last quarter, we got it for
Um, if I remember correctly, uh,
So now the the question moving below the operating profit line.
And.
It's.
It's probably worth elaborating a little bit more on the.
you know, somewhere around 36 37% for 2025, uh, given the recent developments in the live streaming and the value added Services. Uh, it's based in, uh, China. We now expect, 2025 gross margin to land closer to the lower end uh of that range.
Big special tax items for Q2.
Basically.
Here is what happened.
Recently.
Um, so that's for gross margin below. The gross margin line, R&D will, uh, trend lower in absolute dollars.
Actually Ah.
Toward the end of August.
The tax authorities provided an interpretation that we believe represents a new position regarding the applicable withholding.
Withholding tax rate for dividends distributed by our Wuxi to a Hong Kong parent company Momo Hong Kong.
The authorities have determined that the standard 10% rate should apply rather than the 5% preferential rate under the mainland China and.
Yeah, absolute dollar terms as we continue to optimize head count. Those are marketing will increase low teens, uh, percentage wise reflecting our investment to drive overseas growth especially, uh, some of the newer applications that we are launching in the second half, especially in Q4, um, at the operating margin level last quarter uh regarded for from 13 to maybe 14% on an adjusted basis.
Peng Hui: Our current view is that we will probably land in the lower end of that range, depending on where the top line ends. Overall, despite some near-term challenges faced by some of our agencies from tax scrutiny, our annual margin profile remains broadly stable and, I believe, aligned with prior guidance as we continue to exercise cost discipline and fund overseas expansions. Now, the big question, moving below the operating profit line, it's probably worth elaborating a little bit more on the big special tax item for Q2. Basically, here is what happened. Recently, actually, toward the end of August, the tax authorities provided an interpretation that we believe represents a new position regarding the applicable withholding tax rate for dividends distributed by our royalty to its Hong Kong parent company, MoMo Hong Kong.
And Hong Kong tax arrangements that we have applied in.
In prior periods.
For 2025, our current view is that we will probably land in lower end of that range, depending on where the Top Line ends.
Actually from April.
um,
2025 two.
So, overall, despite some near-term challenges.
From April 25, 4% to April 25, our tax filings.
With 5% preferential dividend tax rate, we're subject to multiple we team with us by the local tax Bureau, Lucas tax authority.
Faced with some of our agencies from tax scrutiny, our annual margin profile remains broadly stable, and I believe it is aligned with prior guidance, as we continue to exercise cost discipline and fund overseas expansions.
Right no objections or concerns at the time. In addition, we believe the practice, we previously followed with a comment and industry approach for companies in similar situations.
Uh, so now the, uh, the question, uh, moving below the operating profit line.
um,
It. It's, um,
That's why we were surprised by the subsequent reassessment.
It's probably worth elaborating a little bit more on the, uh,
Of the authorities.
Big special text item for Q2, um, basically.
While we continue to believe our initial assessment was reasonable we note that the application of tax laws can involve very complex the interpretation.
Here is what happened?
Recently. Um,
actually, uh,
toward end of August.
As a reasonable corporate citizen, we have complied with the authorities latest guidance.
Uh, the tax authorities provided in interpretation uh, that we believe represents a new position.
And have adjusted our accounting accordingly.
As to the question.
Peng Hui: The authorities have determined that the standard 10% rate should apply rather than the 5% preferential rate under the mainland China and Hong Kong tax arrangement that we have applied in prior periods. Actually, from April 2024 to April 2025, our tax filings with 5% preferential dividend tax rate were subject to multiple routine reviews by the local tax bureau, local tax authority, which raised no objections or concerns at the time. In addition, we believe the practice we previously followed was a common industry approach for companies in similar situations. That's why we were surprised by the subsequent reassessment of the authorities. While we continue to believe our initial assessment was reasonable, we note that the application of tax laws can involve very complex interpretations. As a reasonable corporate citizen, we have complied with the authority's latest guidance and have adjusted our accounting accordingly.
Regarding the applicable, uh, withholding tax rate for dividends distributed by our Roi, to its Hong Kong. Parent company, Momo Hong Kong,
About whether this is industry wide or specific to Hello group.
From our recent dialogue with the third party advisors, who have been involved all along in this specific matter as well as the dialogue with the authorities.
The authorities have determined that the standard 10% rate should apply rather than the 5% preferential rate under the Mainland China and Hong Kong tax arrangements that we have applied in prior periods.
It's our belief and our understanding that the latest scrutiny.
Hello Group experience.
Is not unique to us alone.
Our original approach was not unique either many companies with similar structures have followed the same practice.
Um, actually from April, uh, 2025 to uh, I'm sorry. Uh, from April 2024 to April 2025, our tax filings uh with 5% preferential dividend tax rate were subject to multiple routine reviews by the local tax Bureau local tax Authority.
And if so according to the authorities there is a possibility that they could face similar scrutiny as well that's what I can say at this point.
So maybe back to you to wrap up the call Yeah I think.
Which raised no objections or concerns at the time. In addition, we believe the practice. We previously followed was a common in Industry approach for companies in similar situations.
Comes up so let's call today and thank you for joining us today, and we'll see you next quarter.
That's why we were surprised by the subsequent reassessment.
Operator, we're ready to close thank you.
Of the authorities.
Thank you that does conclude our conference for today. Thank you for participating you may now disconnect.
While we continue to believe our initial assessment was reasonable.
We note that the application of test off can involve very complex interpretations.
As a reasonable corporate citizen, we have complied with the authorities, latest guidance.
And have adjusted our accounting accordingly.
Peng Hui: As to the question about whether this is industry-wide or specific to Hello Group Inc., from our recent dialogues with the third-party advisors who have been involved all along in this specific matter, as well as the dialogues with the authorities, it's our belief and our understanding that the latest scrutiny that Hello Group Inc. experienced is not unique to us alone. Our original approach was not unique either. Many companies with similar structures.
Um, as to the question.
About whether this is industry-wide or specific to Hello Group.
Um, from our recent dialogues with the third party, advisors who have been involved all along in this specific matter, as well as the dialogues with the authorities.
Is our belief and our understanding that the latest scrutiny. That hello group experience.
Is not unique to us alone.
Aprita: have followed the same practice. If so, according to the authorities, there is a possibility that they could face similar scrutiny as well. That's what I can say at this point. Maybe back to Ashley to wrap up the call.
Not unique. Either many companies with similar structures, have followed the same practice.
Ashley Jing: I think that comes up. Let's call it a day. Thank you for joining us today, and we'll see you next quarter. Operator, we're ready to close. Thank you.
And if so, according to the authorities, there is a possibility that they could face similar scrutiny as well. That's what I can say at this point. Um, so maybe back to Ashley to wrap up the call. Yeah. Uh, I think
Uh thumbs up. So let's uh call your day and thank you for joining us today and we'll see you next quarter. Uh operator we're ready to close. Thank you.
Zhang Sichuan: Thank you. That does conclude our conference for today. Thank you for participating. You may now exit.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
Aprita: Ladies and gentlemen, thank you for standing by and welcome to the second quarter 2025 Hello Group Inc. 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'll need to press the star key followed by the number one on your telephone keypad. Please note this conference is being recorded today. I would now like to hand the conference over to your first speaker today, Ms. Ashley Jing. Thank you. Please go ahead, ma'am.
Ladies and gentlemen, thank you for standing by and welcome to the second quarter 2025, hello grouping and earnings conference call.
All participants are in listen-only mode.
There will be a presentation followed by a question-and-answer session.
If you wish to ask a question, you'll need to press the star key followed by the number 1 on your telephone keypad,
Please note this conference is being recorded today.
I would now like to hand the conference over to your first Speaker today, Miss Ashley Jing. Thank you, please go ahead, ma'am.
Peng Hui: Thank you, operator. Good morning and good evening, everyone. Thank you for joining us today for Hello Group Inc.'s second quarter 2025 earnings conference call. The company's results were released earlier today and are available on the company's IR website. On the call today are Mr. Tang Yan, CEO of the company, Ms. Zhang Sichuan, COO of the company, and Ms. Peng Hui, CFO 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. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provision of the Private Securities Litigation Reform Act of 1995.
Thank you, operator. Good morning and good evening, everyone. Thank you for joining us today for Hello Group's second quarter 2025 earnings conference call. The company's results were released earlier today and are available on the company's website.
On a call today. I missed the Tang Yin CEO of the company, Miss Jan Co of the company and Miss ponge, CFO 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.
Peng Hui: Such statements are based on management's current expectations on current market and operating conditions and relate to events that involve known or unknown risks, uncertainties, 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 forward-looking statements. Further information regarding this and other risks, uncertainties, and factors 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 forward-looking statements as a result of new information, future events, or otherwise, except as required under law. I will now pass the call over to our COO, Ms. Zhang Sichuan. Ms. Zhang, please.
Before we begin I would like to remind you that this call may contain 4 looking statements, made under the Safe Harbor. Provision of the private security litigation Reform, Act of 1995.
Such statements are based on management's current expectations, as well as current market and operating conditions. They relate to events that involve known or unknown risks, uncertainties, 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 for 4 months, or achievements to defer material from those in the forward looking statements.
For the information regarding this and other risks uncertainty is a factors is included in the company's filings with the US Security and Exchange Commission. The company does not undertake any obligation to update any 4 looking statements, as a result of new information, future events or otherwise, except as required under law.
Speaker 5: Thank you, Ashley. Hello, everyone. Thank you for joining our call. In Q2, both our domestic and overseas business continued to have positive trends starting at the start of the year, achieving good results across various operational and financial metrics. Next, I will give you an update on the execution of our strategic goals. Starting with the financial performance for Q2 2025, total group revenue was RMB 2.62 billion, down 3% year over year. Domestic revenue reached RMB 2.18 billion, down 11% year over year, while overseas business was RMB 442 million, up 17.3% year over year. Adjusted operating income was RMB 448 million, down 6% from Q2 last year, with a margin of 17%. Our key priorities for 2025 include the following. For MoMo, the goal is to maintain the productivity of this cash cow business with a healthy social ecosystem.
I will now pass the call over to our coo, Miss Johnson.
Thank you for joining our call.
In Q2, both our domestic and overseas business continued the positive trends that began at the start of the year.
achieving good results across various operational and financial metrics.
Next, I will give you an update on execution of our strategic goals.
Starting with the financial performance.
For Q2, 25 total, group Revenue was 2.62 billion. R&B
Down. 3% year-over-year.
Revenue reached 2.18 billion R&B down 11% year-over-year. While overseas business was 442 million R&B
Up 173% year-over-year.
and income was 448 million R&B,
Q2 last year with a margin of 17%.
Our key priorities for 2025 include the following.
Speaker 5: For TangTang, the goal is to maintain and improve its core dating experience and build an efficient business model that drives profitable growth. For the new endeavors, our goal is to continue deepening our presence in overseas markets, enriching our brand portfolio, and building a long-term growth engine. In the first half of 2025, our domestic business gradually stabilized, with both revenue and profit exceeding our initial expectations. For overseas business, we continue to drive rapid revenue growth with controllable costs and expenses. Now, let me walk you through the details. First, on MoMo app, all product and user acquisition efforts were focused around the goal of ensuring the productivity of the cash cow business. On the product side, the focus was to enhance user track experience to ensure long-term datability through a healthy social ecosystem.
For Momo. The goal is to maintain the productivity of this kaskel business with the healthy social ecosystem.
The goal is to maintain and improve its core dating experience and be an efficient business model that drives profitable growth.
For the new endeavor, our goal is to continue deepening our presence in overseas markets.
Enriching our brand portfolio and building a long-term growth engine.
In the first half of 2025, our domestic business gradually stabilized, with both revenue and profits exceeding our initial expectations.
For overseas business, we continue to drive rapid revenue growth with controllable costs and expenses.
And now, let me walk you through the details.
First on Momo apps, all products and user acquisition efforts were focused around the goal of ensuring the productivity of the cash car business.
Speaker 5: In Q2, we fully rolled out the in-house developed AI greetings feature, which helps male users to generate personalized greetings, driving the reply rate up by a high single-digit %, building our use of AI to enhance icebreaking chat experience. We have also been testing an AI chat assistants feature, which provides content suggestions for male users during the ongoing conversation. This feature drives an increase in the number of multi-round conversations and rate of in-depth chats, thereby improving retention and playing a positive role in stabilizing MoMo's user base. On the user acquisition front, we further refined our approach based on ROI and reduced the budget of inefficient channels. We also optimized acquisition materials for high Apple users and drove sequential growth in Apple by enhancing the onboarding experience for paying features among users from these channels.
On the products side, the focus was to enhance user check experience to ensure long-term stability through a healthy social ecosystem.
in Q2, we fully roll out the in-house developed AI, greeting feature,
Which have male users to generate personalized greeting.
Driving the reply rate up by a high single digit percentage.
Building our use of AI to enhance ice breaking chat experience.
We have also been testing an AI chat assistance feature.
Which provides content suggestions for male users during the ongoing conversation.
this feature drives an increase in number of multi-round conversation and rate of feeling in-depth checks,
thereby improving retention and playing a positive role in stabilizing Momo's user base.
On the user acquisition front, we further refine our approach based on Roi and reduce the budget of inefficient channels.
Speaker 5: The reduction in unit acquisition costs, combined with the app growth, drove further improvement in ROI, which had already achieved a target greater than 100% in Q1. The overall user retention remained stable despite increased channel investment, thanks to the improved user experience driven by product enhancement and algorithm optimization, as well as the ability to accommodate channel users more effectively. In Q2, MoMo app had 3.5 million paying users, a sequential decrease of 0.6 million due to our ongoing efforts to cut user acquisition investment with negative ROI. Since the ultra-low paying users that we proactively abandoned make very limited contributions to the top line, the absence of this group has had a very minimal negative impact on revenue. Instead, their absence contributed to an improvement in profitability.
We also optimize acquisition materials for High Apple user and drove sequential growth in apple, by enhancing the onboarding experience for paying features among users from these channels.
The reduction in unit acquisition costs combined with the app growth.
Grow further improvement in our eyes.
Which had already achieved a Target greater than 100% in q1.
The overall user retention which may stable despite increased Channel Investments.
Thanks to the improved user experience driven by product enhancement and algorithm optimization as well as the ability to accommodate Channel, users more effectively.
In Q2 mobile app has 3.5 million paying users, a sequential decrease of 0.6 million.
Due to our ongoing efforts to cut user acquisition Investments with negative Roi.
Since the ultra low paying users that we proactively abandoned, make very limited contribution to the Top Line.
The absence of this group has had a very minimal negative impact on revenue.
Speaker 5: We believe that the current user acquisition environment in China has fundamentally changed from the pre-pandemic period, and our user acquisition strategy also evolved to achieve ongoing improvement in ROI. I am confident that both MoMo and TangTang still have room for continuous improvement in this area. Now, on the productivity of the cash of MoMo cash cow business, in Q2, MoMo value-added service revenue reached RMB 1.85 billion, down 11% year over year. The decline was mainly due to the soft spending sentiment among high-paying users, particularly in live streaming experience amid the weak microenvironment. In light of this, we increased operational efforts in chat room experience, which is popular among mid-cohort users. We adjusted the common recommendation algorithm to enhance penetration rates and user scale of the audio and video-based experiences, thereby stimulating consumption enthusiasm among mid-cohort users.
instead, their absence contribute to an improvement in profitability,
We believe that the current user acquisition environments in China has fundamentally changed from the pre-pandemic period.
And our user acquisition strategy has also evolved to achieve ongoing improvements in our lives.
I believe that, uh, I'm confident that both Momo and tantan.
Still have room for continuous improvement in this area.
Now, on the productivity of the cash, uh, of Momo, cash competitors.
In Q2, Momo value-added service.
Revenue, reached 1.85 billion R&D down 11% year-over-year.
The decline was mainly due to the stock spending sentiments among high-paying users.
Particularly, the live streaming experience amid the V microenvironments.
In light of this, we increase operational efforts in chat room experiences.
Which is popular among many cohort users.
We adjusted the common recommendations algorithm to enhance penetration rates and user scale of the audio and video-based experiences.
Speaker 5: After the seasonal load in Q2, we organized non-bonus-driven competition events in live streaming and increased the exposure rates of high-quality broadcasters to high-paying users in our algorithm. On the product side, we introduced new interactive gifts that better facilitate relationship building and paying conversion between users and broadcasters. With the joint efforts of our algorithm and product, we enhanced our traffic monetization efficiency, coupled with our seasonal recovery. Boss revenue increased 4% from last quarter. Turning to TangTang, in order to maintain profitability amidst revenue pressure, we continue our strategy of reducing channel investment in Q2. A plan initiated at the start of the year with a target ROI of over 100%, we further scaled back the budget for underperforming channels. This decrease in channel traffic puts some pressure on the overall user scale.
Thereby stimulating consumption for them and Mikko or uses.
After the seasonal load in Q2, we organized, non bonus driven competition events in live streaming.
and increase if the exposure rate of high-quality broadcasters to high-paying users in our algorithms,
On the product side, we introduced new interactive gifts, that better, facilitate relationship building and paying conversion between users and broadcasters.
With the joint efforts of our algorithm and products, we enhance our traffic monetization efficiency, coupled with our seasonal recovery.
Bob Revenue increased 4% from last quarter.
202.
In order to maintain profitability amidst revenue pressure.
We continue our strategy of reducing Channel investments in Q2.
Plan initiated at the star of the year with a Target Roi of over 100%.
With further scaling back the budget for underperforming channels.
Speaker 5: However, organic user growth showed a positive trend since the beginning of the year and increased steadily quarter over quarter, which partially offset the decline in user numbers caused by the reduction in marketing spend. In June, TangTang's MAU reached 10.2 million, down 5% from last quarter. As of the end of Q2, TangTang had 720,000 paying users, a decrease of 80,000 from Q1. In addition to a decrease in MAU, another reason for the decline in paying users is the short-term pressure on the paying conversion caused by the improvements in user experience associated with the product upgrade. Following the full-scale rollout of the pilot project, there was a slight quarter over quarter decrease in paying ratio. Turning to TangTang's financials, revenue from the onshore business in Q2 was RMB 116 million, down 18% year over year and 4% quarter over quarter.
This decrease in channel traffic put some pressure on the overall user scale.
However, organic user growth shows a positive trend since the beginning of the year.
And increase steadily over a quarter-over-quarter.
Which potentially offset the decline in user numbers caused by the reduction in marketing expenses.
On June 10th, Mau reached 10.2 million, down 5% from last quarter.
As of the end of Q2, Tan has 720,000 paying users.
A decrease of 80,000 from q1.
In addition to a decrease in Mao, another reason for the decline in paying users is the short-term pressure on the paying conversion.
Caused by the Improvement in user experience associate with the product upgrade.
Following the food scale roll out of the pilot project. There was a slight quarter over quarter, decreased in paying ratio.
Turning to 10 financials.
Speaker 5: The revenue decrease was due to a decline in the number of paying users, but ARPU increased 18% year over year and 8% quarter over quarter, which partially alleviated the pressure on revenue. At the product level, to explore dating experiences suitable for Asian users, we launched product upgrades from last year. Our key efforts included, first, strengthening real user verification to enhance user authenticity and brand trust. Number two, we focused on the core dating experience by simplifying the UI layout to focus on key information while downplaying non-core dating features such as feeds and group chat. The improvement in user experience had a certain negative impact on paying ratio and user.
Revenue from the onshore business in Q2 was 116 million R&B, down 18%, year-over-year and 4% quarter over quarter.
The revenue decreased was due to a decline in the number of paying users.
But a people increase 18% year-over-year and 8% quarter over quarter.
Which potentially inhibited the pressure on revenue.
At the product, level to export stating experiences suitable for Asian. We launched product upgrades from last year.
Our key efforts included both strengthening real user verification to enhance user authenticity and brand trust.
Number 2, we’re focusing on the core dating experience.
By simplifying the UI layout.
To focus on key information.
While downplaying non-court dating features such as fees and group chats.