Hello Group Inc. American Depositary Shares 2026 Q2 Earnings Call

Thank you, operator. Good morning and good evening, everyone. Thank you for joining us today for Hello Group Second Quarter 2026 Earnings Conference Call. The company's results were released earlier today and available on the company's IR website. On the call today are Mr. Tang Yan, CEO of the company, Mr. Jianhua Wen, 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.

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 to differ materially from those in the forward-looking statement. 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 take any further obligation to update any forward-looking statement 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, Mr. Jianhua Wen.

Jianhua, please. Okay. Hello, everyone. Thank you for joining today's call.

Hello everyone. Thank you for joining today's call.

The group maintained steady business momentum in Q2. On the domestic side, Momo continued to preserve the healthy functioning of our cash cow business through product innovation and refined operations. Tantan focused on AI capability building to improve user experience and monetization efficiency. On the overseas side, the synergy across our diversified product portfolio became increasingly evident. Next, I will walk you through the key updates. Starting with the financials, for Q2 2026, total revenue was CNY 2.49 billion, down 5% year-over-year, but up 4% quarter-over-quarter. Domestic revenue reached CNY 1.81 billion, down 17% year-over-year, but up 1% quarter-over-quarter. Overseas revenue was CNY 673 million, up 52% year-over-year, and 13% quarter-over-quarter. Overseas revenue accounted for 27% of total revenue, compared to 17% in the same period last year. Adjusted operating income was CNY 276 million, with a margin of 11%. Our 2026 priorities continue along three main tracks.

For Momo, the goal is to ensure stable, sustained productivity of our cash cow business. For Tantan, to continue exploring a dating experience and an efficient business model tailored for Asian users. For our new businesses to deepen the overseas presence, enrich our brand portfolio, and build a long-term growth engine. Next, I will walk you through each. Let me start with Momo. On the user side, a year of user-oriented product iteration has effectively lifted platform engagement. Combined with the sequential recovery from the seasonal low in organic traffic, this drove a modest increase in Momo's overall user base. Building on this uptick in the overall scale, our audio and video small ticket scenarios run themed operational events around the World Cup and key seasonal occasions, driving paying users up 200,000 quarter-over-quarter to 3.9 million.

产品方面，敲敲重点优化深度聊天匹配策略，将高聊天意愿的用户精准匹配到一起，对用户活跃留存及平台规模起到积极作用。AI助聊基于真实行为数据训练模型，深化对用户偏好的理解，推动功能采用率与AI招呼回复率稳定增长，既对长期留存与大盘规模形成正向支撑，也开辟了新的营收场景。本季度我们还灰度测试了AI小沫，通过AI浏览用户动态，挖掘兴趣结合点，并完成社交对象筛选，自动生成个性化破冰文案，进一步优化匹配效率与关系达成率。 On the product side, Knock Knock focused on refining our deep chat matching strategy, precisely pairing users with a high intent to chat, which had a positive effect on engagement, retention, and overall user scale.

AI Chat Assistant trains its models on real user behavior data to deepen its understanding of user preferences, driving steady growth in feature adoption, as well as the reply rate in AI greetings. This has both supported long-term retention and user base scale, and opened up new revenue scenarios. This quarter, we also began gray testing AI 小沫, which has AI browse users photos to identify common interests, complete an initial screening of potential matches, and automatically generate a personalized icebreaker message, further improving matching efficiency and connection success rate.

获客方面，我们对于召回用户的渠道投入进行了分组评估实验，目的是确认渠道的错误归因是否会导致公司在渠道召回方面进行了部分低效投入。结果显示，渠道投入确实存在持续优化的空间，我们有信心可以以更少的投入维持目前的平台活跃规模和收益。我们将从三季度开始根据实验结果持续提升获客效率。 On user acquisition, we ran a holdout experiment on channel spend for dormant user reactivation, aiming to test whether attribution errors in our channel data were leading to inefficiencies in these re-engagement efforts.

The results showed that there is indeed room for continued optimization in our channel investment, and we are confident we can maintain our current platform scale and revenue with less spend. In Q3, we will continue to improve acquisition efficiency based on these findings.

接下来谈一下陌陌现金流业务在商业化方面的表现。二季度陌陌VAS收入15.4亿元，同比下降16%，环比增长2%。同比下降主要由于两个因素，一是税务方面的持续收紧，对我们的公会和主播产生了持续而显著的负面影响。二是宏观消费疲软。收入环比增长弱于往年同期，主要由于四月以来音频场景部分公会受税务因素影响，收缩运营力度导致流水回撤。我们于五月末通过定向补贴的方式缓解了部分公会的运营压力，推动流水快速修复。二季度VAS整体分成比例同环比低个位数增长，主要由于为缓解供给侧在税务合规进程中的财务压力，我们适度上调了音频场景部分核心公会的分成比例和补贴力度，以可控的成本保障供给侧稳定。针对腰部用户，抓住World Cup流量红利，通过赛时竞猜等互动玩法，提升房间热度和用户粘性。长尾端，社交线灰度测试Moments Boost功能，用户付费提升动态曝光权重，不仅运营数据正向，更跑通了小额付费的新场景。多维度的精细化运营为宏观下行期整体收入规模稳定提供了有力支撑。 Turning to Momo's commercial performance.

In Q2, Momo's last revenue was CNY 1.54 billion, down 16% year-over-year, but up 2% quarter-over-quarter. The year-over-year decline was mainly driven by two factors. Number one, continued tightening on the tax front, which has had a sustained and material negative impact on our agencies and broadcasters. Number two, softness in consumer spending due to macro. Sequential growth came in weaker than in previous years, mainly because since April, some agencies in the audio scenario scaled back operations due to tax related pressures, which weighted on revenue. In late May, we rolled out targeted subsidies to ease the operating pressure on these agencies, which drove a quick recovery in revenue.

In Q2, our overall VAS revenue sharing ratio rose by a low single-digit percentage point, both year-over-year and quarter-over-quarter, mainly because we moderately raised the revenue sharing ratio and subsidy support for certain core agencies in the audio scenarios to ease the supply side's financial pressure through the tax compliance process, keeping the supply side stable at a manageable cost. On the product and operation side, we stayed with our approach of tiered monetization and use case innovation. For high-value users, we selected top growing broadcasters and created AI-generated likeness-based custom gifts for them, which effectively refreshed the paying interest among our top spenders. For mid-tier users, we capitalized on World Cup related traffic by rolling out interactive gameplay such as match predictions, which lifted engagement and user stickiness.