Hello Group Clocks 5% Revenue Decline In Q2, Beats Estimates

Chinese mobile social and entertainment platform Hello Group Inc MOMO reported a second-quarter FY21 net revenue decline of 5.1% year-on-year to $568.7 million, beating the analyst consensus of $558.01 million.
Drivers: Monthly Active Users (MAU) rose 3.7% Y/Y to 115.6 million in June 2021.
Total paying users of its live video service and value-added service declined 3.1% Y/Y to 12.4 million in Q2.
Segments: Live video service revenues declined 19.3% Y/Y to $325.5 million.
Total value-added service revenues increased 25.2% Y/Y to $233.4 million.
Mobile marketing revenues rose 35.9% Y/Y to $8.0 million.
Mobile games revenues decreased 20.6% Y/Y to $1.4 million.
Net revenues from the Momo segment declined 5.5% Y/Y to $489.0 million. Net revenues from the Tantan segment decreased 0.7% to $79.5 million.
Margin: The gross margin declined 374 bps to 43.6% as costs rise 1.7% Y/Y.
Non-GAAP net income per ADS of $0.39 beat the consensus of $0.32.
Hello Group held $2.4 billion in cash and equivalents. It used $26 million in operating cash flow during Q2.
Outlook: Hello Group sees Q3 revenue of $565 million - $580.5 million versus the consensus of $571.3 million.
Price Action: MOMO shares traded lower by 3.18% at $12.49 in the premarket session on the last check Thursday.