Hello Group Clocks 13% Revenue Decline In Q4 As User Growth Weakens; Issues Cautious Outlook

Hello Group Inc MOMO reported a fourth-quarter FY22 net revenue decline of 12.6% year-on-year to $465.8 million, marginally beating the consensus of $465.3 million.
Drivers: Monthly Active Users (MAU) on the Momo application were 94.6 million in December 2022, down from 114.1 million in December 2021.
Total paying users of its Momo app declined from 8.9 million in Q4 FY21 to 7.8 million in Q4 FY22. Tantan had 1.7 million paying users for Q4 FY22 versus 2.5 million in Q4 FY21.
Segments: Revenues from the Live video service declined 19.8% Y/Y to $250.0 million, Total value-added service decreased 1.8% Y/Y to $210.2 million, Mobile marketing increased 29.8% Y/Y to $4.8 million, and Mobile games fell 72.4% Y/Y to $0.8 million.
Net revenues from the Momo segment fell 11.4% Y/Y to $415.5 million, while the Tantan segment revenues decreased 20.7% to $50.3 million.
Non-GAAP income from operations deteriorated to $72.4 million. Non-GAAP net income per ADS of $0.36 beat the consensus of $0.29.
Hello Group held $1.94 billion in cash and equivalents and generated $78.1 million in operating cash flow.
"2022 was an extremely challenging year. I am pleased to see that our team withstood external pressures by timely adjusting strategic priorities and corresponding execution plans with flexible product and operational measures," commented Yan Tang, Chairman and CEO of Hello Group.
Outlook: Hello sees a Q1 revenue of $372.51 million - $386.57 million (representing a decrease of 15.8% - 12.6% year over year), below the consensus of $425.17 million.
Price Action: MOMO shares traded lower by 3.81% at $8.08 in the premarket session on the last check Thursday.

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