Chinese Social Media Company Hello Group Gains After Q3 Print, CEO Flags Overseas Growth

Hello Group Inc MOMO reported a fiscal third-quarter fiscal 2024 net revenue decline of 12.1% year-on-year to $381.14 million, beating the analyst consensus estimate of $366.41 million.

China’s mobile-based social and entertainment services provider reported an adjusted net income per ADS of $0.38, beating the analyst consensus estimate of $0.27. The stock price gained after the results.

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Drivers: Monthly Active Users (MAU) on the Tantan application were 12.0 million in September 2024, down from 15.7 million a year ago.

Momo app’s total number of paying users declined to 6.9 million in the quarter from 7.8 million a year ago. Tantan had 0.9 million paying users in the quarter, down from 1.4 million a year ago.

Segments: Revenues from the Live video service declined by 16.0% Y/Y to $183.3 million, Total value-added service decreased by 7.5% Y/Y to $193.3 million, and Mobile marketing remained flat Y/Y at $4.4 million.

Net revenues from the Momo segment declined by 10.2% Y/Y to $350.9 million, primarily due to the decrease in net revenues from value-added service and live video service on Momo app. The Tantan segment revenues decreased by 28.1% to $30.2 million.

Adjusted income from operations declined 33.3% to $64.8 million.

Hello Group held $2.11 billion in cash and equivalents and generated $48.6 million in operating cash flow.

Chair and CEO Yan Tang flagged overseas business reaccelerated growth, citing advancing the localization process and expanding its product offering as reasons for continuing to invest firmly in more diversified overseas markets.

Outlook: Hello expects fourth-quarter revenue of 2.56 billion Chinese yuan–2.66 billion Chinese yuan (a decrease of 14.7% – 11.4% year over year) versus the consensus of 2.61 billion Chinese yuan.

The U.S. listed Chinese stocks also gained Monday in anticipation of additional stimulus measures from the country to drive economic growth.

Price Action: MOMO stock is up 6.35% at $7.20 premarket on the last check Monday.

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