Hello Group Inc. Announces Unaudited Financial Results for the Second Quarter of 2021

Author: Hello Group Inc. / 2023-07-23 23:29 / Source: Hello Group Inc.

Hello Group Inc. Announces Unaudited Financial Results for the Second Quarter of 2021

BEIJING,Aug. 26,2021 -- Hello Group Inc. (NASDAQ: MOMO) (the "Company"),a leading mobile social and entertainment platform in China,today announced its unaudited financial results for the secondquarterof 2021.

SecondQuarter of 2021 Highlights

Net revenues decreased by 5.1% year over year to RMB3,671.7 million (US$568.7 million*) in the second quarter of 2021.

Net income attributable to Hello Group Inc. increased to RMB464.2 million (US$71.9 million) in the second quarter of 2021 from RMB456.4 million in the same period of 2020.

Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB551.0 million (US$85.3 million) in the second quarter of 2021,from RMB669.8 million in the same period of 2020.

Diluted net income per American Depositary Share ("ADS") was RMB2.15 (US$0.33) in the second quarter of 2021,compared to RMB2.11 in the same period of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB2.54 (US$0.39) in the second quarter of 2021,compared to RMB3.05 in the same period of 2020.

Monthly Active Users ("MAU") on the Company application were 115.6 million in June 2021,compared to 111.5 million in June 2020.

Total paying users of our live video service and value-added service,without double counting the overlap and including 3.1 million paying users of Tantan Limited ("Tantan"),were 12.4 million for the second quarter of 2021,compared to 12.8 million for the second quarter of 2020,which included 3.9 million paying users of Tantan.

First Half of 2021 Highlights

Net revenues decreased 4.3% year over year to RMB7,142.3 million (US$1,106.2 million) for the first half of 2021.

Net income attributable to Hello Group Inc. was RMB925.8 million (US$143.4 million) for the first half of 2021,compared with RMB995.3 million during the same period of 2020.

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,184.6 million (US$183.5 million) for the first half of 2021,compared with RMB1,406.0 million during the same period of 2020.

Diluted net income per ADS was RMB4.29 (US$0.66) for the first half of 2021,compared with RMB4.57 during the same period of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB5.45 (US$0.84) for the first half of 2021,compared with RMB6.39 during the same period of 2020.

"The second quarter of 2021 was a solid quarter with decent financial results and progress on all of our strategic priorities." commented Li Wang,CEO of Hello Group. "The fundamentals of the core Momo as a social platform continued to strengthen. At the same time revenue performance and structure showed solid improvements. The healthy and productive core business gives us important leverage to plow new grounds and build longer term drivers for the group."

* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unlessotherwise noted,all translations from Renminbi to U.S. dollars,in this press release,were made at a rate of RMB6.4566 to US$1.00,the effective noon buying rate for June 30,2021 as set forth in the H.10 statistical release of the Federal Reserve Board.

SecondQuarter of 2021 Financial Results

Net revenues

Total net revenues were RMB3,671.7 million (US$568.7million) in the secondquarter of 2021,a decrease of 5.1% from RMB3,868.3 million in the secondquarter of 2020.

Live video service revenues were RMB2,101.3 million (US$325.5 million) in the secondquarter of 2021,a decrease of 19.3% from RMB2,602.9 million during the same period of 2020. The decrease was primarily due to our structural reform on the Company's core live video business,which was used to revive the long tail content ecosystem. The decrease was partially offset by the growth from Tantan's live video service revenues,which were RMB216.5 million (US$33.5 million) in the secondquarter of 2021,compared to RMB191.7 million in the same period of 2020.

Value-addedservice revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,507.3 million (US$233.4million) in the secondquarter of 2021,an increase of 25.2% from RMB1,204.3 million during the same period of 2020. The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by more innovative products and operational ideas launched,and more paying scenarios introduced to enhance the social entertainment experience of Momo users,and to a lesser extent,the increase in the virtual gift revenues of new applications. The increase was partially offset by the decrease in the membership subscription revenues of Tantan,due to the decrease of paying users of Tantan.

Mobile marketing revenues were RMB51.6 million (US$8.0 million) in the secondquarter of 2021,an increase of 35.9% from RMB38.0 million during the same period of 2020. The increase in mobile marketing revenues was primarily caused by the increased demand from brand marketers.

Mobile games revenues were RMB9.2 million (US$1.4 million) in the secondquarter of 2021,a decrease of 20.6% from RMB11.6 million in the secondquarter of 2020. The decrease in mobile game revenues was mainly due to the continued decrease in quarterly paying users of mobile games.

Net revenues from the Momo segment decreased from RMB3,340.7 million in the secondquarter of 2020 to RMB3,157.5 million (US$489.0 million) in the secondquarter of 2021,primarily due to the decrease in net revenues from live video service,partially offset by the increase in net revenues from value-added service. Net revenues from the Tantan segment decreased from RMB517.2 million in the secondquarter of 2020 to RMB513.5 million (US$79.5 million) in the secondquarter of 2021,which was mainly due to the decrease in the membership subscription revenues.

Cost and expenses

Cost and expenses were RMB3,075.6 million (US$476.4 million) in the secondquarter of 2021,a decrease of 2.3% from RMB3,146.9 million in the secondquarter of 2020. The decrease was primarily attributable to: (a) a decrease in share-based compensation expenses due to the fair value remeasurement of liability classified options granted to Tantan's founders; (b) a decrease in infrastructure-related spending,such as server depreciation costs; (c) a decrease in commission fees paid to payment channels. These decreases were partially offset by an increase in revenue sharing with virtual gift recipients for our virtual gift service,an increase in revenue sharing with broadcasters related to Tantan'slive video service,and an increase in marketing and promotional expenses to promote our core live video services.

Non-GAAP cost and expenses (note 1) were RMB2,980.1 million (US$461.6 million) in the secondquarter of 2021,an increase of 1.9% from RMB2,923.7 million during the same period of 2020.

Other operating income

Other operating income was RMB90.3 million (US$14.0 million)in the second quarter of 2021,a decrease from RMB91.3million during the second quarter of 2020. The other operating income mainly consisted of government incentives.

Incomefrom operations

Incomefrom operations was RMB686.3 million (US$106.3 million)in the secondquarter of 2021,compared to RMB812.7 million during the same period of 2020. Incomefrom operations of the Momo segment wasRMB711.3 million (US$110.2 million) in the secondquarter of 2021,which decreased from RMB945.3 million in thesecondquarter of 2020. Loss from operations of the Tantan segment was RMB11.9 million (US$1.8 million) in the secondquarter of 2021,compared to loss from operationsof RMB125.6 million in the secondquarter of 2020.

Non-GAAP income from operations (note 1) was RMB781.9 million (US$121.1million) in the secondquarter of 2021,compared to RMB1,035.8 million during the same period of 2020. Non-GAAPincomefrom operations of the Momo segment wasRMB835.8 million (US$129.5 million)in the secondquarter of 2021,which decreased from RMB1,102.6 million in the secondquarter of 2020. Non-GAAPlossfrom operations of the Tantan segment was RMB40.9 million (US$6.3 million) in the secondquarter of 2021,compared to non-GAAP loss from operations of RMB62.4 million in the secondquarter of 2020.

Income tax expenses

Income tax expenses were RMB291.5 million (US$45.1 million) in the secondquarter of 2021,decreasing from RMB443.6 million in the secondquarter of 2020. The decrease in income tax expenses was mainly due to (a) the lower profit in the secondquarter of 2021; and (b) less payment of withholding income tax on dividends distributed by our wholly-foreign owned enterprise ("WFOE") in China to our offshore entity in the second quarter of 2021.The dividends of RMB1,300.0 million (US$201.3 million) and withholding income tax of RMB130.0 million (US$20.1 million) were paid in the second quarter of 2021.

Net income

Net incomewas RMB461.5 million (US$71.5 million) in the secondquarter of 2021,compared toRMB455.5million during the same period of 2020. Net incomefrom theMomo segment was RMB481.3 million (US$74.5 million) in the secondquarter of 2021,which decreased fromRMB586.7million in the secondquarter of 2020. Net loss from the Tantan segment was RMB6.7 million (US$1.0 million) in the secondquarter of 2021,compared tonet loss of RMB124.3 million in the secondquarter of 2020.

Non-GAAP net income (note 1) was RMB548.3 million (US$84.9million) in the secondquarter of 2021,compared to RMB668.9 million during the same period of 2020. Non-GAAPnet incomefrom the Momo segment wasRMB605.8million(US$93.8 million) in the secondquarter of 2021,which decreased fromRMB744.0million in the secondquarter of 2020. Non-GAAPnet lossof the Tantan segment was RMB44.5 million (US$6.9 million) in the secondquarter of 2021,compared tonon-GAAP net loss of RMB70.8 million in the secondquarter of 2020.

Net income attributable to Hello Group Inc.

Net incomeattributable to Hello Group Inc. was RMB464.2 million (US$71.9 million) in the secondquarter of 2021,compared toRMB456.4million during the same period of 2020.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB551.0 million (US$85.3million) in thesecondquarter of 2021,compared to RMB669.8 million during the same period of 2020.

Net incomeper ADS

Diluted net incomeper ADS was RMB2.15 (US$0.33) in the secondquarter of 2021,compared toRMB2.11in the secondquarter of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB2.54 (US$0.39) in the secondquarter of 2021,compared to RMB3.05 in the secondquarter of 2020.

Cash and cash flow

As of June 30,2021,the Company's cash,cash equivalents,short-term deposits,long-term deposits,short-term restricted cash and long-term restricted cash totaled RMB15,450.0 million (US$2,392.9million),compared to RMB16,482.3million as of December 31,2020. Net cash used in operating activities in the second quarter of 2021 was RMB167.8 million (US$26.0million),compared to a net cash provided by operating activities of RMB807.3 million in the second quarter of 2020. The decrease in net cash provided by operating activities was mainly due to the cash payment of RMB678.2 million (US$105.0million) we made to Tantan's founders to settle the previously granted liability-classified share options upon their termination of services with Tantan in the second quarter of 2021.

First Half of 2021Financial Results

Net revenues for the first half of 2021 were RMB7,106.2 million),a decrease of 4.3% from RMB7,462.3 million in the same period of 2020.

Net income attributable to Hello GroupInc. was RMB925.8 million (US$143.4 million) for the first half of 2021,compared to RMB995.3 million during the same period of 2020.

Non-GAAP net income attributable to Hello GroupInc. (note 1)was RMB1,406.0 million during the same period of 2020.

Dilutednet incomeper ADS was RMB4.29 (US$0.66) during the first half of 2021,compared to RMB4.57 in the same period of 2020.

Non-GAAP diluted net incomeper ADS (note 1) was RMB5.45 (US$0.84) during the first half of 2021,compared to RMB6.39inthe same period of 2020.

Net cash provided by operating activities was RMB333.8 million (US$51.7 million) during the first half of 2021,350.7 million in the same period of 2020.

Recent Developments

Execution of share repurchase program

On September 3,2020,the Company's board of directors authorized a share repurchase program under which the Company may repurchase up to US$300 million of its shares over the next 12 months. As of August 26,the Company has repurchased 13.46 million ADSs for US$173.4 million on the open market under this program,at an average purchase price of US$12.87 per ADS.

Business Outlook

For the thirdquarter of 2021,the Company expects total net revenues to be between RMB3.65 billion to RMB3.75 billion,representing a decrease of 3.1% to 0.4% year-over-year. This forecast reflects the Company's current and preliminary views on the market and operational conditions,which are subject to change.

Note 1: Non-GAAP measures

To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"),we use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation and amortization of intangible assets from business acquisitions,and tax impacts related to the amortization of intangible assets from business acquisitions.

Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are shown in tables at the end of this earnings release,which provide more details about the non-GAAP financial measures.

Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP,but should not be considered a substitute for or superior to the GAAP results. In addition,our calculation of the non-GAAP financial measures may be different from the calculation used by other companies,and therefore comparability may be limited.

Our non-GAAP information (including non-GAAP cost and operating expenses,income (loss) from operations,net income (loss)，net income attributable to Hello Group Inc.,and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation,amortization of intangible assets from business acquisitions,and tax impacts related to the amortization of intangible assets from business acquisitions. A limitation of using these non-GAAP financial measures is that share-based compensation,amortization of intangible assets from business acquisitions and tax impacts related to the amortization of intangible assets from business acquisitions have been and will continue to be for the foreseeable future a significant recurring expense in our results of operations. We compensate for these limitations by providing reconciliations of our non-GAAP measures to our U.S. GAAP measures. Please see the reconciliation tables at the end of this earnings release.

Conference Call

Hello Group's management will host an earnings conference call on Thursday,August 26,at8:00 a.m.U.S. Eastern Time (8:00 p.m. Beijing/Hong KongTime on August 26,2021).

All participants must preregister online prior to the call to receive the dial-in details. Oncepreregistration has been complete,participants will receive dial-in numbers,direct event passcode,and a unique registrant ID.

PRE-REGISTER LINK http://apac.directeventreg.com/registration/event/5771017

To join the conference,simply dial the number in the calendar invite you receive after preregistering,enter the passcode followed by your registrant ID,and you will join the conference instantly.

A telephone replay of the call will be available after the conclusion of the conference call through 9:00 a.m.U.S. Eastern Time,September 3,2021. The dial-in details for the replay are as follows:

International: +61-2-8199-0299

U.S. Toll Free: +1-855-452-5696

Passcode: 5771017

Additionally,a live and archived webcast of the conference call will be available on the Investor Relations section of the Company's website at http://ir.immomo.com.

About Hello Group Inc.

We are a leading player in China's online social and entertainment space. ThroughMomo,Tantan and other properties within our product portfolio,we enable users to discover new relationships,expand their social connections and build meaningful interactions.Momois a mobile application that connects people and facilitates social interactions based on location,interests and a variety of online recreational activities. Tantan,which was added into our family of applications through acquisition inMay 2018,is a leading social and dating application. It is designed to help its users find and establish romantic connections as well as meet interesting people. We also operate a number of other applications to serve different social and entertainment demands from our users.

For investor and media inquiries,please contact:

Hello Group Inc.

Investor Relations

Phone: +86-10-5731-0538

Email: ir@immomo.com

Christensen

In China

Mr. Eric Yuan

Phone: +86-10-5900-1548

E-mail: Eyuan@christensenir.com

In US

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: lbergkamp@christensenir.com

Safe Harbor Statement

This news release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933,as amended,and Section 21E of the Securities Exchange Act of 1934,and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to our management quotes,our financial outlook for the thirdquarter of 2021,as well as the amount of,timing,methods and funding sources for repurchases of our shares under the share repurchase program.

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events,many of which,by their nature,are inherently uncertain and outside of our control. Our actual results and other circumstances may differ,possibly materially,from the anticipated results and events indicated in these forward-looking statements. Announced results for the secondquarter of 2021 are preliminary,unaudited and subject to audit adjustment. In addition,we may not meet our financial outlook for the thirdquarter of 2021 and may be unable to grow our business in the manner planned. We may also modifyour strategy for growth. Moreover,there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate,including those relating to our ability to retain and grow our user base,our ability to attract and retain sufficiently trained professionals to support our operations,our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers,the impact of the COVID-19 pandemic on the Company's business operations and the economy in China,the market price of the Company's stock prevailing from time to time,the nature of other investment opportunities presented to the Company from time to time,the Company's cash flows from operations,general economic conditions,and other factors. For additional information on these and other important factors that could adversely affect our business,financial condition,results of operations,and prospects,please see our filings with the U.S. Securities and Exchange Commission.

All information provided in this press release and in the attachments is as of the date of the press release. We undertake no obligation to update any forward-looking statement,whether as a result of new information,future events or otherwise,after the date of this release,except as required by law. Such information speaks only as of the date of this release.

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Operations

(All amounts in thousands,except share and per share data)

Three months

First half year

Ended June 30

2020

2021

2020

2021

RMB

US$

RMB

US$

Net revenues:

Live video service

2,602,876

2,101,332

325,455

4,934,880

4,063,427

629,345

Value-added service

1,204,320

1,507,258

233,445

2,380,074

2,962,771

458,875

Mobile marketing

37,964

51,601

7,992

95,119

90,318

13,988

Mobile games

11,564

9,182

1,422

24,255

20,366

3,154

Other services

11,528

2,341

362

28,008

5,428

841

Total net revenues

3,868,252

3,671,714

568,676

7,462,336

7,142,310

1,106,203

Cost and expenses:

Cost of revenues

(2,036,305)

(2,070,329)

(320,653)

(3,913,221)

(4,008,574)

(620,849)

Research and development

(279,002)

(268,325)

(41,558)

(541,161)

(554,818)

(85,930)

Sales and marketing

(651,500)

(650,236)

(100,709)

(1,361,308)

(1,263,809)

(195,739)

General and administrative

(180,061)

(86,747)

(13,435)

(357,310)

(264,709)

(40,998)

Total cost and expenses

(3,146,868)

(3,075,637)

(476,355)

(6,173,000)

(6,091,910)

(943,516)

Other operating income

91,329

90,268

13,981

117,448

116,168

17,992

Income from operations

812,713

686,345

106,302

1,406,784

1,166,568

180,679

Interest income

108,536

94,448

14,628

239,359

191,142

29,604

Interest expense

(20,121)

(18,302)

(2,835)

(39,940)

(36,663)

(5,678)

Other gain or loss,net

(10,500)

(1,626)

(6,000)

(18,000)

(2,788)

Income before income tax

and share of income on

equity method

investments

901,128

751,991

116,469

1,600,203

1,303,047

201,817

Income tax expenses

(443,633)

(291,509)

(45,149)

(606,524)

(382,907)

(59,305)

Income before share of

income on equity method

investments

457,495

460,482

71,320

993,679

920,140

142,512

Share of (loss) income on

equity method investments

(1,967)

1,042

161

(440)

2,303

357

Net income

455,528

461,524

71,481

993,239

922,443

142,869

Less: net loss attributable to non-controlling interest

(872)

(2,636)

(408)

(2,067)

(3,376)

(523)

Net income attributable to

the shareholders of Hello

Group Inc.

456,400

464,160

71,889

995,306

925,819

143,392

Net income per share

attributable to ordinary

shareholders

Basic

1.09

1.13

0.17

2.38

2.25

0.35

Diluted

1.05

1.07

0.17

2.29

2.15

0.33

Weighted average shares

used in calculating net

income per ordinary share

Basic

417,559,984

411,540,714

411,714

417,427,113

411,753,583

411,583

Diluted

452,500,168

449,020,572

449,572

452,915,745

448,597,242

448,242

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

(All amounts in thousands,except share and per share data)

Three months

First half year

Ended June 30

2020

2021

2020

2021

RMB

US$

RMB

US$

Net income

455,869

Other comprehensive income

(loss),net of tax:

Foreign currency translation

adjustment

8,818

(28,396)

(4,398)

7,951

(32,198)

(4,987)

Comprehensive income

464,346

433,128

67,083

1,001,190

890,245

137,882

Less: comprehensive loss

attributed to the non-controlling

interest

(1,423)

(6,162)

(954)

(6,992)

(5,783)

(896)

Comprehensive income

attributable to Hello Group

Inc.

465,769

439,290

68,037

1,182

896,028

138,778

Hello Group Inc.

Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands,except share and per share data)

December 31

June 30

2020

2021

RMB

US$

Assets

Current assets

Cash and cash equivalents

3,363,942

2,455

341,427

Short-term deposits

7,566,250

7,365,886

1,140,830

Restricted cash

2,130

2,133

330

Accounts receivable,net of allowance for doubtful accounts of

RMB15,390 and RMB15,954 as of December 31,2020 and June 30,respectively

200,831

217,063

33,619

Prepaid expenses and other current assets

613,696

733,792

113,650

Total current assets

11,746,849

10,523,329

1,629,856

Long-term deposits

5,550,000

5,800,000

898,306

Long-term restricted cash

77,479

12,000

Right-of-use assets,net

278,175

223,901

34,678

Property and equipment,net

265,765

224,964

34,842

Intangible assets,net

687,211

607,411

94,076

Rental deposits

21,794

22,386

3,467

Long-term investments

454,996

733,689

113,634

Other non-current assets

94,868

100,054

15,496

Deferred tax assets

32,495

33,729

5,224

Goodwill

4,088,403

4,045,777

626,611

Total assets

23,220,556

22,392,719

3,468,190

Liabilities and equity

Current liabilities

Accounts payable

699,394

752,474

116,545

Deferred revenue

511,617

517,921

80,216

Accrued expenses and other current liabilities

854,835

752,881

116,606

Amount due to related parties

19,462

12,906

1,999

Lease liabilities due within one year

132,793

129,044

19,986

Income tax payable

236,490

140,111

21,700

Deferred consideration in connection with business acquisitions

62,149

45,443

7,038

Total current liabilities

2,516,740

2,350,780

364,090

Deferred tax liabilities

171,803

151,853

23,519

Convertible senior notes

4,658,966

4,617,465

715,154

Share-based compensation liability

875,616

Lease liabilities

136,436

99,858

15,466

Other non-current liabilities

25,666

135,050

20,916

Total liabilities

8,385,227

7,355,006

1,139,145

Shareholder's equity (i)

14,835,329

15,037,713

2,329,045

Total liabilities and shareholder's equity

23,190

(i): As of June 30,the number of ordinary shares outstanding was 411,632,190.

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

(All amounts in thousands,except share and per share data)

Three months

First half year

Ended June 30

2020

2021

2020

2021

RMB

US$

RMB

US$

Cash flows from operating activities:

Net income

455,528

461,524

71,481

993,239

922,443

142,869

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation of property and equipment

52,210

40,072

6,206

104,591

82,615

12,795

Amortization of intangible assets

40,288

36,108

5,592

80,170

73,061

11,316

Share-based compensation

184,100

60,658

9,395

352,627

205,915

31,891

Share of loss (income) on equity method investments

1,967

(1,042)

(161)

440

(2,303)

(357)

Loss on long-term investments

10,500

1,626

6,000

18,000

2,788

Gain on subsidiary deconsolidation

(6,676)

Gain on disposal of subsidiaries

(15,526)

(2,405)

(15,405)

Loss on disposal of property and equipment

(1)

(1,101)

(171)

(1)

(1,079)

(167)

Provision of losses on receivable and other assets

1,060

169

406

564

Cash received on investment income distribution

1,153

Changes in operating assets and liabilities:

Accounts receivable

39,725

(15,162)

(2,348)

1,746

(22,742)

(3,522)

Prepaid expenses and other current assets

42,671

(31,941)

(4,947)

43,833

(118,618)

(18,372)

Amount due from a related party

230

2,353

Rental deposits

363

(1,951)

(302)

190

(592)

(92)

Deferred tax assets

435

(627)

(97)

2,473

(1,234)

(191)

Other non-current assets

3,411

36,720

5,687

18,251

49,050

7,597

Accounts payable

63,598

48,889

7,572

(16,475)

47,822

7,407

Income tax payable

44,712

(119,269)

(18,472)

65,056

(96,378)

(14,927)

Deferred revenue

(12,249)

16,464

2,550

(33,272)

16,085

2,491

Accrued expenses and other current liabilities

(59,987)

23,189

3,592

(214,230)

(95,783)

(14,835)

Amount due to related parties

(16,217)

600

(11,233)

(6,556)

(1,015)

Deferred tax liability

(10,072)

(9,027)

(1,398)

(20,043)

(18,265)

(2,829)

Share-based compensation liability

(678,153)

(105,033)

(678,033)

Other non-current liabilities

(24,522)

(28,877)

(4,472)

(19,852)

(24,517)

(3,797)

Net cash provided by (used in) operating activities

807,250

(167,783)

(25,986)

1,746

333,809

51,699

Cash flows from investing activities:

Purchase of property and equipment

(45,803)

(20,020)

(3,101)

(83,970)

(45,203)

(7,001)

Payment for long-term investments

(300,000)

(46,464)

(4,500)

(300,464)

Purchase of short-term deposits

(4,941,858)

(1,688)

(242,649)

(8,241,858)

(2,476,688)

(383,590)

Cash received on maturity of short-term deposits

8,306,434

2,089,618

323,641

11,285,574

2,912

411,813

Payment for short-term investments

(10,000)

Cash received from sales of short-term investment

10,000

Cash received on investment income distribution

5,610

869

Cash of disposed subsidiaries

(8,750)

(1,355)

(8,355)

Purchase of long-term deposits

(2,000)

(250,000)

(38,720)

(2,720)

Other investing activities

2,390

370

(776)

2,393

371

Net cash provided by (used in) investing activities

518,788

(53,450)

(8,278)

154,470

(413,726)

(64,077)

Cash flows from financing activities:

Deferred payment for business acquisition

(18,355)

(12,907)

(1,999)

Proceeds from exercise of share options

310

Repurchase of ordinary shares

(103,072)

(15,964)

(106,151)

(16,441)

Repurchase of subsidiary's share options

(2,780)

(431)

(5,561)

(861)

Dividends payment

(1,123,983)

(852,743)

(132,073)

(1,073)

Net cash used in financing activities

(1,337)

(958,285)

(148,420)

(1,337)

(977,052)

(151,326)

Effect of exchange rate changes

(5,332)

(28,952)

(4,484)

1,961

(25,036)

(3,877)

Net increase (decrease) in cash and cash equivalents

178,369

(1,208,470)

(187,168)

364,840

(1,082,005)

(167,581)

Cash,cash equivalents and restricted cash at the beginning

of period

2,799,214

3,492,537

540,925

2,612,743

3,366,072

521,338

Cash,cash equivalents and restricted cash at the end of

period

2,977,583

2,284,067

353,757

2,757

Hello Group Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands,except per share data)

Reconciliation of Non-GAAP cost and operating expenses,income from operations,and net income to comparable GAAP measures.

Three months

Ended June 30,2020

Ended June 30,2021

GAAP

Amortization

of intangible

assets from

business

acquisitions

Share-

based

compensation

Tax

impacts

Non-

GAAP

Amortization

of intangible

assets from

business

acquisitions

Share-

based

compensation

Tax

impacts

Non-GAAP

GAAP

Amortization

of intangible

assets from

business

acquisitions

Share-

based

compensation

Tax

impacts

Non-GAAP

(ii)

RMB

US$

Cost of revenues

(2,305)

18,929

2,804

(2,014,572)

(2,329)

17,256

4,201

(2,048,872)

(320,653)

2,673

651

(317,329)

Research and

development

(279,002)

2,404

49,985

(226,613)

(268,325)

1,461

33,965

(232,899)

(41,558)

226

5,261

(36,071)

Sales and marketing

(651,500)

17,702

43,123

(590,675)

(650,236)

16,137

14,588

(619,511)

(100,709)

2,499

2,259

(95,951)

General and

administrative

(180,061)

88,188

(91,873)

(86,747)

7,904

(78,843)

(13,435)

1,224

(12,211)

Cost and operating

expenses

(3,868)

39,035

184,100

(2,923,733)

(3,637)

34,854

60,658

(2,980,125)

(476,355)

5,398

9,395

(461,562)

Income from operations

812,713

39,035

184,100

1,035,848

686,345

34,854

60,658

781,857

106,302

5,398

9,395

121,095

Net income attributable to

Hello Group Inc.

456,400

39,100

(9,759)

669,776

464,160

34,658

(8,714)

550,958

71,889

5,395

(1,351)

85,331

Hello Group Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands,except per share data)

Reconciliation of Non-GAAP cost and operating expenses,and net income to comparable GAAP measures-continued.

First half year

Ended June 30,2021

GAAP

Amortization

of intangible

assets from

business

acquisitions

Share-

based

compensation

Tax

impacts

Non-GAAP

GAAP

Amortization

of intangible

assets from

business

acquisitions

Share-

based

compensation

Tax

impacts

Non-GAAP

GAAP

Amortization

of intangible

assets from

business

acquisitions

Share-

based

compensation

Tax

impacts

Non-GAAP

(ii)

RMB

US$

Cost of revenues

(3,221)

37,574

9,773

(3,865,874)

(4,574)

34,567

7,925

(3,966,082)

(620,849)

5,354

1,227

(614,268)

Research and

development

(541,161)

4,772

92,745

(443,644)

(554,818)

3,660

74,174

(476,984)

(85,930)

567

11,488

(73,875)

Sales and marketing

(1,308)

35,138

90,197

(1,235,973)

(1,809)

32,326

32,144

(1,199,339)

(195,739)

5,007

4,978

(185,754)

General and

administrative

(357,310)

159,912

(197,398)

(264,709)

91,672

(173,037)

(40,998)

14,198

(26,800)

Cost and operating

expenses

(6,000)

77,484

352,627

(5,742,889)

(6,910)

70,553

205,915

(5,815,442)

(943,516)

10,928

31,891

(900,697)

Income from

operations

1,784

77,484

352,627

1,836,895

1,568

70,553

205,915

1,443,036

180,679

10,928

31,891

223,498

Net income attributable

to Hello Group Inc.

995,306

77,627

(19,371)

1,046

925,819

70,915

(17,639)

1,184,648

143,392

10,891

(2,732)

183,479

(ii) Includes tax impacts related to the amortization of intangible assets from business acquisition.

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands,except share and per share data)

Three months

Ended June 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Net revenues:

Live video service

1,884,821

216,511

2,455

Value-added service

1,210,220

297,038

1,445

Mobile marketing

51,601

51,992

Mobile games

9,182

9,422

Other services

1,706

635

2,341

362

Total net revenues

3,157,530

513,549

635

3,676

Cost and expenses (iii):

Cost of revenues

(1,796,504)

(266,197)

(7,628)

(2,653)

Research and development

(195,371)

(72,954)

(268,558)

Sales and marketing

(378,938)

(270,266)

(1,032)

(650,709)

General and administrative

(140,905)

59,205

(5,047)

(86,435)

Total cost and expenses

(2,511,718)

(550,212)

(13,707)

(3,355)

Other operating income

65,445

24,798

90,981

Income (loss) from operations

711,257

(11,865)

(13,047)

686,302

Interest income

94,112

291

94,628

Interest expense

(18,302)

(18,835)

Other gain or loss,net

(10,500)

(10,626)

Income (loss) before income tax and

share of income on equity method

investments

776,567

(11,574)

(13,002)

751,469

Income tax (expenses) benefits

(296,344)

4,835

(291,149)

Income (loss) before share of income

on equity method investments

480,223

(6,739)

(13,002)

460,320

Share of income on equity method investments

1,042

161

Net income (loss)

481,265

(6,002)

461,481

(iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:

Three months

Ended June 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

2,640

1,561

4,201

651

Research and development

29,663

4,302

33,965

5,261

Sales and marketing

12,971

1,617

14,588

2,259

General and administrative

79,308

(71,404)

7,904

1,224

Total cost and expenses

124,582

(63,924)

60,658

9,395

Hello Group Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

(All amounts in thousands,except share and per share data)

Three months

Ended June 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Income (loss) from operations

711,257

(11,865)

(13,047)

686,345

106,302

Share-based compensation

124,582

(63,924)

60,395

Amortization of intangible assets from business

acquisitions

34,854

5,398

Non-GAAP income (loss) from operations

835,839

(40,935)

(13,047)

781,857

121,095

Net income (loss)

481,265

(6,739)

(13,002)

461,481

Share-based compensation

124,398

Tax impacts

(8,714)

(1,351)

Non-GAAP net income (loss)

605,847

(44,523)

(13,002)

548,322

84,923

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands,2020

Momo

Tantan

QOOL

Total

RMB

US$[1]

Net revenues:

Live video service

2,411,223

191,653

2,876

368,413

Value-added service

878,804

325,516

1,320

170,460

Mobile marketing

37,964

5,373

Mobile games

11,564

1,637

Other services

1,163

10,365

11,528

1,633

Total net revenues

3,340,718

517,169

10,365

3,252

547,516

Cost and expenses (iv):

Cost of revenues

(1,792,442)

(232,445)

(11,418)

(2,305)

(288,220)

Research and development

(202,774)

(76,228)

(279,002)

(39,490)

Sales and marketing

(337,196)

(314,293)

(11)

(651,500)

(92,214)

General and administrative

(154,161)

(19,828)

(6,072)

(180,061)

(25,486)

Total cost and expenses

(2,486,573)

(642,794)

(17,501)

(3,868)

(445,410)

Other operating income

91,190

139

91,329

12,927

Income (loss) from operations

945,335

(125,625)

(6,997)

812,713

115,033

Interest income

107,776

689

108,536

15,362

Interest expense

(20,121)

(2,848)

Income (loss) before income tax and

share of income on equity method

investments

1,032,990

(124,936)

(6,926)

901,128

127,547

Income tax (expenses) benefits

(444,278)

645

(443,633)

(62,792)

Income (loss) before share of income

on equity method investments

588,712

(124,291)

(6,926)

457,495

64,755

Share of loss on equity method

investments

(1,967)

(278)

Net income (loss)

586,745

(124,926)

455,528

64,477

(iv) Share-based compensation was allocated in cost of revenues and operating expenses as follows:

Three months

Ended June 30,2020

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

3,396

(592)

2,804

397

Research and development

36,670

13,315

49,985

7,075

Sales and marketing

38,905

4,218

43,123

6,104

General and administrative

78,280

2,658

88,188

12,482

Total cost and expenses

157,221

24,221

2,658

184,100

26,058

[1] All translations from RMB to U.S. dollars are made at a rate of RMB7.0651 to US$1.00,2020 a

s set forth in the H.10 statistical release of the Federal Reserve Board.

Hello Group Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

(All amounts in thousands,2020

Momo

Tantan

QOOL

Total

RMB

US$

Income (loss) from operations

945,335

(125,625)

(6,997)

812,713

115,033

Share-based compensation

157,221

24,221

2,658

184,100

26,058

Amortization of intangible assets from

business acquisitions

39,035

5,525

Non-GAAP income (loss) from operations

1,102,556

(62,369)

(4,339)

1,848

146,616

Net income (loss)

586,745

(124,291)

(6,926)

455,528

64,477

Share-based compensation

157,525

Tax impacts

(9,759)

(1,381)

Non-GAAP net income (loss)

743,966

(70,794)

(4,268)

668,904

94,679

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands,except share and per share data)

First half year

Ended June 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Net revenues:

Live video service

3,595,710

467,717

4,345

Value-added service

2,349,235

613,536

2,875

Mobile marketing

90,318

90,988

Mobile games

20,366

20,154

Other services

3,674

1,754

5,428

841

Total net revenues

6,059,303

1,081,253

1,754

7,203

Cost and expenses (v):

Cost of revenues

(3,453,399)

(547,186)

(7,989)

(4,849)

Research and development

(400,701)

(154,117)

(554,930)

Sales and marketing

(705,767)

(556,976)

(1,066)

(1,739)

General and administrative

(300,356)

45,084

(9,437)

(264,998)

Total cost and expenses

(4,860,223)

(1,213,195)

(18,492)

(6,516)

Other operating income

85,406

30,736

116,992

Income (loss) from operations

1,486

(101,206)

(16,712)

1,679

Interest income

190,455

596

191,604

Interest expense

(36,663)

(36,net

(18,000)

(18,788)

Income (loss) before income tax and

share of income on equity method

investments

1,420,278

(100,610)

(16,621)

1,817

Income tax (expenses) benefits

(389,946)

7,039

(382,305)

Income (loss) before share of income

on equity method investments

1,030,332

(93,571)

(16,621)

920,512

Share of income on equity method

investments

2,303

357

Net income (loss)

1,635

(93,621)

922,869

(v) Share-based compensation was allocated in cost of revenues and operating expenses as follows:

First half year

Ended June 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

4,965

2,960

7,925

1,227

Research and development

60,188

13,986

74,174

11,488

Sales and marketing

25,877

6,267

32,144

4,978

General and administrative

160,792

(69,120)

91,672

14,198

Total cost and expenses

251,822

(45,907)

205,915

31,891

Hello Group Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

(All amounts in thousands,except share and per share data)

First half year

ended June 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Operating income (loss)

1,486

(101,206)

(16,712)

1,568

180,679

Share-based compensation

251,822

(45,907)

205,891

Amortization of intangible assets

from business acquisitions

70,553

10,928

Non-GAAP operating income

(loss)

1,536,308

(76,560)

(16,036

223,498

Net income (loss)

1,635

(93,571)

(16,621)

922,869

Share-based compensation

251,928

Tax impacts

(17,639)

(2,732)

Non-GAAP net income (loss)

1,457

(86,564)

(16,181,272

182,956

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands,2020

Momo

Tantan

QOOL

Total

RMB

US$

Net revenues:

Live video service

4,737,168

197,712

4,880

698,487

Value-added service

1,678,907

701,167

2,074

336,878

Mobile marketing

95,119

13,463

Mobile games

24,255

3,433

Other services

7,358

20,650

28,008

3,964

Total net revenues

6,542,807

898,879

20,650

7,336

1,056,225

Cost and expenses (vi):

Cost of revenues

(3,528,959)

(364,723)

(19,539)

(3,221)

(553,880)

Research and development

(386,674)

(154,487)

(541,161)

(76,596)

Sales and marketing

(731,560)

(629,714)

(34)

(1,308)

(192,681)

General and administrative

(297,296)

(47,508)

(12,506)

(357,310)

(50,574)

Total cost and expenses

(4,944,489)

(1,196,432)

(32,079)

(6,000)

(873,731)

Other operating income

117,309

139

117,448

16,624

Income (loss) from operations

1,715,627

(297,553)

(11,290)

1,784

199,118

Interest income

237,054

2,161

144

239,359

33,879

Interest expense

(39,940)

(5,653)

Other gain or loss,net

(6,000)

(849)

Income (loss) before income tax and

share of income on equity method

investments

1,906,741

(295,392)

(11,146)

1,203

226,495

Income tax (expenses) benefits

(612,490)

5,966

(606,524)

(85,848)

Income (loss) before share of income

on equity method investments

1,294,251

(289,426)

(11,146)

993,679

140,647

Share of loss on equity method

investments

(440)

(62)

Net income (loss)

1,293,811

(289,239

140,585

(vi) Share-based compensation was allocated in cost of revenues and operating expenses as follows:

First half year

ended June 30,2020

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

9,007

766

9,773

1,383

Research and development

63,472

29,273

92,745

13,127

Sales and marketing

84,346

5,851

90,197

12,767

General and administrative

133,234

21,401

5,277

159,912

22,634

Total cost and expenses

290,059

57,291

5,277

352,627

49,911

Hello Group Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

(All amounts in thousands,2020

Momo

Tantan

QOOL

Total

RMB

US$

Operating income (loss)

1,627

(297,553)

(11,290)

1,784

199,118

Share-based compensation

290,059

57,291

5,277

352,627

49,911

Amortization of intangible assets

from business acquisitions

77,484

10,966

Non-GAAP operating income

(loss)

2,005,686

(162,778)

(6,013)

1,895

259,995

Net income (loss)

1,811

(289,426)

(11,146)

993,239

140,585

Share-based compensation

290,966

Tax impacts

(19,371)

(2,742)

Non-GAAP net income (loss)

1,583,870

(174,022)

(5,869)

1,403,979

198,720

View original content:https://www.prnewswire.com/news-releases/hello-group-inc-announces-unaudited-financial-results-for-the-second-quarter-of-2021-301363441.html

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