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

Author: Hello Group Inc. / 2023-07-23 23:50 / Source: Hello Group Inc.

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

BEIJING,Nov. 30,2021 --Hello Group Inc. (NASDAQ: MOMO) ("Hello Group" or the "Company"),a leading mobile social and entertainment platform in China,today announced its unaudited financial results for the thirdquarterof 2021.

ThirdQuarter of 2021 Highlights

Net revenues decreased by 0.2% year over year to RMB3,759.2 million (US$583.4 million*) in the third quarter of 2021.

Net income attributable to Hello Group Inc. decreased to RMB403.2 million (US$62.6 million) in the third quarter of 2021 from RMB456.7 million in the same period of 2020.

Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB571.6 million (US$88.7 million) in the third quarter of 2021,from RMB653.8 million in the same period of 2020.

Diluted net income per American Depositary Share ("ADS") was RMB1.93 (US$0.30) in the third quarter of 2021,compared to RMB2.11 in the same period of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB2.70 (US$0.42) in the third quarter of 2021,compared to RMB2.98 in the same period of 2020.

Monthly Active Users ("MAU") on Momo application were 115.5 million in September 2021,compared to 113.6 million in September 2020.

Total paying users of live video service and value-added service,without double counting the overlap and including 2.9 million paying users of Tantan Limited ("Tantan"),were 12.2 million for the third quarter of 2021,compared to 13.1 million for the third quarter of 2020,which included 4.1 million paying users of Tantan.

First Nine Monthsof 2021 Highlights

Net revenues decreased 2.9% year over year to RMB10,901.5 million (US$1,691.9 million) for the first nine months of 2021.

Net income attributable to Hello Group Inc. was RMB1,329.0 million (US$206.3 million) for the first nine months of 2021,compared with RMB1,452.0 million during the same period of 2020.

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB1,756.2 million (US$272.6 million) for the first nine months of 2021,compared with RMB2,059.8 million during the same period of 2020.

Diluted net income per ADS was RMB6.22 (US$0.97) for the first nine months of 2021,compared with RMB6.68 during the same period of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB8.14 (US$1.26) for the first nine months of 2021,compared with RMB9.36 during the same period of 2020.

* 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 RMB6.4434 to US$1.00,the effective noon buying rate for September 30,2021 as set forth in the H.10 statistical release of the Federal Reserve Board.

"The third quarter of 2021 was a good quarter with solid financial results." commented Li Wang,CEO of Hello Group. "We continued to push forward with all of our strategic goals. For the first time since the beginning of the COVID-19 pandemic,core Momo revenue has achieved year-over-year growth. Although we still have many hard work to do at Tantan,I am glad that we are finally on track to make concrete progresses on the product fronts."

ThirdQuarter of 2021 Financial Results

Net revenues

Total net revenues were RMB3,759.2 million (US$583.4million) in the thirdquarter of 2021,a decrease of 0.2% from RMB3,766.7 million in the thirdquarter of 2020.

Live video service revenues were RMB2,166.7 million (US$336.3 million) in the thirdquarter of 2021,a decrease of 8.8% from RMB2,374.8 million during the same period of 2020. The decrease was primarily attributable to (a) the decrease in Tantan's live streaming revenue due to the shift of our strategic focus; (b) our structural reform on the Company's core live video business.

Value-addedservice revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,533.3 million (US$238.0million) in the thirdquarter of 2021,an increase of 15.2% from RMB1,330.8 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 the introduction of innovative features and operational events in the audio and video social entertainment experiences,and to a lesser extent,incremental revenues contributed by new standalone apps. The increase was partially offset by the decrease in the value-addedservice revenues of Tantan,due to our demonetization measures to improve user experience and retention.

Mobile marketing revenues were RMB43.3 million (US$6.7 million) in the thirdquarter of 2021,a decrease of 14.1% from RMB50.4 million during the same period of 2020. The decrease in mobile marketing revenues was due to our strategy to underweight the line in terms of resource allocation,our product adjustment to address new regulation requirement.

Mobile games revenues were RMB8.1 million (US$1.3 million) in the thirdquarter of 2021,an increase of 1.0% from RMB8.0 million in the thirdquarter of 2020.

Net revenues from the Momo segment increased from RMB3,037.0 million in the thirdquarter of 2020 to RMB3,246.3 million (US$503.8 million) in the thirdquarter of 2021,primarily due to the increase in net revenues from value-added service,partially offset by the decrease in net revenues from live video service. Net revenues from the Tantan segment decreased from RMB728.9 million in the thirdquarter of 2020 to RMB510.7 million (US$79.3 million) in the thirdquarter of 2021,due totheshiftofourstrategicfocusfromdrivingpayingconversiontoloweringthemonetizationlevelin ordertoimproveuserexperienceanddriveoverallusergrowth.

Cost and expenses

Cost and expenses were RMB3,319.9 million (US$515.2 million) in the thirdquarter of 2021,an increase of 1.9% from RMB3,258.5 million in the thirdquarter of 2020. The increase was primarily attributable to: (a) an increase in revenue sharing with virtual gift recipients for our virtual gift service,and broadcasters related to Momo's core live video service; (b) an increase of RMB48.5 million (US$7.5 million) in production costs in connection with a television program and a film.These increases were partially offset by a decrease in revenue sharing with broadcasters related to Tantan'slive video service,a decrease in marketing and promotional expenses to attract users on Tantan platforms,and a decrease in personnel related costs including share-based compensation expenses resulting from the decreased number of employees and the decreased fair value of the share options granted during the period.

Non-GAAP cost and expenses (note 1) were RMB3,143.2 million (US$487.8 million) in the thirdquarter of 2021,an increase of 3.0% from RMB3,052.0 million during the same period of 2020.

Incomefrom operations

Incomefrom operations was RMB460.5 million (US$71.5 million)in the thirdquarter of 2021,compared to RMB531.1 million during the same period of 2020. Incomefrom operations of the Momo segment wasRMB676.5 million (US$105.0 million) in the thirdquarter of 2021,which increased from RMB658.7 million in thethirdquarter of 2020. Loss from operations of the Tantan segment was RMB179.8 million (US$27.9 million) in the thirdquarter of 2021,compared to loss from operationsof RMB121.5 million in the thirdquarter of 2020.

Non-GAAP income from operations (note 1) was RMB637.2 million (US$98.9million) in the third quarter of 2021,compared to RMB737.6 million during the same period of 2020. Non-GAAPincomefrom operations of the Momo segment wasRMB786.3 million (US$122.0 million)in the thirdquarter of 2021,which decreased from RMB805.8 million in the third quarter of 2020. Non-GAAPlossfrom operations of the Tantan segment was RMB112.9 million (US$17.5 million) in the third quarter of 2021,compared to non-GAAP loss from operations of RMB64.7 million in the thirdquarter of 2020.

Income tax expenses

Income tax expenses were RMB143.2 million (US$22.2 million) in the thirdquarter of 2021,compared to RMB143.6 million in the thirdquarter of 2020.

Net income

Net incomewas RMB395.9 million (US$61.4 million) in the thirdquarter of 2021,compared toRMB456.0million during the same period of 2020. Net incomefrom theMomo segment was RMB611.1 million (US$94.8 million) in the thirdquarter of 2021,which increased fromRMB576.2million in the thirdquarter of 2020. Net loss from the Tantan segment was RMB179.0 million (US$27.8 million) in the thirdquarter of 2021,compared tonet loss of RMB114.2 million in the thirdquarter of 2020.

Non-GAAP net income (note 1) was RMB564.3 million (US$87.6million) in the thirdquarter of 2021,compared to RMB653.1 million during the same period of 2020. Non-GAAPnet incomefrom the Momo segment wasRMB720.9million(US$111.9 million) in the thirdquarter of 2021,which decreased fromRMB723.4million in the thirdquarter of 2020. Non-GAAPnet lossof the Tantan segment was RMB120.5 million (US$18.7 million) in the thirdquarter of 2021,compared tonon-GAAP net loss of RMB66.9 million in the thirdquarter of 2020.

Net income attributable to Hello Group Inc.

Net incomeattributable to Hello Group Inc. was RMB403.2 million (US$62.6 million) in the thirdquarter of 2021,compared toRMB456.7million during the same period of 2020.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB571.6 million (US$88.7million) in thethirdquarter of 2021,compared to RMB653.8 million during the same period of 2020.

Net incomeper ADS

Diluted net incomeper ADS was RMB1.93 (US$0.30) in the thirdquarter of 2021,compared toRMB2.11in the third quarter of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB2.70 (US$0.42) in the thirdquarter of 2021,compared to RMB2.98 in the thirdquarter of 2020.

Cash and cash flow

As of September 30,2021,the Company's cash,cash equivalents,short-term deposits,long-term deposits,short-term restricted cash and long-term restricted cash totaled RMB15,173.3 million (US$2,354.9million),compared to RMB16,482.3million as of December 31,2020. Net cash provided by operating activities in the thirdquarter of 2021 was RMB559.9 million (US$86.9million),compared to RMB691.1 million in the thirdquarter of 2020.

First Nine Months of 2021Financial Results

Net revenues for the first nine months of 2021 were RMB10,691.9 million),a decrease of 2.9% from RMB11,229.0 million in the same period of 2020.

Net income attributable to Hello GroupInc. was RMB1,compared to RMB1,452.0 million during the same period of 2020.

Non-GAAP net income attributable to Hello GroupInc. (note 1)was RMB1,compared to RMB2,059.8 million during the same period of 2020.

Dilutednet incomeper ADS was RMB6.22 (US$0.97) during the first nine months of 2021,compared to RMB6.68 in the same period of 2020.

Non-GAAP diluted net incomeper ADS (note 1) was RMB8.14 (US$1.26) during the first nine months of 2021,compared to RMB9.36inthe same period of 2020.

Net cash provided by operating activities was RMB893.7 million (US$138.7 million) during the first nine months of 2021,041.8 million in the same period of 2020.

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 September 2,the Company had repurchased 14.15 million ADSs for a total consideration of US$182.4 million on the open market under this program,at an average purchase price of US$12.87 per ADS.

Business Outlook

For the fourthquarter of 2021,the Company expects total net revenues to be between RMB3.60 billion to RMB3.75 billion,representing a decrease of 5.1% to 1.2% 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,Hello Group,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,and tax impacts related to the amortization of intangible assets from business acquisitions have been and will continue to be for the foreseeable future significant recurring expenses in our results of operations. We compensate for such limitation 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 Tuesday,November 30,at8:00 a.m.U.S. Eastern Time (9:00 p.m. Beijing/Hong KongTime on November 30,2021).

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/7139276

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 8:00 a.m.U.S. Eastern Time,December 8,2021. The dial-in details for the replay are as follows:

International: +61-2-8199-0299

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

Passcode: 7139276

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 fourth quarter 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 thirdquarter of 2021 are preliminary,unaudited and subject to audit adjustment. In addition,we may not meet our financial outlook for the fourth quarter 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 nine months

Ended September 30

2020

2021

2020

2021

RMB

US$

RMB

US$

Net revenues:

Live video service

2,374,824

2,166,733

336,272

7,309,704

6,230,160

966,906

Value-added service

1,330,839

1,533,288

237,962

3,710,913

4,496,059

697,777

Mobile marketing

50,415

43,323

6,724

145,534

133,641

20,741

Mobile games

7,975

8,052

1,250

32,230

28,418

4,410

Other services

2,598

7,784

1,208

30,606

13,212

2,051

Total net revenues

3,766,651

3,759,180

583,416

11,228,987

10,901,490

1,691,885

Cost and expenses:

Cost of revenues

(2,020,779)

(2,183,337)

(338,849)

(5,934,000)

(6,191,911)

(960,970)

Research and development

(299,221)

(260,939)

(40,497)

(840,382)

(815,757)

(126,604)

Sales and marketing

(754,892)

(680,896)

(105,673)

(2,116,200)

(1,944,705)

(301,813)

General and administrative

(183,649)

(194,734)

(30,222)

(540,959)

(459,443)

(71,304)

Total cost and expenses

(3,258,541)

(3,319,906)

(515,241)

(9,431,541)

(9,411,816)

(1,460,691)

Other operating income

22,944

21,221

3,293

140,392

137,389

21,322

Income from operations

531,054

460,495

71,468

1,937,838

1,627,063

252,516

Interest income

104,232

93,564

14,521

343,591

284,706

44,186

Interest expense

(19,885)

(18,669)

(2,897)

(59,825)

(55,332)

(8,587)

Other gain or loss,net

(6,000)

(18,000)

(2,794)

Income before income tax and share of income on equity method

investments

615,401

535,390

83,092

2,215,604

1,838,437

285,321

Income tax expenses

(143,615)

(143,158)

(22,218)

(750,139)

(526,065)

(81,644)

Income before share of income on equity method investments

471,786

392,232

60,874

1,465,465

1,312,372

203,677

Share of (loss) income on equity method investments

(15,763)

3,658

568

(16,203)

5,961

925

Net income

456,023

395,890

61,442

1,449,262

1,318,333

204,602

Less: net loss attributable to non-controlling interest

(705)

(7,301)

(1,133)

(2,772)

(10,677)

(1,657)

Net income attributable to the shareholders of Hello Group Inc.

456,728

403,191

62,575

1,452,034

1,329,010

206,259

Net income per share attributable to ordinary shareholders

Basic

1.09

1.01

0.16

3.48

3.26

0.51

Diluted

1.05

0.96

0.15

3.34

3.11

0.48

Weighted average shares used in calculating net income per ordinary share

Basic

417,884,266

400,835,428

400,428

417,580,609

408,074,205

408,205

Diluted

452,724,863

437,639,164

437,164

452,854,314

444,906,615

444,615

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

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

Three months

First nine months

Ended September 30

2020

2021

2020

2021

RMB

US$

RMB

US$

Net income

456,602

Other comprehensive (loss) income,net of tax:

Foreign currency translation adjustment

(80,618)

368

(72,667)

(31,830)

(4,940)

Comprehensive income

375,405

396,258

61,499

1,376,595

1,286,503

199,662

Less: comprehensive loss attributed to the non-

controlling interest

(9,953)

(7,540)

(1,170)

(16,945)

(13,323)

(2,068)

Comprehensive income attributable to Hello Group

Inc.

385,358

403,798

62,669

1,393,540

1,299,826

201,730

Hello Group Inc.

Unaudited Condensed Consolidated Balance Sheets

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

December 31

September 30

2020

2021

RMB

US$

Assets

Current assets

Cash and cash equivalents

3,363,942

3,283,840

509,644

Short-term deposits

7,566,250

6,010,000

932,737

Restricted cash

2,130

2,135

331

Accounts receivable,net of allowance for doubtful accounts of RMB15,390

and RMB15,633 as of December 31,2020 and September 30,

respectively

200,831

218,944

33,980

Prepaid expenses and other current assets

613,696

820,157

127,286

Total current assets

11,746,849

10,335,076

1,603,978

Long-term deposits

5,550,000

5,800,000

900,146

Long-term restricted cash

77,321

12,000

Right-of-use assets,net

278,175

303,623

47,122

Property and equipment,net

265,765

208,529

32,363

Intangible assets,net

687,211

572,687

88,880

Rental deposits

21,794

19,133

2,969

Long-term investments

454,996

737,347

114,434

Other non-current assets

94,868

81,608

12,665

Deferred tax assets

32,495

34,511

5,356

Goodwill

4,088,403

4,037,551

626,618

Total assets

23,220,556

22,207,386

3,446,531

Liabilities and equity

Current liabilities

Accounts payable

699,394

720,107

111,758

Deferred revenue

511,617

530,453

82,325

Accrued expenses and other current liabilities

854,835

803,564

124,711

Amount due to related parties

19,462

14,766

2,292

Lease liabilities due within one year

132,793

164,357

25,508

Income tax payable

236,490

165,058

25,617

Deferred consideration in connection with business acquisitions

62,149

45,350

7,038

Total current liabilities

2,516,740

2,443,655

379,249

Deferred tax liabilities

171,803

142,915

22,180

Convertible senior notes

4,658,966

4,612,019

715,774

Share-based compensation liability

875,616

Lease liabilities

136,436

141,949

22,030

Other non-current liabilities

25,666

141,054

21,891

Total liabilities

8,385,227

7,481,592

1,161,124

Shareholder's equity (i)

14,329

14,725,794

2,285,407

Total liabilities and shareholder's equity

23,531

(i): As of September 30,the number of ordinary shares outstanding was 393,903,538.

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

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

Three months

First nine months

Ended September 30

2020

2021

2020

2021

RMB

US$

RMB

US$

Cash flows from operating activities:

Net income

456,023

395,890

61,442

1,262

1,333

204,602

Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation of property and equipment

49,024

38,696

6,006

153,615

121,311

18,827

Amortization of intangible assets

39,347

34,722

5,389

119,517

107,783

16,728

Share-based compensation

168,475

143,280

22,237

521,102

349,195

54,194

Share of loss (income) on equity method investments

15,763

(3,658)

(568)

16,203

(5,961)

(925)

Loss on long-term investments

6,000

18,000

2,794

Gain on subsidiary deconsolidation

(6,676)

Gain on disposal of subsidiaries

(15,526)

(2,410)

(Gain) loss on disposal of property and equipment

(284)

2,351

365

(285)

1,272

197

Provision of losses (income) on receivable and other assets

26,006

(322)

(50)

26,412

242

Cash received on investment income distribution

1,153

Changes in operating assets and liabilities:

Accounts receivable

15,968

(1,616)

(251)

17,714

(24,358)

(3,780)

Prepaid expenses and other current assets

(207,586)

(85,048)

(13,199)

(163,753)

(203,666)

(31,608)

Amount due from a related party

2,029

4,382

Rental deposits

(83)

(922)

(143)

107

(1,514)

(235)

Deferred tax assets

561

(782)

(121)

3,034

(2,016)

(313)

Other non-current assets

9,930

(57,100)

(8,862)

28,181

(8,050)

(1,249)

Accounts payable

(62,189)

(28,400)

(4,408)

(78,664)

19,422

3,014

Income tax payable

112,799

24,947

3,872

177,855

(71,431)

(11,086)

Deferred revenue

17,442

9,369

1,454

(15,830)

25,454

3,950

Accrued expenses and other current liabilities

52,819

56,954

8,839

(161,411)

(38,829)

(6,026)

Amount due to related parties

13,495

1,860

289

2,262

(4,696)

(729)

Deferred tax liability

(9,837)

(8,676)

(1,346)

(29,880)

(26,941)

(4,181)

Share-based compensation liability

(678,153)

(105,248)

Other non-current liabilities

(8,648)

38,335

5,949

(28,500)

13,818

2,145

Net cash provided by operating activities

691,054

559,880

86,894

2,041,800

893,689

138,699

Cash flows from investing activities:

Purchase of property and equipment

(24,078)

(30,919)

(4,799)

(108,048)

(76,122)

(11,814)

Payment for long-term investments

(4,500)

(300,000)

(46,559)

Purchase of short-term deposits

(3,053,307)

(2,100,000)

(325,915)

(11,295,165)

(4,576,688)

(710,291)

Cash received on maturity of short-term deposits

4,337,085

3,458,658

536,775

15,622,659

6,117,570

949,432

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

871

Cash of disposed subsidiaries

(8,750)

(1,358)

Purchase of long-term deposits

(1,000)

(4,350,000)

(250,000)

(38,799)

Other investing activities

457

(319)

2,406

373

Net cash (used in) provided by investing activities

(289,843)

1,327,752

206,063

(135,373)

914,026

141,855

Cash flows from financing activities:

Deferred payment for business acquisition

(18,355)

(12,907)

(2,003)

Proceeds from exercise of share options

461

771

120

Repurchase of ordinary shares

(132,407)

(756,714)

(117,440)

(132,407)

(862,865)

(133,915)

Repurchase of subsidiary's share options

(24,900)

(48,489)

(7,525)

(24,900)

(54,050)

(8,388)

Dividends payment

(1,123,983)

(852,743)

(132,344)

Net cash used in financing activities

(157,253)

(804,742)

(124,893)

(1,590)

(1,781,794)

(276,530)

Effect of exchange rate changes

(45,135)

(3,661)

(571)

(43,174)

(28,697)

(4,455)

Net increase (decrease) in cash and cash equivalents

198,823

1,079,229

167,493

563,663

(2,776)

(431)

Cash,cash equivalents and restricted cash at the beginning of period

2,977,583

2,284,067

354,482

2,743

3,366,072

522,406

Cash,cash equivalents and restricted cash at the end of period

3,176,406

3,296

521,975

3,975

Hello Group Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands,except per share data)

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

Three months

Ended September 30,2020

Ended September 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

(2,779)

18,472

4,434

(1,997,873)

(2,337)

17,286

6,623

(2,159,428)

(338,849)

2,683

1,028

(335,138)

Research and development

(299,221)

2,346

44,610

(252,265)

(260,939)

29,094

(231,845)

(40,497)

4,515

(35,982)

Sales and marketing

(754,892)

17,275

41,583

(696,034)

(680,896)

16,165

27,653

(637,078)

(105,673)

2,509

4,292

(98,872)

General and administrative

(183,649)

77,848

(105,801)

(194,734)

79,910

(114,824)

(30,222)

12,402

(17,820)

Cost and operating expenses

(3,541)

38,093

168,475

(3,051,973)

(3,906)

33,451

143,280

(3,143,175)

(515,241)

5,192

22,237

(487,812)

Income from operations

531,054

38,093

168,475

737,622

460,495

33,451

143,280

637,226

71,468

5,192

22,237

98,897

Net income attributable to Hello Group

Inc.

456,728

38,475

(9,523)

653,773

403,191

33,280

(8,363)

571,559

62,575

5,237

(1,298)

88,706

Hello Group Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands,and net income to comparable GAAP measures-continued.

First nine months

Ended September 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

(5,000)

56,046

14,207

(5,863,747)

(6,911)

51,853

14,548

(6,125,510)

(960,970)

8,047

2,258

(950,665)

Research and development

(840,382)

7,118

137,355

(695,909)

(815,757)

3,660

103,268

(708,829)

(126,604)

568

16,027

(110,009)

Sales and marketing

(2,200)

52,413

131,780

(1,932,007)

(1,705)

48,491

59,797

(1,836,417)

(301,813)

7,526

9,280

(285,007)

General and administrative

(540,959)

237,760

(303,199)

(459,443)

171,582

(287,861)

(71,304)

26,629

(44,675)

Cost and operating expenses

(9,541)

115,577

521,102

(8,794,862)

(9,816)

104,004

349,195

(8,958,617)

(1,691)

16,141

54,194

(1,390,356)

Income from operations

1,838

115,577

521,102

2,574,517

1,063

104,004

349,195

2,080,262

252,516

16,141

54,194

322,851

Net income attributable to Hello Group

Inc.

1,034

115,102

(28,894)

2,059,819

1,010

104,195

(26,002)

1,756,207

206,259

16,194

(4,035)

272,559

(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 September 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Net revenues:

Live video service

1,141

234,592

2,272

Value-added service

1,257,158

276,130

1,962

Mobile marketing

43,323

43,724

Mobile games

8,052

8,250

Other services

5,589

2,195

7,208

Total net revenues

3,246,263

510,722

2,195

3,416

Cost and expenses (iii):

Cost of revenues

(1,931)

(269,376)

(29,030)

(2,849)

Research and development

(194,475)

(66,464)

(260,497)

Sales and marketing

(336,691)

(341,636)

(2,569)

(680,673)

General and administrative

(171,609)

(16,321)

(6,804)

(194,222)

Total cost and expenses

(2,587,706)

(693,797)

(38,403)

(3,241)

Other operating income

17,946

3,270

21,293

Income (loss) from operations

676,503

(179,805)

(36,203)

460,468

Interest income

93,174

356

93,521

Interest expense

(18,669)

(18,897)

Income (loss) before income tax and share of income on equity

method investments

751,008

(179,449)

(36,169)

535,092

Income tax (expenses) benefits

(143,562)

404

(143,218)

Income (loss) before share of income on equity method

investments

607,446

(179,045)

(36,169)

392,874

Share of income on equity method investments

3,658

568

Net income (loss)

611,104

(179,169)

395,442

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

Three months

Ended September 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

2,847

3,776

6,623

1,028

Research and development

18,071

11,023

29,094

4,515

Sales and marketing

11,280

16,373

27,653

4,292

General and administrative

77,616

2,294

79,910

12,402

Total cost and expenses

109,814

33,466

143,280

22,237

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 September 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Income (loss) from operations

676,503

(179,805)

(36,203)

460,495

71,468

Share-based compensation

109,814

33,466

143,237

Amortization of intangible assets from business acquisitions

33,451

5,192

Non-GAAP income (loss) from operations

786,317

(112,888)

(36,203)

637,226

98,897

Net income (loss)

611,104

(179,045)

(36,169)

395,442

Share-based compensation

109,192

Tax impacts

(8,363)

(1,298)

Non-GAAP net income (loss)

720,918

(120,491)

(36,169)

564,258

87,573

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands,2020

Momo

Tantan

QOOL

Total

RMB

US$[1]

Net revenues:

Live video service

1,978,098

396,726

2,824

349,774

Value-added service

998,668

332,171

1,839

196,012

Mobile marketing

50,415

7,425

Mobile games

7,975

1,175

Other services

1,810

788

2,598

382

Total net revenues

3,036,966

728,897

788

3,651

554,768

Cost and expenses (iv):

Cost of revenues

(1,660,806)

(358,743)

(1,230)

(2,779)

(297,629)

Research and development

(214,597)

(84,624)

(299,221)

(44,070)

Sales and marketing

(361,448)

(393,437)

(7)

(754,892)

(111,184)

General and administrative

(164,331)

(13,620)

(5,698)

(183,649)

(27,049)

Total cost and expenses

(2,401,182)

(850,424)

(6,935)

(3,541)

(479,932)

Other operating income

22,893

22,944

3,379

Income (loss) from operations

658,677

(121,527)

(6,096)

531,054

78,215

Interest income

103,477

706

104,232

15,352

Interest expense

(19,885)

(2,929)

Income (loss) before income tax and share of income on equity

method investments

742,269

(120,821)

(6,047)

615,401

90,638

Income tax (expenses) benefits

(150,278)

6,663

(143,615)

(21,152)

Income (loss) before share of income on equity method investments

591,991

(114,158)

(6,047)

471,786

69,486

Share of loss on equity method investments

(15,763)

(2,322)

Net income (loss)

576,228

(114,047)

456,023

67,164

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

Three months

Ended September 30,2020

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

3,338

1,096

4,434

653

Research and development

32,296

12,314

44,610

6,570

Sales and marketing

37,110

4,473

41,583

6,125

General and administrative

74,416

837

2,595

77,848

11,466

Total cost and expenses

147,160

18,720

2,595

168,475

24,814

[1] All translations from RMB to U.S. dollars are made at a rate of RMB6.7896 to US$1.00,2020

as 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

658,677

(121,527)

(6,096)

531,054

78,215

Share-based compensation

147,160

18,720

2,595

168,475

24,814

Amortization of intangible assets from business

acquisitions

38,093

5,611

Non-GAAP income (loss) from operations

805,837

(64,714)

(3,501)

737,622

108,640

Net income (loss)

576,228

(114,158)

(6,047)

456,023

67,164

Share-based compensation

147,611

Tax impacts

(9,523)

(1,403)

Non-GAAP net income (loss)

723,388

(66,868)

(3,452)

653,068

96,186

Hello Group Inc.

Unaudited Condensed Segment Report

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

First nine months

Ended September 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Net revenues:

Live video service

5,527,851

702,309

6,906

Value-added service

3,606,393

889,666

4,777

Mobile marketing

133,641

133,741

Mobile games

28,418

28,410

Other services

9,263

3,949

13,051

Total net revenues

9,305,566

1,591,975

3,949

10,885

Cost and expenses (v):

Cost of revenues

(5,338,330)

(816,562)

(37,019)

(6,970)

Research and development

(595,176)

(220,581)

(815,604)

Sales and marketing

(1,042,458)

(898,612)

(3,635)

(1,813)

General and administrative

(471,965)

28,763

(16,241)

(459,304)

Total cost and expenses

(7,447,929)

(1,992)

(56,895)

(9,691)

Other operating income

103,352

34,006

137,322

Income (loss) from operations

1,960,989

(281,011)

(52,915)

1,516

Interest income

283,629

952

125

284,186

Interest expense

(55,332)

(55,net

(18,000)

(18,794)

Income (loss) before income tax and share of income on

equity method investments

2,171,286

(280,059)

(52,790)

1,321

Income tax (expenses) benefits

(533,508)

7,443

(526,644)

Income (loss) before share of income on equity method

investments

1,637,778

(272,616)

(52,677

Share of income on equity method investments

5,961

925

Net income (loss)

1,643,739

(272,602

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

First nine months

Ended September 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

7,812

6,736

14,548

2,258

Research and development

78,259

25,009

103,268

16,027

Sales and marketing

37,157

22,640

59,797

9,280

General and administrative

238,408

(66,826)

171,582

26,629

Total cost and expenses

361,636

(12,441)

349,195

54,194

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 nine months

Ended September 30,2021

Momo

Tantan

QOOL

Total

RMB

US$

Operating income (loss)

1,989

(281,011)

(52,915)

1,063

252,516

Share-based compensation

361,636

(12,441)

349,194

Amortization of intangible assets from

business acquisitions

104,004

16,141

Non-GAAP operating income (loss)

2,322,625

(189,448)

(52,915)

2,262

322,851

Net income (loss)

1,739

(272,616)

(52,790)

1,602

Share-based compensation

361,141

Tax impacts

(26,002)

(4,035)

Non-GAAP net income (loss)

2,005,375

(207,055)

(52,745,530

270,902

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands,2020

Momo

Tantan

QOOL

Total

RMB

US$

Net revenues:

Live video service

6,715,266

594,438

7,704

1,076,603

Value-added service

2,677,575

1,033,338

3,913

546,559

Mobile marketing

145,534

21,435

Mobile games

32,230

4,747

Other services

9,168

21,438

30,606

4,507

Total net revenues

9,579,773

1,776

21,438

11,987

1,653,851

Cost and expenses (vi):

Cost of revenues

(5,189,765)

(723,466)

(20,769)

(5,000)

(873,984)

Research and development

(601,271)

(239,111)

(840,382)

(123,775)

Sales and marketing

(1,093,008)

(1,023,151)

(41)

(2,200)

(311,683)

General and administrative

(461,627)

(61,128)

(18,204)

(540,959)

(79,675)

Total cost and expenses

(7,345,671)

(2,046,856)

(39,014)

(9,541)

(1,389,117)

Other operating income

140,202

190

140,392

20,678

Income (loss) from operations

2,304

(419,080)

(17,386)

1,838

285,412

Interest income

340,531

2,867

193

343,591

50,605

Interest expense

(59,825)

(8,811)

Other gain or loss,net

(6,000)

(884)

Income (loss) before income tax and share of

income on equity method investments

2,649,010

(416,213)

(17,193)

2,604

326,322

Income tax (expenses) benefits

(762,768)

12,629

(750,139)

(110,484)

Income (loss) before share of income on equity

method investments

1,886,242

(403,584)

(17,193)

1,465

215,838

Share of loss on equity method investments

(16,203)

(2,386)

Net income (loss)

1,870,039

(403,262

213,452

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

First nine months

Ended September 30,2020

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

12,345

1,862

14,207

2,092

Research and development

95,768

41,587

137,355

20,231

Sales and marketing

121,456

10,324

131,780

19,409

General and administrative

207,650

22,238

7,872

237,760

35,019

Total cost and expenses

437,219

76,011

7,872

521,102

76,751

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)

2,304

(419,080)

(17,386)

1,838

285,412

Share-based compensation

437,219

76,011

7,872

521,102

76,751

Amortization of intangible assets from business

acquisitions

115,577

17,023

Non-GAAP operating income (loss)

2,811,523

(227,492)

(9,514)

2,517

379,186

Net income (loss)

1,039

(403,584)

(17,193)

1,262

213,452

Share-based compensation

437,023

Tax impacts

(28,894)

(4,255)

Non-GAAP net income (loss)

2,307,258

(240,890)

(9,321)

2,057,047

302,971

View original content:https://www.prnewswire.com/news-releases/hello-group-inc-announces-unaudited-financial-results-for-the-third-quarter-of-2021-301433585.html

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