Hello Group Inc. Announces Unaudited Financial Results for the Second Quarter of 2022

Author: Hello Group Inc. / 2023-07-24 00:48 / Source: Hello Group Inc.

Hello Group Inc. Announces Unaudited Financial Results for the Second Quarter of 2022

BEIJING,Sept. 1,2022 --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 second quarter of 2022.

Second Quarter of 2022 Highlights

Net revenues decreased by 15.3% year over year to RMB3,110.4 million (US$464.4 million*) in the second quarter of 2022.

Net income attributable to Hello Group Inc. decreased to RMB345.6 million (US$51.6 million) in the second quarter of 2022,from RMB464.2 million in the same period of 2021.

Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB463.5 million (US$69.2 million) in the second quarter of 2022,from RMB551.0 million in the same period of 2021.

Diluted net income per American Depositary Share ("ADS") was RMB1.68 (US$0.25) in the second quarter of 2022,compared to RMB2.15 in the same period of 2021.

Non-GAAP diluted net income per ADS (note 1) was RMB2.22 (US$0.33) in the second quarter of 2022,compared to RMB2.54 in the same period of 2021.

Monthly Active Users ("MAU") on Momo application were 111.2 million in June 2022,compared to 115.6 million in June 2021. MAU on Tantan application were 24.8 million in June 2022.

For the Momo app total paying users was 8.6 million for the second quarter of 2022,compared to 9.3 million for the same period last year. Tantan had 2.2 million paying users for the second quarter of 2022 compared to 3.1 million from the year ago period.

* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted,all translations from Renminbi to U.S. dollars,in this press release,were made at a rate of RMB6. 6981 to US$1.00,the effective noon buying rate for June 30,2022 as set forth in the H.10 statistical release of the Federal Reserve Board.

First Half of 2022 Highlights

Net revenues decreased 12.4% year over year to RMB6,258.5 million (US$934.4 million) for the first half of 2022.

Net income attributable to Hello Group Inc. was RMB635.5 million (US$94.9 million) for the first half of 2022,compared to RMB925.8 million during the same period of 2021.

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB862.0 million (US$128.7 million) for the first half of 2022,compared to RMB1,184.6 million during the same period of 2021.

Diluted net income per ADS was RMB3.11 (US$0.46) for the first half of 2022,compared to RMB4.29 during the same period of 2021.

Non-GAAP diluted net income per ADS (note 1) was RMB4.16 (US$0.62) for the first half of 2022,compared to RMB5.45 during the same period of 2021.

"The COVID resurgence in the first half of 2022 has brought many challenges and uncertainties to the overall market environment and our execution of strategic goals. However,I'm pleased to see that our team managed to deliver good results in the second quarter by adjusting our product and operational initiatives in a timely manner to cope with external headwinds,at the same time adapting our execution plan to fit the evolving external environment." commented Li Wang,CEO of Hello Group.

Second Quarter of 2022 Financial Results

Net revenues

Total net revenues were RMB3,110.4 million (US$464.4 million) in the second quarter of 2022,a decrease of 15.3% from RMB3,671.7 million in the second quarter of 2021.

Live video service revenues were RMB1,520.0 million (US$226.9 million) in the second quarter of 2022,a decrease of 27.7% from RMB2,101.3 million during the same period of 2021. The decrease was primarily attributable to consumption softness caused by the macro uncertainties including COVID resurgence,regulatory changes,and to a lesser extent the strategic decision to de-emphases Tantan's live streaming business.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,536.4 million (US$229.4 million) in the second quarter of 2022,an increase of 1.9% from RMB1,507.3 million during the same period of 2021. The year-over-year increase was primarily attributable to the rapid revenue growth from the new standalone apps. The increase was partially offset by the decrease in Tantan's value-added service due to the demonetization process to improve user experience and retention,as well as COVID's negative impact on users' dating sentiment and propensity to pay for VAS.

Mobile marketing revenues were RMB35.9 million (US$5.4 million) in the second quarter of 2022,a decrease of 30.4% from RMB51.6 million during the same period of 2021. The decrease in mobile marketing revenues was due to the negative impact of macro headwind on client's advertising budget,and our product adjustment to address new regulation requirement.

Mobile games revenues were RMB17.2 million (US$2.6 million) in the second quarter of 2022,an increase of 87.3% from RMB9.2 million in the second quarter of 2021,primarily due to one new mobile game launched in the second half of 2021.

Net revenues from the Momo segment decreased from RMB3,157.5 million in the second quarter of 2021 to RMB2,779.5 million (US$415.0 million) in the second quarter of 2022,primarily due to the decrease in net revenues from live video service. Net revenues from the Tantan segment decreased from RMB513.5 million in the second quarter of 2021 to RMB330.8 million (US$49.4 million) in the second quarter of 2022,due to our strategy to lower the monetization level in order to improve user experience and retention,as well as the impact from the elevated COVID situations.

Cost and expenses

Cost and expenses were RMB2,804.8 million (US$418.7 million) in the second quarter of 2022,a decrease of 8.8% from RMB3,075.6 million in the second quarter of 2021. The decrease was primarily attributable to: (a) a decrease in revenue sharing with broadcasters related to Momo's core live video service and Tantan's live video service,which was partially offset by an increase in revenue sharing with virtual gift recipients for our virtual gift service; (b) a decrease in depreciation and amortization cost due to the impairment of intangible assets in 2021; (c) a decrease in marketing and promotional expenses by improving marketing efficiency of Momo and Tantan,which was partially offset by an increase to promote our new app "Tietie"; and (d) a decrease in salary expenses,due to our continuous optimization in personnel costs since the beginning of the year.

Non-GAAP cost and expenses (note 1) were RMB2,686.9 million (US$401.1 million) in the second quarter of 2022,a decrease of 9.8% from RMB2,980.1 million during the same period of 2021.

Other operating income

Other operating income was RMB40.6 million (US$6.1 million) in the second quarter of 2022,a decrease from RMB90.3 million during the second quarter of 2021. The other operating income mainly consisted of government incentives.

Income from operations

Income from operations was RMB346.2 million (US$51.7 million) in the second quarter of 2022,compared to RMB686.3 million during the same period of 2021. Income from operations of the Momo segment was RMB483.5 million (US$72.2 million) in the second quarter of 2022,which decreased from RMB711.3 million in the second quarter of 2021. Loss from operations of the Tantan segment was RMB131.3 million (US$19.6 million) in the second quarter of 2022,compared to loss from operations of RMB11.9 million in the second quarter of 2021.

Non-GAAP income from operations (note 1) was RMB464.1 million (US$69.3 million) in the second quarter of 2022,compared to RMB781.9 million during the same period of 2021. Non-GAAP income from operations of the Momo segment was RMB589.2 million (US$88.0 million) in the second quarter of 2022,which decreased from RMB835.8 million in the second quarter of 2021. Non-GAAP loss from operations of the Tantan segment was RMB119.0 million (US$17.8 million) in the second quarter of 2022,compared to non-GAAP loss from operations of RMB40.9 million in the second quarter of 2021.

Other gain or loss,net

Other gain was RMB66.3 million (US$9.9 million) in the second quarter of 2022,which was resulted from the Company repurchased some of our convertible senior notes from certain bond holders in the second quarter of 2022,compared to a loss of RMB10.5 million in the same period of 2021.

Income tax expenses

Income tax expenses were RMB146.0 million (US$21.8 million) in the second quarter of 2022,compared to RMB291.5 million in the second quarter of 2021. The decrease was primarily due to the following reasons: (a) the lower profit in the second quarter of 2022; (b) in the second quarter of 2022,we accrued withholding income tax of RMB37.7 million (US$5.6 million) on undistributed earnings generated in the second quarter of 2022 by our wholly-foreign owned enterprise ("WFOE"),because we plan to remit WFOE's earnings to its offshore parent company in the foreseeable future to fund its demand on US dollar in business operations,payments of dividends,potential investments,etc. In the second quarter of 2021,the Company distributed dividends of RMB1,300.0 million from our WFOE in China to our offshore entity and paid withholding income tax of RMB130.0 million.

Net income

Net income was RMB344.3 million (US$51.4 million) in the second quarter of 2022,compared to RMB461.5 million during the same period of 2021. Net income from the Momo segment was RMB482.0 million (US$72.0 million) in the second quarter of 2022,compared to RMB481.3 million in the same period of 2021. Net loss from the Tantan segment was RMB131.7 million (US$19.7 million) in the second quarter of 2022,compared to net loss of RMB6.7 million in the second quarter of 2021.

Non-GAAP net income (note 1) was RMB462.3 million (US$69.0 million) in the second quarter of 2022,compared to RMB548.3 million during the same period of 2021. Non-GAAP net income from the Momo segment was RMB587.6 million (US$87.7 million) in the second quarter of 2022,which decreased from RMB605.8 million in the second quarter of 2021. Non-GAAP net loss of the Tantan segment was RMB119.4 million (US$17.8 million) in the second quarter of 2022,compared to non-GAAP net loss of RMB44.5 million in the second quarter of 2021.

Net income attributable to Hello Group Inc.

Net income attributable to Hello Group Inc. was RMB345.6 million (US$51.6 million) in the second quarter of 2022,compared to a net income of RMB464.2 million during the same period of 2021.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB463.5 million (US$69.2 million) in the second quarter of 2022,compared to RMB551.0 million during the same period of 2021.

Net income per ADS

Diluted net income per ADS was RMB1.68 (US$0.25) in the second quarter of 2022,compared to RMB2.15 in the second quarter of 2021.

Non-GAAP diluted net income per ADS (note 1) was RMB2.22 (US$0.33) in the second quarter of 2022,compared to RMB2.54 in the second quarter of 2021.

Cash and cash flow

As of June 30,2022,the Company's cash,cash equivalents,short-term deposits,long-term deposits,short-term restricted cash and long-term restricted cash totaled RMB13,947.2 million (US$2,082.3 million),compared to RMB15,707.0 million as of December 31,2021. The decrease of cash,short-term restricted cash and long-term restricted cash was mainly due to the cash dividend we paid to our shareholders and payment for repurchase of convertible senior notes in the second quarter of 2022.

Net cash provided by operating activities in the second quarter of 2022 was RMB200.3 million (US$29.9 million),compared to a net cash used in operating activities of RMB167.8 million in the second quarter of 2021. For the second quarter of 2022,included in our cash provided by operating activities is RMB100.0 million (US$14.9 million) of cash payment to Chinese tax authorities to repatriate RMB1,000.0 million (US$149.3 million) from our WFOE in China to our offshore entity. For the second quarter of 2021,included in our cash used in operating activities is RMB678.2 million of cash payment to Tantan founders to settle the previously granted liability-classified share options upon their termination of services with Tantan.

First Half of 2022 Financial Results

Net revenues for the first half of 2022 were RMB6,258.5 million (US$934.4 million),a decrease of 12.4% from RMB7,142.3 million in the same period of 2021.

Net income attributable to Hello Group Inc. was RMB635.5 million (US$94.9 million) for the first half of 2022,184.6 million during the same period of 2021.

Diluted net income per ADS was RMB3.11 (US$0.46) during the first half of 2022,compared to RMB4.29 in the same period of 2021.

Non-GAAP diluted net income per ADS (note 1) was RMB4.16 (US$0.62) during the first half of 2022,compared to RMB5.45 in the same period of 2021.

Net cash provided by operating activities was RMB243.7 million (US$36.4 million) during the first half of 2022,compared to RMB333.8 million in the same period of 2021.

Recent Development

Execution of share repurchase program

On June 7,Hello Group's board of directors authorized a share repurchase program under which the Company may repurchase up to US$200 million of its shares over the next 24 months. As of September 1,the Company has repurchased 4.18 million ADSs for US$19.2 million on the open market under this program,at an average purchase price of US$4.58 per ADS.

Business Outlook

For the third quarter of 2022,the Company expects total net revenues to be between RMB3.1 billion to RMB3.2 billion,representing a decrease of 17.5% to 14.9% year-over-year. This forecast reflects the Company's current and preliminary views on the market and operational conditions,which are subject to change,particularly as to the potential impact of the COVID-19 resurgence on the Chinese and global economies,as well as on users' paying capabilities.

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,impairment loss on goodwill and intangible assets,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 (loss) attributable to Hello Group Inc.,and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation,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 Thursday,September 1,at8:00 a.m.U.S. Eastern Time (8:00 p.m. Beijing/Hong KongTime on September 1,2022).

Participants can register for the conference call by navigating to:

https://s1.c-conf.com/diamondpass/10024750-8qar7z.html.

Upon registration,each participant will receive details for the conference call,including dial-in numbers,conference call passcode and a unique access PIN. Please dial in 10 minutes before the call is scheduled to begin.

A telephone replay of the call will be available after the conclusion of the conference call through September 8,2022. The dial-in details for the replay are as follows:

U.S. / Canada: 1-855-883-1031

Hong Kong: 800-930-639

Passcode: 10024750

Additionally,a live and archived webcast of the conference call will be available on the Investor Relations section of Hello Group's website at https://ir.hellogroup.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@hellogroup.com

Christensen

In China

Mr. Eric Yuan

Phone: +86-10-5900-1548

E-mail: Eyuan@christensenir.com

In U.S.

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 third quarter of 2022,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 second quarter of 2022 are preliminary,unaudited and subject to audit adjustment. In addition,we may not meet our financial outlook for the third quarter of 2022 and may be unable to grow our business in the manner planned. We may also modify our 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

2021

2022

2021

2022

RMB

US$

RMB

US$

Net revenues:

Live video service

2,101,332

1,519,978

226,927

4,063,427

3,128,701

467,103

Value-added service

1,507,258

1,536,384

229,376

2,962,771

3,019,815

450,847

Mobile marketing

51,601

35,913

5,362

90,318

63,786

9,523

Mobile games

9,182

17,200

2,568

20,366

42,697

6,374

Other services

2,341

940

140

5,428

3,494

521

Total net revenues

3,671,714

3,110,415

464,373

7,142,310

6,258,493

934,368

Cost and expenses:

Cost of revenues

(2,070,329)

(1,797,846)

(268,411)

(4,008,574)

(3,619,234)

(540,337)

Research and development

(268,325)

(238,262)

(35,572)

(554,818)

(488,457)

(72,925)

Sales and marketing

(650,236)

(610,953)

(91,213)

(1,263,809)

(1,199,530)

(179,085)

General and administrative

(86,747)

(157,746)

(23,551)

(264,709)

(317,581)

(47,414)

Total cost and expenses

(3,075,637)

(2,804,807)

(418,747)

(6,091,910)

(5,624,802)

(839,761)

Other operating income

90,268

40,570

6,057

116,168

64,501

9,630

Income from operations

686,345

346,178

51,683

1,166,568

698,192

104,237

Interest income

94,448

93,630

13,979

191,142

191,487

28,588

Interest expense

(18,302)

(28,231)

(4,215)

(36,663)

(47,565)

(7,101)

Other gain or loss,net

(10,500)

66,303

9,899

(18,000)

77,922

11,633

Income before income tax and share of income on equity method

investments

751,991

477,880

71,346

1,303,047

920,036

137,357

Income tax expenses

(291,509)

(146,045)

(21,804)

(382,907)

(296,819)

(44,314)

Income before share of income on equity method investments

460,482

331,835

49,542

920,140

623,217

93,043

Share of income on equity method investments

1,042

12,513

1,868

2,913

1,480

Net income

461,524

344,348

51,410

922,443

633,130

94,523

Less: net loss attributable to non-controlling interest

(2,636)

(1,221)

(182)

(3,376)

(2,324)

(347)

Net income attributable to the shareholders of Hello Group Inc.

464,160

345,569

51,592

925,819

635,454

94,870

Net income per share attributable to ordinary shareholders

Basic

1.13

0.87

0.13

2.25

1.6

0.24

Diluted

1.07

0.84

0.13

2.15

1.56

0.23

Weighted average shares used in calculating net income per

ordinary share

Basic

411,540,714

396,777,496

396,496

411,753,583

396,013,164

396,164

Diluted

449,020,572

434,212,413

434,413

448,597,242

432,896,998

432,998

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

2021

2022

2021

2022

RMB

US$

RMB

US$

Net income

461,523

Other comprehensive loss,net of tax:

Foreign currency translation adjustment

(28,396)

(151,539)

(22,624)

(32,198)

(140,489)

(20,974)

Comprehensive income

433,128

192,809

28,786

890,245

492,641

73,549

Less: comprehensive (loss) income attributed to the non-

controlling interest

(6,162)

8,915

1,331

(5,783)

6,879

1,027

Comprehensive income attributable to Hello Group Inc.

439,290

183,894

27,455

896,028

485,762

72,522

Hello Group Inc.

Unaudited Condensed Consolidated Balance Sheets

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

December 31

June 30

2021

2022

RMB

US$

Assets

Current assets

Cash and cash equivalents

5,570,563

4,364,550

651,610

Short-term deposits

2,860,000

6,600,000

985,354

Restricted cash

102,270

15,269

Accounts receivable,net of allowance for doubtful accounts of RMB15,127

and RMB6,765 as of December 31,2021 and June 30,respectively

205,225

213,983

31,947

Prepaid expenses and other current assets

775,072

824,221

123,053

Total current assets

9,410,860

12,105,024

1,807,233

Long-term deposits

7,200,000

2,800,000

418,029

Long-term restricted cash

76,471

80,377

12,000

Right-of-use assets,net

257,934

179,102

26,739

Property and equipment,net

180,664

192,372

28,720

Intangible assets,net

27,320

24,762

3,697

Rental deposits

19,204

21,453

3,203

Long-term investments

820,006

885,947

132,268

Other non-current assets

83,930

99,139

14,801

Deferred tax assets

34,849

36,425

5,438

Total assets

18,111,238

16,424,601

2,452,128

Liabilities and equity

Current liabilities

Accounts payable

726,207

626,497

93,534

Deferred revenue

539,967

486,264

72,597

Accrued expenses and other current liabilities

911,050

771,145

115,129

Amount due to related parties

5,016

1,619

242

Lease liabilities due within one year

162,950

121,587

18,152

Income tax payable

125,773

90,484

13,509

Deferred consideration in connection with business acquisitions

44,802

41,220

6,154

Total current liabilities

2,515,765

2,138,816

319,317

Deferred tax liabilities

213,384

54,469

8,132

Convertible senior notes

4,565,292

3,606,426

538,425

Lease liabilities

103,105

63,588

9,493

Other non-current liabilities

128,095

113,405

16,931

Total liabilities

7,525,641

5,976,704

892,298

Shareholder's equity (i)

10,585,597

10,447,897

1,559,830

Total liabilities and shareholder's equity

18,128

(i): As of June 30,the number of ordinary shares outstanding was 396,887,230.

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

2021

2022

2021

2022

RMB

US$

RMB

US$

Cash flows from operating activities:

Net income

461,524

344,348

51,410

922,443

633,130

94,523

Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation of property and equipment

40,072

28,081

4,192

82,615

56,060

8,370

Amortization of intangible assets

36,108

1,279

191

73,061

2,558

382

Share-based compensation

60,658

117,948

17,609

205,915

226,564

33,825

Share of income on equity method investments

(1,042)

(12,513)

(1,868)

(2,303)

(9,913)

(1,480)

Gain on repurchase of convertible senior notes

(66,899)

(77,922)

(11,633)

Loss on long-term investments

10,500

18,000

Gain on disposal of subsidiaries

(15,526)

Cash received on distributions from equity method investments

1,708

255

1,708

255

Loss or gain on disposal of property and equipment

(1,101)

180

(1,079)

140

Provision of losses on receivable and other assets

169

365

564

367

Changes in operating assets and liabilities:

Accounts receivable

(15,162)

(9,927)

(1,482)

(22,742)

(7,278)

(1,087)

Prepaid expenses and other current assets

(31,941)

(13,584)

(2,028)

(118,618)

(57,562)

(8,594)

Rental deposits

(1,951)

3,136

468

(592)

683

102

Deferred tax assets

(627)

(1,234)

(1,576)

(235)

Other non-current assets

36,720

19,075

2,848

49,050

60,690

9,061

Accounts payable

48,889

(16,996)

(2,537)

47,822

(105,954)

(15,819)

Income tax payable

(119,269)

(30,714)

(4,585)

(96,378)

(35,288)

(5,268)

Deferred revenue

16,464

(11,921)

(1,780)

16,085

(54,535)

(8,142)

Accrued expenses and other current liabilities

23,189

(63,615)

(9,497)

(95,783)

(195,833)

(29,237)

Amount due to related parties

600

(3,240)

(484)

(6,556)

(3,397)

(507)

Deferred tax liabilities

(9,027)

(61,942)

(9,248)

(18,265)

(157,327)

(23,488)

Share-based compensation liability

(678,153)

Other non-current liabilities

(28,877)

(25,016)

(3,735)

(24,517)

(31,656)

(4,726)

Net cash (used in) provided by operating activities

(167,783)

200,349

29,911

333,809

243,659

36,378

Cash flows from investing activities:

Purchase of property and equipment

(20,020)

(21,694)

(3,239)

(45,203)

(43,341)

(6,471)

Payment for long-term investments

(300,000)

(55,343)

(8,262)

(300,262)

Purchase of short-term deposits

(1,566,688)

(2,476,688)

Cash received on maturity of short-term deposits

2,089,618

100,000

14,930

2,658,912

1,010,000

150,789

Cash received on investment income distribution

5,610

3,523

526

Cash of disposed subsidiaries

(8,750)

Purchase of long-term deposits

(250,000)

(400,000)

(59,718)

(250,000)

(1,550,000)

(231,409)

Cash received on maturity of long-term deposits

1,000

179,155

1,155

Other investing activities

2,390

318

2,393

322

Net cash (used in) provided by investing activities

(53,450)

823,281

122,913

(413,726)

565,161

84,376

Cash flows from financing activities:

Deferred payment for business acquisition

(12,907)

(5,563)

(831)

Proceeds from exercise of share options

310

Repurchase of ordinary shares

(103,072)

(2,335)

(349)

(106,151)

(2,335)

(349)

Repurchase of subsidiary's share options

(2,780)

(21,110)

(3,152)

(5,561)

(25,537)

(3,813)

Dividends payment

(852,743)

(840,997)

(125,558)

(852,558)

Payment for redemption of convertible bonds

(1,002,537)

(149,675)

(1,112,544)

(166,098)

Net cash used in financing activities

(958,285)

(1,866,977)

(278,734)

(977,052)

(1,986,943)

(296,644)

Effect of exchange rate changes

(28,952)

93,897

14,020

(25,036)

78,286

11,689

Net decrease in cash and cash equivalents

(1,208,470)

(749,450)

(111,890)

(1,082,005)

(1,099,837)

(164,201)

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

3,492,537

5,296,647

790,769

3,366,072

5,647,034

843,080

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

2,284,067

4,547,197

678,879

2,879

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 30,2021

Ended June 30,2022

GAAP

Amortization of

intangible assets from

business acquisitions

Share-based

compensation

Tax impacts

Non-GAAP

GAAP

Share-based

compensation

Non-GAAP

GAAP

Share-based

compensation

Non-GAAP

(ii)

RMB

US$

Cost of revenues

(2,329)

17,256

4,201

(2,048,872)

(1,846)

7,914

(1,789,932)

(268,411)

1,182

(267,229)

Research and development

(268,325)

1,461

33,965

(232,899)

(238,262)

23,965

(214,297)

(35,572)

3,578

(31,994)

Sales and marketing

(650,236)

16,137

14,588

(619,511)

(610,953)

10,894

(600,059)

(91,213)

1,626

(89,587)

General and administrative

(86,747)

7,904

(78,843)

(157,746)

75,175

(82,571)

(23,551)

11,223

(12,328)

Cost and operating expenses

(3,637)

34,854

60,658

(2,980,125)

(2,807)

117,948

(2,686,859)

(418,747)

17,609

(401,138)

Income from operations

686,345

34,854

60,658

781,857

346,178

117,948

464,126

51,683

17,609

69,292

Net income

464,160

34,658

(8,714)

550,958

345,569

117,948

463,517

51,592

17,201

attributable to Hello Group Inc.

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 half year

Ended June 30,2022

GAAP

Amortization of

intangible assets

from business

acquisitions

Share-

based

compensa

tion

Tax impacts

Non-GAAP

GAAP

Share-based

compensation

Non-GAAP

GAAP

Share-based

compensation

Non-GAAP

(ii)

RMB

US$

Cost of revenues

(4,574)

34,567

7,925

(3,966,082)

(3,234)

10,992

(3,608,242)

(540,337)

1,641

(538,696)

Research and development

(554,818)

3,660

74,174

(476,984)

(488,457)

44,939

(443,518)

(72,925)

6,709

(66,216)

Sales and marketing

(1,809)

32,326

32,144

(1,339)

(1,530)

21,499

(1,178,031)

(179,085)

3,210

(175,875)

General and administrative

(264,709)

91,672

(173,037)

(317,581)

149,134

(168,447)

(47,414)

22,265

(25,149)

Cost and operating expenses

(6,910)

70,553

205,915

(5,815,442)

(5,802)

226,564

(5,398,238)

(839,761)

33,825

(805,936)

Income from operations

1,568

70,553

205,915

1,443,036

698,192

226,564

924,756

104,237

33,825

138,062

Net income

925,819

70,915

(17,639)

1,184,648

635,454

226,564

862,018

94,870

33,825

128,695

attributable to Hello Group Inc.

(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 30,2022

Momo

Tantan

QOOL

Total

RMB

US$

Net revenues:

Live video service

1,403,596

116,382

1,927

Value-added service

1,321,967

214,417

1,376

Mobile marketing

35,913

35,362

Mobile games

17,200

17,568

Other services

782

158

940

140

Total net revenues

2,779,458

330,799

158

3,373

Cost and expenses (iii):

Cost of revenues

(1,631,584)

(165,696)

(566)

(1,411)

Research and development

(171,614)

(66,648)

(238,572)

Sales and marketing

(386,496)

(223,311)

(1,146)

(610,213)

General and administrative

(144,574)

(8,685)

(4,487)

(157,551)

Total cost and expenses

(2,334,268)

(464,340)

(6,199)

(2,747)

Other operating income

38,344

2,225

40,057

Income (loss) from operations

483,534

(131,316)

(6,040)

346,683

Interest income

93,506

93,979

Interest expense

(28,231)

(28,215)

Other gain or loss,net

66,303

66,899

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

method investments

615,112

(131,264)

(5,968)

477,346

Income tax expenses

(145,628)

(417)

(146,804)

Income (loss) before share of income on equity method

investments

469,484

(131,681)

(5,968)

331,542

Share of loss on equity method investments

12,513

12,868

Net income (loss)

481,997

(131,968)

344,410

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

Three months

Ended June 30,2022

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

2,152

5,762

7,914

1,182

Research and development

17,659

6,306

23,965

3,578

Sales and marketing

10,693

201

10,894

1,626

General and administrative

75,134

75,175

11,223

Total cost and expenses

105,638

12,310

117,948

17,609

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 30,2022

Momo

Tantan

QOOL

Total

RMB

US$

Income (loss) from operations

483,534

(131,316)

(6,040)

346,178

51,683

Share-based compensation

105,638

12,310

117,609

Non-GAAP income (loss) from operations

589,172

(119,006)

(6,040)

464,126

69,292

Net income (loss)

481,997

(131,681)

(5,968)

344,410

Share-based compensation

105,609

Non-GAAP net income (loss)

587,635

(119,371)

(5,968)

462,296

69,019

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands,2021

Momo

Tantan

QOOL

Total

RMB

US$[1]

Net revenues:

Live video service

1,884,821

216,511

2,332

325,455

Value-added service

1,210,220

297,038

1,258

233,445

Mobile marketing

51,601

7,992

Mobile games

9,182

1,422

Other services

1,706

635

2,341

362

Total net revenues

3,157,530

513,549

635

3,714

568,676

Cost and expenses (iv):

Cost of revenues

(1,796,504)

(266,197)

(7,628)

(2,329)

(320,653)

Research and development

(195,371)

(72,954)

(268,325)

(41,558)

Sales and marketing

(378,938)

(270,266)

(1,032)

(650,236)

(100,709)

General and administrative

(140,905)

59,205

(5,047)

(86,747)

(13,435)

Total cost and expenses

(2,511,718)

(550,212)

(13,707)

(3,637)

(476,355)

Other operating income

65,445

24,798

90,268

13,981

Income (loss) from operations

711,257

(11,865)

(13,047)

686,345

106,302

Interest income

94,112

291

94,448

14,628

Interest expense

(18,302)

(2,835)

Other gain or loss,500)

(10,500)

(1,626)

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

method investments

776,567

(11,574)

(13,002)

751,991

116,469

Income tax (expenses) benefits

(296,344)

4,835

(291,509)

(45,149)

Income (loss) before share of income on equity method

investments

480,223

(6,739)

(13,002)

460,482

71,320

Share of income on equity method investments

1,042

161

Net income (loss)

481,265

(6,002)

461,524

71,481

(iv) 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

[1] All translations from RMB to U.S. dollars are made at a rate of RMB6.4566 to US$1.00,2021 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,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)

60,658

9,395

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)

461,524

71,481

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,except share and per share data)

First half year

Ended June 30,2022

Momo

Tantan

QOOL

Total

RMB

US$

Net revenues:

Live video service

2,119

241,582

3,103

Value-added service

2,581,559

438,256

3,847

Mobile marketing

63,786

63,523

Mobile games

42,697

42,374

Other services

3,172

322

3,494

521

Total net revenues

5,578,333

679,838

322

6,368

Cost and expenses (v):

Cost of revenues

(3,276,411)

(341,911)

(912)

(3,337)

Research and development

(359,913)

(128,544)

(488,925)

Sales and marketing

(704,176)

(493,458)

(1,896)

(1,085)

General and administrative

(291,770)

(16,761)

(9,050)

(317,414)

Total cost and expenses

(4,632,270)

(980,674)

(11,858)

(5,761)

Other operating income

56,690

7,769

64,630

Income (loss) from operations

1,753

(293,067)

(11,494)

698,237

Interest income

191,249

104

134

191,588

Interest expense

(47,565)

(47,net

77,922

77,633

Income (loss) before income tax and share

of income on equity method investments

1,224,359

(292,963)

(11,360)

920,357

Income tax expenses

(295,733)

(1,086)

(296,314)

Income (loss) before share of income on

equity method investments

928,626

(294,049)

(11,360)

623,043

Share of income on equity method investments

9,913

9,480

Net income (loss)

938,539

(294,360)

633,523

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

First half year

Ended June 30,2022

Momo

Tantan

QOOL

Total

RMB

US$

Cost of revenues

3,999

6,993

10,992

1,641

Research and development

36,112

8,827

44,939

6,709

Sales and marketing

21,283

216

21,499

3,210

General and administrative

149,047

149,134

22,265

Total cost and expenses

210,441

16,123

226,564

33,825

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 30,2022

Momo

Tantan

QOOL

Total

RMB

US$

Operating income (loss)

1,753

(293,067)

(11,494)

698,192

104,237

Share-based compensation

210,441

16,123

226,825

Non-GAAP operating income

(loss)

1,213,194

(276,944)

(11,494)

924,756

138,062

Net income (loss)

938,539

(294,049)

(11,360)

633,523

Share-based compensation

210,825

Non-GAAP net income (loss)

1,148,980

(277,926)

(11,360)

859,694

128,348

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands,2021

Momo

Tantan

QOOL

Total

RMB

US$

Net revenues:

Live video service

3,595,710

467,717

4,427

629,345

Value-added service

2,349,235

613,536

2,771

458,875

Mobile marketing

90,318

13,988

Mobile games

20,366

3,154

Other services

3,674

1,754

5,428

841

Total net revenues

6,059,303

1,081,253

1,754

7,310

1,106,203

Cost and expenses (vi):

Cost of revenues

(3,453,399)

(547,186)

(7,989)

(4,574)

(620,849)

Research and development

(400,701)

(154,117)

(554,818)

(85,930)

Sales and marketing

(705,767)

(556,976)

(1,066)

(1,809)

(195,739)

General and administrative

(300,356)

45,084

(9,437)

(264,709)

(40,998)

Total cost and expenses

(4,223)

(1,195)

(18,492)

(6,910)

(943,516)

Other operating income

85,406

30,736

116,168

17,992

Income (loss) from operations

1,486

(101,206)

(16,712)

1,568

180,679

Interest income

190,455

596

191,142

29,604

Interest expense

(36,663)

(5,678)

Other gain or loss,net

(18,000)

(2,788)

Income (loss) before income tax and share

of income on equity method investments

1,420,278

(100,610)

(16,621)

1,047

201,817

Income tax (expenses) benefits

(389,946)

7,039

(382,907)

(59,305)

Income (loss) before share of income on

equity method investments

1,030,332

(93,571)

(16,621)

920,140

142,512

Share of income on equity method

investments

2,303

357

Net income (loss)

1,032,635

(93,621)

922,443

142,869

(vi) 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,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)

205,915

31,891

Amortization of intangible assets

from business acquisitions

70,553

10,928

Non-GAAP operating income

(loss)

1,308

(76,560)

(16,036

223,498

Net income (loss)

1,635

(93,571)

(16,621)

922,443

142,869

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

View original content:https://www.prnewswire.com/news-releases/hello-group-inc-announces-unaudited-financial-results-for-the-second-quarter-of-2022-301616157.html

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