FAST NEWS: Hello Group Reports Lower Revenue and Profit in First Quarter

The latest: Dating app operator Hello Group Inc. (MOMO.US) reported a non-GAAP net profit of 399 million yuan ($60 million) in the first quarter, down 37.1% from 634 million yuan in the same period last year, according to its latest results published on Tuesday.

Looking up: The company’s first-quarter revenue decreased 9.3% year-over-year to 3.15 billion yuan, slightly higher than analysts’ expectations of 3.13 billion yuan, with value-added services revenue up 1.9% to 1.48 billion yuan.

Take Note: The company expects revenue for the second quarter to range from 3.05 billion to 3.15 billion yuan, a 14.2% to 16.9% decline year-over-year, implying an unabated decline in revenue.

Digging Deeper: Founded in 2011 and listed on the Nasdaq in December 2014, Hello Group, formerly known as Momo Inc., has a number of mobile apps including Momo and Tantan, often referred to as the “Chinese version of Tinder.” When Hello Group acquired Tantan for $760 million in 2018, it was seen as a rising star by the investment market because it owned two mobile social apps popular with Chinese users. However, with fewer paid users, Tantan’s performance has declined significantly in recent years, with revenue falling 30%, 40% and 38.5% in the past three quarters, so some analysts estimate that Hello Group may sell this struggling business this year.

Market Reaction: The shares of Hello Group fell 0.3% in New York on Tuesday and dipped 3.8% to $6 in after-hours trading. It now trades at the lower end of its 52-week range.

Translation by Jony Ho

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