MOMO Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenue: RMB 2.65 billion, down 1% year-over-year but up 1% quarter-over-quarter.

Domestic Revenue: RMB 2.12 billion, down 10% year-over-year.

Overseas Revenue: RMB 535 million, up 69% year-over-year.

Adjusted Operating Income: RMB 404 million, down 11% year-over-year, with a margin of 15.2%.

Value-Added Services Revenue: RMB 2.61 billion, down 1% year-over-year.

Cash Reserves: RMB 8.86 billion, down from RMB 14.73 billion at the end of 2024, primarily due to loan repayments and tax payments.

2Strategic Updates and Business Highlights

Momo App: Focused on enhancing user experience through AI features, resulting in a quarter-over-quarter increase in paying users to 3.7 million.

Tantan App: Adjusted monetization strategy led to a slight recovery in paying ratios, with 0.7 million paying users.

Overseas Expansion: Significant growth driven by audio and video products in the MENA region, with new apps like Yaahlan and Amar contributing to revenue.

Acquisition of Happn: Completed at the end of Q3, expected to enhance the group’s dating portfolio in Europe.

3Forward Guidance and Outlook

Q4 2025 Revenue Guidance: Expected to be between RMB 2.52 billion and RMB 2.62 billion, indicating a year-over-year decline of 4.4% to 0.6%.

2026 Outlook: Anticipated continued decline in domestic revenue (mid- to low teens percentage), but potential stabilization in the second half of 2026 due to easier comparisons from 2025.

4Bad News, Challenges, or Points of Concern

Domestic Revenue Decline: Significant pressure from tax scrutiny affecting broadcasters and agencies, leading to a decline in Momo's revenue.

Gross Margin Pressure: Expected reduction in gross margin by 1 to 2 percentage points due to increased revenue sharing support for affected partners.

User Acquisition Costs: Increased costs and reduced user scale due to a shift in strategy towards higher-quality users.

Macro Factors: Ongoing challenges in consumer sentiment and regulatory environment could impact future performance.

5Notable Q&A Insights

Tax Impact: Management acknowledged that tax changes have negatively impacted revenue and operational focus for some partners, with expectations of continued pressure in Q4.

Overseas Growth: Strong performance in overseas markets, particularly from audio and video products, with expectations for continued growth driven by diversified product offerings.

M&A Strategy: Emphasis on understanding the value of acquired products and teams, with a flexible approach to management post-acquisition.

Profitability Outlook: Expected compression in profitability primarily from domestic operations, while overseas segments are anticipated to maintain or improve margins. This summary encapsulates MOMO's financial performance, strategic initiatives, outlook, challenges, and insights from the earnings call, providing a balanced view of the company's current status and future direction.