MOMO Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

Total Revenue: RMB 2.39 billion, down 5% year-over-year.
Domestic Revenue: RMB 1.79 billion, down 15% year-over-year.
Overseas Revenue: RMB 597 million, up 44% year-over-year, now accounting for 25% of total revenue.
Adjusted Operating Income: RMB 349 million, up 1% year-over-year, with a margin of 14.6%.
Net Income: Non-GAAP net income attributable to shareholders was RMB 288 million, compared to RMB 403.8 million in Q1 2025.
Paying Users: Momo's paying users decreased by 200,000 quarter-over-quarter to 3.7 million.

2. Strategic Updates and Business Highlights

Momo: Focused on optimizing user experience through product innovations, including AI-driven features to enhance social interactions. The platform saw improved user retention despite a decline in paying users.
Tantan: Experienced a slight decrease in paying users due to changes in Alipay's billing rules and ongoing MAU decline. However, algorithm improvements showed positive engagement trends among younger users.
New Businesses: Continued expansion overseas, with significant revenue growth from new products in the MENA region. The company is focusing on localizing operations and optimizing monetization strategies.

3. Forward Guidance and Outlook

Q2 Revenue Guidance: Expected to range from RMB 2.45 billion to RMB 2.55 billion, indicating a year-over-year decline of 6.5% to 2.7%. Domestic revenue is projected to decline by high teens percentage-wise, while overseas revenue is expected to grow by high 50s percentage-wise.
Full-Year Outlook: Domestic revenue decline is now expected to be in the mid-teens percentage-wise, adjusted from low teens due to regulatory pressures and consumer sentiment.

4. Bad News, Challenges, or Points of Concern

Regulatory Pressures: New tax regulations and stricter enforcement have negatively impacted Momo's revenue, particularly affecting agency-related income.
Consumer Sentiment: Continued softness in consumer spending is a concern for domestic revenue recovery.
Tantan's Membership Pressure: Changes in Alipay's auto-renewal policies have temporarily affected Tantan's membership conversion rates.
User Base Decline: Momo's paying user base has decreased, and Tantan's paying users also saw a decline, raising concerns about user retention and engagement.

5. Notable Q&A Insights

Management addressed concerns about overseas revenue challenges, particularly in Turkey due to regulatory changes and geopolitical tensions. They expressed confidence in recovery efforts and localization strategies.
The company is focusing on balancing marketing investments with profitability, particularly for new products that are showing promising growth.
Management indicated that the domestic business is expected to stabilize in the second half of the year as regulatory pressures ease and comparisons become easier.
AI investments are seen as high-return, with ongoing efforts to enhance user experience and drive revenue growth through innovative features.

Overall, while MOMO faces significant challenges in its domestic market due to regulatory issues and changing consumer sentiment, its overseas business shows strong growth potential, and strategic innovations in AI are expected to contribute positively to long-term earnings.

MOMO — Hello Group Inc.