Hello Group (NASDAQ:MOMO) reported second-quarter 2026 revenue of RMB2.49 billion, down 5% from a year earlier but up 4% sequentially, as growth in overseas operations partly offset continued pressure in its domestic business.
Non-GAAP net income attributable to shareholders totaled RMB273.9 million, compared with a RMB96 million loss in the prior-year period and RMB328.8 million in the first quarter. Non-GAAP operating income was RMB276.1 million, producing an 11.1% operating margin, down from RMB447.7 million and a 17.1% margin a year earlier.
Domestic Business Faces Spending Pressure
The company attributed the domestic decline primarily to ongoing tax scrutiny affecting Momo agencies and broadcasters, along with weaker consumer spending amid macroeconomic pressure. Wen said some audio-scenario agencies reduced operations beginning in April because of tax-related pressures. Hello Group introduced targeted subsidies in late May, which it said supported a recovery in revenue.
Chief Executive Officer Tang Yan said the company revised its domestic outlook after seeing a more pronounced reduction in spending among Momo’s highest-spending livestreaming users. He said these users generally remain active on the platform but have become more cautious in their spending, leading to a significant decline in average revenue per paying user.
“The weakness we are seeing in revenue is not primarily a function of users leaving the platforms or a deterioration in engagement,” Chief Financial Officer Peng Hui said. “It is much more concentrated in the spending behavior of the highest net worth users.”
Momo’s audio and video small-ticket scenarios added 200,000 paying users sequentially, bringing the total to 3.9 million, helped by themed World Cup and seasonal events. The company also cited product initiatives including AI-generated custom gifts, match-prediction games and testing of a paid “Moments Boost” feature for increasing post exposure.
Hello Group said it will pursue a tiered approach for domestic users. For high-value users, it plans to emphasize social interaction features, offline events and VIP services, while supplying top broadcasters with resources such as overseas training tours and short-drama production. For mid-tier and long-tail users, the company plans to focus on lower-barrier offerings including audio interactions and social mini-games.
Tantan Stabilizes User Base, Navigates Payment Changes
Tantan generated RMB156 million in second-quarter revenue, down 18% year over year and 3% from the prior quarter. Paying users totaled 500,000 at quarter-end, down 40,000 sequentially, largely because Alipay adjusted its auto-renewal deduction rules, according to management.
However, the company said Tantan’s average domestic user base was stable with a slight increase during the quarter, marking its first user-base stabilization since marketing spending was reduced in early 2022. Refined targeting strategies improved matching efficiency and retention among male and female users, Wen said.
Tantan continued to deploy artificial intelligence tools, including AI icebreakers, chat assistance, curated matching and profile optimization. The company said AI tools that analyze photo content to generate personalized opening messages showed a particularly strong benefit for female-user retention.
To address membership renewal pressure, Tantan launched a lifetime membership option, encouraged shorter-cycle subscribers to shift to longer-term plans, and added Douyin Pay and WeChat Pay to reduce reliance on a single payment channel.
Overseas Revenue Expands as Product Mix Diversifies
Overseas revenue rose 52% year over year and 13% sequentially to RMB673 million, accounting for 27% of total revenue, compared with 17% a year earlier. Overseas value-added-services revenue was RMB664.9 million, up 51% from a year earlier.
The growth was driven by newer Middle East and North Africa products, seasonal recovery following Ramadan, and the contribution from overseas dating businesses acquired last year. Wen said the company’s two newer MENA products, YahalaLand and Amar, were approaching the revenue scale of SoulChill during the second quarter.
Tang said the combined revenue of Yahala and Amar had surpassed SoulChill in the third quarter to date. YahalaLand reached net-income breakeven for the first time in the second quarter, while Amar’s loss narrowed as revenue grew. Management said it expects both products to contribute to group profit next year.
SoulChill continued to recover from its first-quarter low, though its performance remained below the company’s original expectations after its removal from Turkey’s App Store and geopolitical tensions in the Middle East. Meanwhile, dating app happn increased conversion and average revenue per user through membership and targeting changes, and began expansion efforts in markets including Korea, Taiwan and the U.K.
Guidance and Cost Discipline
Hello Group forecast third-quarter revenue of RMB2.4 billion to RMB2.5 billion, representing a year-over-year decline of 9.4% to 5.7%. At the midpoint, the company expects mainland China revenue to decline by a high-teens percentage rate and overseas revenue to grow by a high-thirties percentage rate.
Peng said the company’s previous RMB3 billion overseas revenue target for 2026 appeared “a little bit of a stretch,” and indicated a result potentially RMB100 million to RMB200 million below that goal. The company now expects full-year group revenue to decline by a mid-single-digit percentage rate, rather than decline only slightly as previously anticipated.
Second-quarter non-GAAP gross margin was 35.8%, compared with 38.8% a year earlier. The company recorded RMB56.8 million in film production expenses during the quarter; excluding that item, gross margin would have been 38.1%. Hello Group said payment-channel costs rose as its international revenue mix expanded, though improved MENA margins and a greater contribution from higher-margin overseas dating businesses helped offset pressure.
Management said it will seek additional efficiencies in personnel, sales and marketing costs, particularly in domestic operations. Despite the more challenging revenue environment and film-related losses, Peng said the company still believes its low-teens adjusted operating-margin target for 2026 remains achievable if it executes on cost controls and operating-efficiency initiatives.
About Hello Group (NASDAQ:MOMO)
Hello Group Inc (NASDAQ: MOMO) is a China-based technology company specializing in mobile social networking and interactive entertainment. Its flagship product, the Momo app, offers location-based social discovery services that enable users to find and connect with new friends based on shared interests and geographic proximity. The platform integrates instant messaging, group chat, and content-sharing features, while also providing premium subscriptions and in-app purchases such as virtual gifts and sticker packs.
In addition to Momo, Hello Group’s portfolio includes Tantan, a dating-focused social app designed to help users build meaningful relationships through profile matching and interest-driven swiping.
