China's Hello Group Q4 revenue falls on weakness in Momo, Tantan apps

Overview

• China online social networking firm's preliminary Q4 revenue fell 2.3% yr/yr

• Q4 adjusted net income and adjusted EPS rose yr/yr

• Company declared special cash dividend and continued share repurchases

Outlook

• Hello Group expects Q1 2026 net revenues of RMB2.3 bln to RMB2.4 bln, down 8.8% to 4.8% year over year

• Hello Group says overseas business is a key engine for future growth

Result Drivers

• DOMESTIC WEAKNESS - Q4 revenue decline was mainly due to lower revenues from Momo and Tantan apps, affected by external factors and weak consumer sentiment, as well as a shrinking Tantan user base

• OVERSEAS GROWTH - Revenue from overseas apps grew sharply, driven by expansion of audio- and video-based products in MENA and new dating brands outside MENA

• LOWER COSTS - Cost and expenses fell due to the absence of film production costs and reduced revenue sharing with Momo broadcasters, partially offset by increased revenue sharing on overseas apps

Company press release: ID:nPn2x87ZDa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Hello Group Inc is $9.35, about 55.8% above its March 17 closing price of $6.00

• The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 6 three months ago

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