NASDAQ:MOMO

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Hello Group Falls 3.5% Despite Strong Overseas Growth and Solid Profitability

Shares of Hello Group (NASDAQ: MOMO) fell 3.5% despite reporting profitable first-quarter results and continued strong growth in its international business.

The company generated first-quarter revenue of RMB 2.39 billion ($345.9 million), down 5.3% year-over-year, while net income attributable to shareholders reached RMB 291 million ($42.2 million). Non-GAAP net income totaled RMB 328.8 million ($47.7 million).

A major highlight was the company's overseas business, where revenue surged 44.1% year-over-year to RMB 597.4 million. Growth was driven by expanding audio- and video-based social entertainment products, particularly in the Middle East and North Africa, as well as continued growth from international dating applications.

While revenue from mainland China declined, management said its core domestic business remained stable and continued to benefit from product innovation and refined operations. Operating income increased to RMB 309.7 million from RMB 299.5 million a year earlier despite lower overall revenue.

The company also maintained a strong balance sheet, ending the quarter with RMB 8.56 billion ($1.24 billion) in cash, investments, and deposits. In addition, Hello Group continued returning capital to shareholders through dividends and share repurchases, having repurchased nearly $400 million of stock under its buyback program.

For the second quarter, management expects revenue between RMB 2.45 billion and RMB 2.55 billion. Despite the stock's decline following the report, the results demonstrated continued profitability, strong overseas momentum, and ongoing shareholder returns.
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Author
The Investor 06-02-26