Hello Group Inc.

For Q2 2026, total revenue was RMB 2.49 billion, down 5% year over year and up 4% quarter over quarter. Non-GAAP net income attributable to shareholders was RMB 249 million, compared with a net loss of RMB 96 million in the same period of 2025 and RMB 329 million in the prior quarter. Non-GAAP gross margin was 35.8% versus 38.8% a year ago; excluding RMB 56.8 million of film production expenses, gross margin would have been 38.1%. Non-GAAP operating income was RMB 276.7 million with an 11.1% margin, versus RMB 447.7 million and 17.1% last year. Total value-added services revenue was RMB 2.44 billion, down 5% year over year; mainland VAS revenue was RMB 1.77 billion, down 17%; overseas VAS revenue was RMB 664.9 million, up 51%. For Q3, the company expects revenue of RMB 2.4 billion to RMB 2.5 billion, or down 9.4% to 5.7% year over year. At the midpoint, mainland revenue is expected to decline by high-teens percentage-wise, while overseas revenue is expected to grow by high-thirties percentage-wise.

The CEO/lead executive emphasized that the company is shifting toward a more diversified overseas growth engine while continuing to defend the domestic cash cow business. He highlighted that the combined revenue of the two newer MENA products is expected to surpass SoulChill in Q3, which should make the region more resilient if one product faces regulatory or geopolitical pressure. His tone was constructive but cautious: overseas momentum is real, but management is intentionally balancing growth with bottom-line discipline and said it may not “push the gas pedal harder” than planned.

The CFO focused on the numbers behind the quarter and on what is changing in the outlook. She said Q2 revenue was RMB 2.49 billion, non-GAAP net income was RMB 249 million, non-GAAP operating income was RMB 276.7 million, and cash and investments totaled RMB 8.54 billion at June 30, 2026 versus RMB 8.68 billion at year-end 2025. She noted the gross margin pressure came mainly from higher payment channel costs due to mix shift toward overseas business, while film production costs and withholding tax also weighed on profit. She also said full-year group revenue is now expected to decline in the mid-single-digit range, with margin targets still achievable if the company manages personnel and sales-and-marketing costs well.

Analysts focused on the gap between prior expectations for narrowing domestic declines and the weaker Q3 guidance, the sustainability of overseas growth, and the impact on margins. Management said the main domestic issue is reduced spending from the highest-net-worth users in live-streaming showrooms, not users leaving the platforms, and that regulatory pressure is not the main driver. On overseas, management said Yahalan and Ammar are growing quickly, now together above SoulChill in Q3, but the original RMB 3 billion overseas revenue target for 2026 now looks stretched, with management preferring to protect profitability rather than accelerate growth aggressively.