Exhibit 99.1

Hello Group Inc. Announces Unaudited Financial Results for the Fourth Quarter and Fiscal Year 2021

BEIJING, CHINA, March 24, 2022 – Hello Group Inc. (NASDAQ: MOMO) (“Hello Group” or the “Company”), a leading mobile social and entertainment platform in China, today announced its unaudited financial results for the fourth quarter and the full year ended December 31, 2021.

Fourth Quarter of 2021 Highlights

 

•

Net revenues decreased by 3.2% year over year to RMB3,674.2 million (US$576.6 million*) in the fourth quarter of 2021.

 

•

Net loss attributable to Hello Group Inc. was RMB4,242.7 million (US$665.8 million) in the fourth quarter of 2021, compared to a net income of RMB651.5 million in the same period of 2020. Due to the fact that the Group’s fair market value as indicated by its market capitalization was significantly below its net book value of equity, the Group determined that a triggering event had occurred for impairment. The Group conducted a detailed impairment analysis and recorded RMB4,397.0 million (US$690.0 million) as impairment loss, which represented the total value of all the goodwill and intangible assets with the exception of its operational licenses and permits on the consolidated statement of operations for the year ended December 31, 2021.

 

•

Non-GAAP net income attributable to Hello Group Inc. (note 1) decreased to RMB280.9 million (US$44.1 million) in the fourth quarter of 2021, from RMB836.4 million in the same period of 2020. Non-GAAP net income attributable to Hello Group Inc. included an accrual of withholding income tax of RMB207.4 million (US$32.5 million) on undistributed earnings generated in 2021 by our wholly-foreign owned enterprise (“WFOE”), due to our plan to remit WFOE’s earnings to its offshore parent company in the foreseeable future to fund its demand on US dollar in business operations, payments of dividends, potential investments, etc.. Without this item, non-GAAP net income attributable to Hello Group Inc. would have been RMB488.3 million (US$76.6 million) in the fourth quarter of 2021.

 

•

Diluted net loss per American Depositary Share (“ADS”) was RMB21.50 (US$3.37) in the fourth quarter of 2021, compared to a diluted net income per ADS of RMB2.98 in the same period of 2020.

 

•

Non-GAAP diluted net income per ADS (note 1) was RMB1.38 (US$0.22) in the fourth quarter of 2021, compared to RMB3.80 in the same period of 2020.

 

•

Monthly Active Users (“MAU”) on Momo application were 114.1 million in December 2021, compared to 113.8 million in December 2020. MAU on Tantan application were 27.0 million in December 2021.

 

•

Total paying users of live video service and value-added service, without double counting the overlap and including 2.5 million paying users of Tantan Limited (“Tantan”), were 11.4 million for the fourth quarter of 2021, compared to 12.8 million for the fourth quarter of 2020, which included 3.8 million paying users of Tantan.

 

 

*

This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.3726 to US$1.00, the effective noon buying rate for December 30, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

1

Full Year 2021 Highlights

 

•

Net revenues decreased 3.0% year over year to RMB14,575.7 million (US$2,287.2 million) for the full year of 2021.

 

•

Net loss attributable to Hello Group Inc. was RMB2,913.7 million (US$457.2 million) for the full year of 2021, compared to a net income of RMB2,103.5 million during the same period of 2020.

 

•

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB2,037.1 million (US$319.7 million) for the full year of 2021, compared with RMB2,896.2 million during the same period of 2020.

 

•

Diluted net loss per ADS was RMB14.40 (US$2.26) for the full year of 2021, compared to a diluted net income per ADS of RMB9.65 during the same period of 2020.

 

•

Non-GAAP diluted net income per ADS (note 1) was RMB9.56 (US$1.50) for the full year of 2021, compared with RMB13.16 during the same period of 2020.

“2021 was a busy year for us. Despite a variety of external challenges, our team was able to methodically execute our strategic priorities and delivered solid results. I am confident that we’ll continue to navigate through the challenges ahead and capitalize on the growth opportunities down the road.” commented Li Wang, CEO of Hello Group.

Fourth Quarter of 2021 Financial Results

Net revenues

Total net revenues were RMB3,674.2 million (US$576.6 million) in the fourth quarter of 2021, a decrease of 3.2% from RMB3,795.2 million in the fourth quarter of 2020.

Live video service revenues were RMB2,148.8 million (US$337.2 million) in the fourth quarter of 2021, a decrease of 7.7% from RMB2,327.9 million during the same period of 2020. The decrease was primarily attributable to the decrease in Tantan’s live streaming revenues due to the shift of our strategic focus. The live steaming revenues on Momo application increased 1% year over year in the fourth quarter of 2021.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,475.7 million (US$231.6 million) in the fourth quarter of 2021, an increase of 5.3% from RMB1,401.3 million during the same period of 2020. The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by the introduction of innovative features and operational events in the audio and video social entertainment experiences, and the rapid growth in the revenues generated by new standalone apps. The increase was partially offset by the decrease in the value-added service revenues of Tantan, due to our strategy to lower the monetization level to improve user experience and retention.

Mobile marketing revenues were RMB25.4 million (US$4.0 million) in the fourth quarter of 2021, a decrease of 51.8% from RMB52.7 million during the same period of 2020. The decrease in mobile marketing revenues was due to our product adjustment to address new regulation requirement.

Mobile games revenues were RMB19.3 million (US$3.0 million) in the fourth quarter of 2021, an increase of 163.1% from RMB7.3 million in the fourth quarter of 2020.

 

2

Net revenues from the Momo segment increased from RMB3,051.3 million in the fourth quarter of 2020 to RMB3,235.6 million (US$507.7 million) in the fourth quarter of 2021, primarily due to the increase in net revenues from value-added service. Net revenues from the Tantan segment decreased from RMB740.5 million in the fourth quarter of 2020 to RMB437.2 million (US$68.6 million) in the fourth quarter of 2021, due to our strategy to lower the monetization level in order to improve user experience and retention.

Cost and expenses

Cost and expenses were RMB7,729.4 million (US$1,212.9 million) in the fourth quarter of 2021, an increase of 134.9% from RMB3,290.0 million in the fourth quarter of 2020. The increase was primarily attributable to: (a) an increase in impairment loss on goodwill and intangible assets amounting to RMB4,397.0 million (US$690.0 million); and (b) an increase in revenue sharing with broadcasters related to Momo’s core live video service, and virtual gift recipients for our virtual gift service. These increases were partially offset by a decrease in revenue sharing with broadcasters related to Tantan’s live video service, and a decrease in personnel related costs including share-based compensation expenses resulting from the decreased number of employees and the decreased fair value of the share options granted during the period.

Non-GAAP cost and expenses (note 1) were RMB3,205.8 million (US$503.1 million) in the fourth quarter of 2021, an increase of 3.6% from RMB3,095.9 million during the same period of 2020.

Other operating income

Other operating income was RMB38.6 million (US$6.1 million) in the fourth quarter of 2021, a decrease from RMB88.4 million during the fourth quarter of 2020. The other operating income mainly consisted of government incentives.

Income (loss) from operations

Loss from operations was RMB4,016.6 million (US$630.3 million) in the fourth quarter of 2021, compared to an income from operations of RMB593.6 million during the same period of 2020. Income from operations of the Momo segment was RMB549.3 million (US$86.2 million) in the fourth quarter of 2021, which decreased from RMB650.9 million in the fourth quarter of 2020. Loss from operations of the Tantan segment was RMB162.5 million (US$25.5 million) in the fourth quarter of 2021, compared to loss from operations of RMB53.1 million in the fourth quarter of 2020.

Non-GAAP income from operations (note 1) was RMB507.0 million (US$79.6 million) in the fourth quarter of 2021, compared to RMB787.7 million during the same period of 2020. Non-GAAP income from operations of the Momo segment was RMB658.4 million (US$103.3 million) in the fourth quarter of 2021, which decreased from RMB791.8 million in the fourth quarter of 2020. Non-GAAP loss from operations of the Tantan segment was RMB145.0 million (US$22.8 million) in the fourth quarter of 2021, compared to non-GAAP loss from operations of RMB2.3 million in the fourth quarter of 2020.

Income tax expenses

Income tax expenses were RMB296.5 million (US$46.5 million) in the fourth quarter of 2021, compared to RMB5.5 million in the fourth quarter of 2020. The increase was primarily due to the following reasons: (a) in the fourth quarter of 2021, we accrued withholding income tax of RMB207.4 million (US$32.5 million) on undistributed earnings generated in 2021 by our WFOE, because we plan to remit WFOE’s earnings to its offshore parent company in the foreseeable future to fund its demand on US dollar in business operations, payments of dividends, potential investments, etc.; (b) in the fourth quarter of 2020, we reversed the over-accrued income tax expenses of RMB113.4 million, due to the preferential tax rate adjustment from 12.5% to 10.0% for WFOE, resulting from the fact that the application of the Key Software Enterprise for the fiscal year of 2019 was approved in 2020.

 

3

Net income (loss)

Net loss was RMB4,244.0 million (US$666.0 million) in the fourth quarter of 2021, compared to a net income of RMB651.1 million during the same period of 2020. Net income from the Momo segment was RMB306.7 million (US$48.1 million) in the fourth quarter of 2021, which decreased from RMB705.8 million in the fourth quarter of 2020. Net loss from the Tantan segment was RMB147.3 million (US$23.1 million) in the fourth quarter of 2021, compared to net loss of RMB50.5 million in the fourth quarter of 2020.

Non-GAAP net income (note 1) was RMB279.6 million (US$43.9 million) in the fourth quarter of 2021, compared to RMB836.1 million during the same period of 2020. Non-GAAP net income from the Momo segment was RMB415.8 million (US$65.3 million) in the fourth quarter of 2021, which decreased from RMB846.7 million in the fourth quarter of 2020. Non-GAAP net loss of the Tantan segment was RMB129.9 million (US$20.4 million) in the fourth quarter of 2021, compared to non-GAAP net loss of RMB8.8 million in the fourth quarter of 2020.

Net income (loss) attributable to Hello Group Inc.

Net loss attributable to Hello Group Inc. was RMB4,242.7 million (US$665.8 million) in the fourth quarter of 2021, compared to a net income of RMB651.5 million during the same period of 2020.

Non-GAAP net income (note 1) attributable to Hello Group Inc. was RMB280.9 million (US$44.1 million) in the fourth quarter of 2021, compared to RMB836.4 million during the same period of 2020.

Net income (loss) per ADS

Diluted net loss per ADS was RMB21.50 (US$3.37) in the fourth quarter of 2021, compared to a diluted net income per ADS of RMB2.98 in the fourth quarter of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB1.38 (US$0.22) in the fourth quarter of 2021, compared to RMB3.80 in the fourth quarter of 2020.

Cash and cash flow

As of December 31, 2021, the Company’s cash, cash equivalents, short-term deposits, long-term deposits and long-term restricted cash totaled RMB15,707.0 million (US$2,464.8 million), compared to RMB16,482.3 million as of December 31, 2020. Net cash provided by operating activities in the fourth quarter of 2021 was RMB665.5 million (US$104.4 million), compared to RMB1,039.1 million in the fourth quarter of 2020.

Full Year 2021 Financial Results

Net revenues for the full year of 2021 were RMB14,575.7 million (US$2,287.2 million), a decrease of 3.0% from RMB15,024.2 million in the same period of 2020.

 

4

Net loss attributable to Hello Group Inc. was RMB2,913.7 million (US$457.2 million) for the full year of 2021, compared to a net income of RMB2,103.5 million during the same period of 2020.

Non-GAAP net income attributable to Hello Group Inc. (note 1) was RMB2,037.1 million (US$319.7 million) for the full year of 2021, compared to RMB2,896.2 million during the same period of 2020.

Diluted net loss per ADS was RMB14.40 (US$2.26) during the full year of 2021, compared to a diluted net income per ADS of RMB9.65 in the same period of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB9.56 (US$1.50) during the full year of 2021, compared to RMB13.16 in the same period of 2020.

Net cash provided by operating activities was RMB1,559.2 million (US$244.7 million) during the full year of 2021, compared to RMB3,080.9 million in the same period of 2020.

Recent Development

Declaration of a special cash dividend

Hello Group’s board of directors has declared a special cash dividend in the amount of US$0.64 per ADS, or US$0.32 per ordinary share. The cash dividend will be paid on April 29, 2022 to shareholders of record at the close of business on April 13, 2022. The ex-dividend date will be April 12, 2022. The aggregate amount of cash dividends to be paid is approximately US$127 million, which will be funded by surplus cash on the Company’s balance sheet.

CFO Transition

The Company today announced that Jonathon Zhang, Chief Financial Officer, will retire effective June 30, 2022. Cathy Hui Peng, Senior Vice President of corporate finance, will assume the role of chief financial officer following Mr. Zhang’s retirement and Mr. Zhang will remain with the Company as a senior advisor.

“My tenure with Hello Group was such a gratifying journey. I consider the past 8 years with the Company as the most exciting part of my long career life. It has been an absolute privilege to work with the team and have built a great business.” said Jonathon Zhang. “I’m also pleased to pass the baton to Cathy. A long time deputy of mine, she is the right person to lead the team to continue their success.”

“Jonathon has made tremendous contribution to the Company over the past 8 years. He has been playing an indispensable role in transforming the company and guiding the team to enable our success. On behalf of the company, I want to thank Jonathon for his leadership and dedication and wish him much happiness in his next chapter.” said Li Wang, Chief Executive Officer of the Company. “At the same time, we are delighted that Cathy will transition into the CFO role. Her deep capital market experience, demonstrated financial acumen and leadership skills will serve her well in her new role.”

 

5

Prior to this expanded role, Ms. Peng serves as the Company’s Senior Vice President of corporate finance. In this role she is responsible for the company’s financial planning and analysis, strategic investment and acquisitions, as well as corporate strategy and investor communications. Ms. Peng joined the Company in 2015 as vice president of investor relations. Since then, she has played a key role in driving the company’s success in various capital market transactions. From 2007 to 2015, Ms. Peng worked for SINA Corporation as director of investor relations and a corporate treasurer. Prior to that, she worked for several public and private companies in TMT space where she served various roles in accounting, financial planning and analysis, M&As and corporate communications. Ms. Peng started her career in auditing at Ernst &Young from 2001. Ms. Peng received her bachelor degree in Economics from Peking University in 2001.

Business Outlook

For the first quarter of 2022, the Company expects total net revenues to be between RMB3.1 billion to RMB3.2 billion, representing a decrease of 10.7% to 7.8% year-over-year. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.

Note 1: Non-GAAP measures

To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we, Hello Group, use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation, impairment loss on goodwill and intangible assets, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions.

Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures.

Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors’ overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to the GAAP results. In addition, our calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Our non-GAAP information (including non-GAAP cost and operating expenses, income (loss) from operations, net income (loss), net income (loss) attributable to Hello Group Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation, impairment loss on goodwill and intangible assets, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions. A limitation of using these non-GAAP financial measures is that share-based compensation, impairment loss on goodwill and intangible assets, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions have been and will continue to be for the foreseeable future significant recurring expenses in our results of operations. We compensate for such limitation by providing reconciliations of our non-GAAP measures to our U.S. GAAP measures. Please see the reconciliation tables at the end of this earnings release.

 

6

Conference Call

Hello Group’s management will host an earnings conference call on Thursday, March 24, 2022, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on March 24, 2022).

All participants must preregister online prior to the call to receive the dial-in details. Once preregistration has been complete, participants will receive dial-in numbers, direct event passcode, and a unique registrant ID.

PRE-REGISTER LINK http://apac.directeventreg.com/registration/event/1244109

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your registrant ID, and you will join the conference instantly.

A telephone replay of the call will be available after the conclusion of the conference call through 8:00 a.m. U.S. Eastern Time, April 1, 2022. The dial-in details for the replay are as follows:

International: +61-2- 9003- 4211

U.S. Toll Free: +1-855- 4525-696

Passcode: 1244109

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of the Company’s website at http://ir.immomo.com.

About Hello Group Inc.

We are a leading player in China’s online social and entertainment space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions. Momo is a mobile application that connects people and facilitates social interactions based on location, interests and a variety of online recreational activities. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application. It is designed to help its users find and establish romantic connections as well as meet interesting people. We also operate a number of other applications to serve different social and entertainment demands from our users.

For investor and media inquiries, please contact:

Hello Group Inc.

Investor Relations

Phone: +86-10-5731-0538

Email: ir@immomo.com

Christensen

In China

Mr. Eric Yuan

Phone: +86-10-5900-1548

E-mail: Eyuan@christensenir.com

In US

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: lbergkamp@christensenir.com

 

7

Safe Harbor Statement

This news release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to our management quotes, our financial outlook for the first quarter of 2022, as well as the amount of, timing, methods and funding sources for repurchases of our shares under the share repurchase program.

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the fourth quarter of 2021 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the first quarter of 2022 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth. Moreover, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers, the impact of the COVID-19 pandemic on the Company’s business operations and the economy in China, the market price of the Company’s stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company’s cash flows from operations, general economic conditions, and other factors. For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission.

All information provided in this press release and in the attachments is as of the date of the press release. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, after the date of this release, except as required by law. Such information speaks only as of the date of this release.                

 

8

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Operations

(All amounts in thousands, except share and per share data)

 

		Three months Ended December 31												Year Ended December 31
		2020 RMB				2021 RMB				2021 US$				2020 RMB				2021 RMB				2021 US$
Net revenues:
Live video service			2,327,875				2,148,785				337,191				9,637,579				8,378,945				1,314,839
Value-added service			1,401,269				1,475,733				231,575				5,112,182				5,971,792				937,104
Mobile marketing			52,663				25,369				3,981				198,197				159,010				24,952
Mobile games			7,334				19,294				3,028				39,564				47,712				7,487
Other services			6,060				5,048				792				36,666				18,260				2,866
Total net revenues			3,795,201				3,674,229				576,567				15,024,188				14,575,719				2,287,248
Cost and expenses:
Cost of revenues			(2,042,781	)			(2,191,520	)			(343,897	)			(7,976,781	)			(8,383,431	)			(1,315,543	)
Research and development			(327,295	)			(316,024	)			(49,591	)			(1,167,677	)			(1,131,781	)			(177,601	)
Sales and marketing			(697,722	)			(659,604	)			(103,506	)			(2,813,922	)			(2,604,309	)			(408,673	)
General and administrative			(222,191	)			(165,257	)			(25,932	)			(763,150	)			(624,700	)			(98,029	)
Impairment loss on goodwill and intangible assets			—				(4,397,012	)			(689,987	)			—				(4,397,012	)			(689,987	)
Total cost and expenses			(3,289,989	)			(7,729,417	)			(1,212,913	)			(12,721,530	)			(17,141,233	)			(2,689,833	)
Other operating income			88,385				38,558				6,051				228,777				175,947				27,610
Income (loss) from operations			593,597				(4,016,630	)			(630,295	)			2,531,435				(2,389,567	)			(374,975	)
Interest income			100,880				99,573				15,625				444,471				384,279				60,302
Interest expense			(19,047	)			(18,444	)			(2,894	)			(78,872	)			(73,776	)			(11,577	)
Other gain or loss, net			7,500				2,000				314				1,500				(16,000	)			(2,511	)
Income (loss) before income tax and share of income on equity method investments			682,930				(3,933,501	)			(617,250	)			2,898,534				(2,095,064	)			(328,761	)
Income tax expenses			(5,481	)			(296,491	)			(46,526	)			(755,620	)			(822,556	)			(129,077	)
Income (loss) before share of income on equity method investments			677,449				(4,229,992	)			(663,776	)			2,142,914				(2,917,620	)			(457,838	)
Share of loss on equity method investments			(26,319	)			(14,045	)			(2,204	)			(42,522	)			(8,084	)			(1,269	)
Net income (loss)			651,130				(4,244,037	)			(665,980	)			2,100,392				(2,925,704	)			(459,107	)
Less: net loss attributable to non-controlling interest			(320	)			(1,319	)			(207	)			(3,092	)			(11,996	)			(1,882	)
Net income (loss) attributable to the shareholders of Hello Group Inc.			651,450				(4,242,718	)			(665,773	)			2,103,484				(2,913,708	)			(457,225	)
Net income (loss) per share attributable to ordinary shareholders
Basic			1.57				(10.75	)			(1.69	)			5.05				(7.20	)			(1.13	)
Diluted			1.49				(10.75	)			(1.69	)			4.83				(7.20	)			(1.13	)
Weighted average shares used in calculating net income (loss) per ordinary share
Basic			414,839,350				394,694,993				394,694,993				416,914,898				404,701,910				404,701,910
Diluted			449,683,596				394,694,993				394,694,993				452,081,642				404,701,910				404,701,910

 

9

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

(All amounts in thousands, except share and per share data)

 

		Three months												Year
		Ended December 31												Ended December 31
		2020				2021				2021				2020				2021				2021
		RMB				RMB				US$				RMB				RMB				US$
Net income (loss)			651,130				(4,244,037	)			(665,980	)			2,100,392				(2,925,704	)			(459,107	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustment			(69,010	)			(7,331	)			(1,150	)			(141,677	)			(39,161	)			(6,145	)
Comprehensive income (loss)			582,120				(4,251,368	)			(667,130	)			1,958,715				(2,964,865	)			(465,252	)
Less: comprehensive loss attributed to the non-controlling interest			(9,059	)			(3,280	)			(515	)			(26,004	)			(16,603	)			(2,605	)
Comprehensive income (loss) attributable to Hello Group Inc.			591,179				(4,248,088	)			(666,615	)			1,984,719				(2,948,262	)			(462,647	)

 

10

Hello Group Inc.

Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands, except share and per share data)

 

		December 31				December 31				December 31
		2020				2021				2021
		RMB				RMB				US$
Assets
Current assets
Cash and cash equivalents			3,363,942				5,570,563				874,143
Short-term deposits			7,566,250				2,860,000				448,796
Restricted cash			2,130				—				—
Accounts receivable, net of allowance for doubtful accounts of RMB15,390 and RMB15,127 as of December 31, 2020 and 2021, respectively			200,831				205,225				32,204
Prepaid expenses and other current assets			613,696				775,072				121,626
Total current assets			11,746,849				9,410,860				1,476,769
Long-term deposits			5,550,000				7,200,000				1,129,837
Long-term restricted cash			—				76,471				12,000
Right-of-use assets, net			278,175				257,934				40,475
Property and equipment, net			265,765				180,664				28,350
Intangible assets, net			687,211				27,320				4,287
Rental deposits			21,794				19,204				3,014
Long-term investments			454,996				820,006				128,677
Other non-current assets			94,868				83,930				13,170
Deferred tax assets			32,495				34,849				5,469
Goodwill			4,088,403				—				—
Total assets			23,220,556				18,111,238				2,842,048
Liabilities and equity
Current liabilities
Accounts payable			699,394				726,207				113,957
Deferred revenue			511,617				539,967				84,733
Accrued expenses and other current liabilities			854,835				911,050				142,964
Amount due to related parties			19,462				5,016				787
Lease liabilities due within one year			132,793				162,950				25,570
Income tax payable			236,490				125,773				19,737
Deferred consideration in connection with business acquisitions			62,149				44,802				7,030
Total current liabilities			2,516,740				2,515,765				394,778
Deferred tax liabilities			171,803				213,384				33,485
Convertible senior notes			4,658,966				4,565,292				716,394
Share-based compensation liability			875,616				—				—
Lease liabilities			136,436				103,105				16,179
Other non-current liabilities			25,666				128,095				20,101
Total liabilities			8,385,227				7,525,641				1,180,937
Shareholder’s equity (i)			14,835,329				10,585,597				1,661,111
Total liabilities and shareholder’s equity			23,220,556				18,111,238				2,842,048

 

(i):	As of December 31, 2021, the number of ordinary shares outstanding was 395,200,884.

 

11

Hello Group Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

(All amounts in thousands, except share and per share data)

 

		Three months Ended December 31												Year Ended December 31
		2020 RMB				2021 RMB				2021 US$				2020 RMB				2021 RMB				2021 US$
Cash flows from operating activities:
Net income (loss)			651,130				(4,244,037	)			(665,980	)			2,100,392				(2,925,704	)			(459,107	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation of property and equipment			55,375				34,226				5,371				208,990				155,537				24,407
Amortization of intangible assets			37,741				1,279				201				157,258				109,062				17,114
Share-based compensation			157,584				126,576				19,862				678,686				475,771				74,658
Share of loss on equity method investments			26,319				14,045				2,204				42,522				8,084				1,269
Impairment loss on goodwill and intangible assets			—				4,397,012				689,987				—				4,397,012				689,987
Gain or loss on long-term investments			(7,500	)			(2,000	)			(314	)			(1,500	)			16,000				2,511
Gain on subsidiary deconsolidation			—				—				—				(6,676	)			—				—
Gain on disposal of subsidiaries			—				—				—				—				(15,526	)			(2,436	)
Loss or gain on disposal of property and equipment			3				(36	)			(6	)			(282	)			1,236				194
Provision of losses (income) on receivable and other assets			19,663				(505	)			(79	)			46,075				(263	)			(41	)
Cash received on investment income distribution			—				—				—				1,153				—				—
Changes in operating assets and liabilities:
Accounts receivable			34,533				13,984				2,194				52,247				(10,374	)			(1,628	)
Prepaid expenses and other current assets			104,636				52,504				8,239				(59,117	)			(151,162	)			(23,721	)
Amount due from a related party			—				—				—				4,382				—				—
Rental deposits			(4,372	)			1,171				184				(4,265	)			(343	)			(54	)
Deferred tax assets			1,535				(338	)			(53	)			4,569				(2,354	)			(369	)
Other non-current assets			(166,665	)			42,125				6,610				(138,484	)			34,075				5,347
Accounts payable			66,948				11,053				1,734				(11,716	)			30,475				4,782
Income tax payable			(95,341	)			(39,285	)			(6,165	)			82,514				(110,716	)			(17,374	)
Deferred revenue			24,740				9,652				1,515				8,910				35,106				5,509
Accrued expenses and other current liabilities			41,048				99,497				15,613				(120,363	)			60,668				9,520
Amount due to related parties			(12,406	)			(9,751	)			(1,530	)			(10,144	)			(14,447	)			(2,267	)
Deferred tax liability			(9,435	)			207,114				32,501				(39,315	)			180,173				28,273
Share-based compensation liability			—				—				—				—				(678,153	)			(106,417	)
Other non-current liabilities			113,553				(48,777	)			(7,654	)			85,053				(34,959	)			(5,486	)
Net cash provided by operating activities			1,039,089				665,509				104,434				3,080,889				1,559,198				244,671
Cash flows from investing activities:
Purchase of property and equipment			(16,095	)			(19,201	)			(3,013	)			(124,143	)			(95,323	)			(14,958	)
Payment for long-term investments			(9,000	)			(115,052	)			(18,054	)			(13,500	)			(415,052	)			(65,131	)
Purchase of short-term deposits			(3,654,500	)			(400,000	)			(62,769	)			(14,949,665	)			(4,976,688	)			(780,951	)
Cash received on maturity of short-term deposits			3,954,500				3,550,000				557,072				19,577,159				9,667,570				1,517,053
Payment for short-term investments			—				—				—				(10,000	)			—				—
Cash received from sales of short-term investment			—				—				—				10,000				—				—
Cash received on investment income distribution			—				—				—				—				5,610				880
Cash of disposed subsidiaries			—				—				—				—				(8,750	)			(1,373	)
Cash received from sales of long term investment			12,000				20,000				3,138				12,000				20,000				3,138
Purchase of long-term deposits			(900,000	)			(1,600,000	)			(251,075	)			(5,250,000	)			(1,850,000	)			(290,305	)
Cash received on maturity of long term deposits			—				200,000				31,384				—				200,000				31,384
Other investing activities			2				569				89				(317	)			2,975				467
Net cash (used in) provided by investing activities			(613,093	)			1,636,316				256,772				(748,466	)			2,550,342				400,204
Cash flows from financing activities:
Deferred payment for business acquisition			—				(50	)			(8	)			(18,355	)			(12,957	)			(2,033	)
Proceeds from exercise of share options			171				5				1				226				776				122
Repurchase of ordinary shares			(197,799	)			—				—				(330,206	)			(862,865	)			(135,402	)
Repurchase of subsidiary’s share options			(932	)			(5,070	)			(796	)			(25,832	)			(59,120	)			(9,277	)
Dividends payment			—				—				—				(1,123,983	)			(852,743	)			(133,814	)
Net cash used in financing activities			(198,560	)			(5,115	)			(803	)			(1,498,150	)			(1,786,909	)			(280,404	)
Effect of exchange rate changes			(37,770	)			(12,972	)			(2,035	)			(80,944	)			(41,669	)			(6,538	)
Net increase in cash and cash equivalents			189,666				2,283,738				358,368				753,329				2,280,962				357,933
Cash, cash equivalents and restricted cash at the beginning of period			3,176,406				3,363,296				527,775				2,612,743				3,366,072				528,210
Cash, cash equivalents and restricted cash at the end of period			3,366,072				5,647,034				886,143				3,366,072				5,647,034				886,143

 

12

Hello Group Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands, except per share data)

 

1.	Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures.

 

		Three months																				Three months																Three months
		Ended December 31, 2020																				Ended December 31, 2021																Ended December 31, 2021
		GAAP RMB				Amortization of intangible assets from business acquisitions RMB				Share-based compensation RMB				Tax impacts (ii) RMB				Non-GAAP RMB				GAAP RMB				Impairment loss on goodwill and intangible assets RMB				Share-based compensation RMB				Non-GAAP RMB				GAAP US$				Impairment loss on goodwill and intangible assets US$				Share-based compensation US$				Non-GAAP US$
Cost of revenues			(2,042,781	)			17,694				4,242				—				(2,020,845	)			(2,191,520	)			—				3,393				(2,188,127	)			(343,897	)			—				532				(343,365	)
Research and development			(327,295	)			2,247				38,515				—				(286,533	)			(316,024	)			—				36,303				(279,721	)			(49,591	)			—				5,697				(43,894	)
Sales and marketing			(697,722	)			16,547				27,122				—				(654,053	)			(659,604	)			—				11,024				(648,580	)			(103,506	)			—				1,730				(101,776	)
General and administrative			(222,191	)			—				87,705				—				(134,486	)			(165,257	)			—				75,856				(89,401	)			(25,932	)			—				11,903				(14,029	)
Impairment loss on goodwill and intangible assets			—				—				—				—				—				(4,397,012	)			4,397,012				—				—				(689,987	)			689,987				—				—
Cost and operating expenses			(3,289,989	)			36,488				157,584				—				(3,095,917	)			(7,729,417	)			4,397,012				126,576				(3,205,829	)			(1,212,913	)			689,987				19,862				(503,064	)
Income (loss) from operations			593,597				36,488				157,584				—				787,669				(4,016,630	)			4,397,012				126,576				506,958				(630,295	)			689,987				19,862				79,554
Net income (loss) attributable to Hello Group Inc.			651,450				36,488				157,584				(9,122	)			836,400				(4,242,718	)			4,397,012				126,576				280,870				(665,773	)			689,987				19,862				44,076

 

13

Hello Group Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands, except per share data)

 

1.	Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures-continued.

 

		Year																				Year																								Year
		Ended December 31, 2020																				Ended December 31, 2021																								Ended December 31, 2021
		GAAP RMB				Amortization of intangible assets from business acquisitions RMB				Share- based compensation RMB				Tax impacts (ii) RMB				Non-GAAP RMB				GAAP RMB				Impairment loss on goodwill and intangible assets RMB				Amortization of intangible assets from business acquisitions RMB				Share-based compensation RMB				Tax impacts (ii) RMB				Non-GAAP RMB				GAAP US$				Impairment loss on goodwill and intangible assets US$				Amortization of intangible assets from business acquisitions US$				Share-based compensation US$				Tax impacts (ii) US$				Non-GAAP US$
Cost of revenues			(7,976,781	)			73,740				18,449				—				(7,884,592	)			(8,383,431	)			—				51,853				17,941				—				(8,313,637	)			(1,315,543	)			—				8,137				2,815				—				(1,304,591	)
Research and development			(1,167,677	)			9,365				175,870				—				(982,442	)			(1,131,781	)			—				3,660				139,571				—				(988,550	)			(177,601	)			—				574				21,902				—				(155,125	)
Sales and marketing			(2,813,922	)			68,960				158,902				—				(2,586,060	)			(2,604,309	)			—				48,491				70,821				—				(2,484,997	)			(408,673	)			—				7,609				11,113				—				(389,951	)
General and administrative			(763,150	)			—				325,465				—				(437,685	)			(624,700	)			—				—				247,438				—				(377,262	)			(98,029	)			—				—				38,828				—				(59,201	)
Impairment loss on goodwill and intangible assets			—				—				—				—				—				(4,397,012	)			4,397,012				—				—				—				—				(689,987	)			689,987				—				—				—				—
Cost and operating expenses			(12,721,530	)			152,065				678,686				—				(11,890,779	)			(17,141,233	)			4,397,012				104,004				475,771				—				(12,164,446	)			(2,689,833	)			689,987				16,320				74,658				—				(1,908,868	)
Income (loss) from operations			2,531,435				152,065				678,686				—				3,362,186				(2,389,567	)			4,397,012				104,004				475,771				—				2,587,220				(374,975	)			689,987				16,320				74,658				—				405,990
Net income (loss) attributable to Hello Group Inc.			2,103,484				152,065				678,686				(38,016	)			2,896,219				(2,913,708	)			4,397,012				104,004				475,771				(26,002	)			2,037,077				(457,225	)			689,987				16,320				74,658				(4,080	)			319,660

 

(ii)	Includes tax impacts related to the amortization of intangible assets from business acquisition.

 

14

Hello Group Inc.

Unaudited Condensed Segment Report

(All amounts in thousands, except share and per share data)

 

		Three months Ended December 31, 2021
		Momo				Tantan				QOOL				Unallocated1				Total				Total
		RMB				RMB				RMB				RMB				RMB				US$
Net revenues:															—
Live video service			1,947,958				200,827				—				—				2,148,785				337,191
Value-added service			1,239,351				236,382				—				—				1,475,733				231,575
Mobile marketing			25,369				—				—				—				25,369				3,981
Mobile games			19,294				—				—				—				19,294				3,028
Other services			3,667				—				1,381				—				5,048				792
Total net revenues			3,235,639				437,209				1,381				—				3,674,229				576,567
Cost and expenses (iii):
Cost of revenues			(1,962,718	)			(228,290	)			(512	)			—				(2,191,520	)			(343,897	)
Research and development			(233,512	)			(82,512	)			—				—				(316,024	)			(49,591	)
Sales and marketing			(377,672	)			(281,534	)			(398	)			—				(659,604	)			(103,506	)
General and administrative			(147,957	)			(10,362	)			(6,938	)			—				(165,257	)			(25,932	)
Impairment loss on goodwill and intangible assets			—				—				—				(4,397,012	)			(4,397,012	)			(689,987	)
Total cost and expenses			(2,721,859	)			(602,698	)			(7,848	)			(4,397,012	)			(7,729,417	)			(1,212,913	)
Other operating income			35,532				3,023				3				—				38,558				6,051
Income (loss) from operations			549,312				(162,466	)			(6,464	)			(4,397,012	)			(4,016,630	)			(630,295	)
Interest income			99,399				139				35				—				99,573				15,625
Interest expense			(18,444	)			—				—				—				(18,444	)			(2,894	)
Other gain or loss, net			2,000				—				—				—				2,000				314
Income (loss) before income tax and share of income on equity method investments			632,267				(162,327	)			(6,429	)			(4,397,012	)			(3,933,501	)			(617,250	)
Income tax (expenses) benefits			(311,479	)			14,988				—				—				(296,491	)			(46,526	)
Income (loss) before share of income on equity method investments			320,788				(147,339	)			(6,429	)			(4,397,012	)			(4,229,992	)			(663,776	)
Share of loss on equity method investments			(14,045	)			—				—				—				(14,045	)			(2,204	)
Net income (loss)			306,743				(147,339	)			(6,429	)			(4,397,012	)			(4,244,037	)			(665,980	)

 

(iii)

Share-based compensation was allocated in cost of revenues and operating expenses as follows:

 

		Three months Ended December 31, 2021
		Momo RMB				Tantan RMB				QOOL RMB				Total RMB				Total US$
Cost of revenues			2,729				664				—				3,393				532
Research and development			19,569				16,734				—				36,303				5,697
Sales and marketing			10,997				27				—				11,024				1,730
General and administrative			75,808				48				—				75,856				11,903
Total cost and expenses			109,103				17,473				—				126,576				19,862

 

 

1	The impairment loss on goodwill and intangible assets is presented as an unallocated item in the segment information because our management does not consider this as part of the segment operating performance measure.

 

15

Hello Group Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

(All amounts in thousands, except share and per share data)

 

		Three months Ended December 31, 2021
		Momo RMB				Tantan RMB				QOOL RMB				Unallocated RMB				Total RMB				Total US$
Income (loss) from operations			549,312				(162,466	)			(6,464	)			(4,397,012	)			(4,016,630	)			(630,295	)
Share-based compensation			109,103				17,473				—				—				126,576				19,862
Impairment loss on goodwill and intangible assets			—				—				—				4,397,012				4,397,012				689,987
Non-GAAP income (loss) from operations			658,415				(144,993	)			(6,464	)			—				506,958				79,554
Net income (loss)			306,743				(147,339	)			(6,429	)			(4,397,012	)			(4,244,037	)			(665,980	)
Share-based compensation			109,103				17,473				—				—				126,576				19,862
Impairment loss on goodwill and intangible assets			—				—				—				4,397,012				4,397,012				689,987
Non-GAAP net income (loss)			415,846				(129,866	)			(6,429	)			—				279,551				43,869

 

16