Hello Group Inc.

Ladies and gentlemen, thank you for standing by and welcome to the first quarter 2024 Hello Group Incorporated earnings conference call. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. Please note this conference is being recorded today. I would now like to hand the conference over to your first speaker today, Ms. Ashley Jing. Thank you. Please go ahead, ma'am. Thank you, operator.

Good morning and good evening, everyone. Thank you for joining us today for Hello Group's first quarter 2024 earnings conference call. The company's results were released earlier today and are available on the company's IR website. On the call today are Mr. Tang Yan, CEO of the company, Ms. Zhang Sichuan, CEO of the company, and Ms. Peng Hui, CFO of the company. They will discuss the company's business operations and highlights, as well as the financials and guidance. They will all be available to answer your questions during the Q&A sessions that follow. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provision of the Private Security Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors. all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to differ materially from those in the forward-looking statements. Further information regarding this and other risks, uncertainties, and factors is included in the company's findings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under law. I will now pass the call over to our COO, Ms. Zhang Sichuan. Ms. Zhang, please.

Hello, everyone. Thank you for joining our call. Since the beginning of the year, we have mixed study projects in implementing our strategic priorities across all business lines. I will now walk you through the details. I will start with a brief overview of our financial performance. For the first quarter of 2024, Total good revenue was 2.56 billion RMD, down 9% year-over-year and 17% sequentially, slightly exceeding the high end of our revenue guidance. Adjusted operating income was 550 million RMD, a slight decrease of 0.5% year-over-year and down 22% sequentially. Profit margin was 20.1%, up 1.8 percentage point year-over-year, but down 2 percentage points essentially. The year-over-year margin improvement despite lower revenue was primarily due to our continued efforts to improve car efficiency across all business lines, offsetting the revenue decline's impact. Specifically, we drove continued efficiency improvement in personnel and cash utilization by reducing inefficient channel investments and optimizing allocation. As a result, cost declined more than revenue. And the cost optimization initiative drove margin improvement. The sequester declining margin was, primarily due to negative operating leverage resulting from the seasonal declines in revenue. Children's revenue from the Momo app and San Antonio app was 2.32 billion RMB, down 8% year-over-year, mainly due to the declines in revenue from the Momo app, resulting from spending selfless amidst the market economy and also active product and operational adjustments to maintain a healthy community ecosystem. And a lot of new apps, especially overseas, continue to grow rapidly year over year. Adjusted operating income was 487 million RMB, down 3% year over year, with a margin of 21% upload percentage points from a year ago. For 10 times, total revenue decreased 22% year-over-year to 241 million RMB, mainly due to the reduced number of paying users. Our commercial product team continued to optimize the paying experience to improve AppyPool, which particularly mitigated the revenue pressure. Canton's adjusted operating income was 28 million RMB, up 92% year-over-year, with a margin of 11.6%, up 6.9 percentage points from a year ago. Now I will move through the progress we have made against our strategic priorities for Momo, Canton, and new endeavors since the beginning of the year. As I highlighted on the Q4 2023 Earnings Call in March, the main goal for the Normal Act this year is to maintain the productivity of this cash cow business with a healthy, equal system. The timeline's goal is to continue to improve the coordinating experience and build an efficient business model that drives profitable growth. As for our new endeavor, Our plan is to enrich the brand portfolio further, push the business boundaries beyond normal and compact, and build a long-term growth engine. I will now walk you through the details of our execution. First, on the product and operational front of the normal app. Since the beginning of the year, our product team has been focused on continuously enriching use cases, and gamified features, as well as strengthening moments of social contribute. To help users improve their interactive experience, we applied AI technology to assist with chatting and image generation features. For example, AI Greeting provides chatting assistance service for users who want to make new friends from the nearby people. In another word, AI can suggest eye-clipping topics to users by analyzing the image and text information on the potential candidate's profile page. Data from the test strip shows that this feature plays a positive role in increasing the screening response rate. Another example is AI Magic Mirror or AI Mozing. and image generation tools that allow users to synthesize photos with other users or landmarks, increasing users' social capital to provide new ways to interact. In addition, last year we piloted a Finding Partners, or South Assy, program for our online to offline interest groups in several major cities, which was well received by young users. The number of times outdoor activity groups represented by City Walk grew quite strongly in the first quarter. Product innovation and our ability to keep pace with the time in technology has abled Momo, a mature social brand with a 30-year history, to play an essential role in helping users discover new relationships, and build meaningful interactions. This has laid a solid foundation for MomoApp to maintain user and revenue scale over the long term. On the China front, about a year ago, we shifted our focus from general user growth to ROI-oriented profitable user growth. This model is more kinetic and better suited to Momo's current stage of development as well as the overall economic eco-environment. Our adjusted purchase allocation for various channels according to the traffic at the beginning of the year optimize potential channels, cut spending in channels, and add to the core ROI. and explore new ways to bring incremental traffic while further reducing user acquisition costs through collaboration with KOS. We also focused on improving paying conversions, acquiring more high-paying users, and improving our ability to better accommodate this group of people with more suitable features on our mobile app. In the first quarter, the normal app has 7.1 million paying users, a decrease of 300K during the previous quarter, mainly due to two reasons. First, our product and operational adjustment should reduce competition events resulting in declining paying users. Second, in order to improve profitability and pursue profitable growth, our channel team reduced investments in acquiring low-paying users with negative channel ROI. We're starting in a decrease in long-time paying users. Now, let's talk about the productivity of our Momo Cash How business. In the first quarter, Momo's live streaming revenue was 1.15 billion RMB, down 11% year-over-year, and 90% sequentially. The year-over-year decrease was mainly due to our strategy and practically reduced revenue-oriented large-scale competition events in order to maintain a good social ecosystem and limited and healthy monetization approaches adopted by forecasters and agencies to obtain competition events-related bonuses. funding softness amidst the weak market economy was another reason for the year-over-year decrease in revenue. The sequential revenue decrease was due to the Chinese New Year seasonality. On the product operations side, we fully leveraged Momo's social contributor to achieve the transition from revenue-oriented competition events to user-oriented, content-focused operational activities. We managed to drive non-event related, in other words, organic revenue growth by strengthening support for high-quality content and adding new game-advice features. Call savings from reduction in operational activities during Chinese New Year resulted in a slight SEQUENTIAL DECREASE IN THE REVENUE SHARING RATIO. REVENUE FROM RELATED SERVICES, EXCLUDING CONTENT, TURNED TO 1.5 BILLION RMB FOR THE FIRST QUARTER, DOWN 4% YEAR-OVER-YEAR AND 9% SEQUENTIALLY. LAST REVENUE FROM THE LONGWARD ACT WAS 806 MILLION RMB down 17% year-over-year and 14% sequentially. Revenue from the standalone app was 343 million RMB, up 52% year-over-year and 6% sequentially. The year-over-year decline in last revenue from the normal app was mainly due to our proactive product and operational adjustment to mitigate the regulatory risk as well as the spending softness amidst the market economy. But the crucial decline was due to Chinese New Year's personality. On the product front, the user scale of the audio and video-based live experience gradually recovered after the Chinese New Year, thanks to our efforts to drive the penetration rate. Our team made a smooth transition from competition event driven to non-event focused operations by enriching interaction features and upgrading core gamified play. The study increased in organic revenue partially offset the reduction in competition events. The group's revenue for the quarter was slightly better than expected. mainly due to the smooth transition of the normal app-class business, which has strong social contributors. The overall revenue sharing ratio decreased slightly compared to the previous quarter due to the seasonal cost savings. Now, moving to the countdown. First, regarding user terms and financial performance, As the cold wave at the beginning of the year and Chinese New Year holiday reduced content users demand, our team reduced channel investment and our user base fell to a low point. In March, with the gradual easing of external unfitable factors and the improvement in user experience brought about by continuously ecosystem improvement and recommendation strategy optimization, our user base and retention started to recover gradually. Tencent's MAU was 13.7 million in March. Flex sequentially. As of the end of the first quarter, Tencent had 1.1 million paying users, down 100,000 sequentially. primarily due to the redesign of the auto renewal page as required by the regulators. Our commercial product team has improved user propensity to pay by optimizing guidance on the paying experience and highlighting differentiated member experience, thereby mitigating the negative impact on paying users on the Renewal Page redesign. Turning to TimeHunt Financial. Total revenue for the first quarter was 241 million RMB, down 22% year-over-year and 11% sequentially. The year-over-year decrease was mainly due to a reduced number of paying users. The increase in the revenue contributions of relatively high-end black gold and SVIP membership products drove overall FPV growth. Particulate mitigated the revenue pressure caused by reduction in paying users. The decline was mainly due to the change in auto renewal policy as well as . which put pressure on paying users and app people. In terms of business line, last revenue was 145 million RMB, down 40% year over year and 10% sequentially, while last streaming revenue was 87.7 million RMB, down 37% year over year and 12% sequentially. The significant year-over-year decrease was mainly due to the ongoing operational strategy to exercise live streaming. Sometimes adjusted operating income for the first quarter was 28 million RMB, nearly doubling year-over-year despite lower revenue and slightly up 4% sequentially. Profit growth was mainly driven by continued improvements in channel efficiency and personal cost optimization. Now I would like to walk you through the details of TimeHouse's progress on channel and product firms. First on channel firms, over the past two years, our user acquisition team has continuously cut in efficient channel and marketing approaches and further reduce marketing investments in negative ROI, laying a solid foundation for Tantan to achieve profitable despite revenue pressures. In the first quarter, thanks to the effective control of spamming activity and continuous improvements in Apple over the past year, new user ROI meaningfully improved over the previous year. While our channel strategy optimization has yielded promising results over the past two years, the space for continuous optimization of unit acquisition cost is relatively limited. Meanwhile, a major problem facing time-time user growth model is relying too much on user acquisition. through pay channels and too little on adding users organically through brand recognition. As a result, although the overall user acquisition cost has continued to decline over the past year or so, the resolution in overall average cost of new users was quite limited due to the continuous decline in number of new organic users. To explore new growth models, and more importantly, to increase the portion of new users acquired outside paid channels, our user acquisition team plans to wrap up spending on KOI advertising, which is both ROI-focused and brand-oriented. Preliminary data in March shows that the popularity of new users acquired through offline branding activity is higher than the overall average. We believe that improving brand image will contribute to sustainable and stable organic user growth over the long term. Effectively reducing the overall user acquisition cost is the long run and helping to achieve a positive business cycle. We are now moving to content progress on product and operational sites. To achieve our strategic goals of improving the coordinating experience and building an efficient business model. Our user product team focused on two things in the first quarter. First, we continue our anti-spam campaign with an updated strategy to enhance anti-spam capabilities to improve user experience. Second, we are working on an upgraded version to improve the dating experience. Our new version focuses on guiding users to enrich their personalities by adding more information to their profile page, thereby increasing their reach and matching performance and improving the efficiency of matching and in deep interaction thereafter. Meanwhile, in terms of UI design, we have decided to emphasize the and encourage users to scroll down and check out the details of each candidate. We started testing the new version at the end of April. We are currently iterating and emphasizing the version based on our user feedback and gradually extend the testing scale. In terms of monetization, We're adding a short-term WAF membership package to lower the threshold for new paying users. In addition, we have a few paying models in and match the specifically for users with our to improve long-term retention and paying conversion of this group of users. We firmly believe that our efforts to continue to focus on product innovation and improving paying experience to drive app growth is the only effective way for Tantan to achieve the strategic goals of profitable growth in the long term. Lastly, in terms of new endeavors, in the first quarter, the total revenue of the new app included social and game products with 344 million RMB, up 51% year-over-year and 5% sequentially. The year-over-year increase was mainly driven by the rapid growth in our overseas business. On a sequential basis, Consumer sentiment in Arabic-speaking regions experienced a seasonal decline due to the impact of Ramadan. At the beginning of the year, our user acquisition team increased investment in overseas channels and enhanced collaboration with local KOLs. Resulting in a significant year-over-year, as you can see, increasing numbers of users and paying users. Launching new gifting features and rapid growth in Turkish speaking market led to a slight sequential increase in overseas revenue during the off-season, contributing in portion incremental revenue for the Cernanon new app. At present, we are accelerating the localization process of our overseas business. On the product side, we are introducing more interactive gamified features in line with local user preferences and stepping up testing of live streaming. On the operational side, we are improving customer experience and product experience specifically for high paying users. At the same time, we are strengthening collaboration with local agencies and forecasters to improve content quality. And W, making rapid progress in multiple regions in the Middle East means we will face more uncertainty and challenges due to the geo-diversification. For example, the sharp depreciation of the Egyptian pounds in March caused significant foreign exchange losses. In addition, as we gradually refurb our local operational team and start entering new markets, we could put more pressure on the profits of our overseas business in the short term. However, these upfront investments have laid a necessary foundation for future revenue and profit growth. This concludes my remarks. Now let me pass the call to Kathy for the financial review. Kathy, please.