Hello Group Inc.

ladies and gentlemen thank you for standing by and welcome to the second 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 second quarter 2024 earnings conference call. The company's results were released earlier today and available on the company's IR website. On the call today, we have Mr. Tang Yan, CEO of the company, Ms. Jiang Sichun, 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 session that follows. 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 filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements 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. I will now work you through the progress we make in the second quarter against our strategic priorities across all businesses. I will start with a brief overview of our financial performance. For the second quarter of 2024, total group revenue was 2.69 billion RMB, down 14% year-over-year, but up 5% sequentially. Adjusted operating income was 477 million RMB, down 33% year-over-year, and 7% sequentially. Profit margin was 17.7%, down 4.9 percentage points year-over-year, and 2.4 percentage points sequentially. In terms of business statements, total revenue from the Momo app and San Antonio app was 2.46 billion RMB, down 30% year-over-year, but up 6% sequentially. The year-over-year decline was mainly due to the decline in revenue from the normal app resulting from spending softness amid the weak macroeconomy and our proactive product and operational adjustments to maintain a healthy community ecosystem since the end of last year. The sequential increase was due to seasonality. In Quarter 2, Standalone new apps maintain their growth momentum on both year-on-year and sequential basis. Driven by our overseas business, adjusted operating income from the Momo app and Standalone new app was 456 million RMB, down 33% year-over-year and 6% sequentially, mainly due to the revenue decline. Adjusted operating margin was 18.5%, down 5.5 percentage point year-over-year and 2.4 percentage point sequentially. For Tantan, total revenue for the quarter was 234 million RMB, down 27% year-over-year and 3% sequentially, mainly due to the decreased number of paying users. Adjusted operating income was 20.6 million RMB compared with 31.9 million RMB a year ago and 28.8 million RMB a quarter ago, representing a margin of 8.8%, down 1.1 percentage point year-over-year and 3.1 percentage point sequentially. Now I will walk you through the programs that have mixed against our strategic priorities for Momo, Tam Tam, and new endeavors since the beginning of the year. Our main goal for the Momo Act this year is to maintain the productivity of the cash cow business with a healthy social ecosystem. Tam Tam's goal is to continue improving the court dating experience and view an efficient business model that drives profitable growth. As for our new endeavors, our goal is to further enrich the brand portfolio, push the business boundaries beyond normal and and view 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 Momo app. In the second quarter, our product team focused on optimizing the community ecosystem, improving the female user experience, and increasing the volume of effective social interactions. To improve the experience of female users receiving green teams, our product team applied AI technology to help male users to generate greeting faces, which increased the success rate of ice-breaking chats and led to the growth of two-way chats. In terms of algorithm strategy, we increased the matching rate of active female users to improve the experience for users with unmatched social needs. Our optimization of product and recommendation strategy plays a positive role in increasing both the number of matches and the number of 2A chats. In addition, for the finding partners, or 找大子, a pilot program for our online to offline interest group, which has been running for a year, in the second quarter, we focused on expanding the coverage of our young user base to improve MOMO's social brand perception. Our efforts to further improve and make breakthroughs in products and algorithms based on brand tone, wipe, and user preferences are an important foundation for normal cash cow business to maintain sustainable productivity. On the channel front, our user acquisition team continues to implement ROI-oriented strategies and work with our commercial product team to recommend interactive features to users from channels that match their spending capabilities to improve paying conversion. In order to increase the proportion of female users, we adjusted our advertising materials and channel strategies to focus on female users and work with our product team to specific recommend interactive female-friendly features to improve their onboarding experience on our platform. After several years of optimizing channel strategies, the room to further reduce unit access is relatively limited. Accordingly, we have been working with KOLs to leverage new channels to bring in incremental traffic, thereby increasing brand exposure with a limited budget and controlling user acquisition costs within a reasonable range. In the second quarter, the mobile app had 7.2 million paying users, an increase of 100,000 driven by the return of long-term vast users after the quarter one low seasonality. Now, let's talk about the productivity of our Momo Cash Cow business. In the second quarter, Momo's live streaming revenue was 1.22 billion RMB, down 50% year-over-year, but up 6% sequentially. The year-over-year decline was mainly due to our strategy to proactively reduce revenue-oriented large-scale competition events in order to maintain a healthy social ecosystem and spending softness amidst the macroeconomy. On the sequential basis, revenue increased after the seasonal low, but the growth rate was lower than the previous years. This was mainly due to the adjustment to our event operating policy, which resulted in lower profits for agencies and broadcasters which in turn caused them to be less motivated. To address this issue, we have moderately increased the incentives for non-event operations, and the revenue sharing ratio has increased slightly quarter over quarter. Our product team also introduced specific interactive features for users at different levels. Increasing daily revenue and reducing reliance on event revenue. Moreover, we have introduced props such as privilege, functions, and host costumes in live streaming showrooms, which do not require revenue sharing. This not only enriches the variety of features and keeps users engaged, but it also plays a positive role in improving the profit level of live streaming. In quarter two, revenue from web-added services, excluding time-to-time, totaled 1.21 billion RMB, down to 9% year-over-year, but up 5% sequentially. Last revenue from the Momo app was 850 million RMB, down 20% year-over-year, but up 5% sequentially. Revenue from Revenue from the standalone apps was 355 million RMB, up 36% year-over-year and 4% sequentially. The year-over-year declines in vast revenue from the normal app was mainly due to our proactive product and operational adjustments to mitigate the regulatory risk, which put pressure on a number normal RAS paying user and app people. Additionally, microfactors also weighted on consumer sentiment. The sequential growth was mainly due to seasonality. On the product operational front, we launched new gifting features in the audio and video based commercial channels to help broadcasters effectively interactive with medium and long tail users. We also tested interactive light games such as Xiao Xiao Le and new categories such as Love Fortune Telling in our chatroom features, which have the largest user base. Our data shows that the pay conversion of the new features was higher than the one existing features. Turning to Tantan, Let me first talk about its user trends and financial performance. Although our cost reduction and efficiency improvement strategy implemented over the past three years has effectively driven Timeline to profitability, the continued reduction in channel investments has put significant pressure on Timeline's user base. Meanwhile, the lack of investments in branding over the years has led to a continuous decline in organic users. At the same time, we haven't been able to find an effective product level solution that can significantly improve user retention. The combination of the both mentioned factors has resulted in Tantan's MAU decreasing by 6% sequentially to 12.9 million in June. As of end of the second quarter, Tantan had 1 million paying users, down to 100,000 sequentially. The main reasons were the decline in MAU. The short-term negative impact on new users on new paying user conversions from the UI upgrades and the regulatory-related redesign of the new Renewal page. Coming to TimeTimes Financial, total revenue for the quarter was 234 million RMB, down 27% year-over-year and 3% sequentially. mainly due to the reduction in the number of paying users. Overall, our people were flat year over year, among which the IP pool of the live streaming business increased significantly as a result of our strategy to to emphasize life training, which has a lower correlation with the dating experience. While our people saw a significant year-on-year increase thanks to our efforts to promote relatively high-priced products, such as Black Gold, SVIP membership, and additional pay-as-you-go privilege for members. enabling the sustainability of the overall IP pool. In terms of business line, last revenue was 140 million RMB, down 80% year-over-year and 4% sequentially, while last year's revenue was 83 million RMB, down 43% year-over-year and 5% sequentially. Now, I would like to walk you through the efforts we make on TomTom products and user acquisition funds and the challenges we face. First, on the marketing and user acquisition funds. To address the issues of weak brand awareness among young users and the significant decline in organic users due to the Metacritz brand commotion, we conducted branding events during the quarter in cooperation with offline venues such as bars and clubs in metropolitan cities with a high density of young people. We also leverage new media channels for online promotion to increase awareness of TangTang among young people and overall brand popularity. We believe that compared with user acquisition through channels, Driving user growth by improving brand awareness is a relatively long-term initiative that can take time to bear reasonably. But over time, it plays a positive role in the continuous and stable growth of our organic users. especially as Tan Tan has gradually refocused on the court's dating experience by de-emphasizing the community-oriented and entertainment-oriented experience in recent quarters. This is important for us to strengthen young people's awareness of Tan Tan's value for dating through long-term brand investments and product improvements. Therefore, continuous increasing the opportunities for brand exposure with a controllable range of marketing investments will be a long-term direction for our branding strategy in the future. On the user acquisition front, factors such as the e-commerce festival in June led to fierce channel competition. resulting in a sequential increase in unit acquisition costs, which combined with the pressure on the new user output from the UI upgrade led to a sequential decrease in channel ROI. To address this, our user acquisition and membership product teams worked together to recommend a relatively high-end membership product to high-value users from channels. which help increase the user output. Now, let me give you an update on the progress Tantan has made on product and operational sites. In the second quarter, we worked on an upgraded version to improve the dating experience for users. Preliminary user interviews and surveys reviewed two major pain points in user experience. Uncertainty about authenticity of picture profiles and users' identity. And second, lack of response to chats after matches. Since the issue of spamming has been effectively controlled since the beginning of the year, users' feedback in authentic experience stem primarily from issues such as incomplete profile information, lack of real person authentication, and photos that look too good to be true. The first phase of our redesign in Q2 focused on guiding users to complete their profile information and encouraging them to spend more time learning about potential matching before swiping. Early data shows that users with a richer profile content has significantly higher post-match conversation rates than those just profile pictures and basic information. However, this improvement in matching experience and different head interactions conflicted with our existing business model, which relied largely on users' quick swiping decisions based solely on looking at profile pictures. The negative impact of this redesign on new user paying conversion was one of the reasons for the sequential decline in Tantan's number of paying users. Nevertheless, we believe that making short-term commercial sacrifices to improve long-term user experience is a critical foundation for Tantan to ultimately achieve the strategic goals of profitable growth We should monetize product features that improve user experience and add value to them rather than do so at the expense of user experience, which can only get us into a downward cycle. During the ongoing product upgrades and optimization, our commercial product team will continue to optimize paying experience to increase new user output. which should potentially offset the negative impact on revenue caused by the product upgrade. Lastly, in terms of our new endeavors, in the second quarter, total revenue of the new app reached 365 million RMB, up 36% year-over-year and 4% sequentially, mainly driven by our overseas business With a stable channel ROI, we moderately increase channel investments, driving steady growth in MAU and paying users. On the product and operational front, our team has been accelerating the localization process of overseas business since the beginning of the year. After strengthening the localization research on virtual gifts and props, Our commercial product team introduced hot sales gifts that better match local user preferences. Meanwhile, our local operation teams refined our services for high-paying users and standardized supply-side collaborations and KPIs. This combined effort led to a significant increase in number of top-tier paying users. which in turn drove the app people growth. The simultaneous increase in paying users and app people has laid a solid foundation for sustainable and stable growth in our overseas business. Regarding our expansion in the MENA region, we are focusing on two key tasks. regional expansion and extending our offering from more days to live streaming. These initiatives are taking longer than we anticipated at the beginning of the year as we realized that both efforts required a highly localized service team as a prerequisite. We do not know enough in the past couple of years in terms of localization. and we are now accelerating our efforts to make up the shortcomings. Overall, we remain confident in our growth potential in the MENA region. Compared to six months ago, we now have a clear understanding of what we must do to continue to grow, and we will continue to invest in this region. This concludes my remarks. Now, let me pass the call over to Kathy for the financial review. Kathy, please.