MOMO Reports Q2 2025 Net Loss, Driven by One-Time Tax Accrual

Hello Group (MOMO.US) announced a net loss attributable to shareholders of RMB140.2 million (US$19.6 million) for Q2 2025, a significant decrease from a net income of RMB397.8 million in the same period of 2024. Non-GAAP net loss attributable to Hello Group Inc. was RMB96.0 million (US$13.4 million), compared to a net income of RMB449.2 million in Q2 2024. The net revenues for the quarter decreased by 2.6% year-over-year to RMB2,620.4 million (US$365.8 million), falling short of the analyst estimate of US$362.7 million (RMB2,602.45 million). Diluted non-GAAP net loss per ADS was RMB0.58 (US$0.08), missing the analyst estimate of RMB2.07.

Impact of Withholding Tax Accrual

The company's net loss was largely impacted by an additional withholding tax accrual of RMB547.9 million (US$76.5 million) in Q2 2025. This accrual resulted from a notice received by Momo Beijing from Chinese tax authorities, requiring a 10% withholding tax rate instead of the previously applied 5% preferential rate. This one-time accrual was for prior periods and is unrelated to current or future normal business operations.

Management stated that the company will continue to accrue withholding tax at the standard rate of 10% for dividends payable by Momo Beijing to Momo Hong Kong going forward. This change significantly increased income tax expenses to RMB638.4 million (US$89.1 million) in Q2 2025, compared to RMB102.6 million in Q2 2024.

Revenue Performance and Segment Drivers

Total net revenues decreased by 2.6% year-over-year to RMB2,620.4 million in Q2 2025. This was primarily due to a 28.8% decline in net revenues from Chinese mainland, from RMB2,435.1 million in Q2 2024 to RMB2,177.9 million (US$304.0 million) in Q2 2025. This decline was driven by decreases in revenue from the Momo app and Tantan app, reflecting soft consumer sentiment and a declining user base, with Momo app total paying users dropping to 3.5 million from 7.2 million year-over-year.

In contrast, net revenues from overseas operations showed strong growth, increasing by 72.7% year-over-year to RMB442.4 million (US$61.8 million). This growth was propelled by the strong performance of the brand Soulchill and incremental revenue from other emerging apps. The CEO commented that the overseas business is on track to contribute meaningfully to the group's financial performance.

Management Outlook

For the third quarter of 2025, Hello Group expects total net revenues to be between RMB2.59 billion to RMB2.69 billion. This forecast represents a decrease of 3.2% to an increase of 0.6% year-over-year. The company noted that this outlook reflects its current and preliminary views, which are subject to change based on market and operational conditions.