Hello Group (NASDAQ:MOMO) Issues Quarterly Earnings Results, Beats Estimates By $0.04 EPS

Key Points

• Hello Group beat quarterly estimates, reporting adjusted EPS of $0.26 versus the $0.22 consensus and revenue of $365.9 million versus $363.6 million. However, revenue declined 5.1% year over year.
• Domestic operations remain under pressure: Q3 revenue guidance of RMB2.4–2.5 billion implies a 5.7%–9.4% annual decline, with mainland China revenue expected to fall by the high teens. The adjusted operating margin also dropped to 11.1% from 17.1% a year earlier.
• Overseas growth provided a bright spot, with revenue rising 52% year over year to RMB673 million and new MENA products approaching profitability. Still, management expects full-year revenue to decline by the mid-single digits and lowered expectations for its 2026 overseas revenue target.

Hello Group (NASDAQ:MOMO - Get Free Report) announced its quarterly earnings data on Thursday. The information services provider reported $0.26 EPS for the quarter, beating analysts' consensus estimates of $0.22 by $0.04, FiscalAI reports. Hello Group had a net margin of 7.27% and a return on equity of 7.04%. The firm had revenue of $365.91 million during the quarter, compared to the consensus estimate of $363.62 million. During the same quarter last year, the firm earned ($0.58) earnings per share. The firm's revenue was down 5.1% compared to the same quarter last year.

Here are the key takeaways from Hello Group's conference call:

• Q3 revenue guidance is RMB2.4–2.5 billion, implying a 5.7%–9.4% year-over-year decline, with mainland China revenue expected to fall by the high teens. Management attributed the weaker outlook primarily to reduced spending by high-value users amid deteriorating macroeconomic expectations.
• Overseas revenue grew 52% year over year to RMB673 million in Q2, reaching 27% of group revenue. New MENA products YahaLand and Amar are growing rapidly, with YahaLand reaching operating break-even and the pair expected to surpass SoulChill’s revenue in Q3.
• Q2 adjusted operating margin declined to 11.1% from 17.1% a year earlier, while domestic revenue fell 17% and Momo VAS revenue dropped 16% due to tax scrutiny, weaker consumer sentiment and higher agency payouts. The company also recognized approximately RMB60 million of additional losses related to two released movies.
• Management reported stabilization in Tantan’s domestic user base for the first time since marketing reductions began in 2022, supported by improved retention and AI-powered matching and messaging features. Hello Group also plans to reduce inefficient reactivation spending and diversify Tantan’s payment channels beyond Alipay.
• Management now expects full-year group revenue to decline in the mid-single digits and said the original RMB3 billion 2026 overseas revenue target is likely to be reduced by roughly RMB100–200 million. Although cost controls may help, the company acknowledged that achieving its low-teens adjusted operating margin target will be more challenging.

Hello Group Stock Down 7.1%

MOMO opened at $5.10 on Friday. The company has a market cap of $548.61 million, a P/E ratio of 7.97 and a beta of 0.45. Hello Group has a 52-week low of $5.05 and a 52-week high of $8.59. The company has a 50 day moving average of $5.84 and a two-hundred day moving average of $5.97.

Wall Street Analyst Weigh In

A number of equities research analysts recently commented on the stock. Benchmark reissued a "buy" rating on shares of Hello Group in a research note on Thursday, June 4th. Weiss Ratings reissued a "sell (d+)" rating on shares of Hello Group in a research note on Monday, August 3rd. UBS Group set a $10.00 target price on Hello Group in a research note on Thursday, June 4th. Finally, Wall Street Zen lowered shares of Hello Group from a "buy" rating to a "hold" rating in a report on Sunday, July 26th. One equities research analyst has rated the stock with a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, the stock presently has a consensus rating of "Hold" and an average target price of $9.05.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the stock. Raymond James Financial Inc. bought a new stake in shares of Hello Group in the 2nd quarter valued at approximately $41,000. Quarry LP bought a new position in shares of Hello Group during the third quarter valued at approximately $65,000. Barclays PLC raised its position in shares of Hello Group by 696.8% during the 4th quarter. Barclays PLC now owns 10,000 shares of the information services provider's stock worth $66,000 after purchasing an additional 8,745 shares during the period. Boothbay Fund Management LLC acquired a new stake in shares of Hello Group during the 3rd quarter worth approximately $88,000. Finally, OMERS ADMINISTRATION Corp lifted its holdings in shares of Hello Group by 13.3% in the 4th quarter. OMERS ADMINISTRATION Corp now owns 17,000 shares of the information services provider's stock worth $111,000 after purchasing an additional 2,000 shares during the last quarter. 50.96% of the stock is owned by institutional investors and hedge funds.

Key Hello Group News

Here are the key news stories impacting Hello Group this week:

• Positive Sentiment: Second-quarter adjusted earnings were $0.26 per share, exceeding the $0.22 consensus estimate. Revenue of approximately $365.9 million also surpassed expectations of $363.6 million. Hello Group Q2 2026 Financial Results
• Positive Sentiment: Hello Group returned to profitability on a year-over-year basis, compared with a $0.58-per-share loss in the prior-year quarter. Net margin was 7.27%, while narrower tax expenses helped support net profit. Hello Group Releases Q2 2026 Financial Results
• Neutral Sentiment: The company appointed a new chief operating officer, a management change that could affect execution and product strategy but does not immediately alter its financial outlook. Hello Group Q2 Results and COO Appointment
• Negative Sentiment: Quarterly revenue declined 5.1% from a year earlier, indicating that the earnings improvement was not driven by top-line growth.
• Negative Sentiment: Hello Group projects third-quarter revenue of RMB 2.4 billion to RMB 2.5 billion, with domestic revenue expected to decline in the high teens. The company’s latest update did not provide a specific EPS guidance figure, leaving investors focused on the persistent revenue contraction. Hello Group Q3 Revenue Guidance

Hello Group Company Profile

Hello Group Inc NASDAQ: MOMO is a China-based technology company specializing in mobile social networking and interactive entertainment. Its flagship product, the Momo app, offers location-based social discovery services that enable users to find and connect with new friends based on shared interests and geographic proximity. The platform integrates instant messaging, group chat, and content-sharing features, while also providing premium subscriptions and in-app purchases such as virtual gifts and sticker packs.

In addition to Momo, Hello Group's portfolio includes Tantan, a dating-focused social app designed to help users build meaningful relationships through profile matching and interest-driven swiping.

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