Çin Gelirleri Kayarken Hello Group (MOMO) Kâr Eder

Hello Group (MOMO) Turns A Profit While China Revenue Slides

Sat, September 12, 2026 at 1:39 PM GMT+3 4 min read

• MOMO -1.79%

On September 3, Hello Group (NASDAQ:MOMO) reported second-quarter 2026 results that read like two different companies stitched together. Total net revenue fell 5.1% year over year to RMB2,486.0 million ($366.4 million), yet the bottom line flipped from a net loss of RMB140.2 million a year earlier to net income of RMB237.4 million ($35 million). Overseas revenue jumped 52% year over year to RMB672.7 million ($99.1 million), while paying users on the core Momo app climbed to 3.9 million. It is a quarter built on contrasts.

Overseas Momentum Overshadows Home Turf

The overseas business is doing the heavy lifting. Revenue from outside the Chinese mainland rose 52.0% year over year to RMB672.7 million ($99.1 million) in the quarter, and for the first half of 2026 it was up 48.2% to RMB1,270.1 million ($187.2 million). That growth came from new audio and video products expanding across the Middle East and North Africa region, plus incremental revenue from dating brands outside that region. Hello Group describes its overseas portfolio as having shifted from relying on one product to a more diversified mix, and the numbers back that up.

The Momo app itself also added paying users, reaching 3.9 million in the second quarter, up from 3.5 million a year earlier and 3.7 million in the prior quarter. Cash generation improved too. Operating cash flow more than doubled year over year to RMB642.3 million ($94.7 million) in the quarter, and for the first half of 2026 it rose to RMB801.3 million ($118.1 million) from RMB489.9 million. That cash has funded an active buyback. As of September 3, Hello Group had repurchased 68.0 million ADSs for $424.1 million at an average price of $6.22 per ADS, with $62.0 million left in the program.

The China Slide Continues

The core China business is still shrinking. Value-added service revenue, mostly virtual gifts and subscriptions, fell 5.4% year over year to RMB2.44 billion ($359.6 million), which Hello Group attributed to external factors still weighing on broadcasters and agencies on the Momo app, weak consumer sentiment tied to macro headwinds, and a shrinking user base at Tantan. Tantan's paying users dropped to 0.5 million in the quarter, down from 0.7 million a year earlier and 0.6 million in the prior quarter. Net revenue from the Chinese mainland fell to RMB1.81 billion ($267.2 million) from RMB2.18 billion a year earlier.

Costs moved the wrong direction relative to revenue, rising 1.5% year over year to RMB2.26 billion ($333.1 million) on higher film production costs, added marketing spend on new overseas apps, and higher payment channel costs tied to overseas growth. That pushed income from operations down to RMB238 million from RMB403.5 million a year earlier. The reported net income turnaround is also flattered by a comparison effect: income tax expense fell to RMB69.6 million from RMB638.4 million because the year-ago quarter included an additional RMB547.9 million withholding tax accrual on dividends sent from Hello Group's Chinese subsidiary to its Hong Kong parent. Looking ahead, Hello Group guided third quarter 2026 revenue to RMB2.4 billion to RMB2.5 billion, a year-over-year decline of 9.4% to 5.7%.

Cheap Stock, Rising Interest

Hedge fund ownership of Hello Group rose from 17 funds to 19 in the most recent quarter, a modest sign of accumulating interest. Short interest sits at just 2.03% of float, suggesting little organized skepticism toward the stock. The forward price-to-earnings ratio is 6.44 as of September 11, a level that prices in very little growth. That mix of rising fund ownership, low short interest, and a single-digit forward multiple sits oddly next to a company that just guided to another quarter of shrinking revenue.

Two Stories, One Stock

Hello Group's quarter leaves two narratives running side by side. One shows profit returning, cash flow building, and an overseas business growing faster than the legacy China platform is shrinking. The other shows Momo's home market still losing ground, Tantan losing users, and management itself forecasting another year-over-year revenue decline into the third quarter. For the more optimistic read to hold, overseas growth needs to keep outrunning the domestic slide long enough to bend the total revenue trend, not just the profit line.

While we acknowledge the potential of MOMO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In.

Disclosure: None. Follow Insider Monkey on Google News.