Hello Group Inc (MOMO) 2024 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2024 Hello Group, Incorporated Earnings Conference Call. (Operator Instructions) Please note, this conference is being recorded today.

女士們，先生們，感謝你們的支持，歡迎參加 2024 年第一季 Hello Group, Incorporated 收益電話會議。 （操作員指示）請注意，今天正在錄製本次會議。

I would now like to hand the conference over to your first speaker today, Ms. Ashley Jing.

現在，我想將會議交給今天的第一位演講者 Ashley Jing 女士。

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, COO 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. We will all be available to answer your questions during the Q&A session that follows.

謝謝您，接線生。大家早安，晚上好。感謝您今天參加 Hello Group 2024 年第一季財報電話會議。該公司的業績已於今天早些時候公佈，並可在公司的 IR 網站上查閱。今天參加電話會議的有公司執行長唐岩先生；公司營運長張四川女士；以及公司財務長彭暉女士。他們將討論公司的業務運營和亮點以及財務狀況和指導。在接下來的問答環節中，我們將隨時回答您的問題。

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 Securities 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.

在我們開始之前，我想提醒您，本次電話會議可能包含根據《1995 年私人證券訴訟改革法》安全港條款做出的前瞻性陳述。 此類陳述基於管理層當前的預期以及當前的市場和運營條件，並與涉及已知或未知風險、不確定性和其他因素的事件有關，所有這些因素都難以預測且其中許多超出了公司的結果、結果、結果和經驗陳述中存在的重大成果。有關此風險和其他風險、不確定性和因素的更多資​​訊包含在公司提交給美國證券交易委員會的文件中。除法律要求外，本公司不承擔因新資訊、未來事件或其他原因更新任何前瞻性聲明的義務。

I will now pass the call over to our COO, Ms. Zhang Sichuan. Ms. Zhang, please.

現在我將電話轉給我們的營運長張四川女士。請張女士。

Hello, everyone. Thank you for joining our call. Since the beginning of the year, we have made steady progress 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 Group revenue was RMB 2.56 billion, down 9% year-over-year and [15%] (corrected by company after the call) sequentially and slightly exceeding the high end of our revenue guidance.

大家好。感謝您加入我們的電話會議。今年以來，我們在各業務線策略重點落實上穩步推進。現在我將向你詳細介紹。我將首先簡要介紹我們的財務表現。 2024 年第一季度，集團總收入為人民幣 25.6 億元，年減 9%，環比下降 [15%]（電話會議後公司進行了更正），略高於我們收入預期的高端。

Adjusted operating income was RMB 515 million, a slight decrease of 0.6% year-over-year and down 22% sequentially. Profit margin was 20.1%, up [1.7] (corrected by company after the call) percentage points year-over-year, but down 2 percentage points sequentially. The year-over-year margin improvement despite lower revenues was primarily due to our continued efforts to improve cost efficiency across all business lines, offsetting the revenue decline impact.

調整後營業收入為人民幣5.15億元，較去年同期略降0.6%，季減22%。利潤率為20.1%，比去年同期上升[1.7]個百分點（電話會議後公司進行了修正），但比上一季下降2個百分點。儘管收入下降，利潤率同比仍有所提高，這主要歸功於我們不斷努力提高所有業務線的成本效率，從而抵消了收入下降的影響。

Specifically, we drove continued efficiency improvements in personnel and cash utilization by reducing inefficient channel investments and optimizing staff allocation. As a result, costs declined more than revenues and the cost optimization initiatives drove margin improvement. The sequential decline in margin was primarily due to negative operating leverage resulting from the seasonal decline in revenue.

具體而言，我們透過減少低效率的通路投資和優化人員配置，持續提高人員和現金使用效率。結果，成本下降幅度超過收入下降幅度，成本優化措施推動了利潤率的提高。利潤率環比下降主要是由於收入季節性下降導致的負經營槓桿。

Total revenue from the Momo app and standalone new apps was RMB 2.32 billion, down 8% year-over-year, mainly due to the decline in revenue from the Momo app, resulting from spending softness amid the weak macro economy and our proactive product and operational adjustments to maintain a healthy community ecosystem. Standalone new apps, especially overseas, continued to grow rapidly year-over-year. Adjusted operating income was RMB 486 million, down 3% year-over-year with a margin of 21%, up 1 percentage point from a year ago.

陌陌應用程式及獨立新應用程式的總收入為 23.2 億元，年減 8%，主要是因為宏觀經濟疲軟導致支出疲軟，以及我們為維持健康的社區生態系統而進行的積極產品和營運調整導致陌陌應用程式的收入下降。獨立新應用程式（尤其是海外新應用程式）繼續同比快速成長。調整後營業收入為人民幣4.86億元，較去年同期下降3%，利潤率為21%，較上年同期上升1個百分點。

For Tantan, total revenue decreased 22% year-over-year to RMB 241 million, mainly due to the decrease in the number of paying users. Our commercial product team continued to optimize the paying experience to improve ARPPU, which partially mitigated the revenue pressure.[Tantan's adjusted operating income was RMB 28.8 million, up 99% year-over-year with a margin of 11.9%, up 7.2 percentage points from a year ago.](corrected by company after the call)

探探總收入2.41億元，年減22%，主要由於付費用戶數減少。商業產品團隊持續優化付費體驗，提升ARPPU，部分緩解了收入壓力。

Now I'll walk you through the progress we've made against our strategic priorities for Momo, Tantan and new endeavors since the beginning of the year. As I outlined on the Q4 2023 earnings call in March, the main goal for the Momo app this year is to maintain the productivity of this cash cow business with a healthy ecosystem. The Tantan's goal is to continue to improve the core dating experience and build an efficient business model that drives profitable growth. As for our new endeavors, our plan is to enrich the brand portfolios further, push the business boundaries beyond Momo and Tantan and build long-term growth engine.

現在我將向大家介紹今年以來我們在陌陌、探探和新業務的策略重點方面所取得的進展。正如我在 3 月的 2023 年第四季財報電話會議上所概述的那樣，陌陌應用今年的主要目標是透過健康的生態系統來維持這頭搖錢樹業務的生產力。探探的目標是持續提升核心約會體驗，並建立推動獲利成長的高效商業模式。對於新的嘗試，我們的計畫是進一步豐富品牌組合，拓展陌陌和探探以外的業務邊界，打造長期成長引擎。

I will now walk you through the details of our execution. First, on the product and operational front of the Momo 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 Momo's social attributes. To help users improve their interactive experience, we applied AI technology to assisted chatting and image generation features. For example, AI Greeting provides chatting assistant services for users who want to make new friends from the Nearby People list. In other words, AI can suggest ice-breaking topics to users by analyzing the image and text information on the potential candidate's profile page. Data from the test group shows that this feature plays a positive role in increasing the greeting response rate.

我現在將向你們介紹我們執行的細節。首先，關於陌陌應用的產品和營運方面。自今年年初以來，我們的產品團隊一直致力於不斷豐富用例和遊戲化功能以及強化陌陌的社交屬性。為了幫助使用者提升互動體驗，我們將AI技術運用到輔助聊天、圖片產生等功能。例如，AI Greeting為想要從附近的人清單中結交新朋友的使用者提供聊天助理服務。換句話說，AI可以透過分析潛在候選人個人資料頁面上的圖像和文字訊息，向用戶建議破冰話題。測試組數據顯示，此功能對於提升問候回覆率有正面作用。

Another example is AI Magic Mirror or (in Chinese), an image-generation tool that allows 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 (in Chinese) program for our online to offline interest groups in a several major cities, which was well received by young users. The number of pan-outdoor activity groups, represented by City Walk, grew quite strongly in the first quarter. Product innovation and our ability to keep pace with the times in technology has enabled Momo, a mature social brand with a 13-year history to play an important role in helping users discover new relationships and build meaningful interactions. This has laid a solid foundation for Momo app to maintain user and revenue scale over the long-term.

另一個例子是人工智慧魔鏡，這是一種圖像生成工具，允許用戶將照片與其他用戶或地標合成，增加用戶的社會資本，提供新的互動方式。此外，去年我們在幾個主要城市針對我們的線上線下興趣小組試行了「尋找伴侶」計劃，受到了年輕用戶的一致好評。以城市漫步為代表的泛戶外活動群體數量第一季成長較為強勁。產品創新和與時俱進的技術能力，使得陌陌這個擁有13年歷史的成熟社交品牌在幫助用戶發現新的關係、建立有意義的互動方面發揮著重要作用。這為陌陌App長期維持用戶及收入規模奠定了堅實的基礎。

On the channel front, about a year ago, we shifted our focus from general user growth to ROI-oriented profitable user growth. This model is more pragmatic and better suited to Momo's current stage of development as well as the overall economic environment. We adjusted budget allocation for various channels according to the traffic at the beginning of the year, optimized potential channels, cut spending in channels and ads with poor ROI and explored new ways to bring incremental traffic, while further reducing user acquisition cost through collaboration with KOLs. We also focused on improving paying conversion, acquiring more high-paying users and improving our ability to better accommodate this group of people with the most suitable features on our Momo app.

在通路方面，大約一年前，我們將重點從一般用戶成長轉向以投資回報率為導向的獲利用戶成長。這種模式更加務實，也更適合陌陌目前的發展階段和整體經濟環境。我們根據年初流量狀況調整各通路預算分配，優化潛力管道，壓縮ROI較差的管道與廣告投入，探索新的增量流量方式，同時透過與KOL的合作進一步降低獲客成本。我們也致力於提高付費轉換率，獲取更多高付費用戶，並提升我們在陌陌應用程式上為這群人提供最合適功能的能力。

In the first quarter, the Momo app had 7.1 million paying users, a decrease of 300,000 from the previous quarter, mainly due to 2 reasons. First, our product and operational adjustments to reduce competition events resulted in a decline in 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, resulting in a decrease in long-tail paying users.

第一季度，陌陌App付費用戶數為710萬，季減30萬，主要因為2個原因。首先，我們對產品和營運進行了調整，減少了比賽活動，導致付費用戶數量下降。其次，為了提高獲利能力，追求獲利成長，我們的通路團隊減少了獲取低付費用戶的投入，通路ROI為負，導致長尾付費用戶減少。

Now let's talk about the productivity of our Momo cash cow business. In the first quarter, Momo's live streaming revenue was RMB 1.15 billion, down 11% year-over-year and 19% sequentially. The year-over-year decrease was mainly due to our strategy to proactively reduce revenue-oriented large-scale competition events in order to maintain a good social ecosystem and limit the unhealthy monetization approaches adopted by broadcasters and agencies to obtain competition event-related bonuses. Spending softness amid the weak macro economy was another reason for the year-over-year decrease in revenue. The sequential revenue decrease was due to Chinese New Year seasonality.

現在我們來談談陌陌搖錢樹業務的生產力。第一季度，陌陌直播收入為11.5億元，年減11%，季減19%。年比下降主要由於我們採取主動減少以收益為導向的大型賽事的策略，以維護良好的社會生態，並限制廣播公司和代理機構為獲取賽事相關獎金而採取的不健康貨幣化方式。宏觀經濟疲軟導致支出疲軟是收入較去年同期下降的另一個原因。收入連續下降是由於農曆新年的季節性影響。

On the product operation side, we fully leveraged Momo's social attributes 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 gamified features. Cost savings from the reduction in operational activities during Chinese New Year resulted in a slight sequential decrease in the revenue sharing ratio.

在產品營運方面，我們充分利用陌陌的社交屬性，實現由以賽事收入為主導轉變為以使用者為中心的內容營運。我們透過加強對高品質內容的支援和增加新的遊戲化功能，成功推動了與非事件相關的收入成長，也就是有機收入成長。由於農曆新年期間營運活動減少而節省的成本，導致收入分成比例較上季略有下降。

Revenue from value-added services, excluding Tantan, totaled RMB 1.15 billion for the first quarter, down 4% year-over-year and 9% sequentially. VAS revenue from the Momo app was RMB 806 million, down 17% year-over-year and 14% sequentially. Revenue from the standalone apps was RMB 343 million, up 52% year-over-year and 6% sequentially. The year-over-year decline in VAS revenue from the Momo app was mainly due to our proactive product and operational adjustments to mitigate regulatory risks as well as the spending softness amid the weak macro economy. The sequential decline was due to Chinese New Year seasonality.

第一季增值服務收入（不含探探）為人民幣 11.5 億元，年減 4%，季減 9%。來自陌陌應用的增值服務收入為人民幣 8.06 億元，年減 17%，季減 14%。獨立應用程式收入為人民幣 3.43 億元，年增 52%，季增 6%。陌陌應用增值服務收入年減，主要由於我們主動進行產品和營運調整，以降低監管風險，以及宏觀經濟疲軟導致的支出疲軟。環比下降是由於農曆新年的季節性影響。

On the product front, user scale of the audio and video based VAS experiences gradually recovered after Chinese New Year, thanks to our efforts to drive the penetration rate. Our team made a smooth transition from competition events driven to non-event-focused operations by enriching interactive features and upgrading core gamified play. The steady increase 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 Momo app VAS business, which has strong social attributes. The overall revenue sharing ratio decreased slightly compared to the previous quarter due to seasonal cost savings.

產品方面，春節後，透過努力提升滲透率，影音類加值服務體驗的使用者規模逐漸恢復。我們的團隊透過豐富的互動功能和升級核心遊戲玩法，順利地從以競賽活動為中心轉向以非賽事為中心。有機收入的穩定成長部分抵消了比賽活動的減少。集團本季營收略優於預期，主要得益於具有強社交屬性的陌陌應用增值業務的平穩轉型。由於季節性成本節約，整體營收分成比例較上一季略有下降。

Now moving on to Tantan. First, regarding user trends and financial performance. As the cold wave at the beginning of the year and the Chinese New Year holiday reduced Tantan's user demand, our team reduced channel investments and our user base fell to a low point. In March, with the gradual easing of external unfavorable factors and the improvement in user experience brought about by continuous ecosystem improvement and recommendation strategy optimization, our user base and retention started to recover gradually.

現在繼續說探探。首先，關於用戶趨勢和財務表現。隨著年初的寒流和春節假期導致探探的用戶需求減少，我們團隊減少了通路的投入，用戶規模也跌到了低點。 3月份，隨著外部不利因素的逐步緩解，以及生態的不斷改進和推薦策略的不斷優化帶來的用戶體驗的提升，我們的用戶規模和留存開始逐步恢復。

Tantan's MAU was 13.7 million in March, flat sequentially. As of the end of the first quarter, Tantan 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 paying experience and highlighting differentiated member experiences, thereby mitigating the negative impact on paying users from the renewal page redesign.

探探3月份月活躍用戶數為1,370萬，與上月持平。截至第一季末，探探付費用戶數為110萬，比上一季減少10萬，主要由於根據監管要求重新設計自動續費頁面。我們的商業產品團隊透過優化付費體驗引導、凸顯差異化會員體驗等方式提升用戶的付費傾向，進而減輕續費頁面改版對付費用戶帶來的負面影響。

Turning to Tantan's financials. Total revenue for the first quarter was RMB 241 million, down 22% year-over-year and 11% sequentially. The year-over-year decrease was mainly due to reduced number of paying users. The increase in the revenue contribution of relatively high-end Black Gold and SVIP membership products drove overall ARPPU growth, partially mitigating the revenue pressure caused by reduction in paying users. The sequential revenue decline was mainly due to the change in auto-renewal policy as well as seasonality, which put pressure on paying users and ARPPU.

談談探探的財務狀況。第一季總營收為人民幣2.41億元，年減22%，季減11%。年比下降主要是由於付費用戶數量減少。相對高階的黑金和SVIP會員產品收入貢獻的提升，帶動了整體ARPPU的成長，部分緩解了付費用戶減少帶來的收入壓力。收入環比下降主要由於自動續約政策的變化以及季節性因素，對付費用戶和 ARPPU 帶來壓力。

In terms of business lines, VAS revenue was RMB 145 million, down 14% year-over-year and 10% sequentially, while live streaming revenue was RMB 87.7 million, down 37% year-over-year and 12% sequentially. The significant year-over-year decrease was mainly due to our ongoing operational strategy to de-emphasize live streaming. Tantan's adjusted operating income for the first quarter was RMB 28.8 million, nearly doubling year-over-year despite lower revenue and slightly up 6% sequentially. Profit growth was mainly driven by continued improvements in channel efficiency and personnel costs optimization.

業務方面，增值服務收入為人民幣 1.45 億元，年減 14%，季減 10%；直播收入為人民幣 8,770 萬元，較去年同期下降 37%，季減 12%。年比大幅下降主要由於我們持續的營運策略，不再強調直播。探探第一季調整後營業收入為2,880萬元人民幣，儘管營收下降，但年增近兩倍，季增6%。利潤成長主要得益於通路效率的持續提升和人員成本的最佳化。

Now I'd like to walk you through the details of Tantan's progress on the channel and product fronts. First, on the channel front. Over the past 2 years, our user acquisition team has continuously cut inefficient channels and marketing approaches and further reduced marketing investments with negative ROI, laying a solid foundation for Tantan to achieve profitability despite revenue pressure. In the first quarter, thanks to the effective control of spamming activities and continuous improvement in ARPU over the past year, new user ROI meaningfully improved over the previous year.

現在我跟大家詳細講一下探探在通路和產品方面的進度。第一，通路方面。過去2年，我們的用戶獲取團隊不斷砍掉低效率的管道和行銷手段，進一步減少ROI為負的營銷投入，為探探在營收壓力下實現盈利奠定了堅實的基礎。第一季度，由於垃圾訊息行為的有效管控以及一年來ARPU值的持續提升，新用戶ROI較上年有較大提升。

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 Tantan's user growth model is relying too much on user acquisition through paid 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 reduction in overall average cost of new users was quite limited due to the continuous decline in the number of new organic users.

雖然我們的通路策略優化在過去兩年取得了良好的成效，但單位購買成本的持續優化空間相對有限。同時，探探用戶成長模式面臨的一個主要問題是過度依賴透過付費管道獲取用戶，而較少依賴透過品牌知名度自然增加用戶。因此，雖然過去一年多來整體獲客成本持續下降，但由於新增自然用戶數量持續下降，導致整體平均新用戶成本降幅十分有限。

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 ramp up spending on KOL advertising, which is both ROI-focused and brand-oriented. Preliminary data in March showed that the popularity of the new users acquired through offline branding activities was higher than that of the overall average. We believe that improving brand image will contribute to sustainable and stable organic user growth over the long-term, thereby effectively reducing the overall user acquisition cost in the long run and helping to achieve a positive business cycle.

為了探索新的成長模式，更重要的是增加從付費管道之外獲取的新用戶的比例，我們的用戶獲取團隊計劃加大對KOL廣告的支出，這既注重投資回報率，又以品牌為導向。 3月初步數據顯示，透過線下品牌活動獲得的新增用戶熱度高於整體平均。我們相信，提升品牌形象將有助於長期持續穩定的有機用戶成長，進而有效降低長期整體用戶獲取成本，有助於實現業務正向循環。

Now moving to the Tantan's progress on product and operational side. To achieve our strategic goal of improving the core dating experience and building an efficient business model, our user product team focused on 2 things in the first quarter. First, we continued our anti-spam campaign with the 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 personality by adding more information to their profile page, thereby increasing their reach and matching performance and improving the efficiency of matching and in-depth interaction thereafter.

現在來談談探探在產品和營運上的進展。為了實現改善核心約會體驗和建立高效商業模式的策略目標，我們的使用者產品團隊在第一季專注於兩件事。首先，我們持續進行反垃圾郵件活動，並更新了策略，增強反垃圾郵件能力，改善使用者體驗。第二，我們正在開發升級版本，以改善約會體驗。新版本將重點引導用戶豐富自己的個性，在個人資料頁面中添加更多信息，從而增加用戶的觸達率和匹配率，提高匹配效率以及後續的深度互動。

Meanwhile, in terms of UI design, we have slightly de-emphasized the swipe mode and encouraged 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 user feedback and gradually expanding the testing scale.

同時，在UI設計方面，我們稍微弱化了滑動模式，鼓勵用戶向下滾動查看每個候選人的詳細資訊。我們從四月底開始測試新版本。目前我們正在根據用戶的回饋不斷迭代並完善版本，並逐步擴大測試規模。

In terms of monetization, we're adding the short-term VAS membership packages to lower the threshold for new paying users. In addition, we have built a paying model in the core swipe and match mechanism specifically for users without qualified photos 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 ARPU growth is the only effective way for Tantan to achieve its strategic goal of profitable growth in the long-term.

在獲利方面，我們正在增加短期增值會員套餐，以降低新付費用戶的門檻。另外，我們在核心的滑動配對機制中，專門針對沒有合格照片的用戶，建構了付費模型，提升該群體用戶的長期留存和付費轉換。我們堅信，持續聚焦產品創新、提升支付體驗以驅動ARPU成長是探探實現長期獲利成長策略目標的唯一有效途徑。

Lastly, in terms of our new endeavors. In the first quarter, total revenue of the new apps, including social and game products, was RMB 344 million, 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 investments in overseas channels and enhanced collaboration with local KOLs, resulting in a significant year-over-year and sequential increase in the number of users and paying users.

最後，關於我們的新努力。第一季度，包括社交和遊戲產品在內的新應用總收入為 3.44 億元，年增 51%，較上季成長 5%。年比成長主要得益於我們海外業務的快速成長。從環比來看，受齋戒月的影響，阿拉伯語地區的消費者信心出現季節性下降。年初，我們的用戶獲取團隊加大了海外管道的投入，加強了與本地KOL的合作，使得用戶數和付費用戶數同比及環比均有大幅增長。

The launch of new gifting features and the rapid growth in the Turkish-speaking market led to a slight sequential increase in overseas revenue during the off-season, contributing important incremental revenue for the standalone new apps. 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 the 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 broadcasters to improve content quality.

全新贈送功能的推出，以及土耳其語市場的快速成長，帶動海外收入在淡季環比小幅增長，為獨立新應用貢獻了重要的增量收入。目前，我們正在加速推進海外業務在地化進程。產品方面，我們正在推出更多符合本地用戶喜好的互動遊戲化功能，並加強直播的測試。在營運方面，我們正在專門針對高付費用戶改善客戶體驗和產品體驗。同時，我們正在加強與當地機構和廣播公司的合作，以提高內容品質。

Undoubtedly, making rapid progress in multiple regions in the Middle East means that we will face more uncertainty and challenges built through the geo diversification. For example, the sharp depreciation of the Egyptian pound in March caused significant foreign exchange losses. In addition, as we gradually beef up our local operational teams and start entering new markets, we could put some pressure on the profits of our overseas business in the short-term. However, these upfront investments have laid the necessary foundation for future revenue and profit growth.

毫無疑問，在中東多個地區取得快速進展意味著我們將面臨更多因地緣多樣化而產生的不確定性和挑戰。例如3月份埃及鎊大幅貶值，造成重大外匯損失。此外，隨著我們逐步加強本地營運團隊並開始進入新市場，短期內可能會對海外業務的利潤造成一些壓力。然而，這些前期投資為未來的收入和利潤成長奠定了必要的基礎。

This concludes my remarks. Now let me pass the call over to Cathy for the financial review. Cathy, please.

我的發言到此結束。現在，讓我將電話轉給 Cathy 進行財務審查。請叫我凱西。

Thanks, Sic. Hello, everyone. Thank you for joining our conference call today.

謝謝，Sic。大家好。感謝您參加我們今天的電話會議。

Now let me briefly take you through the financial review. Total revenue for the first quarter 2024 was RMB 2.56 billion, down 9% year-on-year and 15% quarter-on-quarter. Non-GAAP net income attributable to the company was RMB 59.9 million compared to RMB 471.9 million from the same period of 2023. In the first quarter, we accrued a withholding income tax of RMB 448.6 million associated with our historical undistributed earnings generated by our WFOE. I will elaborate a bit later on such accounting treatment.

現在讓我簡單向大家介紹一下財務回顧。 2024年第一季總營收為人民幣25.6億元，年減9%，季減15%。非公認會計準則下歸屬於公司的淨利潤為人民幣 5,990 萬元，而 2023 年同期為人民幣 4.719 億元。稍後我將詳細說明此類會計處理。

This tax expense item is on accrual basis. Meaning that it did not result in an actual cash outflow in that amount during the current quarter. In addition, it was one-off in nature and did not reflect the fundamental performance of the current quarter, nor is it indicative of future profit prospect. Excluding this special item, non-GAAP net income for the quarter would have been RMB 508.5 million, up 8% from the same quarter last year, but slightly down 1% sequentially. I'm glad to see that net income continued to grow on a year-over-year basis despite lower revenue. This was mainly attributable to our effective cost optimization and efficiency improvement initiatives.

此項稅務費用採用權責發生製。這意味著它並沒有導致本季產生該金額的實際現金流出。此外，該數據屬於一次性數據，並不反映本季的基本表現，也不代表未來的獲利前景。剔除此特殊項目，本季非美國通用會計準則淨利潤為人民幣 5.085 億元，較去年同期成長 8%，但比上一季略有下降 1%。我很高興看到，儘管收入下降，但淨收入仍同比增長。這主要歸功於我們有效的成本優化和效率提升措施。

Now let me walk you through the details. Looking into the key revenue items for the quarter. Firstly, on live broadcasting, total revenue from live broadcasting business for the first quarter of 2024 was RMB 1.24 billion, down 13% year-over-year and 19% quarter-over-quarter. The year-over-year decrease was mainly due to 3 factors. #1, our proactive product and operational adjustments to de-emphasis revenue-oriented competition events for the sake of maintaining a healthy ecosystem. #2, soft consumer sentiment amid the weak macro economy. #3, Tantan strategically pivoting away from the less dating-centric live streaming service.

現在讓我向您詳細介紹一下。查看本季的主要收入項目。首先，直播方面，2024年第一季直播業務總收入為人民幣12.4億元，年減13%，季減19%。年比下降主要有3個因素。 #1，我們積極主動地進行產品和營運調整，不再強調以收入為導向的競賽活動，以維持健康的生態系統。 #2、宏觀經濟疲軟，消費者信心疲軟。 #3，探探策略性地放棄不太以約會為中心的直播服務。

The sequential decrease was due to CNY negative seasonality. Momo app live broadcasting revenue totaled RMB 1.15 billion for the quarter, down 11% year-over-year and 19% quarter-over-quarter. Tantan's live broadcasting revenue amounted to RMB 87.7 million, down 37% year-over-year and 12% quarter-on-quarter. Revenue from value-added services for the first quarter of 2024 was RMB 1.29 billion, down 5% from Q1 last year and 9% sequentially. Revenue from value-added service on an ex-Tantan basis was RMB 1.15 billion in the first quarter of 2024, down 4% from Q1 last year and 9% from the previous quarter.

環比下降是由於人民幣的季節性負面作用。陌陌App直播收入本季總計11.5億元，年減11%，季減19%。探探直播收入為8770萬元，年減37%，季減12%。 2024年第一季增值服務收入為人民幣12.9億元，較去年第一季下降5%，較上一季下降9%。 2024年第一季除探探外增值服務收入為人民幣11.5億元，較去年第一季下降4%，較上一季下降9%。

Momo app VAS revenue decreased both on a year-over-year and quarter-over-quarter basis. This was due to our proactive product adjustments to manage regulatory risks as well as a weak spending sentiment coupled with negative seasonality. On the other hand, revenue from the standalone new apps continued to grow steadily, partially offsetting the revenue pressure from Momo value-added service. Tantan's value-added service revenue amounted to RMB 145.1 million, down 14% year-over-year and 10% sequentially. The Y-o-Y decrease was due to a decline in paying users, which was in turn due to a reduction in channel investment, the anti-spam campaign and the adjustments to subscription renewal policy. The sequential decrease was due to the CNY seasonality, which had a negative impact on both paying users and ARPU.

陌陌應用加值服務收入年比、季均有所下降。這是因為我們主動調整產品以管理監管風險，以及疲軟的消費情緒和負面的季節性影響。另一方面，獨立新應用的營收持續穩定成長，部分抵銷了陌陌加值服務的營收壓力。探探增值服務收入為人民幣1.451億元，年減14%，季減10%。年比下降是由於付費用戶數量的下降，而付費用戶數量的下降又是由於管道投資的減少、反垃圾郵件活動和訂閱續訂政策的調整。環比下降是由於人民幣的季節性影響，這對付費用戶和 ARPU 都產生了負面影響。

Now turning to cost and expenses. Non-GAAP cost of revenue for the first quarter of 2024 was RMB 1.50 billion compared to RMB 1.66 billion for the same period last year. Non-GAAP gross margin for the quarter was 41.4%, up 0.4 percentage points from the year ago period and 0.3 percentage point from last quarter. The increase was due to an improvement in Tantan's margin that resulted from a shift in its revenue mix.

現在來談談成本和費用。 2024年第一季非公認會計準則營收成本為人民幣15億元，去年同期為人民幣16.6億元。本季非公認會計準則毛利率為 41.4%，較去年同期上升 0.4 個百分點，較上季上升 0.3 個百分點。成長的原因在於探探的收入結構轉變導致其利潤率提高。

Non-GAAP R&D expenses for the first quarter was RMB 183.4 million compared to RMB 214.4 million for the same period last year or a 14% decrease year-over-year. The decrease was due to the continuous optimization in personnel and infrastructure costs. Non-GAAP R&D expenses as a percentage of revenue was 7% compared with 8% from the year ago period. We ended the quarter with 1,375 employees, of which 294 are from Tantan compared to 1,533 total employees, of which 374 from Tantan a year ago. The R&D personnel as a percentage of total employee for the Group was 62% compared with 63% Q1 last year.

第一季非美國通用會計準則研發費用為人民幣1.834億元，去年同期為人民幣2.144億元，較去年同期下降14%。下降是由於人員和基礎設施成本的持續優化。非公認會計準則研發費用佔營收的百分比為 7%，去年同期為 8%。截至本季度，我們共有 1,375 名員工，其中 294 名來自探探，而去年同期共有 1,533 名員工，其中 374 名來自探探。集團研發人員佔員工總數的比例為62%，去年第一季為63%。

Non-GAAP sales and marketing expenses for the first quarter was RMB 287.3 million or 11% of total revenue compared to RMB 372.0 million or 13% of total revenue for the same period last year. The significant year-over-year decrease both in terms of absolute renminbi amount and as a percentage of revenue was primarily attributable to 2 reasons. One, in Q1 last year, we hosted an offline year end gala for Momo live streaming. #2, our strategy to trim inefficient channel marketing spend and focus on channel ROI. It's worth calling out that the offline annual gala for Momo live streaming is scheduled to happen in June 2024. Therefore, we expect the marketing costs in the second quarter this year to see a spike due to that event.

第一季非美國通用會計準則銷售及行銷費用為人民幣 2.873 億元，佔總營收的 11%，去年同期為人民幣 3.72 億元，佔總營收的 13%。人民幣絕對金額和收入百分比較去年同期大幅下降主要有兩個原因。一是去年第一季度，我們舉辦了陌陌直播線下年終盛典。 #2，我們的策略是削減低效率的通路行銷支出，並專注於通路投資報酬率。值得一提的是，陌陌直播線下年度盛典將於2024年6月舉行，我們預計今年第二季的行銷費用將受此影響大幅上漲。

Non-GAAP G&A expenses was RMB 93.5 million for the first quarter 2024 compared to RMB 88.4 million for the same quarter last year, representing a 4% and 3% of total revenue respectively. Non-GAAP operating income was RMB 515.0 million, a slight decrease of 0.6% from Q1 2023, down 22% from the previous quarter. Non-GAAP operating margin for the quarter was 20.1%, up 1.7 percentage points from the same period last year, but down 2.0 percentage points from the previous quarter.

2024 年第一季非公認會計準則一般及行政費用為 9,350 萬元，去年同期為 8,840 萬元，分別佔總收入的 4% 及 3%。非GAAP營業收入為人民幣5.150億元，較2023年第一季略降0.6%，較上一季下降22%。本季非美國通用會計準則營業利益率為20.1%，較去年同期上升1.7個百分點，但較上季下降2.0個百分點。

Non-GAAP OpEx as a percentage of total revenue was 22%, a decrease from 24% from Q1 2023, but up from 20% in Q4 last year. Non-GAAP operating expenses on a year-on-year basis decreased 16%. The decrease in both absolute renminbi amount and as a percentage of revenue for OpEx was mainly due to a reduction in sales and marketing expenses, and to a lesser degree, optimization in personnel costs. Non-GAAP operating expenses decreased 6% sequentially. This was attributable to the decrease in year-end bonus related as well as double pay.

非 GAAP 營運支出佔總收入的百分比為 22%，低於 2023 年第一季的 24%，但高於去年第四季的 20%。非美國通用會計準則營業費用較去年同期下降16%。營運支出絕對人民幣金額和占收入比例的下降，主要是由於銷售及行銷費用的減少，以及人員成本的最佳化（在較小程度上）。非公認會計準則營業費用較上月下降 6%。主要是年終獎金及雙薪減少所致。

Now briefly on income tax expenses. Total income tax expense was RMB 557.6 million for the quarter. In Q1, the company repatriated RMB 2.0 billion from our WFOE in China to our offshore entity in order to replenish our U.S. dollar funding. As such repatriation already partly involved our historical undistributed earnings for prior years and since we might continue to distribute the WFOE's retained earnings to fund overseas business operations, shareholder return and potential investments, based on the principle of conservatism, in Q1, we accrued a withholding tax of RMB 448.6 million, which is 5% of the historical undistributed earnings of our WOFE.

現在簡單談談所得稅費用。本季總所得稅費用為人民幣5.576億元。第一季度，公司將20億元從中國外商獨資企業匯回至境外實體，以補充美元資金。由於該等匯回已部分涉及我們以前年度的歷史未分配盈利，且我們可能繼續分配WFOE的留存盈利以資助海外業務運營、股東回報和潛在投資，因此，基於穩健性原則，我們在第一季提列了人民幣4.486億元的預扣稅，占我們WOFE歷史未分配盈利的5%。

As said at the beginning of my remarks, this tax expense item is on accrual basis, meaning that it did not result in an actual cash outflow in that amount during the quarter. In addition, it was one-off in nature and did not reflect the fundamental performance of the current quarter, nor is it indicative of future profit prospects. Without the withholding tax, our estimated non-GAAP effective tax rate was around 15% in the first quarter.

正如我在發言開始時所說，這項稅費項目是按權責發生製計算的，這意味著它並沒有導致本季度產生該數額的實際現金流出。此外，該數據本質上是一次性的，並不反映本季的基本表現，也不代表未來的獲利前景。如果沒有預扣稅，我們估計第一季的非公認會計準則有效稅率約為 15%。

Now turning to balance sheet and cash flow items. As of March 31, 2024, Hello Group's cash, cash equivalents, short-term deposits, long-term deposits, short-term investments and restricted cash totaled RMB 15.12 billion compared to RMB 13.48 billion as of December 31, 2023. Net cash provided by operating activities in the first quarter of 2024 was RMB 400.2 million.

現在轉向資產負債表和現金流量項目。截至2024年3月31日，哈嘍集團的現金、現金等價物、短期存款、長期存款、短期投資及受限現金總計人民幣151.2億元，而截至2023年12月31日為人民幣134.8億元。

Lastly on business outlook. We estimated our first quarter revenue to come in the range from RMB 2.65 billion to RMB 2.75 billion, representing a decrease of 15.5% to 12.4% year-on-year or an increase of 3.5% to 7.4% quarter-on-quarter. At segment level, for Q2 2024, on a sequential basis, we expect Momo revenue to increase around mid-single-digit. On the Tantan side, we expect revenue to decrease mid-single-digit. Please be mindful that this forecast represents the company's current and preliminary view on the market and operational conditions which are subject to changes.

最後談談商業前景。我們預計第一季營業收入將在26.5億元至27.5億元之間，年減15.5%至12.4%，季增3.5%至7.4%。從細分層面來看，對於 2024 年第二季度，我們預計陌陌收入將按季成長約中個位數。就探探方面而言，我們預期收入將下降中個位數。請注意，此預測代表公司對市場和營運條件的當前和初步看法，可能會發生變化。

That concluded our prepared portion of today's discussion. With that, let me turn the call back to Ashley to start Q&A. Ashley, please.

今天我們準備的討論部分到此結束。說完這些，讓我將電話轉回給 Ashley 開始問答環節。阿什利，請。

Thank you. Just a quick reminder before we take any questions. For those who can speak Chinese, please ask your questions in Chinese first and followed by a translation by yourself. Operator, please, we are ready for questions. Thank you.

謝謝。在我們回答任何問題之前，請先快速提醒一下。對於會講中文的人士，請先用中文提問，然後自行翻譯。接線員，我們已經準備好回答您的問題了。謝謝。

(Operator Instructions) Your first question comes from Xueqing Zhang with CICC.

(操作員指示)您的第一個問題來自中金公司的張學清。

[Interpreted]

[翻譯]

My question is about Momo. Considering adjustment to macro environment, regulation and other reasons, what's your strategy for VAS in the future? Also, you mentioned in the prepared remarks, Momo reduced the competition events. Does it improve the revenue-sharing ratio of live streaming and VAS? And lastly, how to view the revenue and profit of the core Momo in 2024?

我的問題是關於 Momo 的。考慮到宏觀環境、監管等因素的調整，未來加值業務的策略是什麼？另外，您在準備好的發言中提到，Momo 減少了比賽項目。是否能提高直播與加值業務的分成比例？最後，如何看待2024年核心陌陌的營收與利潤？

[Interpreted]

[翻譯]

Given the uncertainties in the macro environment in the end of last year, our team proactively reduced the revenue-oriented competition events in the live streaming and audio and video-based VAS experiences in order to protect user experience and limit the unhealthy monetization approaches adopted by broadcasters and agencies to obtain more revenue from competition events. The year-over-year revenue changes in the past 2 quarters reflected the impacts of this operational adjustments on the Momo app revenue.

考慮到去年底宏觀環境的不確定性，我們的團隊主動減少了直播和基於音視頻的增值服務體驗中以收益為導向的競賽活動，以保護用戶體驗並限制廣播公司和代理機構為從競賽活動中獲取更多收入而採用的不健康貨幣化方式。過去兩個季度的營收同比變化反映了此次營運調整對陌陌應用收入的影響。

And since the beginning of the year, our team has introduced a new interactive gamified features and fostered the supply of high-quality content and leveraged Momo's strong social attribute to drive organic revenue growth, partially offsetting the decrease in competition events-related revenue. I'm very pleased with the team's ability to flexibly respond to changes in the external environment and make a smooth transition from competition events-driven to non-event-focused operations. This year, we plan to further pursue this strategy of fully leveraging Momo's core value proposition and develop more immersive interactive gamified features in the audio and video-based experiences and explore incremental revenue opportunities.

並且自今年初以來，我們的團隊推出了新的互動遊戲化功能，並促進了優質內容的供應，並利用陌陌強大的社交屬性推動了有機收入增長，部分抵消了比賽活動相關收入的下降。我很高興看到團隊能夠靈活應對外部環境的變化，順利從賽事驅動轉向非賽事驅動的營運。今年，我們計劃進一步推進這項策略，充分利用陌陌的核心價值主張，在音訊和視訊體驗中開發更具沉浸感的互動式遊戲化功能，並探索增量收入機會。

In terms of revenue sharing, our basic revenue sharing policy has remained stable over the past few years. Due to the reduction in competition events in the past 6 months, we have saved some bonus costs. However, the decrease in revenue caused by these operational adjustments has resulted in lower income for broadcasters and lower profits for agencies. As a result, we believe that it makes strategic sense to use a portion of the saved bonuses to increase the revenue sharing for non-event operations and to enhance agency engagement and motivation through moderate profit concession. And consequently, our overall revenue sharing ratio will remain basically stable compared to the previous period.

在收入分享方面，我們的基本收入分享政策在過去幾年中保持穩定。由於過去6個月比賽項目的減少，我們節省了一些獎金成本。然而，這些營運調整帶來的收入減少，導致廣播公司的收入降低，經紀公司的利潤也降低。因此，我們認為，使用部分節省的獎金來增加非活動運營的收入分成，並透過適度的利潤讓步來提高代理商的參與度和積極性，具有戰略意義。因此，我們的整體收入分成比例與前期相比將保持基本穩定。

And as for our revenue and profit guidance, I'll leave it to Cathy.

至於我們的營收和獲利預測，就交給凱西吧。

Okay. Before talking about the revenue outlook, I would like to remind the analysts and investors that the Momo segment revenue actually includes both the revenues from the core Momo application and the revenues from the new applications, including Social, Hertz and Duidui, et cetera. That's something you may want to bear in mind when taking our comments into your modeling.

好的。在談論收入前景之前，我想提醒分析師和投資者，陌陌部門的收入實際上包括來自核心陌陌應用程式的收入以及來自新應用程式的收入，包括社交、赫茲和對對等。在將我們的意見納入您的建模時，您可能需要牢記這一點。

Now on the core Momo application, as in the past few quarters, future revenue trajectory will continue to hinge upon the development on 2 major fronts. One is macro and the other one is regulatory environment. For macro, which in turn dictates the consumer sentiment, we're seeing some positive policy changes at the top. However, how effectively and quickly those policy changes will get filtered down into the consumer behavior in general and more specifically into user spending on our platform, that at this point, I think it's still too early to tell. We'll see as the year progresses. So that's for macro.

現在，就核心的陌陌應用程式而言，與過去幾季一樣，未來的收入走勢將繼續取決於兩個主要方面的發展。一個是宏觀，一個是監管環境。對於宏觀經濟（它反過來決定消費者情緒）而言，我們看到高層出現了一些積極的政策變化。然而，這些政策變化將如何有效且迅速地滲透到消費者行為中，更具體地說，如何滲透到我們平台上的用戶支出中，目前我認為還為時過早。隨著時間的推移，我們會看到結果。這就是宏。

On the regulatory front, as investors can see, we have always been very disciplined and prudent in terms of managing risks and making sure our ecosystem is healthy and safe in the regulatory regard. In Q1, we undertook very important adjustments to the operational policy, as described by Sic and Tang in their remarks. The impact on the ecosystem is positive and the financial impacts so far are pretty in line with our earlier expectations, as communicated in last quarter's call. So that's the core business.

在監管方面，正如投資者所看到的，我們在管理風險方面始終非常自律和審慎，並確保我們的生態系統在監管方面是健康和安全的。第一季度，我們對營運政策進行了非常重要的調整，正如Sic和Tang在演講中所描述的那樣。對生態系統的影響是正面的，迄今為止的財務影響與我們先前的預期相當一致，正如上個季度的電話會議中所傳達的那樣。這就是核心業務。

The overseas piece will obviously continue to grow pretty robustly and thus help mitigate the decrease from the core. Overall, if you look at our Q2 guidance at midpoint, I think we are seeing 13% decrease on a year-over-year basis in Momo segment. That Y-o-Y decrease is higher than what we saw in Q1, mainly because Q2 2023, if you remember, that was the best quarter of that year, forming a higher base for Y-o-Y comparison. As we head into the second half, the Y-o-Y comparison should get a little bit easier. But overall, because the biggest impact factor, which is the operational adjustment, that adjustment was fully in the system by Q1. And the other 2 elements, the macro and regulatory risk, currently seem to be pretty stable. So if you put all these together, I would say, first half is a pretty good basis for us to think about the back half.

海外業務顯然將持續強勁成長，有助於緩解核心業務的下滑。總體而言，如果你看一下我們第二季的中期指引，我認為陌陌部門的營收年減了 13%。同比降幅高於我們在第一季看到的降幅，主要是因為 2023 年第二季度（如果你還記得的話）是當年最好的季度，為同比比較形成了更高的基數。隨著我們進入下半年，同比對比應該會變得容易一些。但總體而言，由於最大的影響因素是營運調整，該調整在第一季已完全融入系統。另外兩個因素，宏觀風險和監管風險，目前似乎相當穩定。所以如果把所有這些放在一起，我想說，前半部是我們思考後半部的一個很好的基礎。

With regards to profit, while we continue to try to optimize the cost structure for the core Momo business, we're also going to put a very significant portion of the savings from the core into building the new applications. And thus, we won't have as much room to cut on operating expenses in 2024 as in the past couple of years. This means, we're probably going to get some negative leverage from the decrease on top-line. Overall, for Momo segment, we'll try to hit a range in the high-teens for the adjusted operating margin, but we won't pin ourselves down to that range.

至於利潤，我們在持續努力優化陌陌核心業務成本結構的同時，也將把核心業務節省下來的很大一部分投入到新應用程式的開發中。因此，2024 年我們在營運費用削減方面的空間不會像過去幾年那麼大。這意味著，我們可能會因營業收入的下降而受到一些負面影響。整體而言，對於陌陌部門，我們將努力將調整後的營業利潤率達到百分之十幾左右，但不會將自己限制在這個範圍內。

I guess, that's several points to address the question on top-line and bottom line outlook. Back to Ashley for next question.

我想，這是解決頂線和底線前景問題的幾點意見。回到 Ashley 來回答下一個問題。

Operator, next question, please?

接線員，請問下一個問題嗎？

Your next question comes from Raphael Chen with BOCI Research. Please go ahead.

您的下一個問題來自中銀國際研究部的 Raphael Chen。請繼續。

[Interpreted]

[翻譯]

I will translate myself. I want to follow-up on overseas business. Could management share the basic strategy? Any updates on operational metrics or the localization progress? And lastly, could we have any quantitative outlook regarding the total revenue and the profit of our overseas business this year?

我會自己翻譯。我想跟進海外業務。管理層可以分享基本策略嗎？有關於營運指標或本地化進展的最新消息嗎？最後，我們能否對今年我們海外業務的總收入和利潤做出一些量化的展望？

[Interpreted]

[翻譯]

I think Sic has covered this topic quite comprehensively in her prepared remarks earlier. At the beginning of the year, our business in the Middle East temporarily slowed down sequentially due to the restrictions on entertainment activities during Ramadan, but year-over-year it remained a rapid growth momentum. This was mainly because we have attached a great strategic importance to the overseas business in recent years and we have provided strong support to our overseas teams in terms of talent and capital allocation over the past years. On the last earnings call, I outlined 3 directions for overseas business growth; localization, new features and new regions.

我認為 Sic 在之前的準備好的發言中已經相當全面地討論了這個主題。年初，中東地區業務因齋戒月期間娛樂活動的限制，環比成長暫時放緩，但同比仍保持了快速成長的動能。主要是由於近年來我們高度重視海外業務的策略部署，並在人才、資金配置等方面給予海外團隊強而有力的支持。在上次財報電話會議上，我概述了海外業務成長的三個方向；在地化、新功能和新區域。

In terms of localization, we have set-up an office in the Middle East and this enables us to connect with and select local high-quality partners in a more efficient manner, therefore reducing communication and management costs. And in terms of products, we have engaged with high-paying users from different language and cultural backgrounds and optimized the product design and adjusted our practice based on user feedback and thereby improving user experience and boosting overall consumer sentiment.

在在地化方面，我們在中東設立了辦公室，這樣可以更有效率地聯繫並選擇當地優質的合作夥伴，降低溝通和管理成本。在產品方面，我們與來自不同語言和文化背景的高付費用戶進行了接觸，並根據用戶回饋優化了產品設計並調整了實踐，從而改善了用戶體驗並提升了整體消費者情緒。

In addition to upgrading the existing voice-based gamified play, we also ramped up testing of live streaming by increasing its penetration. In terms of new market expansion, we have begun to gradually increase investment in richer countries in the Gulf region. And we expect our products and operations in the Middle East to improve significantly this year compared to last year and laying a solid foundation for continued growth in this region.

除了對原有的語音遊戲化玩法進行升級之外，我們還加強了直播的測試力度，提升了直播的滲透率。在新市場拓展方面，我們已經開始逐步增加對海灣地區較富裕國家的投資。我們預計今年在中東的產品和營運將比去年有顯著改善，為該地區的持續成長奠定堅實的基礎。

As for financial-related matters, I will leave it to Cathy.

至於財務方面的事情，我就交給 Cathy 處理了。

Okay. For revenue outlook for the overseas piece, in Q1, Soulchill grew I think over 60% year-over-year. Moving deeper into the year, the Y-o-Y growth may slowdown a little bit due to the higher comp last year. If we can move faster in implementing our product and operational strategies, the slowdown could be mitigated to a large extent. If some of the growth initiatives takes time to bear fruit, then the slowdown could be more evident. We'll get more clarity as we head into the second half. Profit wise, there is still going to be pretty impressive Y-o-Y growth. But as we are still seeing many growth opportunities in the region, we'll try to strike a balance between profit growth and investment for the future.

好的。就海外部分的營收前景而言，我認為第一季 Soulchill 年比成長超過 60%。隨著今年的進一步深入，由於去年的同比增長率較高，今年的同比增長率可能會略有放緩。如果我們能夠更快地實施我們的產品和營運策略，那麼經濟放緩的現象就可以在很大程度上得到緩解。如果一些成長措施需要一些時間才能取得成效，那麼經濟放緩可能會更加明顯。進入下半場後我們會更加清楚。從利潤方面來看，年成長仍然相當可觀。但由於我們仍然看到該地區有許多成長機會，我們將努力在利潤成長和未來投資之間取得平衡。

Back to Ashley.

回到阿什利。

Operator, in the interest of time, let's take our one last question.

接線員，由於時間關係，我們來回答最後一個問題。

Your last question is from Henry Sun with JPMorgan.

您的最後一個問題來自摩根大通的亨利·孫。

[Interpreted]

[翻譯]

I'll translate myself. I have a few questions about Tantan. Management mentioned in the prepared remarks an improvement in Tantan's acquisition efficiency. Does that mean we should expect an increase in marketing spend moving forward? And how much are we planning to invest in a brand marketing initiative? Does the change in strategy suggest that user numbers have bottomed out? And lastly, could management share your perspective on the user trends as well as the revenue and profit outlook this year?

我會自己翻譯。我對探探有幾個問題。管理層在準備好的評論中提到探探的收購效率有所提高。這是否意味著我們應該預期未來行銷支出會增加？我們計劃在品牌行銷計劃上投資多少？策略的改變是否意味著使用者數量已觸底？最後，管理層能否分享您對今年用戶趨勢以及收入和利潤前景的看法？

[Interpreted]

[翻譯]

Our continuous cost reduction and efficiency improvement strategies over the past 2 years have effectively brought Tantan to stable profitability. However, the continued reduction in channel investment has also put significant pressure on Tantan's user base. And we see that Tantan's users and revenue have not stabilized. And given the new user ARPU has improved significantly over the past year leading to an improvement in new user ROI, we plan to moderately increase our channel investment in the second quarter, while maintaining the current ROI in order to stabilize the user base.

過去2年持續的降本增效策略有效帶動探探實現穩定獲利。不過，通路投入的持續減少，也給探探的使用者群體帶來了不小的壓力。而且我們看到探探的用戶和收入還沒有穩定下來。同時考慮到過去一年新用戶ARPU值大幅提升，進而帶來新用戶ROI的提升，我們計畫在第二季適度增加通路投入，在維持現有ROI的前提下，穩定用戶基礎。

In addition, we haven't invested in Tantan's brand marketing since 2019, which is one of the key reasons for the continuous decline in organic new users in the recent years. Therefore, based on our successful test in March, we plan to adopt more offline marketing strategies to raise brand awareness, improve brand image and user trust to drive download conversions and organic user growth.

此外，我們從2019年起就沒有再對探探的品牌行銷進行投入，這也是近年來有機新增用戶持續下滑的關鍵原因之一。因此，在3月成功測試的基礎上，我們計劃採用更多的離線行銷策略來提高品牌知名度，提升品牌形象和用戶信任度，以推動下載轉換和自然用戶成長。

In terms of monetization, Sic just mentioned that we are working on an upgraded version of Tantan. The new UI design will guide users to enrich their personal information and encourage users to spend more time learning about a candidate before deciding to swipe left or right. We had much debate internally about this design change because it involves changing a long-standing user behavior based on which many of our premium features are built. Thus such change in UI will likely to have a negative impact on monetization.

在變現方面，剛才Sic提到，我們正在做探探的升級版。新的UI設計將引導用戶豐富自己的個人訊息，並鼓勵用戶在決定向左或向右滑動之前花更多時間了解候選人。我們內部對這項設計變更進行了大量爭論，因為它涉及改變長期以來的用戶行為，而我們的許多高級功能都是基於這種行為構建的。因此，UI 的這種改變可能會對貨幣化產生負面影響。

However, we eventually concluded that this is the right course of action for long-term improvement in user experience and was a sacrifice in short-term monetization. Of course, our commercial product team will continue to optimize paying experience to improve new user ARPU to partially offset the negative impact of regulatory changes on membership renewal policy and product upgrade.

然而，我們最終得出結論，這是長期改善用戶體驗的正確做法，但需要犧牲短期的獲利能力。當然，我們的商業產品團隊會持續優化付費體驗，提升新用戶ARPU，以部分抵銷監管變化對會員續費政策和產品升級的負面影響。

And as for the financial part, I will leave that to Cathy, please.

至於財務部分，請交給 Cathy 處理。

Sure. I think there are several questions here. On the marketing spend, although the ARPU of Tantan has significantly improved during the past year, we have not reached the tipping point where the return on investment is high enough to drive a positive business cycle yet. That means, if we pull the marketing spend too high, we could slip back to loss. So the plan for the coming couple of quarters is to moderately increase the marketing spend. By moderately, I mean ballpark probably between RMB 10 million to RMB 20 million incrementally per quarter. And most of that incremental spending will go into KOL marketing. At the same time, we will carefully monitor the ROI to make sure we get good return for the marketing investment.

當然。我認為這裡有幾個問題。在行銷投入方面，雖然探探的ARPU在過去一年有明顯提升，但我們尚未達到投資報酬率足以推動正向商業週期的臨界點。這意味著，如果我們將行銷支出提高得太高，我們可能會再次陷入虧損。因此，未來幾季的計劃是適度增加行銷支出。我所說的適度，是指大概每季增量在1000萬到2000萬元人民幣之間。大部分增量支出將用於KOL行銷。同時，我們將仔細監控投資報酬率，以確保我們的行銷投資獲得良好的回報。

The goal for the Tantan team this year -- here I'm answering the question about the user plan. The goal for Tantan team this year is to keep the user base stable through effective marketing campaigns as well as product innovations to deliver better dating experiences. Whether we will be able to reach that target will depend on how efficient our product and marketing teams are. Revenue wise, we are likely still going to see a downtick as live streaming continue to shrink, but there is quite limited impact on profit because gross margin for live streaming is very, very low for Tantan's live broadcasting business. However, as we are investing part of the profit back to brand marketing, the bottom-line this year will likely decrease from last year's level. So hopefully, that addresses your question.

探探團隊今年的目標－這裡我回答一下關於使用者計畫的問題。探探團隊今年的目標是透過有效的行銷活動以及產品創新來保持用戶群的穩定，以提供更好的約會體驗。我們是否能夠實現該目標取決於我們的產品和行銷團隊的效率。從收入方面來看，隨著直播業務的持續萎縮，我們可能仍會看到收入下滑，但對利潤的影響相當有限，因為探探直播業務的直播毛利率非常非常低。但由於我們將部分利潤重新投資於品牌行銷，今年的利潤可能會比去年的水準下降。希望這能解答您的問題。

Ashley? I'll pass to Ashley for closing.

阿什利？我將把發言權交給 Ashley。

Thank you. And actually that's it for today. And thank you for participating, and we'll see you guys next quarter. Thank you, operator. We're ready to close.

謝謝。今天的內容就到這裡。感謝您的參與，我們下個季度再見。謝謝您，接線生。我們準備結束了。

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

謝謝。今天的會議就到此結束了。感謝您的參與。您現在可以斷開連線。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[本記錄中標記為[已翻譯]的部分由現場翻譯人員朗讀。