Hello Group Expects 70% Overseas Revenue Growth in 2025 Amid Product Innovation and Tax Headwinds

Hello Group anticipates up to 70% revenue growth in 2025 due to product innovation and tax headwinds. COO Sichuan Zhang reports positive trends in both domestic and overseas business.

Hello Group Inc. (MOMO) reported a robust performance in Q2 2025, with COO Sichuan Zhang highlighting positive trends in both domestic and overseas businesses. The company anticipates up to 70% revenue growth in 2025, driven by product innovation and strategic responses to tax headwinds. Total group revenue for Q2 2025 was RMB 2.62 billion, with overseas revenue surging 73% year-over-year to RMB 442.4 million .

Despite a one-off withholding income tax expense of RMB 547.9 million, which reduced non-GAAP net income to RMB 451.9 million, the company demonstrated resilience. CFO Cathy Peng attributed the tax expense to a change in tax authority interpretation, emphasizing that it does not reflect normal business operations . The tax headwind underscores the company's strategic pivot to overseas markets, which now constitute a significant portion of its total revenue .

Hello Group's overseas expansion is a proactive strategy to unlock new revenue streams. The company's investment in emerging apps and localized content strategies, such as the Soulchill brand, highlights its commitment to international markets. The Momo app's AI features, including an AI greeting feature and AI chat assistant, have driven user engagement and retention, contributing to the overseas revenue surge .

The company's strategic resilience is evident in its ability to absorb the tax shock without curtailing its overseas ambitions. This adaptability aligns with broader global trends, such as Egypt’s tax reforms and Latin America’s push for tax transparency, which emphasize adaptability and compliance optimization as competitive advantages . Hello Group's technological compliance tools and localized content strategies enable it to navigate complex fiscal landscapes while maintaining growth trajectories .

Looking ahead, Hello Group expects domestic revenue to decline in the low teens year-over-year, while overseas revenue is anticipated to grow around 70% for the full year 2025. The company's top-line revenue in 2025 is expected to either see a slight downtick from or remain flattish compared to 2024. Management indicated that for Q3 2025, revenue is expected to range from RMB 2.59 billion to RMB 2.69 billion, representing a decrease of 3.2% to an increase of 0.6% year-over-year .

In conclusion, Hello Group's Q2 2025 results illustrate a company adept at navigating regulatory turbulence while accelerating its global footprint. The tax-related net loss is a temporary setback in the context of its broader strategic goals. By prioritizing overseas expansion and technological compliance tools, the firm has demonstrated a capacity to transform challenges into opportunities. For investors, this resilience, coupled with the 73% overseas revenue growth, suggests that Hello Group is well-positioned to achieve sustainable profitability in the coming years, even as it contends with evolving tax regimes.

References:
Hello Group Inc. Announces Unaudited Financial Results [https://www.prnewswire.com/news-releases/hello-group-inc-announces-unaudited-financial-results-for-the-second-quarter-of-2025-302550519.html]
Earnings call transcript: Hello Group sees overseas growth [https://www.investing.com/news/transcripts/earnings-call-transcript-hello-group-sees-overseas-growth-in-q1-2025-93CH-4205329]