MOMO Beats Earnings but Shares Plunge on Domestic Woes

Hello Group (MOMO) reported mixed results for Q4 2025, with revenue declining 2.3% year-over-year to $2.58 billion but net income rising 27.0% to $237.83 million. The company exceeded both revenue and EPS estimates, though domestic challenges and bearish market sentiment pressured its stock price. CEO Sichuan Zhang emphasized overseas growth as a key focus amid domestic headwinds.

Revenue

The total revenue of Hello Group decreased by 2.3% to $2.58 billion in 2025 Q4, down from $2.64 billion in 2024 Q4.

Earnings/Net Income

Hello Group's EPS rose 35.2% to $0.73 in 2025 Q4 from $0.54 in 2024 Q4, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $237.83 million in 2025 Q4, marking 27.0% growth from $187.24 million in 2024 Q4. The EPS increase reflects effective cost management and operational efficiency, despite revenue contraction.

Price Action

The stock price of Hello Group has edged down 0.83% during the latest trading day, has dropped 5.21% during the most recent full trading week, and has tumbled 8.12% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Hello Group (MOMO) shares on the date of its revenue raise and holding for 30 days resulted in a -0.29% annualized return over the past three years. Historical context reveals Hello Group’s earnings have declined at an average annual rate of -0.3%, with revenue falling 9.1% per year. Despite a Q3 2025 earnings beat, the stock dipped 0.29% premarket and fell 6.77% post-release. Holding MOMO shares after a revenue raise yielded minimal gains amid a bearish trend and declining earnings. Market sentiment was further challenged by new tax requirements and domestic revenue declines. An alternative strategy without the revenue trigger might have mitigated losses. The company’s ongoing challenges suggest a need for a more robust or long-term approach to capitalize on potential rebounds.

CEO Commentary

Sichuan Zhang, CEO of Hello Group, highlighted that the domestic business faced "fresh external headwinds" in 2025 but maintained stability through agile execution, particularly in Momo’s "cash cow" operations. She emphasized overseas growth as a "key engine for" future expansion.

Guidance

Hello Group forecasts Q4 2025 revenue between RMB 2.52-2.62 billion, with continued 70% YoY overseas growth offsetting expected domestic declines.

Additional News

Hello Group has strategically expanded its global footprint through acquisitions, including the European platform Happn, to bolster overseas revenue. The company’s overseas operations surged 70.3% YoY in Q4 2025, driven by growth in the MENA and Gulf regions. CEO Sichuan Zhang reiterated confidence in international expansion as a core growth driver. Additionally, Hello Group provided a Q1 2026 revenue outlook, projecting continued overseas momentum despite domestic headwinds. No dividend or buyback announcements were disclosed in the recent earnings report.