Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter and Fiscal Year 2021 Hello Group, Inc. Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Ashley Jing. Please go ahead.

Thank you, operator. Good morning, and good evening, everyone. Thank you for joining us today for Hello Group's Fourth Quarter and Fiscal 2021 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. Wang Li, CEO of the company; and Mr. Jonathan Zhang, CFO of the company. They will discuss the company's business operations and highlights as well as the financial guidance. They will both be available to answer your questions during the Q&A session that follows. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provisions of 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. I will now pass the call to Mr. Wang. I will translate for him. Mr. Wang.

[Foreign Language] Good day, everyone. Thank you for joining our conference call today. 2021 was a busy year for us despite a variety of external challenges. Our team was able to methodically execute our strategic priority set at the beginning of the year and delivered solid results. In my remarks today, I will begin by reviewing the key operational and business results for the fourth quarter and fiscal year 2021, followed by outlining our strategic priorities for FY 2022 and our execution plan. [Foreign Language] I will start with a brief overview of our financial performance. For the fourth quarter of 2021, total revenue at the group level was CNY 3.67 billion, down 3% year-over-year and 2% quarter-over-quarter. Adjusted operating income for the quarter was CNY 507 million, representing a 14% profit margin. For the core Momo business, total revenue was CNY 3.24 billion, up 6% from Q4 last year and flattish from last quarter. Adjusted operating income was CNY 652 million with a 20% margin. Tantan’s total revenue for the quarter came in CNY 437 million, down 41% year-over-year and 14% sequentially. The decrease was due to the demonetization process to improve user experience and retention. Adjusted net loss from Tantan was CNY 130 million for the quarter compared with CNY 8.84 million for the year ago period. [Foreign Language] For fiscal 2021, total revenue at the group level was CNY 14.6 billion compared with CNY 15 million in 2020. The year-over-year revenue decrease was due to our strategic decision to lower Tantan's monetization level in the second half of the year to improve user experience and retention to drive overall user growth. Excluding Tantan, revenue for the core Momo was slightly down 1% from last year with the second half of 2021 back onto the year-over-year growth track.…

Thanks. Hello, everyone. Thank you for joining our conference call today. Now let me briefly take you through the financial review. Total revenue for the fourth quarter of 2021 was CNY 3.6 billion, down 3% year-on-year or 2% quarter-over-quarter. Non-GAAP net income attributable to Hello Group was CNY 280.9 million compared to CNY 836.4 million from the same period of 2020 or a 66% decrease year-over-year. During the fourth quarter, the company accrued CNY 407.4 million withholding tax on undistributed earnings generated in 2021 by our wholly owned foreign enterprise due to our plan to continue to repatriate profit from the OFI to support our capital allocation demand, including, not limited to, returning cash to our shareholders and overseas business investments, et cetera. Excluding this special item, non-GAAP net income for the quarter would have been CNY 488.3 million. As Wang Li has covered revenue analysis in a great level of detail in the interest of time, I will skip it. and dive directly into the cost and expenses items for the quarter. Our non-GAAP cost of revenue for the fourth quarter of 2021 was CNY 2.19 billion compared to CNY 2.02 billion for the same period last year. The non-GAAP cost of revenue as a percentage of total revenue was 59.6%, an increase from 53.2% from the Q4 2020 non-GAAP gross profit margin for the quarter was down by 6.3 percentage points from a year ago. The decrease was attributed to the following factors: number one, which is the biggest one, higher payout ratio from core Momo live broadcasting business on a year-over-year basis due to our adjustments to the broadcaster and agency incentive program; and number two, Tantan accounted for a smaller percentage of the group's total revenue as its gross margin is higher than core Momo; number…

Thanks, Jon. Just a quick reminder before we take in the questions. For those Chinese, please ask your questions in Chinese first, by English translation. And also, please leave it in the number of questions to maximum 2. Thank you. Operator, we are ready for questions.

[Operator Instructions] Our first question comes from Thomas Chong with Jefferies.

[Foreign Language] I have 2 questions. The first question is about core Momo. Can management share about the 2022 user growth expectations and the revenue trend for VAS and live streaming together with the full year profitability profile? And the second question is about, can management comment about the user trend, revenue as well as the earnings profile?

[Foreign Language] So Thomas, to answer your question on the core Momo part, our user growth target for the core Momo in 2022 remains the same as last year, which is to remain a stable user base with a flattish marketing budget and try to seek user growth on top of that. And as far as the current channel marketing environment is concerned, to achieve this goal, we need to continue to optimize our strategy for reactivating government users and expanding marketing channels. However, MAU in Q1 may experience a decline due to the impact of the pandemic and the negative seasonality. In terms of revenue outlook, there are a few factors that need to be taken into consideration. First of all, is the macro economy. Our Q1 guidance reflects the severe challenges to our live streaming business from the macro headwinds. And besides changes in the external environment have had quite an impact on the engagement of agencies. So if the macro and other external conditions ease in the second half, the live streaming business may very well improve; otherwise, the downward pressure will continue. To address this, we will try to make more efforts on the product and operational side to enhance user experience and ensure stable content supply. And in terms of value-added service, the macro environment and pandemic have had a negative impact on the core Momo value-added service. But compared with live streaming business, VAS is a lot more resilient to the economic cycles. So in particular, as the new bucket of standalone long app is taking off, so we will moderate the ramp up monetization efforts this year to drive overall user growth of VAS. We expect value-added service to grow as a whole in the double-digit in 2022. As for the revenue structure,…

So I think I hope we've answered your question, Thomas. I think in the interest of time, we are getting quite close to market open. So maybe we're just going to wrap up here for today's call. And thank you all for participating to our Q4 earnings conference call, and we'll see you next quarter.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.