Ladies and gentlemen, thank you for standing by, and welcome to Hello Group's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded today. I would now like to hand the conference over to your first speaker today, Ms. Ashley Jing. Thank you. Please go ahead, ma'am.

Thank you, operator. Good morning, and good evening, everyone. Thank you for joining us today for Hello Group's Fourth Quarter and Fiscal 2025 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 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. They will 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 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. I will now pass the call over to our COO, Ms. Zhang Sichuan. Ms. Zhang, please?

Thank you, Ashley. Hello, everyone. Thank you for joining today's call. In the second half of 2025, our domestic business faced fresh external headwinds. That said, through the team's agile response and strong execution, we kept our cash cow business stable while sustaining a healthy ecosystem. To better show you our ongoing structural transition towards overseas growth, we began providing a geographic revenue breakdown in 2025 to improve transparency for investors. Our overseas business delivered exceptional results last year, fueled by organic product incubation and targeted M&A. This allowed us to diversify our portfolio and rapidly expand our global presence, leading to accelerated revenue momentum. The overseas business is now a solidified revenue contributor and a key engine for our future growth. Next, I'll walk you through the major highlights from Q4 and the full year of 2025 across our business lines, followed by our strategic priorities for 2026. Starting with the financials. For Q4 '25, total group revenue was RMB 2.58 billion, down 2% year-over-year. Domestic revenue reached RMB 1.97 billion, down 14% year-over-year. Overseas revenue was RMB 608 million, up 70% year-over-year. Overseas revenue accounted for 24% compared to 14% in the same period last year. Adjusted operating income was RMB 354 million, up 26% year-over-year with a margin of 13.7%. For fiscal 2025, total group revenue was RMB 10.37 billion, a slight decrease of less than 2% year-over-year. Domestic revenue reached RMB 8.37 billion, down 11% year-over-year. Overseas revenue reached RMB 2 billion, up 71% year-over-year. Overseas revenue now accounts for 19% of our total, up for 11% in 2024. Adjusted operating income was RMB 1.55 billion, down 10% year-over-year with a margin of 15% Next, I'll review the execution of the strategic priorities for Momo and Tantan and our new endeavors in 2025. Let's start with…

Thanks, Sic. Hello, everyone. Thank you for joining our conference call today. Now let me take you through the financial review. Total revenues for the fourth quarter 2025 was RMB 2.58 billion, down 2% year-on-year and 3% quarter-on-quarter. Non-GAAP net income attributable to the company was RMB 281.3 million compared to RMB 230.5 million in the same period of 2024 and RMB 404.5 million in the previous quarter. Looking into key revenue items for Q4. Total revenue for value-added services for the fourth quarter of 2025 was RMB 2.53 billion, down 2% year-on-year and 3% quarter-on-quarter. On a geographic basis, PRC Mainland VAS revenue was RMB 1.93 billion, down 14% year-on-year and 3% quarter-over-quarter. The decrease was primarily due to 3 factors: number one, heightened tax scrutiny on the supply side, which diverted their operational focus; number two, softened consumer sentiment amid broad macro pressures; and number three, a decline in paying users on Tantan. VAS overseas revenue reached RMB 604.4 million, up 70% year-over-year and 13% quarter-over-quarter. This robust growth was primarily fueled by the rapid expansion from multiple social entertainment and dating brands across our diverse portfolio. Turning to costs and expenses. Non-GAAP cost of revenue for the fourth quarter of 2025 was RMB 1.6 billion compared to RMB 1.72 billion for the same period last year. Non-GAAP gross margin for the quarter was 37.8% compared to 34.7% from a year ago period. In Q4 '24, our non-GAAP cost of revenue included certain one-off items. Excluding these special items, gross profit margin in Q4 '25 was slightly down 0.4 percentage points year-over-year. The decrease was the net impact from several factors due to the same structural shift of revenue toward membership subscription revenue in the overseas market, especially in developed markets. These factors are: number one, payment channel…

[Operator Instructions] Operator, we're ready for questions.

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

Based on the guidance just given now, Q1 domestic business is expected to decline more than what we saw in Q4 last year and full year 2025. Can management provide some color about the trend for domestic revenue this year? What are the measures undertaken on this cash cow business? When should we expect domestic revenue to start declining year-on-year and stabilize?

Thank you. Looking back, our 2025 revenue hit the overall target. But the path, there was a little bit of surprise. We actually started the year very strong by tapping into our mid-tier and regular users, which helped us beat expectations in the first half. However, things got tougher in the second half. New tax policies really hit our supply side and momentum slowed. That said, the Momo team did an incredible job staying steady a really challenging environment, and we are very happy with how they handle it. So while the top-tier users started to tighten their belts, we pivoted and we did it fast. We moved our focus to small ticket spender. -- think social games and direct chat features that don't need expensive agencies. We kept moving our AI tools to make the social experience smoother. This strategy worked. We added 400,000 new paying users in the second half of the year. For a mature platform like Momo, growing that much in this economy is not easy. This shows our business is becoming more resilient and less dependent on top-tier users. Protecting profits, I think I want to highlight that we have been very proactive with our cost cutting. Because we streamlined our teams and reduced channel spending, our profit didn't drop nearly as much as our revenue did. We are keeping the cash cow healthy. Looking into 2026, we are not expecting the macro environment to fix itself overnight. So we are sticking the game plan that works in 2025. On the product side, more AI, better chat features and more social games to keep users grew to the platform. On the money side, we will keep focusing on audio and video scenarios that regular users love. We also expect revenue pressures to continue this year, similar to what we saw in 2025. But our commitment to efficiency is ironclad. Even if the top line numbers fluctuated, we are fully confident that we can keep our profit stable. Let me hand it to Cathy to dig into the numbers.

Okay. I would like to frame the 2026 revenue outlook around my good old 3 key drivers. Number one is regulatory environment; number two, macro conditions; and number three, platform fundamentals. Firstly, on regulation. The tax scrutiny on agencies and broadcasters in the second half of '25 materially impacted our value-added services revenues. But we believe most of the negative impact from that scrutiny has been absorbed by the end of Q1 '26. So assuming no incremental regulatory tightening from here, Q1 should provide a cleaner base to assess underlying trends. Second factor, macro. Consumer sentiment remains soft, perhaps even a little bit softer compared to a year ago. That said, macro conditions have been challenging for the past several years, and we have been adapting our monetization and product strategies accordingly. Encouragingly, our revenue mix is, as Sic said, becoming less top heavy, reflecting improved contribution from mid- and long-tail users. We have additional initiatives rolling out in the coming quarters that aimed at improving monetization efficiency under weak demand conditions. And the third factor, platform fundamentals. Since Q3 2025, we have seen a meaningful shift after multiple years of decline, paying users have returned to net growth, roughly -- I think we've been adding roughly 200,000 net adds per quarter. Retention metrics for both users and paying customers have also improved modestly. We see this as evidence that product optimization and user experience upgrades are working, particularly in expanding monetization beyond heavy standards. So if you put these 3 factors together and assuming no incremental regulatory tightening and broadly stable macro conditions, our baseline view for 2026 is First of all, full year revenue decline should be around low to mid-teens year-over-year. If you break the time line down, first half of '26 decline should decline in the mid-teens and perhaps the second half '26 would moderate meaningfully due to easier comps and improving fundamentals. So that's the outlook for '26. I think there is another question, which is when does the domestic business bottom? It's difficult to precisely call the bottom at this stage. However, based on the trajectory that we're seeing, like I said, we expect the year-over-year decline to moderate in the second half of '26. If the external conditions are stable by Q4 this year, we may narrow the year-over-year decline rate to below 10% if we are lucky. That said, the timing of a full bottom will depend significantly on, of course, macro recovery. Our current focus is on strengthening controllable fundamentals so that when macro stabilizes, we are positioned to return to growth. Back to Ashley for more questions.

Operator next question, please.

Your next question comes from Xueqing Zhang with CICC.

My question is about overseas business. As you mentioned in your prepared remarks, the overseas business accelerated in 2025, mainly driven by the commercialization of new products in MENA regions as well as contribution from M&A consolidation. Could management share more color on the revenue contribution from MENA, specifically for audio and video products, new apps and SoulChill ? What kind of sales are we looking at for each of these? And how should we think about the growth trend of overseas revenue in 2026? Also has the recent geopolitical situation in the Mid East had any impact on the operations in the region? And lastly, considering the overseas business is still in the investment phase, what's the margin impact in 2026? And when do you expect overseas operations to start contributing meaningful profit?

Thank you for the question. First, let's look at the big picture. Back in 2024, our overseas revenue was almost entirely driven by SoulChill and Tantan International. But in 2025 was a total breakout year for us. Our overseas revenue dropped more than 70%, hitting the RMB 2 billion mark. In terms of mix, SoulChill is still the heavy hitter. It brings in over half of our international revenue, but the real growth engine right now is our new MENA products, Yaha Live and Amar. They are scaling fast, and they will be the main drivers for us as we head into 2026. But it's not only just about the Middle East though, our other markets are also picking up serious speed. We have got Tantan International in Asia, MiraiMind in Japan and Happn, which started in Europe and is now moving into Turkey and South America. In 2026, we are focusing on going deeper into this market. We expect this dating segment to become our first largest revenue pillar right behind SoulChill and our new MENA app. Long term, we see massive potential there. The developed markets are more mature and stable. So we are staying fully committed to them for the long haul. As for the revenue trends and the final details for 2026, I will let Cathy walk you through the numbers.

Okay. Let me break this down into 2 parts, growth trajectory of overseas business and profitability. With regards to the revenue growth outlook, unfortunately, it's a bit hard to give you a precise quantitative outlook for 2026 because as Sic said in her remarks, if you look at the overseas part of the business, it's a piece that spans across different markets, including both developing markets and developed markets. In addition, it also spans across different business sectors, including social entertainment and dating. -- each of these markets and sectors presents different growth dynamics and associated risks/ uncertainties. All of those make it hard to pin down a very precise outlook at the beginning of the year, specifically at the time when a lot of these business are still developing so fast. But what I can do is to try to sort of unpack the growth dynamics in each of the different sectors along the lines that are just outlined by Sic. In MENA area, we're -- what we are doing mostly involves social entertainment, SoulChill, which is our flagship brand has already surpassed RMB 1 billion revenue. As the base scales, growth rates will naturally moderate. Additionally, we also have to admit that some of our product and geographical expansion plans didn't progress as fast as we planned in 2025. So there is going to be a further slowdown in its growth in 2026, especially in first half. But in absolute terms, it will remain a meaningful contributor this year. At the same time, newer products such as Yaha Land and Amar are still in rapid expansion phase. Their continued scaling should be able to offset the moderation at SoulChill. With regards to the impact from the war, the Iran war, so far, the negative impact on our business…

Next question, please operator.

Your next question comes from Leo Chiang with Deutsche Bank.

We had initially expected that adjustment in ratio in the second half together with the rising contribution from low-margin overseas audio and video business would drive a sequential decline in gross margin in Q4. However, Q4 gross margin held relatively stable and even came in slightly above management previous guidance of 36% to 37%. Should we interpret this as an indication that group gross margin in 2026 could remain broadly at the Q4 2025 level? My second question is management indicated that domestic revenue in 2026 is expected to decline year-over-year and low to mid-teens. while overseas revenue is projected to increase from RMB 2 billion to RMB 3 billion. Does this suggest that overall revenue for 2026 could be roughly flat? And given that overseas operations are still in the investment phase, could you provide us with some directional guidance on profitability for the 2026?

Okay. I'll take this question. I'm hearing many questions. Firstly, on gross profit. And the second question is revenue at the group level. Third question is perhaps asking for guidance on the group level profit. So let me sort of flip the sequence of the question a little bit. Let me talk about group level revenue. Before that, I would like to throw out a disclaimer here that we do not really have visibility to give annual guidance on either top or bottom line at this point. So my comments below should be taken as a sort of a working assumption rather than firm targets, especially given uncertainties in both domestic macro environment and the pace of overseas expansion. With that in mind, here are how we think about 2026. On revenue, your math is broadly in line with how we are thinking about it. If we take the baseline assumption we previously discussed domestic business declining roughly low to mid-teens year-over-year and overseas revenue increasing from around RMB 2 billion in '25 to roughly RMB 3 billion in '26, then at the group level, a -- either a flattish or slightly downtick top line versus 2025 would be a reasonable baseline assumption. And then the question on gross margin, you're right that Q4 came in better than we had guided in Q3, and the outperformance mainly came from 2 areas. Number one is on the domestic side, we had expected to further compress margins by raising payout ratios to support agencies under tax scrutiny. In practice, we faced a payout increase in several rounds. And after the first 2 rounds, we saw motivation among agencies and broadcasters recover pretty strongly, more strongly than expected. As a result, we didn't need to deploy as many promotional incentives as originally planned.…

Yes. In the interest of time, I think we're going to call it a day, and thank you for joining us and see you next quarter.

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