Ladies and gentlemen, thank you for standing by, and welcome to Hello Group Inc's first quarter 2022 earnings conference call. At this time, all participants are in a listen- only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please note that this conference is being recorded today. I'd 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 first quarter 2022 earnings conference call. The company's results were released earlier today and 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 financials and 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 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 and 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 statement as a result of new information, future events, or otherwise, except as required under law. I'll now pass the call to Mr. Wang. I'll translate for him. Mr. Wang, please. Good day, everyone. Thank you for joining our conference call today. Q1 was a very challenging quarter for numerous companies in China. The same applies to us. However, I'm pleased that our team was able to focus on our product and operational initiatives to cope with headwinds from the resurgence of COVID-19 and related challenges, getting 2022 off to a good start. In my remarks today, I will begin by reviewing the key operational and business results for the first quarter, followed by an update on the progress that we've made pertaining to the company's strategic priorities. I will start with a brief overview of our financial performance. For the first quarter of 2022, total revenue at the group level was RMB 3.15 billion, down 9% year-over-year and 14% quarter-over-quarter. Adjusted operating income for the quarter was RMB 461 million, with a profit margin of 15%. On an ex-Tantan basis, total revenue was RMB 2.8 billion, down 4% from Q1 last year and 14% from last quarter. The year-over-year decrease was mainly due to the negative impact of the macro headwind and the COVID on live streaming business. VAS revenue growth partially offset the decline in live streaming. Among them, the new bucket of standalone apps was a real outperformer this quarter, and its incremental revenue contribution exceeded that of the Momo app value-added services, making it a new growth engine for the VAS business line. Adjusted operating income on an ex-Tantan basis was RMB 619 million, with a 22% margin. Tantan's total revenue for the quarter came in at RMB 349 million, down 39% year-over-year, and 20% quarter-over-quarter. The year-over-year decrease was due to the demonetization process to improve users' experience and retention in the second half of 2021, as well as COVID's negative impact on user dating sentiment and intention to pay for VAS. Adjusted net loss from Tantan was RMB 159 million for the quarter, compared with RMB 42.04 million a year ago. 但鉴于二季度疫情的持续升级，造成用户约会及付费意愿的显著下降，团队在权衡ROI之后，决定暂时削减投放预算。我们稍后将会对这个决定做更详尽的解释。相应的，我们也将探探未来几个月的目标从用户增长暂时调整为持续提升推广效率，改善核心约会体验，并提升用户留存率。同时缩减探探的投放预算，以削减疫情期间的亏损幅度。新业务方面，我们的目标是持续丰富产品矩阵，拓宽陌陌和探探之外的业务边界。 Now, I will walk you through the progress we made with our strategic priorities during the first quarter. At the beginning of the year, I set strategic goals for Momo, Tantan, and the new endeavors. For the Momo app, our first goal for the year 2022 is to maintain a stable user growth with a limited marketing budget and seek growth on top of that. The second goal for Momo is to ensure the cash cow business remains stable. With respect to Tantan, the strategic goal set at the beginning of the year was to deliver solid user growth by improving marketing efficiency and quality experience. However, as we entered into Q2, the COVID-19 situation continued to escalate, which resulted in a significant decline in user spending sentiment and propensity to pay for that. Our team has temporarily decided to scale back channel investment for ROI considerations. I will explain this decision in more detail later. For that reason, we have shifted our focus for the next few months from user growth to continuously improve marketing efficiency and enhance quality experience in order to improve user retention. At the same time, we have lowered Tantan's marketing budget to reduce net loss amidst the escalation period of the COVID lockdowns. For new products and businesses, we aim to continue to enrich our product portfolio and push the boundaries beyond Momo and Tantan. 首先是陌陌APP的用户增长情况及核心运营数据。陌陌一季度MAU 1.109亿人。春节因素叠加全国多处地区疫情防控措施持续升级，导致MAU环比下降3%，下滑幅度低于2020年一季度疫情爆发初期的6%。季节性低点及疫情令自然新增和回流显著下降。渠道方面，加大获客力度部分弥补外部压力造成的流量缺口。投放策略上，团队通过优化数据模型和广告素材，并抓住有利时间窗口，使整体获客效率大幅提升，实现渠道量增长的同时，总成本稳中有降。产品方面，核心附近场景设计升级，提升男用户匹配连接效率，持续优化去年推出的新场景小宇宙，强化陪伴和内容方消费，以此承接女性用户的情感倾诉需求。本季度付费用户数860万，环比减少30万。主要原因在于MAU环比下滑。付费转化率在产品和运营的共同作用下基本保持了稳定。 Firstly, regarding Momo's user growth and key metrics. Momo had 110.9 million monthly actives for the first quarter of 2022, down 3% from the previous quarter. The sequential decrease was due to Chinese New Year seasonality, compounded by continuous escalation of pandemic containment measures in various regions across China. However, the magnitude of the decrease was lower than the 6% seen in Q1 2020 at the beginning of the initial COVID-19 outbreak. Negative seasonality and the COVID-19 resurgence led to a significant decrease in organic user growth. We therefore stepped up our channel marketing efforts to counter this trend. In terms of the channel strategy, our team optimized the data models and ad materials and took advantage of favorable marketing windows during Chinese New Year, which significantly improved overall user acquisition efficiency. This in turn resulted in an increase in traffic acquired from channels on the back of a slight decrease in total marketing expenses from the previous quarter. On the product side, we upgraded the design of the core nearby features, which improved the efficiency of relationship discovery for male users. At the same time, we continue to refine the Miniverse experience launched last year to enhance a sense of companionship and content consumption to meet the needs of female users to express their feelings. The number of paying users for the quarter was 8.6 million. The 300,000 sequential decrease was mainly due to the decrease in MAUs. Paying conversion remained stable thanks to the success of our product and operational efforts. 接下来介绍一下在确保现金业务稳定产出这一战略重点上取得的进展。尽管受到宏观不确定性及疫情升级等多重外部因素的负面影响，一季度陌陌主APP营收28亿人民币，同比下降3.6%。live直播营收占比环比提升21个百分点至85%。 Now, I'll discuss progress we made regarding our priority of ensuring the cash cow business remains stable. Despite the negative impact of multiple external factors such as macro headwinds and the escalation of COVID-19. On an ex-Tantan basis, revenue was RMB 2.8 billion, down 3.6% from Q1 last year. Value-added service revenue represented 85% of the size of live streaming, up 21 percentage points quarter-over-quarter. 一季度陌陌直播业务营收14.8亿人民币，同比下降13%。主要由于两个原因所致。第一，宏观层面的不确定性及与之相关的消费疲软。第二，税务合规方面的调查对公会生态造成的影响。为应对外部挑战，一季度采取弱化营收导向的运营策略，未组织大规模赛事，以小型日常活动及优化直播生态为重点，资源向腰部主播和优质新人倾斜。赛事活动的减少降低了奖金相关的分成成本。陌陌主站一季度毛利率环比回升。公会流水贡献度由头部向腰部转移。反映直播生态健康程度的运营指标环比向好。供给侧头部主播开播及时长保持稳定。但受制于宏观因素，营收能力触底后恢复缓慢。我们认为二季度宏观层面和监管环境仍然相当具有挑战性。我们计划继续对低限度赛事奖金的保守策略，稳定毛利率，提升腰部付费能力，确保生态稳定向好，以便消费情绪好转后流水能够得以迅速恢复。 Momo's live streaming revenue totaled RMB 1.48 billion for the first quarter, down 13% year-over-year. The decrease was mainly due to two factors. First, consumption softness due to macro headwinds. Second, the negative impact of tax compliance scrutiny on the engagement of talent agencies. In order to overcome these external challenges, we de-emphasized the revenue in favor of improving profitability during the first quarter. Instead of hosting one large quarterly tournament, we focused on small-scale promotional events and optimized our live streaming ecosystem by allocating more resources to mid-level performers and quality newcomers. The scale back in competition events led to a decrease in bonus-related revenue sharing costs. Momo's gross profit margin in Q1 rebounded from the previous quarter, and the agency revenue contribution mix shifted from top agencies to medium-sized ones. Operational indicators reflecting the health of live streaming ecosystem improved from the previous quarter. The number of sessions and online time committed by the top broadcasters remained stable. However, revenue recovery was slow after Chinese New Year due to unfavorable macro conditions. We believe the macro economy and regulatory environment will remain quite challenging throughout the second quarter. We plan to continue our conservative operation strategy with minimum budget on event related bonuses, stabilizing gross profit margin, and driving spending from mid-cohort users to ensure steady improvement in our ecosystem so that revenue can recover as soon as the consumer sentiment comes back. 接下来介绍增值业务。一季度不包含探探，VAS营收12.6亿人民币，同比增长11%。陌陌战略VAS营收11.2亿元人民币，同比增长4%。独立新APP在推送规模持续改善的基础上，保持快速增长，营收1.35亿人民币，同比增长104%。后面我会对新业务的进展做详细的分析，此处先讲陌陌战略增值业务。 With regards to VAS, revenue from value-added services including Tantan totaled RMB 1.26 billion for the first quarter, up 11% year-over-year. VAS revenue from the main Momo app totaled RMB 1.12 billion, up 4% year-over-year. Revenue from the new bucket of standalone apps maintained rapid growth momentum, totaling RMB 135 million, up 140% year-over-year, while the net loss continued to narrow. I will provide an update of our new endeavors in detail later. But for now, I'll focus on Momo app VAS business. 一季度宏观层面的挑战及与之相关的消费疲软，对部分用户造成负面影响。叠加全国多处地区疫情升级，管控措施持续加码，造成战略VAS收入同比增长显著放缓。但与直播业务相比，VAS对较为艰难的外部环境具有更强的抗周期能力。一季度团队聚焦中小用户产品创新，例如在音视频场景聊天室内推出恋爱告白墙的玩法，用户可将送出的特定礼物展示在告白墙上，供整个聊天室的人围观并送上评论祝福。这种玩法设计很好地满足了中长尾用户寻求关注的心智需求。持续的产品创新令战略VAS收入在疫情、春节及消费疲软三重压力的影响下，环比基本保持稳定。同时整体流水占比更加向中长尾用户和轻型VAS付费场景倾斜。 In Q1, consumption softness in connection with macro headwinds had a negative impact on some of our users, and the resurgence of COVID in various regions of China led to escalation of containment measures, leading to a significant slowdown in year-over-year growth in revenue. However, compared with live streaming, VAS is more resilient to economic cycles and difficult external conditions. In the first quarter, the team focused on product innovation for long tail and mid-cohort users. Taking audio and video based experiences as an example, we introduced the Love Confession Wall, 恋爱告白墙 feature in the chat room, where users can display specific gifts they send out on the wall for other users in the chat room to comment and give blessings. This kind of design addressed the long tail and mid-cohort users desire for attention seeking fairly well. Continuous product and operational innovations allowed revenue to remain stable on a sequential basis, despite pressure from the pandemic, Chinese New Year seasonality, and challenging macro conditions. In addition, the overall revenue structure tilted towards mid, middle cohort and long tail users and small ticket VAS features. 下面谈一下探探。首先是用户趋势和整体财务表现。上年末以来，全国多处地区疫情防控措施持续加码，压抑用户社交意愿，对探探用户增长造成压力。一季度探探MAU两千五百六十万人，环比下降5%，下滑幅度大于陌陌。主要原因在于探探核心价值在于帮助用户发现并建立浪漫关系，并将这种关系延续至真实生活当中。用户线下见面的心智相较于陌陌更为明显。因此，当人们的户外活动由于疫情受到限制的时候，与社交场景相对多元化的陌陌相比，探探受到的打击更为严重。一季度受益于产品的稳步改善以及渠道质量优化，平台整体用户留存有所提升。在疫情相对可控地区，用户占比有所增长，但由于全国多区域，特别是人口众多且密集的大城市，疫情较为严重，且防控持续升级，自然新增下降明显，且新客留存出现显著下滑，导致大部分疫情严重地区活跃用户显著回撤。由于新客留存的下滑以及ARPU的降低，我们相应减少渠道投放力度。团队专注于通过产品改善提升留存，促进用户增长的策略。截止一季度末，探探付费用户数两百四十万人，环比减少十万人。主要原因在于MAU的下滑。 With respect to Tantan, I will start with user trends and overall financials. Since the end of last year, COVID prevention and control measures in many regions of China continued to intensify, which suppressed users' social sentiment and put pressure on user growth. Tantan had 25.6 million monthly actives for the first quarter, down 5% from December last year. The decrease was greater than that of Momo. This was mainly because the core value proposition of Tantan is helping users discover new relationships, connecting them for romantic purposes, and connecting and converting the relationship to offline dating activities. Tantan's users have a higher propensity to meet in real life than Momo's users. Therefore, compared with Momo, which has relatively diversified social use cases, Tantan took a bigger hit during the pandemic, as people were often restricted from participating in outdoor activities. Steady optimization of the product and marketing approach led to improvement in the overall retention ratio. Users in regions that were free of pandemic grew sequentially. However, due to the severe epidemic situation in many regions of the country, especially large and densely populated cities, and continuous escalation of prevention and control measures, both organic user growth and retention of new users significantly deteriorated, leading to a considerable decline in the active user base in most of the severely affected areas. In light of the decline in the retention of new users and the decrease in our eyeballs, we lowered our channel investment and strategically focused on improving retention through product improvement to ultimately drive user growth. The number of paying user for the quarter was 2.4 million, down 100,000 sequentially. This was mainly due to the decrease in MAU. 接下来回顾一下探探的财务表现。一季度探探总营收3.49亿元人民币，同比下降39%，环比下降20%。探探收入的同比下降主要由于去年下半年管理层调整后，为改善用户体验、提升留存进行的主动性商业化回撤。因此，我们对探探营收的分析将主要以环比为基础来进行。一季度探探MAU收入2.24亿元人民币，同比下降29%，环比下降5%。环比下降主要来自于两个因素，首先是MAU下降导致的付费人数减少，而ARPU相对保持稳定。其次，商业化回撤对财务的影响仍未完全吸收，主要体现在部分会员业务递延收入的缺失。直播收入1.25亿元人民币，环比下降38%。主要原因在于，一，一季度是传统直播淡季。二，上年对直播的战略性回撤仍在延续。目前产品的策略是将直播逐步转型为与社交耦合度更好的、更高的多人视频派对模式。 Now, I'll briefly review Tantan's financial performance. Total revenue for the first quarter was RMB 349 million, down 39% year-over-year, 20% quarter-over-quarter. Year-over-year decrease was mainly due to our demonetization strategy to improve user experience and retention after the change of management in the second half of last year. For this reason, we will discuss Tantan's revenue on a sequential basis. Live revenue for the first quarter was RMB 224 million, down 29% year-over-year, and 5% quarter-over-quarter. The sequential decrease was mainly attributable to two factors. First, the decline in paying users as a result of decreased MAU, while ARPU remained relatively stable. Second, the financial impact from demonetization efforts was not completely absorbed. This was reflected in the lack of deferred revenue for the membership business. Live streaming revenue for the first quarter was RMB 125 million, down 38% quarter-over-quarter, mainly due to two factors. First, Q1 seasonality for the live streaming business in general. Second, the demonetization process of live streaming last year continued into this quarter. Our current product strategy is to gradually transform live streaming into a multiplayer video party mode, which fits better with an open social networking atmosphere. 接下来介绍一下探探在提高市场营销效率以及核心约会体验方面取得的进展。 Now, let's move to the development Tantan made on the strategic priorities of improving marketing efficiency and core dating experience. 在提升市场效率方面，一季度的主要工作聚焦在降低单位获客成本，优化和创新广告素材。获客团队针对不同人群画像，定制专属广告素材，通过专项工作提升核心渠道的客源质量。新的获客方案有助于我们更加精准地触达探探的目标用户群体，提升获客留存。一季度由于疫情导致自然量显著下降，我们在策略上加大了渠道获客的数量。我们高兴地看到，在渠道获客量环比增长的情况下，总获客成本稳中有降，并且新增女饼和年龄都控制在理想范围之内。这体现... 更为挑战，主要由于疫情和各地防控措施的持续升级。进入二季度，由于疫情范围扩大以及封控力度加码，我们预计MAU将继续承压。考虑到疫情期间新活、新客流失明显降低，且付费转化亦显著低于正常水平，造成整体新客获取ROI较低，二季度采取保守型投放策略，削减市场投入，减少探探整体亏损。该策略将延续至疫情好转，用户社交意愿逐步恢复为止。 In terms of improving marketing efficiency, in Q1, we mainly focused on reducing user acquisition costs as well as optimizing the innovative and innovating ad content. Our team made particular efforts to target users from core channels more effectively. This new user acquisition initiatives enabled us to more accurately reach Tantan's target users, thereby improving retention. As organic user growth in the first quarter slowed significantly amidst the pandemic, we strategically increased the number of users acquired from channels. I'm pleased to see that the total number of users acquired from channels increased, while overall channel marketing expenses slightly decreased from last quarter. In addition, we managed to keep the proportion of female users and the age of new users within a favorable range. This demonstrates preliminary yet solid progress the team has made in improving user acquisition efficiency. While this was encouraging, the market environment for user growth became more challenging than Q4 last year, mainly due to the pandemic and continuous escalation of containment measures. We believe MAU may continue to face challenges in Q2 due to the further spread of COVID and escalated control measures. Considering the significant decline in new user retention and the lower paying conversion ratio during the pandemic, which resulted in low ROI, we have adopted a conservative marketing approach in Q2, lowering channel investment and reducing the net loss for Tantan. We will keep this practice until the pandemic improves and user social sentiments gradually reappears. 尽管疫情并获客环境面临挑战，我们在产品改善方面的工作仍然在按照既定的计划努力推进。一季度我们试图通过两方面努力，持续改善女性用户和不露脸用户的流失问题。首先是丰富用户资料信息和其他能展现个性的内容，例如引导用户上传有助于反映性格特征和生活方式的照片，添加书剧等更具时效性的兴趣爱好，让用户在相互选择时有更多的信息依据。其次是拓宽用户之间的连接互动方式，例如在动态页上推出打招呼功能，帮助用户基于内容实现关系破冰，给社交主动性差的女性用户提供被动社交的机会。另外，我们为羞于露脸的用户开辟该群体专属的滑卡场景，算法上优先推荐已发起右滑的在线用户，提升不露脸用户间的匹配几率。 Although user acquisition was challenged by the pandemic, the team continued to push forward on product improvement against our original plan. In Q1, we tried to improve the retention of female users and those without qualified photos on two fronts. The first is to enrich user profile information as well as other content that can reveal users' personalities in a more comprehensive way. For example, we encourage the users to upload photos truly depicting their personality and lifestyles and provide more detailed interests, such as books and dramas that they've recently consumed. This gives other users more information to base their swipe decisions on. The second is to expand the ways people connect and interact with one another. For example, we launched a greeting function on post to help users break the ice based on content. This provides more passive social opportunities for female users who are more reserved when it comes to dating. In addition, we created an exclusive swiping experience for those who fail to provide qualified photos. Our algorithm is designed to prioritize users who have initiated right swipes to improve probability of matching among users without qualified photos. 以上是探探国内业务的更新。下面我想简要为大家介绍一下探探海外的发展近况。探探在海外市场的战略简单明了，即追求有盈利的增长。这一目标的实现有两个重要组成部分。一是我们需要通过引入音视频服务以及非会员订阅的商业模式，提升发展中国家的ARPU。二是要在取得ROI比较低的地区降低市场投入。前几个季度我有介绍过，管理层调整后，我们重启了印尼市场。在那之后，我们取得的最大进展之一是通过直播和非会员VAS商业模式成功地提升了当地市场的ARPU和获客ROI。在ARPU和ROI改善的基础上，加大市场投放力度，推动用户和收入增长。与此同时，我们还降低了在亏损地区的市场投入。伴随海外用户和直播业务的壮大，我们也有了足够的话语权来降低非会员订阅业务的分成比例。由于ROI的改善、市场费的降低以及分成比例的优化，探探海外业务一季度在不考虑人员成本的情况下已经实现盈利。探探年内将在海外市场持续按照这一战略执行。 This concludes Tantan's domestic business update. Now, I'll briefly discuss Tantan's overseas development. Tantan's strategy in the overseas market is simple and clear: to pursue profitable growth. Our approach to achieve that goal has two important components. One is that we need to improve our ARPU by introducing audio and video services, and on the back of that, non-subscription based revenue models in developing countries. The other component is lowering marketing costs in areas that are not currently making any sense from an ROI perspective. As I mentioned in the previous quarters, after the management transition, we made a foray back into the Indonesia market. One of our biggest progress made since then was that we successfully improved the ARPU and ROI in that market by leveraging live streaming and the non-membership value added service monetization model. With an increase in ARPU and improvement in ROI, we stepped up channel investment to drive users and revenue growth. At the same time, we scaled back marketing efforts in some of the loss-making regions. As the number of overseas users and the scale of live streaming business grows, we have enough leverage to lower the payout ratio of the non-subscription business. As a result of all of the improved ARPU, lowered marketing costs, and optimized payout structure, Tantan's overseas business turned profitable in Q1 on an ex-payroll basis. Tantan will continue to execute such a strategy for the rest of the year in overseas market. 最后我想介绍下团队在创新业务方面取得的进展。2018年，我们通过收购探探，启动了品牌组合战略，迈出了通过不同apps更有效地满足不同人群细分社交需求的第一步。从2019年开始，集团孵化器中持续不断地推出新apps，让我们从真正意义上实现了通过多品牌多平台的方式覆盖更加广泛的用户群体，满足他们不同的社交偏好。这个战略也使集团能够更快更深入地渗透到社交行业的其他垂直领域，挖掘海外市场机会，稳固我们的行业龙头地位。 Lastly, I'll review the progress we made with our new endeavors. In 2018, we launched a brand portfolio strategy through the acquisition of Tantan. This marked our first step in meeting the social needs of different target groups more effectively through different apps. Starting from 2019, our incubator continued to launch new apps, enabling us to reach a broader group of users and cater to the different social preferences through a multi-brand and multi-platform approach. This strategy helped us quickly and effectively penetrate niche areas within the social space, explore opportunities in overseas markets, and solidify our industry-leading position. 一季度创新业务营收1.6亿人民币，同比增长184%，环比增长43%。目前我们的创新业务收入包括SoulChill以及主打欧美市场的游戏app童话镇。这两类apps的收入分别计入陌陌主站的VAS和游戏业务。其中面向国内市场的两款社交产品Hertz和对对，延续了2021年下半年降本增效的运营策略，持续优化成本费用，同时适度加大商业化力度。ARPU提升推动收入环比快速增长。一季度，这两款apps均实现单季度盈利，并为集团利润做出增量贡献。特别是对对作为一款2020年推出的面对下沉市场的视频交友软件，团队凭借前期在体内其他项目上累积的产品和运营经验，不到两年时间就实现了盈亏平衡，并在此基础上展现出了继续扩大营收和盈利规模的潜力。我们今年对国内创新业务的整体策略是，在保证盈利的基础上，寻求稳定增长。 Revenue from the new bucket in the first quarter was RMB 160 million, up 184% year-over-year, and 43% quarter-over-quarter. Revenue from the new bucket includes ROI-oriented social apps Hertz, Duidui, and SoulChill. Revenues of which were recorded in the VAS line, as well as Fairytown, a simulation game focusing on the Western markets, revenue of which was recorded in the game line. For Hertz and Duidui, the two social apps targeting domestic markets, we continue to focus on cost reduction and efficiency improvement, as we did in the second half of 2021, optimizing costs and expenses while moderately ramping up the monetization level. Driven by an increase in ARPU, revenue rapidly increased quarter-over-quarter, and both apps achieved full quarter profitability and made incremental contributions to the group's bottom line in Q1. In particular, for Duidui, a video matchmaking app targeting lower tier markets, our team leveraged the rich product and operational experience accumulated in our other products and achieved breakeven in less than two years after its launch in 2020. On top of that, the app has also shown the potential to sustain top-line growth and profit expansion. Our strategy for domestic market new endeavors this year is to simultaneously pursue steady growth and ensure profitability. 海外ROI项的产品中，主打中东市场的SoulChill一季度加大营收导向的运营力度，付费用户数和收入环比大幅提升。随着用户和收入的持续增长，我们也采取了降低分成比例的策略，推送规模环比大幅缩减。我们今年对SoulChill的计划是在中东核心市场实现盈利增长，并为该产品探索适合东南亚及南美市场的产品模式，为长期的用户及收入增长做好铺垫。 Among overseas ROI oriented products, we ramped up efforts to drive revenue growth of SoulChill, a social app targeting the MENA area. As a result, in Q1, both the paying user count and revenue showed rapid growth from the previous quarter. We adopted the same strategy to lower the payout ratio as users and revenues continue to scale. As a result, net loss significantly narrowed compared with the previous quarter. Our plan for SoulChill this year is to achieve profitable growth in its core market in the MENA region, and at the same time, to develop a product mode suitable for the Southeast Asian and South American markets. This will lay the groundwork for SoulChill's long-term user and revenue growth. 除了ROI项的产品之外，春节后我们上线了DAU项的产品贴贴，这是一款基于桌面小组件的社交产品，主打喜欢跟三五密友分享内容的零零后群体。用户可以通过照片或视频的方式随手记录自己的日常生活，而这些内容会被自动推送给他们贴贴密友的桌面。像贴贴这样的产品，让用户和朋友之间能够更加快捷方便地分享真实的生活瞬间。在功能和目标用户群体上与陌陌形成高度互补。由于精准捕获了零零后未被挖掘满足的社交需求，Tietie上线后自然新增和留存迅速增长。我们随即加大产品迭代和市场投放力度。目前Tietie已经达到了相当可观的用户体量，且仍在快速持续的增长之中。这款产品给我们的未来打开了许多新机会，这也标志着公司在满足全新用户需求、培育大DAU量的APP方面取得了首个里程碑式的成就。这将是我们未来持续努力的新方向。二季度我们计划进一步加快产品迭代速度，同时加大推广力度，以获取更大规模的增长。 In addition to ROI oriented products, we launched the DAU pro-oriented product, Tietie, after the Chinese New Year. Tietie is a widget-based social app, which mainly targets Gen Z and Gen Alpha users who prefer to share content with a few intimate friends. Users can document their daily lives in photo and video format, and this content will be automatically pushed to the cell phone home pages of their predefined intimate friends on Tietie. A product like Tietie, which supports more convenient real-time sharing of authentic life moments with their close friends, is highly complementary to the Momo app in terms of feature and independent users. As it accurately fulfills unique and untapped demands from Gen Z and Gen Alpha users, Tietie delivered rapid growth in organic users and retention after its launch. We immediately stepped up our product iteration and marketing efforts. At the moment, Tietie has already reached a pretty sizable user scale, and it's still showing strong growth momentum. We believe this is the app that will open the doors to many future opportunities. It also marks the first milestone for the company in the area of new app development that earns a large deal base with a brand new category of user demand. This is a new front that we will continue to explore. In the second quarter, we have a plan to further accelerate the product iteration, and step up the marketing efforts around it to drive bigger growth. 最后，我很高兴地宣布，今天董事会批准了多至两亿美元为期二十四个月的股票回购计划。该计划令公司可以利用当前与公司基本面严重脱离的股价进行回购，从而提升股东价值。这次回购计划践行了我们不断追求股东利益最大化的承诺，以及管理层对公司未来业务发展的信心。 Lastly, I'm pleased to announce that today, our board approved a $200 million share repurchase plan during a 24-month period. This program will allow the company to significantly enhance shareholders value, capitalizing on the undervalued share price that obviously is failing to reflect the fundamentals of the company. This share buyback plan demonstrate our long-term commitment to maximizing shareholders value, as well as management's confidence in the future of the business. 以上是本次电话会我想和大家分享的内容。接下来请Jonathan为大家介绍具体的财务情况。 This is what I'd like to cover today. Now, I'll pass the call over to Mr. Jonathan Zhang for the financial review. Thank you. 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 first quarter 2022 was RMB 3.15 billion, up 9% year-on-year, or 14% quarter-over-quarter. Non-GAAP net income attributable to the company was RMB 398.5 million compared to RMB 633.7 million from the same period last year. As Wang Li has covered the revenue analysis in a great level of details, 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 first quarter of 2022 was RMB 1.82 billion, compared to RMB 1.92 billion for the same period last year. Non-GAAP cost of revenue as a percentage of total revenue was 58%, an increase from 55% from Q1 2021. Non-GAAP gross profit margin for the quarter was down by 2.5 percentage points from a year ago. The decrease was mainly attributed to higher payout to the content providers. On a sequential basis, non-GAAP gross profit margin was up 1.8 percentage points compared to Q4 last year. The sequential increase was due to two factors. Number one, less revenue streaming events related cost. Number two, a positive change in revenue mix towards VAS, which bears higher gross margin than live streaming, contributed more to the top line. Non-GAAP R&D expenses for the first quarter was RMB 229.2 million, compared to RMB 244.1 million for the same period last year, representing 7.3% and 7% of total revenue, respectively. The decrease was the result of optimization in personnel cost. On a sequential basis, non-GAAP R&D expenses decreased by 18% from RMB 279.7 million in Q4 last year due to the year-end bonus expenses, during Q4 last year. We ended the quarter with 1,936 total employees, of which 563 are from Tantan. R&D personnel as a percentage of total employees for the group was 61% compared to 57%, Q1 last year. Non-GAAP sales and marketing expenses for the first quarter was RMB 578 million, or 18.4% of total revenue, compared to RMB 579.8 million, or 16.7% of total revenue for the same period last year. On a sequential basis, Non-GAAP sales and marketing expenses decreased by 11% from RMB 648.6 million in Q4 last year. The decrease was attributable to the following factors. Number one, lower marketing spend for new apps as a result of our focus on cost reduction and efficiency improvement. Number two, lower user acquisition investment on Tantan, as we adopted a conservative marketing approach during the pandemic resurgence. Number three, in Q4 last year, the core Momo had a quarterly specific branding expense item. Non-GAAP G&A expenses was RMB 85.9 million for the first quarter of 2022, compared to RMB 94.2 million for the same quarter last year, representing 2.7% of total net revenue, same in both periods. Same as in the R&D line. The decrease was mainly a result of optimization in personnel costs. Non-GAAP operating income was RMB 460.6 million, a decrease of 30% from Q1 2021, representing 14.6% non-GAAP operating margin for the quarter, down 4.4% from the same period last year. Non-GAAP OpEx as a percentage of total revenue was 28.4%, an increase from 26.5% from Q1 last year. The increase- ...forward, we expect to continue to exercise cost discipline for the rest of the year in order to improve cost efficiencies in a difficult macro environment. Now, briefly on income tax expenses. The total income tax expense was RMB 150.8 million for the quarter, compared to RMB 100.3 million for the same period last year. Effective tax rate for the quarter was 27.4%. In Q1, the company accrued withholding income tax of RMB 44 million, which is 10% of undistributed profit generated by our WOFE. Without the withholding income tax, our estimated Non-GAAP effective tax rate was around 19% in the first quarter. Now turning to balance sheet and cash flow items. As of March 31st, 2022, Hello Group's cash equivalents, short-term deposits, long-term deposits and restricted cash totaled RMB 15.6 billion, compared to RMB 15.71 billion as of December 31st, 2021. Excluding the RMB 140 million cash payment to Chinese tax authorities to repatriate RMB 1.4 billion from our WOFE in China to our offshore entity. Net cash provided by operating activities in the first quarter of 2022 was RMB 183 million compared to RMB 502 million in the first quarter 2021. In addition, during the first quarter of 2022, we paid a greater portion of revenue share to the content providers accrued in the previous quarter. We made such payments during the same period in previous years. It caused the operating cash flow from operating activities to decrease to a greater extent on a year-over-year basis than the Non-GAAP net income of the company in Q1 2022. Lastly, on business outlook, we estimated our second quarter revenue to come in the range from RMB 3.05 billion to RMB 3.15 billion, representing a decrease of 16.9% to 14.2% year-on-year, or a decrease of 3.1% to an increase of 0.1% quarter-over-quarter. For Q2 2022 on a sequential basis, we expect the total revenue from core Momo to decline slightly due to negative impact on live streaming business from new regulation on live streaming rolled out in May. Continued macro headwind and intensified COVID control measures. We expect event growth to partially offset the decline in live streaming. The total revenue from Tantan is expected to decrease in mid-single digit due to the increased level of pressure from COVID control on Tantan's user and membership business. We expect content user and revenue to come back to the growth track after the large scale lockdown is lifted and the dating sentiment improves. 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. That concluded our prepared portion of today's discussion. With that, let me turn the call back to Ashley to start the Q&A. Ashley, please. Thanks. Just a quick reminder before we take the questions. For those who can speak Chinese, please ask your questions in Chinese first, followed by English translations by ourselves. Operator, we're ready for questions, please. Thank you. As a reminder, ladies and gentlemen, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to withdraw your request, please press the pound or hash key. Our first question comes from the line of Daniel Chen from J.P. Morgan. Please ask your question. I'll translate for myself. Thanks, management for taking my question. This is Henry speaking on behalf of Daniel Chen. I have two questions. The first one is about regulation. Can management share more color on the regulation impacts on your financials and the overall China live streaming industry? The second question is about Tantan user trends. Can management comment about the Tantan user trend this year? Thank you. With regards to regulations, the opinions on re-regulating gifting in live streaming and strengthening the protection of minors published in May, it should standardize the requirements on ranking system as well as the PK competitions during evening peak hours that stimulate impulsive high spending behavior among users with relatively clear implementation guidelines and detailed rules. That's a blessing for the live streaming industry because it helps to level the playing field and ensure that the industry as a whole develops in a healthy and sustainable manner. In the months since the opinion was issued, our team operational adjustments. In the coming weeks, we will follow up with and fine-tune our product plan in line with regulatory requirements. The new product plan officially took effect in early June, so its impact on revenues will mainly be reflected in the second half of the year. Our assessment of the revenue impact may not be accurate at the moment, because we only have a few days of adjusted operating income from the late May, that can be used for reference. However, our estimates are based on such limited data. The impact of the new product plan on the full year of live streaming revenue should be less than 10%, which is within a reasonably manageable range. 然后从这个内部来看的话，用户增长呢，来自获客和产品的两股驱动因素。年初以来，我们在这两方面的工作吧，一直在稳步地推进，也取得了一些进展。这就是为什么从这个封地域的角度来看的话，我们的用户数据，在疫情严重、管控级别高的地区会出现显著的下降，而在不被疫情感染的地区呢，则会是一个向上的趋势。而未来几个月，我们希望可以在提升留存方面持续地进步，能为以后这个疫情后的用户增长呢，打好一个坚实的基础吧。 Content user growth depends on both internal and external factors. As for external factors, as previously mentioned, the new wave of COVID-19 started at the end of last year, spread further since entering Q2. Consequently, related control measures continued to intensify, whereby the speed, the scope, and extent of the escalation exceeded our expectations back in March. Our data in April showed that the new user growth, retention, and paying conversion were largely affected in major pandemic regions where prevention and control measures were severe. This is very much consistent with the trend that we saw in early 2020. Considering the decrease in retention and paying conversion, which resulted in low ROI, we have decided to reduce Tantan's marketing budget in Q2. We will maintain this practice until the pandemic situation improves. Currently, the pandemic in Beijing and Shanghai has been initially brought under control, but the containment measures are still relatively strict, and it will take time for users' social sentiment to recover. However, we remain optimistic about the outlook in the second half, and hopefully we'll see some substantial improvement by then. Regarding internal factors, user growth is driven by both user acquisition and product efforts. We have been making steady progress on those two fronts since the beginning of the year. That's why from a geographical perspective, MAU declined significantly in regions where severe pandemic and a high level of control measures. Whereas users showed an upward trend in areas that was not affected by the pandemic. We plan to expand continuous effort in improving retention and lay a solid foundation for steady user growth in the post-pandemic era. I think that answers your question. Operator, we're ready for the next one. Thank you. Next question comes from Thomas Chong from Jefferies. Please go ahead. 晚上好。谢谢管理层接受我的提问。我的问题是关于宏观消费大环境对直播还有VAS的影响，我们对全年的收入还有利润的预期可以分享吗？Thanks, management, for taking my questions. My question is really about the overall macro and the consumption environment in China. How should we think about the impact to live streaming and VAS, as well as thoughts for the full year revenue and the earnings assumptions? Thank you. Thanks, Thomas. This is Jonathan. Let me try to address your question. First of all, in terms of revenues, let me begin with our live streaming business. In contrast to regulation, the macro uncertainties and spending softness has brought more severe challenges to the live streaming business. This situation has become clearer in Q2 than in Q1. Our Q2 guidance implies that Momo app live streaming business will see a year-over-year decline of high twenties percentage points. Since the visibility of the macro environment in the second half is quite low at this moment, to be conservative, I suggest investors to use Q2 as a baseline to think about or to predict the situation in the second half of the year. Strategically, we take active measures to enhance user experience and ensure stability of the supply side content ecosystem in the context of a year-over-year decline in revenue. Based on the situation in Q1, we are quite confident that in this regard. In that way, our live streaming business can recover as soon as the macro environment improves. With respect to the VAS business, although VAS has this discretionary consumption is also being affected by the macro environment and the pandemic, it is more resilient to economic cycles compared with live streaming. In addition, with the rapid growth of new apps, we expect the VAS revenue on ex- Tantan basis can still achieve double-digit growth target set at the beginning of the year. Tantan has been more severely affected by pandemic-related lockdowns in the first half of the year than we expected at the beginning of the year. Coupled with the demonetization process in the second half of 2021, the year-on-year decrease in VAS revenue in the first half of the year will be relatively big, at somewhere between a high 20%-30% range. Once the pandemic subsides, the revenue will resume its growth track as dating sentiment comes back and user numbers starts to uptick. However, we have to wait for the situation to improve before making specific estimate. Tantan's live streaming business is no longer our strategic focus. We will transform it into something that fits better with its social atmosphere. Lastly, I'd like to please emphasize on one crucial point in terms of a revenue structure. With the continuous sequential growth of VAS business, as at the group level, VAS revenue will reach or even exceed the scale of live streaming in the second half of the year. This is a stable and more resilient revenue structure, which will make future development of the whole groups more balanced. It is also a safer revenue structure for our shareholders. With respect to the gross margin, the biggest factor causing the margin fluctuation is live streaming revenue sharing ratio. The revenue sharing ratio in Q1 was 2 percentage points lower than that in Q4 last year, as we didn't host large-scale competition events, which led to a decrease in bonus-related revenue sharing cost. On a year-over-year basis, the revenue sharing ratio was up by 2%, as a result of a smaller scale events we hosted to help agencies to navigate through the challenging environment. As we continue to invest in this kind of events throughout the year, the overall impact of the revenue sharing ratio of live streaming on gross margin will be around 2% for the whole year. However, due to the continuous increase in revenue contribution from VAS, which bears a relatively higher margin, from the gross profit point of view. The shift in revenue mix is conducive to improve in gross margin. Therefore, for 2022, at the group level, the gross profit margin decline should be between 1%-2%. On the cost and the expenses side, we have been optimizing Momo's costs and expenses. On the marketing expenses for Momo apps, will remain stable compared with last year. However, given the development of new apps, especially for Tietie, which is currently showing strong growth momentum with outstanding performance in various indicators, including user acquisition cost, user retention and engagement, we will step up our marketing efforts in the coming quarters, and its MAU will continue to deliver rapid growth. Although the marketing expenses of new apps have increased, thanks to cost optimization of Momo apps, we expect that operating margin on an ex-Tantan basis will still be around high teens percent to 20%. For Tantan, we expect its net loss to be between RMB 500 million-RMB 600 million. Okay. Maybe in the interest of time, let's just take one last question. Operator, next one please. Thank you. Our last question comes from Leo Chiang from Deutsche Bank. Please go ahead. Thanks management for taking my question. My question is about the new apps in Tantan Overseas. As these two new businesses gradually become our new growth drivers, can management share with us the longer term potential of these two initiatives and the difference of user spending behaviors between the new initiatives and our older business? Thanks. 然后至于这个探探的海外业务呢，主要的目标呢还是通过这个非会员业务提升这个发展中地区的ROI，同时呢降低整个获客成本，追求有利润增长。我们第一个试点是印尼，经过半年的耕耘呢，一季度印尼地区的用户同比增长27%，而ROI呢翻倍，收入也翻了两倍半。那为了保证ROI的同时，在资源有限的情况下避免多线作战呢，我们也开始收缩这个暂时亏损地区的投放，例如日韩。虽然这些地方的收入相应出现下降，但整体国际化收入仍然会有增长，同时ROI情况也有大幅的改善。我们的策略是先在亚洲地区推广印尼的模式，那之后呢再集中资源发展其他地区。 Thank you for your questions. We have different methodologies and expectations when managing ROI oriented and DAU oriented apps. For ROI oriented apps, which includes Hertz, Duidui, SoulChill and Fairytown. Strategically, these apps focus on profitable growth and scaling back from non-profitable users and revenue growth. We plan to achieve this goal by improving ARPU, reducing user acquisition costs and the revenue sharing ratio. Total revenues from the bucket of new apps was slightly over RMB 300 million last year. This year, revenue is expected to be somewhere between RMB 700 million-RMB 800 million, while the net loss continues to narrow. The profitable trend as a whole is starting to emerge. For DAU oriented apps, our main goal this year is to deliver rapid product and user growth with no revenue plan for now. For our overseas business, our main goal is to improve our ARPU in developing regions by leveraging a non-subscription monetization model while reducing user acquisition costs in order to pursue profitable growth. Our first pilot was Indonesia market. Over the past six months period of time, user scale in Indonesia market grow 27%, and the ARPU doubled with revenue growth 2.5 times. Basically, in order to ensure profit and avoid multi-front operations with limited resources, we started to reduce investment in loss-making markets with low ROI, such as Japan and South Korea. Although revenue from these markets declined accordingly, but revenue from the overseas market as a whole will still grow. At the same time, profitability has also improved substantially. Our strategy is to initially replicate the Indonesian model in Asia and then focus our resources to develop peer in other regions. I think this is going to be the end of the conference. Thank you guys for participating, and we will see you next quarter. Back to you, Operator. Thank you. With that, we conclude our conference for today. Thank you for participating. You may now disconnect.