Gross margins have compressed from 41.1% in 2023Q4 to 38.7% in 2026Q1, reflecting persistent structural pressure on profitability as revenue growth remains negative.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 |
|---|
| Sales/Revenue | 10.23B | 10.37B | 10.56B | 12B | 12.7B | 14.58B | 15.02B | 17.02B | 13.41B | 8.89B | 3.71B | 869.83M | 277.62M | 18.96M | 0 |
| Revenue Growth % | -2.77% | -1.85% | -11.99% | -5.52% | -12.84% | -2.99% | -11.7% | 26.9% | 50.89% | 139.7% | 326.22% | 213.32% | 1364.04% | - | - |
| Cost of Goods Sold | 6.34B | 6.45B | 6.45B | 7.03B | 7.42B | 8.38B | 7.98B | 8.49B | 7.18B | 4.37B | 1.62B | 196.78M | 97.77M | 17.74M | 919.3K |
| COGS % of Revenue | - | 62.18% | 61.04% | 58.53% | 58.42% | 57.52% | 53.09% | 49.91% | 53.57% | 49.21% | 43.68% | 22.62% | 35.22% | 93.54% | - |
| Gross Profit | 3.89B | 3.92B | 4.12B | 4.98B | 5.28B | 6.19B | 7.05B | 8.52B | 6.23B | 4.51B | 2.09B | 673.05M | 179.85M | 1.22M | -919.3K |
| Gross Margin % | 38.03% | 37.82% | 38.96% | 41.47% | 41.58% | 42.48% | 46.91% | 50.09% | 46.43% | 50.79% | 56.32% | 77.38% | 64.78% | 6.46% | - |
| Gross Profit Growth % | - | -4.74% | -17.31% | -5.79% | -14.69% | -12.13% | -17.31% | 36.9% | 37.95% | 116.14% | 210.24% | 274.23% | 14591.3% | 233.16% | - |
| Operating Expenses | 2.53B | 2.57B | 2.58B | 2.67B | 3.66B | 4.18B | 4.52B | 4.97B | 2.96B | 2.08B | 1.11B | 636.6M | 341.98M | 57.94M | 23.11M |
| OpEx % of Revenue | - | 24.75% | 24.45% | 22.26% | 28.77% | 28.71% | 30.06% | 29.2% | 22.07% | 23.39% | 30.02% | 73.19% | 123.18% | 305.53% | - |
| Selling, General & Admin | 1.8B | 1.82B | 1.84B | 1.92B | 2.67B | 3.23B | 3.58B | 4.22B | 2.45B | 1.89B | 906.95M | 490.2M | 284.67M | 36.53M | 14.01M |
| SG&A % of Revenue | - | 17.59% | 17.4% | 15.98% | 21.01% | 22.15% | 23.81% | 24.79% | 18.29% | 21.26% | 24.46% | 56.36% | 102.54% | 192.65% | - |
| Research & Development | 760.79M | 779.45M | 804.42M | 884.59M | 1.01B | 1.13B | 1.17B | 1.1B | 760.64M | 346.14M | 208.65M | 151.03M | 57.47M | 21.4M | 9.09M |
| R&D % of Revenue | - | 7.52% | 7.62% | 7.37% | 7.92% | 7.76% | 7.77% | 6.44% | 5.67% | 3.9% | 5.63% | 17.36% | 20.7% | 112.88% | - |
| Other Operating Expenses | -4M | -37.59M | -59M | -130.1M | -20.63M | -175.95M | -228.78M | -344.84M | -253.7M | -156.76M | -2.66M | -4.63M | -161.28K | 0 | 0 |
| Operating Income | 1.36B | 1.35B | 1.53B | 2.31B | 1.63B | 2.01B | 2.53B | 3.55B | 3.27B | 2.43B | 975.09M | 36.45M | -162.13M | -56.71M | -24.03M |
| Operating Margin % | 13.34% | 13.07% | 14.51% | 19.2% | 12.81% | 13.77% | 16.85% | 20.89% | 24.36% | 27.39% | 26.3% | 4.19% | -58.4% | -299.07% | - |
| Operating Income Growth % | - | -11.63% | -33.5% | 41.63% | -18.92% | -20.7% | -28.79% | 8.83% | 34.18% | 149.64% | 2575.51% | 122.48% | -185.88% | -136.03% | - |
| EBITDA | 1.45B | 1.44B | 1.59B | 2.38B | 1.74B | 2.27B | 2.9B | 3.91B | 3.51B | 2.52B | 1.03B | 79.59M | -144.73M | -51.61M | -23.11M |
| EBITDA Margin % | 14.2% | 13.86% | 15.07% | 19.87% | 13.69% | 15.59% | 19.29% | 22.98% | 26.16% | 28.33% | 27.81% | 9.15% | -52.13% | -272.16% | - |
| EBITDA Growth % | 1.37% | -9.75% | -33.26% | 37.07% | -23.43% | -21.59% | -25.91% | 11.5% | 39.3% | 144.24% | 1195.32% | 154.99% | -180.44% | -123.34% | - |
| D&A (Non-Cash Add-back) | 88.47M | 81.81M | 58.73M | 79.61M | 112.13M | 264.6M | 366.25M | 356.19M | 241.27M | 83.67M | 55.84M | 43.14M | 17.4M | 5.1M | 919.3K |
| EBIT | 1.68B | 1.73B | 1.95B | 2.71B | 2.11B | -2.02B | 2.98B | 3.95B | 3.5B | 2.55B | 990.41M | 36.45M | -162.13M | -56.71M | -24.03M |
| Net Interest Income | 265.18M | 293.8M | 383.12M | 374.03M | 285.35M | 310.5M | 365.6M | 328.93M | 216.44M | 145.57M | 54.6M | 50.67M | 4.48M | 193.93K | 0 |
| Interest Income | 307.01M | 364.26M | 510.96M | 436.25M | 368.88M | 384.28M | 444.47M | 407.54M | 272.95M | 145.57M | 54.6M | 50.67M | 4.48M | 193.93K | 18.73K |
| Interest Expense | 41.83M | 70.46M | 127.85M | 62.22M | 83.53M | 73.78M | 78.87M | 78.61M | 56.5M | 0 | 0 | 0 | 0 | 0 | 18.73K |
| Other Income/Expense | 227.03M | 294.83M | 351.82M | 276.7M | 414.75M | -4.11B | 324.58M | 289.87M | 221.9M | 155.21M | 38.51M | 53.07M | 4.48M | 193.93K | 18.76K |
| Pretax Income | 1.59B | 1.65B | 1.88B | 2.58B | 2.04B | -2.1B | 2.86B | 3.84B | 3.49B | 2.59B | 1.01B | 89.52M | -157.65M | -56.52M | -24.01M |
| Pretax Margin % | 15.56% | 15.91% | 17.84% | 21.51% | 16.08% | -14.43% | 19.01% | 22.6% | 26.02% | 29.14% | 27.34% | 10.29% | -56.79% | -298.05% | - |
| Income Tax | 852.31M | 842.87M | 845.02M | 630.02M | 562.28M | 822.56M | 755.62M | 883.8M | 699.65M | 445M | 34.64M | 597.25K | 0 | 0 | 0 |
| Effective Tax Rate % | 53.54% | 51.1% | 44.84% | 24.4% | 27.53% | -39.11% | 26.46% | 22.99% | 20.06% | 17.19% | 3.42% | 0.67% | 0% | 0% | 0% |
| Net Income | 737.07M | 804.01M | 1.04B | 1.96B | 1.48B | -2.91B | 2.1B | 2.97B | 2.82B | 2.15B | 978.97M | 88.92M | -157.65M | -56.52M | -17.72M |
| Net Margin % | 7.2% | 7.76% | 9.84% | 16.31% | 11.68% | -19.99% | 14% | 17.46% | 21% | 24.17% | 26.41% | 10.22% | -56.79% | -298.05% | - |
| Net Income Growth % | -47.06% | -22.66% | -46.89% | 31.89% | 150.94% | -238.52% | -29.2% | 5.51% | 31.08% | 119.42% | 1000.97% | 156.4% | -178.94% | -218.89% | - |
| Net Income (Continuing) | 739.54M | 806.52M | 1.04B | 1.95B | 1.48B | -2.93B | 2.1B | 2.96B | 2.79B | 2.14B | 978.97M | 88.92M | -157.65M | -56.52M | -24.01M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 187.27M | 181.84M | 153.33M | 138.96M | 196.35M | 188.72M | 92.3M | 18.6M | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 4.59 | 4.62 | 5.58 | 9.84 | 7.30 | -14.42 | 9.66 | 13.18 | 13.00 | 10.05 | 5.00 | 0.39 | -0.82 | -0.30 | -0.82 |
| EPS Growth % | -42.49% | -17.2% | -43.29% | 34.79% | 150.62% | -249.28% | -26.71% | 1.38% | 29.35% | 101% | 1182.05% | 147.56% | -173.33% | 63.41% | - |
| EPS (Basic) | - | 4.68 | 5.62 | 10.36 | 7.60 | -14.42 | 10.10 | 14.32 | 13.18 | 10.58 | 5.28 | 0.52 | -0.90 | -0.30 | -0.86 |
| Diluted Shares Outstanding | 160.66M | 169.3M | 186.8M | 200.92M | 202.35M | 202.35M | 226.04M | 225.6M | 216.54M | 207.63M | 203.52M | 200.7M | 193.71M | 186.48M | 28.98M |
| Basic Shares Outstanding | 157.68M | 166.18M | 186.97M | 198.94M | 195.09M | 202.34M | 217.75M | 207.66M | 213.64M | 197.27M | 188.67M | 171.32M | 173.37M | 186.48M | 27.73M |
| Dividend Payout Ratio | - | 41.88% | 68.9% | 48.94% | 56.66% | - | 53.43% | 29.53% | - | - | - | - | - | - | - |
Regulatory and competitive saturation
As reported in recent financial statements, Hello Group's revenue has consistently declined, with the most recent quarter showing a 5.3% year-over-year contraction, signaling that the core social discovery and live streaming business model is struggling to maintain its top-line scale in a saturated market.
The persistent negative growth rates across the last ten quarters suggest that the platform has moved firmly into a maturity phase where user acquisition is failing to offset churn. Investors should monitor whether this trend reflects a structural decline in the appeal of the live-streaming gifting model or merely a temporary cyclical downturn in discretionary consumer spending.
Based on the provided income statement data, Hello Group's gross margin has compressed from 41.1% in 2023Q4 to 38.7% in 2026Q1, reflecting the high variable costs associated with revenue-sharing arrangements that remain a significant drag on the company's overall profitability profile.
The inability to expand gross margins despite the maturity of the platform suggests limited pricing power within the competitive Chinese live-streaming ecosystem. This margin profile appears structurally capped by the necessity of incentivizing content creators, which leaves little room for operational leverage to improve bottom-line results.
According to the latest quarterly figures, operating income has fallen to $309.7 million from a peak of $602.0 million in 2023Q4, indicating that the company is failing to achieve meaningful operating leverage as revenue declines outpace the firm's ability to rationalize its overhead expenses.
While SG&A expenses have remained relatively contained, the decline in operating margin to 13.0% highlights the difficulty of maintaining profitability when the top line is shrinking. The company appears to be in a defensive posture, where cost discipline is necessary just to maintain current levels of operating income rather than driving growth.
Analysis of the income statement reveals significant earnings volatility, highlighted by a net loss in 2025Q2 and fluctuating EPS figures, which suggests that non-operating items and periodic adjustments are creating noise that obscures the underlying cash-generating capability of the core social discovery business.
The presence of significant stock-based compensation in prior periods, coupled with the recent swing to a net loss, warrants further investigation into the consistency of the company's accounting practices. Investors should be wary of relying on headline net income, as it appears sensitive to non-recurring charges that may not reflect the true operational health of the firm.
While the company maintains a fortress balance sheet, the consistent revenue decay and margin compression suggest that the market's current valuation may be a rational response to the risk of terminal decline rather than a simple mispricing of the firm's substantial cash reserves.
Short-sellers would likely focus on the lack of a viable 'third act' beyond the core Momo and Tantan apps, arguing that the cash pile is being eroded by a business model that is structurally incapable of returning to growth. The risk remains that the company's capital allocation will continue to favor stagnant assets rather than pivoting to new, higher-growth opportunities.
Quick answers to the most common questions about buying MOMO stock.
For fiscal year 2025, Hello Group Inc. (MOMO) reported total revenue of $10.37B.
Hello Group Inc. (MOMO) is profitable, generating $804.0M in net income for the fiscal year ending 2025 with a net profit margin of 7.8%.
Hello Group Inc. (MOMO) reported an operating income of $1.35B, resulting in an operating profit margin of 13.1%. This margin reflects the operational efficiency of the business before interest and taxes.
Hello Group Inc. (MOMO) generated $3.92B in gross profit for the year, representing a gross profit margin of 37.8%. This demonstrates the company's core pricing power and production efficiency.