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Hello Group, operator of the Chinese dating apps Tantan and Momo as well as several other niche platforms, is turning to artificial intelligence to help users break the ice. The company unveiled new AI-driven conversation aids this year, but early signs suggest the technology has yet to reverse its long-running revenue decline.
In its second-quarter earnings report, the Nasdaq-listed firm said revenue fell 2.6% year-on-year to 2.62 billion yuan ($368 million), marking the latest in a string of quarterly contractions dating back to 2020. The company also posted its first net loss in more than three years, partly due to a one-time tax charge tied to recent dividend payouts.
The new AI features, launched on the core Momo app in the second quarter, aim to make interactions smoother for men who often struggle with first messages or sustained conversation. “Using our use of AI to enhance icebreaking chat experience, we have also been testing an AI chat assistant feature, which provides content suggestion for male users during the ongoing conversations,” COO Zhang Sichuan told analysts. He said the tools are designed to encourage longer chats, boost engagement, and help stabilize Momo’s shrinking user base.
Despite that effort, the platform continues to see erosion. Paid users on Momo fell about 15% sequentially to 3.5 million in the quarter, while users on its smaller Tantan app also dropped. The company blamed “soft consumer sentiment” for an 11% decline in value-added services revenue, a segment that makes up around 70% of overall sales.
One bright spot has been international expansion, particularly in the Middle East. Overseas revenue surged 73% year-on-year to 442 million yuan (45M GBP, or 62M USD), lifting its share of total revenue to 17% from under 10% a year earlier. However, management cautioned that growth in this segment is likely to slow in the coming quarter.
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