Ladies and gentlemen, thank you for standing by and welcome to Hello Group's second quarter 2026 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. 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 second quarter 2026 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. Tang Yan, CEO of the company, Mr. Wen Jianhua, CEO 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 all 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 Security 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 and others. 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 to differ materially from those in the forward-looking statement. For the information regarding this and other risks, uncertainties and factors is included in the company's findings with the U.S. Securities and Exchange Commission. The company does not take any further I will now pass the call over to our COO, Mr. Wen Jianhua. Jianhua, please. Okay. 大家好,感谢参加今天的电话会。 我们二季度集团业务稳定推进国内方面默默持续通过产品创新和精细化运营维护现金流业务健康运转。

Hello, everyone.

Thank you for joining today's call. The group maintained steady business momentum in Q2. On the domestic side, MoMo continued to preserve the healthy functioning of our cash cow business through product innovation and refined operations. While Tantan focused on AI capability building, to improve user experience and monetization efficiency. On the overseas side, the synergy across our diversified product portfolio became increasingly evident. Next, I'll walk you through the key updates.

首先是财务表现。 2026年二季度集团总营收24.9亿人民币, 同比下降5%,环比增长4%。 其中国内业务收入18.1亿人民币, 同比下降17%,环比增长1%。 Starting with the financials, for Q2 26, total group revenue was 2.49 billion RMB, down 5% year-over-year, but up 4% quarter-over-quarter. Domestic revenue reached 1.81 billion RMB,

down 17% year-over-year but up 1% quarter-over-quarter. Overseas revenue was 673 million RMB, up 52% year-over-year and 13% quarter-over-quarter. Overseas revenue accounted for 27% of total revenue compared to 17% in the same period last year. Adjusted operating income was 276 million RMB with a margin of 11%.

Our 2026 priorities continue along three main tracks. For Momo,

The goal is to ensure stable, sustained productivity of our cash cow business for Tantan to continue exploring a dating experience and an efficient business model tailored for Asian users, and for our new businesses to deepen the overseas presence, enrich our brand portfolio, and build a long-term growth engine. Next, I'll walk you through each.

首先是默默主弹。 Let me start with Momo. On the user side,

A year of user-oriented product iteration has effectively lifted platform engagement. Combined with the sequential recovery from the seasonal low in organic traffic, this drove a modest increase in MoMA's overall user base. Building on this uptick in the overall scale, our audio and video small ticket scenarios run themed operational events around the World Cup and key seasonal occasions, driving paying users up $200,000 quarter-over-quarter to 3.9 million.

On the product side, KnockKnock focused on refining our deep chat matching strategy, precisely pairing users with a high intent to chat, which had a positive effect on engagement, retention, and overall user scale.

AI Chat Assistant trains its models on real user behavior data to deepen its understanding of user preferences, driving steady growth in feature adoption, as well as the reply rate in AI greetings. This has both supported long-term retention and user-based scale and opened up new revenue scenarios. This quarter, we also began grade testing AI Xiaomu, which has AI browse users' photos to identify common interests complete an initial screening of potential matches and automatically generate a personalized icebreaker message, further improving matching efficiency and connection success rate.

或各方面,我们对于造回用户的渠道投入进行了分组屏蔽实验, 目的是确认渠道的错误归因是否会导致公司在渠道造回方面进行了部分低效投入。 On user acquisition, we run a holdout experiment on channel spend for dormant user reactivation, aiming to test whether attribution errors in our channel data were leading to inefficiencies in these re-engaging efforts.

The results show that there is indeed room for continued optimization in our channel investment, and we are confident we can maintain our current platform scale and revenue with less spend. In Q3, we will continue to improve acquisition efficiency based on these findings.

接下来谈一下默默现金流业务在商业化方面的表现。 二季度默默WAS收入是5.4亿元,同比下降16%,环比增长2%。 . . . . . . . . . . . . . . . . . . and Qi Du. The overall share share ratio is the same as the growth of low-end units, mainly due to the financial pressure in the tax return process in order to alleviate the supply and demand side. We have moderately adjusted the share ratio and supply and demand intensity of part of the core union of the audio and video scene to ensure that the supply and demand side is stable at the controllable cost. For back-end users, grab the world cup volume red power, and increase the heat of the room and user connectivity through the interactive play method such as size banning. Turning to MoMA's commercial performance in Q2, MoMA's vast revenue was 1.54 billion RMB, down 16% year-over-year, but up 2% quarter-over-quarter.

The year-over-year decline was mainly driven by two factors. Number one, continued tightening on the tax front, which has had a sustained and material negative impact on our agencies and broadcasters. Number two, softness in consumer spending due to macro. Sequential growth came in weaker than in previous years, mainly because since April, some agencies in the audio scenarios scaled by operations due to tax-related pressures, which weighted on revenues. In late May, we rolled out targeted subsidies to ease the operating pressure on these agencies, which drove a quick recovery in revenue. In Q2, our overall vast revenue sharing ratio rose by a low single-digit percentage point, both year-over-year and quarter-over-quarter, mainly because we moderately raised the revenue sharing ratio and subsidy support for certain core agencies in the audio scenarios to ease the supply side's financial pressure through the tax compliance process, keeping the supply side stable at a manageable cost. On the product and operation side, we stayed with our approach of tiered monetization and use case innovation. For high value users, we selected top-grossing broadcasters and created AI-generated, likeness-based custom gifts for them, which effectively refreshed paying among our top spenders. For media users, we capitalized on World Cup-related traffic by rolling out interactive gameplay, such as match predictions, which lifted engagement and user stickiness. At the long-tail end, we gray-tested a moments boost feature, letting users pay to increase the exposure of their posts. This not only produced positive operating data, but also successfully validated a new small-ticket payment scenario This multi-pronged, refined operating approach provided solid support for the stability of our overall revenue base amid the macro downturn.

Next, let's talk about carbon tax. At the end of the second quarter, the carbon tax for paid users was 500,000. Compared to the decline of 400,000, mainly due to the adjustment of the rules and regulations of Alipay and Autonomous Pay, it caused pressure on the paid rate. In terms of the big plate, the size of Japanese users in China Now, let's turn to Tantan. As of the end of Q2, Tantan had 0.5 million paying users, a modest decrease of 40,000 quarter over quarter.

mainly due to pressure on paying conversion from early-paced adjustments to its auto-renewal deduction rules. On the user base, average domestic user scale was stable with a slight uptick in Q2, marking the first stabilization in our user base since we began scaling back marketing spend in early 2022. New user growth stayed under year-over-year pressure amid the lingering effects of lower marketing spend. But on the product side, refined targeting strategies for different user segments improved matching efficiency, lifting retention among both male and female users to varying degrees, and contributing positively to overall user-based stability.

二制度探探國內業務核心聚焦在探索AI驅動的用戶體驗改善。 A.I. In Q2, Tantan's domestic business focused its core efforts

on exploring AI-driven improvements to the user experience. Among those, AI Icebreaker and AI Chat Assistant delivered encouraging early results. The team strengthened AI's semantic understanding of users' photos, which fits Tantan's users' preference for expressing themselves through images rather than text, and used the photo content to generate personalized opening lines, which had a particularly strong pull on female user retention. To address the pinpoint of female users receiving too many matches, the new AI curated matching feature scans through a large volume of matches to surface the best people to chat with, effectively reducing decision fatigue. In addition, AI one-click registration and profile optimization process the user information in bulk with precision, which not only lowers the barrier to onboarding, but also laid a high-quality data foundation for building an AI-engineered social manager down the road and enabling deeper, more curated matching and recommendations.

货客方面受外部因素影响,客单价同比上涨,叠加渠道预算收窄造成货客量同比减少, 但由于自然量的流程好于渠道, 且衰减相对缓慢部分环节投放数量对大盘整体造成的压力,

On user acquisition, external factors pushed up unit acquisition costs year over year, and combined with narrowed channel budget, this reduced the number of users acquired from year ago. However, because organic traffic retains better and drops more slowly than channel traffic, This partially offset the pressure on the overall user base from the reduction in paid acquisition. China ROI declined quarter over quarter due to raising unit cost and the impact of Alipay's policy change on Apple, but Tantan's overall ROI remained at a healthy level above 100% payback.

In terms of finance, Tantan's total revenue of 1.56 billion yuan in the second quarter decreased by 18% and decreased by 3%. On the financial side in Q2,

Tantan generated total revenue of 156 million RMB, down 18% year-over-year and 3% quarter-over-quarter. The revenue decline was mainly due to the temporary pressure on membership renewals from Alipay's domestic channel policy adjustment. In response, we took several measures. First, we launched a lifetime membership product and encouraged the short-cycle subscribers to convert to longer-cycle plans. Last but not least, CEO Wu.

China, China, China, China, China, China, China, China, China, China, China In comparison, the two-digit growth of overseas revenue is mainly due to the natural recovery after the season of disaster in the MENA region and the product test to introduce new game-based gameplay. The theme activities of the upcoming festival and World Cup are effective in improving the user activity and payment will to drive the growth of product revenue across the whole line. were affected by the fall of Turkey and the ongoing turmoil in the Middle East. The rate of growth is slower than expected in the beginning of the year, but the product is now gradually moving out of the Q1-D5, showing a clear recovery trend. In addition, it is worth mentioning that Mira's two new products have a strong growth power, and the second quarter combined income and volume are close to the demand, and while maintaining a high growth rate, the profitability is also continuously increasing. The pressure on this quarter has led to a loss balance at the competitive level. Lastly, our new businesses. In Q2, total overseas revenue was 673 million RMB, up 52% year-over-year and 13% quarter-over-quarter.

overseas revenue as a share of group revenue rose 10 percentage points year-over-year to 27%. The acceleration in year-over-year growth was mainly driven by strong momentum from our new MENA products, as well as the consolidation of overseas dating products acquired last year. Sequentially, overseas revenue grew at a double-digit rate, mainly reflecting the natural recovery in the MENA region following the seasonal Ramadan low, along with new gamified features on the product side and the themed events tied to seasonal occasions and the World Cup on the operational side, both of which lifted user engagement and paying propensity and drove revenue growth across the board. Within the portfolio, Xochitl's progress moderated relative to our initial timeline due to external factors including its removal from the Turkish app store and the ongoing geopolitical tension in the Middle East since the beginning of the year. However, the product is gradually emerging from its Q1-12 and is showing a clear recovery trend. Notably, the two newer products in Milan demonstrated strong growth momentum, with their combined revenue in the second quarter already approaching the scale of Socio. And alongside this high growth, profitability has also continued to improve. Yakaland achieved a net income break-even for the first time in Q2, Amar, having turned marginal contribution positive earlier this year, has seen its net loss continue to narrow quickly on the back of a rapid revenue growth and operating leverage. This marks a new stage of our MENA strategy, moving from a socio-driven single product model toward a multi-product matrix working in concert.

另外,我们在发达国家地区的约会业务二季度延续了高质量的扩张趋势, In the first half of the year, HAPN realized the recovery rate with the improvement of the RAR TPU through the membership rights system. Promote income and return ratio, no need to grow. Relying on the local advantages of the European core market, HAPN launched the exploration of the surrounding market at the beginning of the year and obtained satisfactory initial results. The current user and income performance of the new market fully verifies the long-term growth potential of these areas. For our next stage of scale expansion, we have developed a good base.

On the other hand, our developed market dating business has maintained high quality expansion in Q2. In the first half of the year, Happen improved pay conversion and RP pool through iterating on its membership benefit and precision targeting, driving continued revenue growth both year-over-year and quarter-over-quarter. Building on its strong position in its core European markets, Happen began exploring neighboring markets starting early this year and has seen encouraging early results. The current user and revenue performance in these new markets fully validates their long-term growth potential and lays a solid foundation for the next phase of scaled expansion.

Overall, in the last half of the year, while the Group has been working on the domestic business to continuously absorb external environmental challenges, the overseas product governance has achieved a growth of diversification from a single point of support to a diversified army. This has proven that we have been investing in globalization for a long time in the past few years. In the first half of the year, while our domestic business continued to weather external headwinds,

Our overseas product portfolio has shifted from being supported by a single product to achieving balanced, diversified growth. This validates the effectiveness of our sustained investment in globalization over the past several years and has given the group a healthier revenue structure and stronger resilience. In the second half of the year, we'll continue to strengthen the foundation of our domestic cash cow business through product innovation and refined operations. while advancing the scaling of our overseas business so as to create long-term value for both users and shareholders.

This concludes my remarks today. Now, let me pass the call over to Cassie for the financial review. Cassie, please. Thanks, Jianhua and Ashley.

Hello, everyone. Thank you for joining our conference call today. Now let me take you through the financial review. Total revenue for the second quarter of 2026 was 2.49 billion RMB, down 5% year-on-year, but up 4% quarter-on-quarter. Non-GAAP net income attributable to the shareholders of the company was 273.9 million RMB compared to a net loss of in the same period of 2025, and 328.8 million RMB in the previous quarter. Looking into the key revenue items for Q2, total revenue from value-added services for the second quarter of 2026 was 2.44 billion RMB, down 5% year-on-year, but up 4% quarter-on-quarter. On a geographic basis, PRC mainland value-added services revenue was 1.77 billion renminbi, down 17% year-over-year. The decrease was primarily due to continuous tax scrutiny on some of Momo's agencies, combined with weak consumer sentiment due to broader macro pressures, and to a lesser degree, a decline in paying users on TanTan. PRC Mainland VAS revenue for Q2-26 was up 1% quarter-over-quarter due to recovery from low seasonality. VAS overseas revenue for the second quarter of 2026 reached $664.9 million, up 51% year-over-year, driven by strong growth momentum from our new MENA product as well as the consolidation of overseas dating products acquired last year. sequentially overseas vast revenue rose 12% driven by a recovery in the MENA region after its seasonal low alongside product and operational initiatives. Turning to cost and expenses, non-GAAP cost of revenue for the second quarter of 2026 was 1.6 billion RMB, same as the year-ago period. Non-GAAP gross margin for the quarter was 35.8%. compared to 38.8% from year-ago period. Q2 cost of revenue included 56.8 million RMB in film production expenses. Excluding this item, gross profit margin would have been 38.1%, a decline of less than 1 percentage point versus Q2 last year. The decrease was primarily due to payment channel costs rising as a percentage of revenue. This resulted from a geographic mixed shift toward international operations which carry higher payment channel fee structures compared with our domestic businesses. Although Momoa raised agency payout ratio to mitigate impact from tax scrutiny, improved gross margins in the MENA region coupled with larger revenue contribution from higher margin overseas dating products offset the margin pressure stemming from Momos operations. As a result, total revenue share costs as a percentage of revenue remained stable from the year-ago period. Non-GAAP R&D expenses for the second quarter was 171.3 million RMB compared to 172.0 million RMB for the same period last year. Non-GAAP R&D expenses as a percentage of revenue was 7%, same as Q2 last year. We ended the quarter with 1,399 total employees compared to 1,268 from a year ago. The R&D personnel as a percentage of total employee for the group was 56% compared with 58% from Q2 last year. Non-GAAP sales and marketing expenses for the second quarter was 380.4 million RMB compared to 339.7 million RMB for the same period last year, representing a 15% and 13% of total revenue, respectively. The year-over-year increase in sales and marketing expenses was mainly attributable to a greater marketing spend on our new overseas app. This increase was partly offset by ongoing cost controls in mainland China operations. Both Momo and Tangtang cut marketing spend, while Soqiu temporarily pulled back on-channel investments amid external challenges. Non-GAAP G&A expenses were 75.1 million RMB for the second quarter, compared to 67.5 million RMB for the same period last year. The increase was primarily driven by 11 million RMB in exchange gains on Euro-dominated deposits stemming from currency fluctuations in Q2 last year compared with a 1.8 million RMB exchange loss in the current quarter. Non-GAAP G&A expenses as a percentage of revenue was 3%, largely unchanged from Q2 last year. Non-GAAP operating income was 276.1 million RMB representing a margin of 11.1% compared with 447.7 million RMB and a margin of 17.1% from Q2 2025. As noted earlier, non-GAAP cost of revenue included film production related expenses. Excluding this item, non-GAAP operating income from our recurring business would have been 332.9 million RMB with a margin of 13.4%. Non-GAAP OPEX as a percentage of total revenue was 25%, an increase from 22% from the year-ago period. Now briefly on income tax expenses. Non-GAAP income tax expenses was 71.2 million RMB for the quarter with an effective tax rate of 23%. In Q2, the company accrued withholding income tax of 18.4 million RMB which is 10% of undistributed profit generated by our role fee. Without the withholding tax, our estimated non-GAAP effective tax rate was around 17% in the second quarter. Now turning to balance sheet and cash flow items. As of June 30th, 2026, hollow group cash, cash equivalents, short-term deposits, long-term deposits, short-term investments, and restricted cash totaled 8.54 billion RMB compared to 8.68 billion RMB as of December 31, 2025. Net cash provided by operating activities in the second quarter of 2026 was 642.3 million RMB. The difference between operating net cash and non-GAAP net income was mainly due to the fact that a substantial amount of Q1 receivables were collected in Q2 of crude interest and some non-cash items, including film production costs and withholding tax. Lastly, on business outlook, we estimated our third quarter revenue to come in the range from 2.4 billion RMB to 2.5 billion RMB, representing a decrease of 9.4% to 5.7% year-over-year. This is based on the assumption that, at midpoint, on a year-over-year basis, revenue from our mainland China business will decline by high teens percentage-wise, while overseas revenue is expected to grow by high 30s percentage-wise. Please be mindful that this forecast represents the company's current and preliminary view on the market and operational conditions, which are subject to change. That concludes are a prepared portion of today's discussion. With that, let me turn the call back to Ashley to start Q&A. Ashley, please.

Thanks. Just a quick reminder before we take the questions, for those who don't speak Chinese, please ask your questions in Chinese first, followed by English translation by yourself. Operator, we're ready for questions.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Thomas Chong with Jefferies. Please go ahead.

晚上好,謝謝管理層接受我的提問。 記得上一次的Earnings Call, 管理層曾經提到就是上半年, 我們國內業務的收入的下降的幅度會叫上半年。 will be significantly reduced. But if we look at the latest data, we can see that Q3 will increase in the second half of the year. I would like to ask what is the core reason for this deviation? Is it due to the change in the external landscape or is it a strategic adjustment from the platform's own operation? Let me translate myself. Hi, good evening. Thanks, management, for taking my question. In our last earnings call, management talked about the decline in domestic revenue in the second half would be notably leveling versus the first half. However, when we look at the guidance, it seems the decline in Q3 is slightly widening versus the first half of the year. May we know the key reason for the difference? Is it more due to the changes in external macro environment or adjustment about our platform operational strategy? And in response to the situation, what specific measures does the company have at the moment? Can management provide more color about the financial, about the domestic revenue and expenses in the second half? Thank you.

我来回答一下吧。 我们关于国内业务预期的调整,主要是基于经过下半年以来默默直播流水出现的一些新趋势。 数据显示我们流水的压力主要集中在高额付费用户群体的消费降级。 Although most of the users in the group are still active on the platform, the number of consumers has decreased significantly. Through our VIP team's targeted research on customers, we have learned that the core reason is the high demand for high-paying people due to the fluctuation of the PR environment, which has led to people's spending in the social entertainment field.

Our revised outlook for the domestic business is mainly based on some new trends that we've seen in the mobile live streaming revenue since entering the second half of the year. The data shows that the revenue pressure is concentrated mainly in consumption downgrading among high-spending paying users. Although the vast majority of these users in this cohort remain active on our platform, but they've become more cautious about spending, and average RP pool has declined significantly. Based on our targeted interviews to those cohort of users by our VIP team, we found out that the core driver behind this is weaker wealth expectations. among high-net-worth individuals amid macro-volatility, which has dampened spending on social entertainment. But by contrast, mid-tier and long-tail users, as well as the broadcasters from the supply side, have remained relatively stable.

基于这个判断,我们会采用分层运营的思路。 首先是头部用户,我们会充分用好默默的社交平台优势, The focus is to strengthen social connections, not just stimulate consumption. Specifically, on the one hand, we will present a lightweight play method based on social interaction. At the same time, the official organization of offline activities for high-end users will further improve the connection between this part of the user and the platform, and upgrade VIP exclusive services. On the other hand, we will continue to provide overseas tourism, short-term production, and this kind of scarce resources, and continue to update content supply.

based on this view we will take a tiered operating approach starting with top tier users we will make full use of more and more strengths as a social platform focusing on deepening social connections rather than simply pushing more spending and specifically on the one hand we will roll out lightweighted social interaction focused features and organized official offline events for high paying users, further strengthening this group's stickiness to the platform and upgrading our VIP exclusive services. On the other hand, we will continue to provide high quality broadcasters with exclusive resources such as overseas training tours and short drama production to constantly refresh content supply and sustain are high-value users' ongoing interests and engagement around top broadcasters.

For media and long-tail users,

will focus on low-barrier, high-retention scenarios, such as audio-based interactive features and social mini-games, using richer use case offering to stabilize the revenue base generated by this user group. And for the financial figures, I will hand it over to Cassie.

Sure. Let me... Let me give you a quick update on how we currently think about the domestic business in the second half of 2026. As you may see, our Q3 guidance implies roughly a high-teens year-over-year decline for the domestic business, widening from Q2 17% year-over-year decline rate. and that underperforms our earlier expectation that in the second half domestic business could see YY decline rate narrowing down from first half. The key reason Q3 is coming in below our quarter ago expectation is that, as Tang Zou mentioned just now, the domestic business has been facing greater pressure than we anticipated. particularly on user spending sentiment among the very top cohort users in live streaming showrooms. With regards to the trajectory from Q3 onward, as in the previous quarters, I would still frame our view around three areas that we closely monitor. First is overall spending sentiment. What we've observed since late Q2 is a meaningful reduction in spending from the top cohort of users. These are the users who historically contribute a disproportionate amount of revenue in the showrooms, and many of them spend in the hundreds of thousands on a monthly basis. the reduction in spending from this top of pyramid users became more pronounced. Our current assessment is that this reflects continued pressure on the financial outlook of these so-called high net worth users, which is in turn affecting their discretionary and entertainment spending. So from a macro spending sentiment perspective, we may continue to see a headwind as we move into Q4. And the second factor is the regulatory environment. At this point, we are not seeing any significant incremental regulatory pressure and we expect the environment to remain relatively stable. So this is not a major driver of the change in our outlook. The third area and one where we continue to see encouraging signs is the underlying health of the platforms. Our DAU and engagement metrics remain relatively resilient and importantly, more and more paying user base in Q2 increased meaningfully from Q1. This is certainly, there is certainly some seasonality in that sequential improvement However, we believe it also reflects a relatively healthy and resilient user ecosystem. So in other words, the weakness we're seeing in revenue is not primarily a function of users leaving the platforms or a deterioration in engagement. It's much more concentrated in the spending behavior of the highest net worth users. These users are still active and still paying. They're simply spending less. So if you put these factors together, I would say the biggest change in our view versus at the beginning of the year is the macro spending environment, particularly among the top cohort of users. For that reason, our earlier expectation for a meaningful narrowing of the year-over-year decline in the second half should be adjusted downward. At this point, given the uncertainty around the macro environment, I don't think it would be appropriate for us to put a specific Q4 number out there. What we can control is continuing to strengthen the fundamentals of both Momo and Tan Tan, improve the user experience and engagement across the platforms, and make the business more efficient. On the cost side, we do see opportunities to further optimize our operating expenses. This includes continued discipline around personnel costs. As Jianhua mentioned in his prepared remarks, additional opportunities to optimize sales and marketing spending in the domestic business. So while the revenue environment is more challenging than we anticipated at the beginning of the year, we are taking a more balanced approach, remaining focused on improving the underlying Thank you. Your next question comes from Sichuan Zhang with CICC. Please go ahead.

Thank you for answering my question. My question is about overseas business. Just now, the management has mentioned that the second-hand drug and AMER are new products, and the receipt has been almost sold out. At the same time, the ability to profit is also continuing to improve. Thanks management for taking my question. My question regards on the overseas business. and management mentioned that the combined revenue from IHANA and AMER in the same quarter was already close to that of SOCIO, while their profitability continues to improve. As the revenue mix of the social attainment business in the MENA region becomes more diversified, we expect the company's performance in the region to become more stable and resilient going forward. and how will the structural shift affect the overall margin profile of the MENA business? And the commencement also share whether there has been any update to the company's three-year outlook for OVNC's business. Thank you.

From the current perspective, the two relatively new products in the middle will exceed the market share in Q3. Based on the current momentum, the combined revenue of our two new Amina products will surpass Socio's in Q3.

Both products are still maintaining healthy, strong growth, so we are confident that we can grow them into social products of the scale comparable to Socio.

In addition, these three products have different ways of playing, and they are different in focusing on the customer group and the area. This will make the business of the group in the MENA region more diversified, and the ability to resist external risks and mobilize the ability to seize growth opportunities is stronger. After the new product is made, even if a certain product is short-term suppressed due to external supervision or geopolitical factors, other products can still support the stability of the entire area income. In addition, these three products differ in gameplay, target of user base, and regional focus, which will make the group's MENA business more diversified and strengthen both our resilience to external risk.

and our agility in capturing growth opportunities. Once the new products are established, even if one of them comes under short-term pressure from external regulatory or geopolitical factors, the others can still support the stability of overall regional revenue. We also believe the market for this type of audio-video social product isn't limited to Amina. A diversified product portfolio gives us stronger capability to expand into other regions than a single product would. On profitability, both Yachlan and Amar are improving quickly. Yachlan has already crossed breakeven, and Amar is likely still around half a year away. But both products' growth margin and contribution margin are improving rapidly and steadily. We believe both products will contribute to group profit next year. As for our overseas revenue outlook, I will leave it to Cassie.

Okay, before giving a quantitative outlook, let me briefly walk through the three key components of the overseas business. First, on Xochitl, our flagship product in the MENA region, the business has underperformed our original expectations somewhat. There were two main factors behind that. One was the removal of the app from the app store in Turkey earlier this year. And the other was the regional conflict that started in April, which had an impact on the operating environment in parts of the Middle East. The encouraging part is that, as you can see from Q2 results, both revenue and traffic for Socio have already recovered from the low point in Q1. We are continuing to see gradual sequential improvement as we move through Q3 and hopefully Q4 as well. So, SoChill is somewhat below our initial expectation for the year, but the trajectory has been improving over the past couple of quarters. The second piece is Yahalan and Amark. As Tang Zong and Jianhua mentioned, the outperformance of these two businesses has partially compensated for the shortfall in social. In Q3, the combined revenue from Ya Haolan and Amar has already exceeded that of social. Both businesses are still growing at a rapid pace, while we are also seeing a meaningful improvement in their bottom line performance. So we believe these two businesses can continue to make progress and become increasingly meaningful contributors to both the top line and bottom line of the overseas business going forward. The third piece is the dating and membership subscription businesses, which continue to perform well. Some of the acquired brands, including Happn, have been making broke have been making good progress in new markets, including Korea, Taiwan, and UK. At the same time, we are taking a fairly disciplined approach to investment in these new markets. We do see opportunities to increase marketing investment to accelerate top-line growth, but we also want to maintain a healthy bottom line for the newly acquired dating business. More importantly, we want to make sure that we are building the ecosystem in these markets in a sustainable way rather than simply pushing for short-term user or revenue growth. So there is naturally a balance between the pace of top-line expansion and the level of investment that we are willing to pour in within a relatively short time frame. In other words, we'd rather take it right than take it fast. So if you wrap these all up and try to look at the takeaway as a whole, I would say that Socio perhaps moved a little bit slower than we expected a quarter ago. We do have the potential to maybe compensate it by moving faster on expanding the other two MENA apps and the dating apps. But given that we wanted to balance top-line growth and bottom-line target, we probably won't push the gas pedal harder than we previously planned. Therefore, my current view is that the original 3 billion renminbi target for overseas revenue for 2026 at this point looks a little bit of a stretch. We'd rather take one or two hundred millions down from that target.

Maybe back to Ashley to take one last question. Yeah, so in the interest of time, let's just take one last question before we close the line. Operator, we're ready.

Your next question comes from Jenny Yuan with UBS. Please go ahead.

Thank you for the question. My question is about our profit outlook for the second half of the year. We mentioned the economic downturn of domestic business in the second half of the year. What impact will it have on the performance of the entire economy? So, thanks for managing my question. My question is on the profit outlook. As management now expects a weaker revenue outlook for domestic business in the second half, How do we see the impact on the group's overall profitability and the earnings performance going forward?

Thank you.

I'll take that question. Profitability. Maybe let me start with the group top line first because that's the first area where our view has changed. As I mentioned back in during our Q1 conference call. At that time, we expected the group revenue to decline slightly year-over-year, perhaps by a couple of percentage points. Given the additional pressure we are seeing in the domestic business in the second half, we currently expect the four-year group revenue decline to be somewhat larger, maybe to meet single-digit range. The second factor affecting profitability is the investment in the two movies. With both movies now released, we've recognized roughly somewhere around 60 million of additional losses in Q2. That obviously creates some incremental pressure on the full-year bottom line relative to our earlier expectations. Having said that, we continue to see opportunities to offset some of this pressure through cost management and improving operating efficiency. In particular, we are looking at further optimization of personnel costs as well as sales and marketing spending. especially in the domestic businesses. So putting these factors together, the additional pressure on the top line does make it more challenging to achieve our original margin target, which was, I think we pointed toward a low teens adjusted operating margin for 2026. but at this point we still believe that that margin target remains achievable provided that we execute well on the cost side and continue to improve operating efficiency.

Back to Ashley to wrap up the call. I think that's all the time we have and thank you for joining us today and we'll see you next quarter.

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