Ladies and gentlemen, thank you for standing by. Welcome to the third quarter 2022 Hello Group Inc. 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 third 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. Tang Yan, CEO of the company, and Ms. Cathy Peng , CFO of the company. They will discuss the company's business operations and highlights, as well as the financials and guidance. They will be both available to answer your questions during the Q&A session that follows. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions, and relate to events that involve known or unknowns 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 will now pass the call over to our CEO, Mr. Tang Yan.
Good day, everyone. Thank you for joining our conference call. This is my first earnings call since returning to the CEO position. I'm very happy to have the opportunity to communicate with the investor community again.
In the third quarter, thanks to the product and operational enhancements, we delivered good financial results and made solid progress in our businesses. I'll walk you through the details. Good day, everyone. Thank you for joining our conference call. This is my first earnings call since returning to the CEO position. I'm very happy to have the opportunity to communicate with the investor community again. In the third quarter, thanks to the product and operational enhancements, we delivered good financial results and made solid progress in our businesses. I'll walk you through the details. I will start with a brief overview of our financial performance. For the third quarter of 2022, total group revenue was CNY 3.23 billion, down 14% year-over-year, but up 4% quarter-over-quarter.
Revenue growth came in stronger than we expected, as live streaming performed slightly better than our conservative estimates. Adjusted operating income was CNY 605 million, up significantly by 13% sequentially, with a profit margin of 19%. This was mainly attributable to solid execution of our strategy to optimize cost and improve efficiency, delivering good progress across all business lines. On an ex-Tantan basis, total revenue was CNY 2.89 billion, down 11% year-over-year, but up 4% sequentially, and adjusted operating income was CNY 643 million with a margin of 22%. The year-over-year decrease in total revenue was mainly due to pressure on the live streaming business caused by the pandemic and regulatory factors. However, this decrease was partially offset by rapid growth in standalone apps.
Tantan's total revenue for the quarter came in at CNY 341 million, down 33% year-over-year. Up 3% sequentially. The year-over-year decrease was mainly due to the demonetization process we initiated in September last year to improve user experience and retention, as well as the negative impact of COVID and the reduction of channel investment on content user growth and paying conversion. Adjusted net loss was significantly narrowed to CNY 38.84 million from CNY 119 million in the second quarter, mainly due to our initiatives to optimize channel marketing strategy since July.
接 下 来 介 绍 一 下 团 队 三 季 度 在 各 项 战 略 重 点 方 面 的 执 行 情 况 。 今 年 陌 陌 、 探 探 和 新 业 务 的 战 略 目 标 分 别 是 ： 陌 陌 以 有 限 的 营 销 预 算 ， 力 图 实 现 用 户 规 模 稳 中 求 进 ， 同 时 确 保 现 金 流 业 务 稳 定 产 出 。 尽 管 三 季 度 疫 情 和 消 费 充 满 诸 多 不 确 定 性 ， 但 团 队 能 够 灵 活 应 对 。 在 陌 陌 主 阵 战 略 重 点 的 执 行 方 面 取 得 了 非 常 值 得 认 可 的 成 绩 。 探 探 年 初 的 目 标 是 通 过 市 场 提 效 及 产 品 的 优 化 创 新 ， 推 动 用 户 规 模 稳 定 增 长 。 但 由 于 上 半 年 疫 情 管 控 持 续 加 码 ， 严 重 影 响 用 户 约 会 以 及 付 费 意 愿 ， 大 幅 降 低 获 客 ROI。 三 季 度 管 理 层 决 定 将 探 探 的 战 略 目 标 调 整 为 减 投 控 本 ， 持 续 收 窄 亏 损 ， 跑 通 适 合 亚 洲 市 场 约 会 文 化 的 产 品 和 商 业 模 式 ， 在 盈 亏 平 衡 的 基 础 上 追 求 增 长 。 本 季 度 探 探 的 财 务 表 现 显 示 出 我 们 在 这 一 战 略 重 点 的 执 行 方 面 取 得 了 初 步 的 成 果 。 关 于 新 业 务 ， 我 们 的 目 标 是 持 续 丰 富 产 品 矩 阵 ， 拓 宽 探 探 和 陌 陌 之 外 的 业 务 边 界 。 这 方 面 我 们 本 季 度 也 取 得 了 不 错 的 进 展 。 接 下 来 给 大 家 逐 项 介 绍 一 下 本 季 度 我 们 就 以 上 战 略 重 点 所 取 得 的 成 果 以 及 未 来 的 发 展 规 划 。
Now I'll discuss the execution of our strategic priorities during the third quarter. The goal we set for Momo, Tantan and our new endeavors this year are as follow: For the Momo app, our goal is to maintain a stable user base with a limited marketing budget and seek growth on top of that, while ensuring this cash cow business remains stable. Although the consumer and regulatory environments were full of uncertainties, our team adapted well and did a good job in executing on Momo's strategic goal. For Tantan, our goal set at the beginning of the year was to deliver solid user growth by improving marketing efficiency and the core dating experience. However, in the first half of the year, the COVID situation continued to deteriorate, which largely affected users dating sentiments and their propensity to pay for that, resulting in a significant decline in channel ROI.
In the third quarter, we decided to adjust Tantan's strategic goals to focus on narrowing net loss by reducing low efficiency channel marketing spend and accelerating our efforts to develop products and monetization models that are suitable for the Asian dating culture in order to pursue profitable growth. Tantan's financial performance this quarter demonstrated the initial success we achieved in executing on this strategic goal. With respect to new products and businesses, our goal is to continue to enrich our product portfolio and push the boundaries beyond Momo and Tantan. We made steady progress on this front during this quarter. I will discuss the progress we made with the aforementioned strategic priorities and our future plans.
首 先 是 陌 陌 APP 的 用 户 增 长 情 况 及 核 心 的 运 营 数 据 。 陌 陌 三 季 度 MAU 一 点 零 八 八 亿 人 ， 环 比 下 降 百 分 之 二 。 封 控 措 施 对 陌 生 人 社 交 的 情 绪 的 负 面 影 响 贯 穿 了 整 个 三 季 度 ， 且 至 季 度 中 开 始 持 续 加 码 ， 导 致 自 然 量 、 留 存 及 付 费 意 愿 都 面 临 下 行 压 力 。 渠 道 方 面 ， 疫 情 期 间 出 于 控 本 考 虑 ， 减 投 了 付 费 率 不 佳 且 留 存 差 的 低 效 渠 道 ， 将 有 限 的 预 算 向 ROI 高 的 渠 道 倾 斜 。 三 季 度 陌 陌 付 费 用 户 的 数 量 是 八 百 四 十 万 ， 跟 二 季 度 的 八 百 六 十 万 相 比 呢 减 少 了 二 十 万 。 主 要 的 原 因 在 于 MAU 的 减 少 。 团 队 及 时 调 整 了 渠 道 及 增 长 策 略 ， 向 付 费 指 标 倾 斜 。 叠 加 商 业 产 品 用 户 体 验 优 化 ， 使 付 费 率 在 疫 情 及 减 投 的 压 力 下 环 比 保 持 稳 定 ， 为 现 金 流 业 务 的 稳 定 产 出 奠 定 了 良 好 的 基 础 。
Regarding Momo app user growth and key operating metrics. Momo had 100.88 million monthly actives this quarter, down 2% sequentially. The negative impact of pandemic control measures pressured the overall open social sentiment throughout Q3, the situation worsened starting in the middle of the quarter, resulting in a sequential decline in organic traffic, retention, and users propensity to pay. In terms of channel marketing, in order to control costs amid the pandemic, we scaled back investments in channels with low-paying conversion and less satisfactory retention, and tilted our limited marketing budget toward channels with high ROI. The number of paying users for the quarter was 8.4 million, down from 8.6 million in Q2. The 200,000 sequential decrease was mainly due to the decline in MAUs.
Paying conversion remained stable, thanks to our team's timely adjustments in user acquisition strategy, focusing on high ROI channels and paying conversion, and continuous paying experience optimization of commercial features. This laid a solid foundation for our cash cow business to remain stable.
接 下 来 介 绍 一 下 在 确 保 现 金 流 业 务 稳 定 产 出 这 一 战 略 重 点 上 取 得 的 进 展. 尽 管 疫 情 管 控 给 大 盘 流 量 造 成 了 压 力, 但 团 队 通 过 及 时 调 整 产 品 策 略 和 运 营 方 案在 确 保 利 润 率 基 本 保 持 稳 定 的 基 础 上, 推 动 Momo 主 App, 的 流 水 环 比 增 长. 在 面 对 疫 情 以 及 消 费 疲 软 等 诸 多 挑 战 的 外 部 环 境 下, 能 够 实 现 毛 利 额 与 流 水 同 步 增 长, 反 映 出 团 队 出 色 的 业 务 把 控 和 执 行 能 力.
Now, I'll discuss progress we made regarding the priority of ensuring the cash cow business remains stable. Although the COVID control measures put pressure on our user base on an X time basis, revenue growth sequentially and profit margins stayed largely stable, thanks to our team's efforts to adjust product and operational strategy in a timely manner. Our team managed to drive gross profit increase along with revenue growth against the challenging external environment with the COVID and discretionary spending softness. This demonstrate our strong adaptability and execution skills.
三 季 度 ， 陌 陌 直 播 业 务 营 收 十 五 点 二 亿 人 民 币 ， 同 比 呢 下 降 了 百 分 之 二 十 一 ， 环 比 增 长 了 百 分 之 八 。 同 比 下 降 主 要 原 因 在 于 疫 情 及 监 管 因 素 。 环 比 的 增 长 得 益 于 针 对 腰 部 以 上 的 用 户 活 动 玩 法 ， 叠 加 定 向 主 播 推 荐 ， 有 效 提 升 了 该 群 体 的 产 品 体 验 ， 带 动 高 额 付 费 用 户 环 比 增 长 。 运 营 团 队 通 过 调 整 活 动 政 策 和 玩 法 设 计 ， 控 制 分 成 成 本 ， 在 推 动 流 水 增 长 的 同 时 ， 使 毛 利 率 基 本 保 持 稳 定 ， 实 现 有 利 润 的 收 入 增 长 。 生 态 方 面 ， 优 化 针 对 不 同 层 级 用 户 的 推 荐 算 法 ， 带 动 直 播 间 DAU 环 比 提 升 。 共 计 测 优 质 新 主 播 数 量 环 比 显 著 增 加 ， 整 体 生 态 保 持 健 康 稳 定 。
Momo live streaming revenue was RMB 1.52 billion for the third quarter, down 21% year-over-year, up 8% sequentially. The year-over-year decrease was mainly due to COVID and regulatory factors. The sequential growth was mainly attributable to the increase in the number of high paying users, driven by promotional events targeting mid to high cohort users, and designated broadcaster recommendation algorithm, which effectively enhanced the product experience of the relevant groups. Our operation team controlled revenue sharing costs by adjusting event policy and design of gamified features so that gross profit margins stayed relatively stable while revenue increased sequentially, generating gross profit and creative revenue growth. Our ecosystem remained healthy and stable as we optimized the recommendation algorithm for different cohorts of users, driving sequential growth in live streaming DAU.
On the supply side, the number of high quality talents grew significantly quarter-over-quarter.
接 下 来 介 绍 增 值 业 务 。 三 季 度 不 包 括 探 探 。VAS 营 收 十 三 点 四 亿 人 民 币 ， 同 比 增 长 百 分 之 六 ， 环 比 增 长 百 分 之 一 。 增 量 全 部 来 自 于 新 业 务 的 收 入 贡 献 。 陌 陌 站 内 VAS 营 收 十 一 点 四 亿 人 民 币 ， 同 比 下 降 百 分 之 三 ， 环 比 保 持 稳 定 。 独 立 新 app 营 收 一 点 九 六 亿 人 民 币 ， 同 比 增 长 百 分 之 一 百 四 十 七 ， 环 比 增 长 百 分 之 八 。 稍 后 我 会 对 新 业 务 做 整 体 分 析 ， 这 里 先 讲 一 下 陌 陌 站 内 的 VAS。
With regards to VAS, revenue from Value-Added Services including Tantan totaled RMB 1.34 billion for the third quarter, up 6% year-over-year, up 1% sequentially. All incremental revenue came from our new endeavors. VAS revenue from the main Momo app totaled RMB 1.14 billion, down 3% year-over-year and flat sequentially. Revenue from the new app was RMB 196 million, up 147% year-over-year and 8% sequentially. I will provide an overall update for our new endeavors later. For now, I'll focus on Momo app VAS business.
站 内 VAS 场 景 方 面, 三 季 度 受 疫 情 封 控 持 续 加 码 的 影 响, 例 如 群 组 和 线 下 聚 会 这 类 LBS 属 性 较 强 的 场 景 流 量 及 活 跃 度 减 弱, 导 致 传 统 礼 物 整 体 付 费 金 额 较 低. 会 员 业 务 受 流 量 下 降 影 响, 收 入 环 比 降 低. 传 统 社 交 线 场 景 营 收 规 模 回 撤, 是 拖 累 站 内 VAS 实 现 环 比 增 长 的 主 要 原 因. 音 视 频 场 景 通 过 上 线 新 玩 法, 提 升 付 费 转 化, 推 动 收 入 规 模 环 比 提 升, 弥 补 了 传 统 礼 物 的 流 水 缺 口, 使 得 整 体 站 内 VAS 收 入 环 比 呢 保 持 稳 定.
For VAS within the Momo app, Q3 has seen COVID situation deteriorating and lockdown measures get increasingly stringent. As a result, user traffic and engagement level of highly LBS related features such as the interest group and offline gatherings, were particularly depressed by the pandemic control measures in Q3. This was reflected in the relatively low overall spending on traditional gifts, and revenue from membership services also decreased sequentially due to weaker traffic. The revenue decline in traditional LBS related social use cases was the main drag on the sequential performance of the Momo app. For audio and video based social entertainment experiences, we introduced new features to drive paying conversion and sequential revenue growth, which offset the decline in traditional virtual gifting and kept Momo VAS revenue stable.
下 面 谈 一 下 探 探 。 首 先 回 顾 用 户 趋 势 和 整 体 财 务 表 现 。 为 应 对 疫 情 及 经 济 形 势 的 诸 多 不 确 定 性 ， 三 季 度 管 理 层 决 定 正 式 启 动 减 投 控 本 策 略收 缩 投 放 规 模 ， 砍 掉 效 率 低 下 二 的 渠 道 和 获 客 方 式 ， 以 减 少 探 探 的 亏 损 。 减 投 短 期 对 探 探 MAU 造 成 明 显 压 力 。 叠 加 八 月 下 旬 以 来 全 国 各 地 地 区 疫 情 管 控 力 度 加 码 ， 九 月 探 探 整 体 用 户 规 模 两 千 零 九 十 万 ， 环 比 下 降 百 分 之 十 六 。 截 至 三 季 度 末 ， 默 默 啊 探 探 付 费 用 户 数 两 百 万 ， 环 比 减 少 了 二 十 万 。 主 要 原 因 在 于 MAU 的 下 滑 。 付 费 率 环 比 提 升 主 要 有 两 个 因 素 呃 ， 所 导 致 。 第 一 ， 付 费 用 户 留 存 好 于 非 付 费 用 户 。 第 二 ， 产 品 及 算 法 的 优 化 带 来 了 高 付 费 意 愿 用 户 的 购 买 行 为 。
With respect to Tantan, I will start with user trend and overall financials. In response to uncertainties created by the pandemic and the macro environment. In the third quarter, management decided to pursue a cost control strategy to narrow Tantan's net loss by reducing marketing spend on cutting investment in channels and methods with low ROI. Such strategy had a clear impact on Tantan's overall MAUs in the near term, compounded by the escalated COVID control measures in multiple regions in China since late August. Tantan's overall MAUs decreased 16% quarter-over-quarter to 20.9 million in September. The number of paying users for the quarter was 2 million, down 200,000 sequentially, mainly due to the decline in MAUs. The sequential improvement in paying conversion was mainly attributable to two factors.
First, the retention of paying users is better than that of non-paying users. Second, the optimization of our product and algorithm drove spending from users with a high propensity to pay.
接 下 来 回 顾 一 下 探 探 的 财 务 表 现 。 三 季 度 探 探 总 营 收 三 点 四 亿 ， 三 点 四 一 亿 元 人 民 币 ， 同 比 下 降 百 分 之 三 十 三 ， 环 比 增 长 百 分 之 三 ， 好 于 我 们 之 前 的 预 期 。 同 比 下 降 来 自 于 去 年 九 月 为 提 升 用 户 体 验 实 施 的 商 业 化 回 撤 。 本 季 度 虽 然 付 费 用 户 受 MAU 影 响 环 比 下 滑 ， 但 ARPU 在 直 播 业 务 和 其 他 高 消 费 项 目 的 带 动 下 环 比 显 著 提 升 。 抵 消 付 费 人 数 下 滑 对 营 收 造 成 的 压 力 。 分 业 务 线 来 看 ，VAS 收 入 二 点 零 二 亿 元 人 民 币 ， 环 比 下 降 百 分 之 六 ， 下 降 全 部 来 自 于 付 费 人 数 减 少 。SVIP 销 量 占 比 提 升 ， 带 动 ARPU 环 比 小 幅 增 长 。 直 播 收 入 一 点 四 亿 元 人 民 币 ， 环 比 增 长 百 分 之 二 十 ， 主 要 得 益 于 供 几 侧 优 化 带 动 的 ARPU 环 比 显 著 提 升 。
Now I'll briefly review Tantan's financial performance. Total revenue for the third quarter was RMB 341 million, down 33% year-over-year, but up 3% sequentially. Tantan revenue for the quarter came in better than expected. The year-over-year decrease was mainly due to our demonetization strategy to improve user experience since September last year. Although the number of paying users decreased sequentially due to the decline in MAUs, the significant improvement in ARPU, driven by live streaming and other high spending services, offset the pressure on MAU caused by the decline in paying user count. For the third quarter, VAS revenue was RMB 202 million, down 6% sequentially, mainly due to a decrease in paying user counts. The proportional increase in SVIP sales led to a slight increase in VAS ARPU.
Live streaming revenue for the third quarter was RMB 140 million, up 20% sequentially. The sequential growth was mainly attributable to the significant increase in ARPU driven by supply side optimization.
接 下 来 介 绍 下 Tantan 战 略 重 点 的 执 行 情 况 ， 未 来 规 划 。 下 半 年 Tantan 的 目 标 是 减 投 控 本 ， 持 续 缩 窄 亏 损 规 模 ， 同 时 通 过 算 法 、 产 品 创 新 和 新 的 非 会 员 付 费 产 品 推 动 留 存 及 ARPU 增 长 。 ROI 打 正 后 ， 再 将 利 润 投 入 到 市 场 推 广 ， 以 此 形 成 自 己 自 主 的 正 循 环 。 Tantan 扭 亏 为 盈 有 2 个 关 键 因 素 ： 1 、 采 取 什 么 样 的 减 投 方 案 ， 能 够 在 少 花 钱 的 同 时 提 高 获 客 效 率 。 2 、 如 何 通 过 新 的 产 品 体 验 提 升 留 存 和 ARPU。 下 面 我 将 分 别 这 两 点 分 别 介 绍 一 下 。
Let's move to the progress Tantan has made against its strategic priorities and our future plans. Tantan's goal for the second half of the year is to reduce spending in low efficiency channels to narrow net loss. At the same time, we are working hard to improve user retention and driving ARPU growth through algorithm, product innovation and new non-membership VAS features. Once ROI turns positive, we will reinvest the profit into marketing to form a self-sustaining positive cycle. Tantan's breakeven depends on two key factors. First, reducing cost while ensuring the improvement of user acquisition efficiency. Second, improving user retention and ARPU through new product experiences. Next, let me explain each of the two in detail.
首 先 是 渠 道 减 投 。 三 季 度 探 探 亏 损 从 二 季 度 的 亿 点 一 九 亿 元 人 民 币 大 幅 收 窄 到 了 三 千 八 百 八 十 四 万 ， 减 亏 效 果 好 于 预 期 ， 主 要 得 益 于 减 投 控 本 提 效 的 渠 道 策 略 。 进 入 七 月 以 来 ， 我 们 陆 续 砍 掉 了 低 效 的 渠 道 和 投 放 方 式 ， 并 持 续 优 化 渠 道 预 算 的 分 配 方 案 ， 根 据 市 场 环 境 灵 活 变 化 ， 调 整 出 价 策 略 。 三 季 度 渠 道 获 客 单 位 成 本 环 比 下 降 近 三 成 ， 同 比 下 降 百 分 之 四 十 以 上不 断 优 化 了 获 客 策 略 ， 令 新 增 留 存 、 同 环 比 均 得 以 改 善 。 受 益 于 获 客 素 材 和 针 对 不 同 的 用 户 群 体 的 定 向 策 略 调 整 ， 新 增 女 用 户 占 比 提 升 至 年 内 最 高 水 平 ， 新 用 户 平 均 年 龄 进 一 步 年 轻 ， 年 轻 化 。 三 季 度 渠 道 减 投 的 阶 段 性 成 果 ， 为 明 年 进 一 步 缩 减 亏 损 以 及 实 现 盈 亏 平 衡 和 业 务 正 循 环 奠 定 了 良 好 的 基 础 。 四 季 度 ， 我 们 计 划 进 一 步 收 窄 国 内 市 场 预 算 ， 持 续 优 化 投 放 策 略 。 在 不 考 虑 奖 金 等 年 末 特 殊 成 本 的 情 况 下 ， 进 一 步 收 窄 运 营 亏 损 。 同 时 持 续 提 升 新 增 留 存 和 年 轻 用 户 占 比 ， 并 将 新 增 女 性 的 比 例 保 持 在 合 理 水 平 。
Regarding reduction in channel investments. In the third quarter, Tantan's adjusted net loss meaningfully narrowed to 38.84 million RMB from 119 million RMB in the previous quarter. The better than expected net loss reduction was mainly due to our channel strategy to reduce and control marketing costs and improve user acquisition efficiency. Since July, we have gradually cut off channels and methods with low ROI, continued to optimize budget allocation for channel investment, and adjusted bidding strategy timely according to market dynamics. In the third quarter, unit user acquisition cost decreased by nearly 30% sequentially and by more than 40% from a year ago. The continuous improved user acquisition strategy drove new user retention to increase both on a year-over-year and on a sequential basis.
Thanks to the adjustment in user acquisition advertisement material and targeting strategies for different user groups, the female ratio of new users reached a peak for the year, and the average age of new users continued to get younger. The initial results of channel investment reduction has laid a solid foundation for us to further narrow Tantan's net loss to achieve breakeven and enter into a positive business cycle next year. In the fourth quarter, we plan to further reduce marketing spend in the domestic market and continue to optimize our user acquisition strategy so that excluding specific year-end expenses such as annual bonuses, we can further narrow Tantan's loss from operations. In the meantime, we will continue to improve user retention, new user retention and the proportion of young users, and maintain the female ratio of new users at a satisfactory level.
虽 然 减 投 三 季 度 取 得 了 不 错 的 成 绩 ， 但 想 要 达 成 我 们 的 目 标 ， 实 现 有 利 润 的 增 长 ， 除 了 提 升 渠 道 效 率 以 外 ， 另 外 一 个 不 可 或 缺 的 因 素 是 提 高 单 用 户 营 收 水 平 。 在 如 何 提 升 单 用 户 营 收 水 平 方 面 ， 陌 陌 走 过 ， 探 探 走 过 一 段 弯 路 。 在 19 年 重 新 上 架 后 ， 到 2021 年 中 旬 ， 我 们 决 定 进 行 主 动 的 商 业 化 回 撤 之 前 ， 探 探 提 升 ARPU 的 做 法 是 通 过 日 益 精 细 化 的 付 费 墙 策 略 ， 提 升 会 员 服 务 的 付 费 转 化 。 这 个 策 略 用 更 ， 更 通 俗 的 说 法 来 解 释 ， 就 是 在 用 户 认 为 使 用 价 值 较 高 的 服 务 周 围 建 造 越 来 越 多 的 付 费 壁 垒 ， 让 大 家 不 付 费 就 不 能 玩 得 爽 。 由 于 会 员 服 务 单 价 无 法 无 限 分 层 ， 因 此 营 收 增 长 手 段 从 付 费 率 加 ARPU 两 条 腿 走 路 变 成 了 只 能 靠 提 升 付 费 率 来 完 成 。 这 也 是 为 什 么 探 探 会 选 择 在 2020 到 2021 上 半 年 间 ， 通 过 增 加 男 用 户 占 比 以 及 高 度 付 费 用 户 壁 垒 等 方 法 ， 把 会 员 付 费 率 做 得 越 来 越 极 致 的 根 本 原 因 。 这 样 做 虽 然 令 探 探 曾 经 一 度 非 常 接 近 盈 亏 平 衡 ， 但 过 于 激 进 的 付 费 墙 策 略 严 重 影 响 了 用 户 体 验 ， 带 来 了 男 女 比 例 的 大 幅 失 衡 、 新 用 户 ， 即 女 ， 女 性 用 户 留 存 持 续 变 差 、 会 员 付 费 率 降 低 、 投 诉 率 高 企 等 问 题 。 这 段 弯 路 证 明 单 纯 依 赖 无 法 进 行 用 户 分 层 的 会 员 模 式 是 行 不 通 的 ， 无 法 令 探 探 的 营 收 增 长 进 入 更 加 规 模 化 ， 同 时 可 持 续 的 良 性 增 长 循 环 。 因 此 ， 我 们 必 须 尝 试 更 好 的 方 法 ， 而 这 个 目 的 只 能 通 过 更 大 力 度 的 产 品 和 运 营 创 新 才 能 达 成 。
Although we delivered good results in lowering marketing spend in the third quarter, to achieve our goal of profitable growth, we need to address another critical factor, which is to increase ARPU. In the past, Tantan took a wrong path in driving ARPU. After the resumption of App Store downloads in 2019 and before we initiated the demonetization process in mid-2021, the way to increase paying conversion and ARPU was to make the paywall strategies more and more aggressive. In other words, this was a strategy to build more and higher paywalls around features deemed to be highly valuable to users and making it impossible for users to fully enjoy Tantan's services without paying.
Since membership subscription is limited in differentiating users in different paying capabilities, in order to drive revenue growth, Tantan team at the time had to heavily focus on increasing paying conversion rather than driving both paying conversion and ARPU at the same time. That was the fundamental reason why Tantan chose to push the membership subscription ratio higher and higher by increasing male user ratio and aggressively building paywalls between 2020 and the first half of 2021. Although doing so made Tantan once very close to breakeven. The overly aggressive paywall strategy severely affected users' experience, resulting in a number of problems such as the largely disproportionate gender ratio continuously deteriorating new users and female users retention, lower membership renewal rate, and growing customer complaints.
That detour, which ended up hitting a dead end, taught us that is not feasible to entirely rely on a membership model with limited options to differentiate users. This model won't put Tantan's revenue growth into a scalable and sustainable virtuous cycle. Therefore, we have to try a better way to drive ARPU growth. This goal can only be achieved through greater product and operational innovations.
我 们 的 计 划 是 通 过 新 的 产 品 体 验 改 善 留 存 和 ARPU。 用 户 产 品 方 面 ， 尽 快 探 索 出 滑 动 匹 配 之 外 的 有 效 社 交 体 验 。 而 付 费 产 品 方 面 ， 通 过 更 容 易 的 分 层 的 非 会 员 增 值 服 务 ， 提 升 单 用 户 营 收 贡 献 。 过 去 几 个 季 度 ， 团 队 一 直 致 力 于 通 过 改 善 女 性 及 不 露 脸 用 户 的 产 品 体 验 来 提 升 这 两 个 用 户 群 体 的 留 存 ， 进 而 带 动 整 体 留 存 增 长 。 例 如 向 女 性 用 户 推 荐 优 质 聊 天 对 象 的 Vase 产 品 ， 算 法 的 优 化 迭 代 带 动 女 用 户 使 用 时 长 、 留 存 及 人 均 对 话 数 量 环 比 提 升 。 又 例 如 佩 戴 虚 拟 的 人 的 头 像 的 聊 天 室 ， 为 羞 于 露 脸 的 用 户 提 供 即 时 聊 天 的 陪 伴 场 景 。 三 季 度 在 新 玩 法 和 话 题 运 营 的 带 动 下 ， 聊 天 室 互 动 效 果 和 用 户 粘 性 均 有 所 提 升 。 四 季 度 ， 我 们 计 划 在 聊 天 室 搭 建 更 多 的 玩 法 ， 在 提 升 产 品 渗 透 和 用 户 粘 性 的 同 时 ， 尝 试 商 业 化 模 式 ， 使 该 场 景 对 于 提 升 ARPU 和 商 业 化 提 效 产 生 更 积 极 的 贡 献 。
Our solution to improve retention and ARPU is to introduce new product experiences. On the user product front, our urgent priority is to explore effective social experiences beyond the swipe and match mechanism. For commercial products, we will leverage non-membership-based paying models that can better differentiate users to drive ARPU growth. Over the past few quarters, our team was dedicated to optimizing product experience for female users and those without qualified photos to improve retention of these two specific groups, thereby enhancing overall retention. For example, we introduced the female-oriented Vase features to recommended potential matches for high quality conversations. Algorithm iteration on the back end of this feature drove a sequential increase in female users time spent, retention, and number of average conversations. Another example I can share with you here is the chatroom experience.
Users who feel reluctant to show their real photos can use avatar to chat with others and enjoy a sense of companionship. In the third quarter, we improved chatrooms user engagement by leveraging innovative features and initiating hot topic discussions. In the fourth quarter, the key is on introducing more innovative features in the chatroom in order to enhance product penetration and user engagement. We will also going to be testing different monetization models. The goal is for the chatroom to contribute more to ARPU growth and improve monetization efficiency.
整 体 来 看 ， 三 季 度 创 的 团 队 在 减 投 控 本 方 面 取 得 了 不 错 的 进 展 。 在 产 品 和 场 景 创 新 上 虽 然 还 没 有 取 得 突 破 性 的 进 展 ， 但 用 户 体 验 和 留 存 都 稳 中 有 进 。 这 让 我 对 未 来 几 个 季 度 持 续 收 窄 运 营 亏 损 ， 最 终 达 成 在 盈 亏 平 衡 的 基 础 上 实 现 有 利 润 的 增 长 这 一 目 标 更 加 充 满 信 心 。 我 们 有 足 够 的 信 心 和 耐 心 在 产 品 运 营 方 面 慢 慢 打 磨 ， 不 断 尝 试 。
Overall, in the third quarter, Tantan made good progress in narrowing the net by reducing low efficiency channel marketing spend. Although we haven't made breakthroughs in user experiences and product innovations, we have seen steady improvement in user engagement. This makes me feel more confident that we will continue to narrow operating loss in the coming quarters and eventually achieve profitable growth. We have enough confidence and patience to keep driving and gradually refining our products and operations.
接 下 来 回 顾 一 下 创 新 业 务 取 得 的 进 展. 三 季 度 创 新 产 品 中 ， 以 追 求 利 润 为 目 标 的 ROI 项 独 立 apps 整 体 营 收 CNY 203 million ， 同 比 增 长 了 154% ， 环 比 增 长 2%. 对 于 生 命 周 期 相 对 成 熟 的 国 内 产 品 ， 我 们 今 年 的 策 略 是 加 速 商 业 化 进 程 ， 提 升 变 现 效 率 ， 扩 大 利 润 规 模. 处 于 扩 张 期 的 海 外 社 交 产 品 ， 我 们 的 目 标 是 在 盈 利 的 基 础 上 ， 通 过 深 耕 成 熟 市 场 、 拓 展 收 入 新 区 来 扩 大 用 户 及 流 水 规 模 ， 优 化 供 给 侧 生 态 的 同 时 降 低 分 成 比 例 ， 提 升 获 客 效 率. 三 季 度 ROI 项 的 产 品 整 体 用 户 数 量 稳 中 有 升 ， 利 润 规 模 环 比 大 幅 增 长. 这 一 出 色 的 用 户 及 财 务 表 现 主 要 得 益 于 获 客 效 率 的 改 善 ， 使 得 推 广 费 用 得 以 收 窄 ， 进 而 显 著 提 升 运 营 利 润 率. 本 季 度 海 外 产 品 收 入 规 模 已 超 越 国 内 业 务 ， 且 展 现 出 更 大 的 增 长 潜 力. 未 来 一 段 时 间 内 ， 我 们 对 于 ROI 导 向 的 产 品 管 理 方 式 会 延 续 当 前 的 方 案 ， 即 在 保 证 盈 利 的 基 础 上寻 求 稳 定 增 长 ， 扩 大 用 户 规 模. 在 拓 展 新 市 场 的 过 程 中 ， 根 据 当 地 用 户 特 点 ， 有 针 对 性 地 推 出 特 定 社 交 产 品 ， 并 尝 试 商 业 化 创 新.
Lastly, I will review the progress we made with our new endeavors. In the third quarter, total revenue for the profit-driven ROI-oriented standalone apps was RMB 203 million, up 154% year-over-year, and 2% sequentially. For the domestic products that are more mature, our strategy this year is to step up the monetization process, improve monetization efficiency and scale up profits. As for overseas social apps in the expansion stage, our goal is to expand user base and grow profitable revenue by deepening operations in established markets and expanding into new markets. In addition, we will optimize supply-side ecosystem, lower the revenue sharing ratio and improve user acquisition efficiency. In the third quarter, user base of the ROI-oriented products grew steadily and profit increased significantly from the previous quarter.
Such encouraging user and financial performances were mainly attributable to reduction in marketing spends due to improved user acquisition efficiency, which in turn drove a substantial growth in operating margin. In Q3, revenue generated by apps in the overseas markets surpassed that in the domestic market, and overseas apps showed greater growth potential. Going forward, we will continue our covered management approach to ROI oriented products, namely to pursue steady growth and scale up profit contribution. We will launch new social apps and innovate monetization model to meet local users specific preferences while expanding into new markets.
以 上 是 本 次 电 话 会 我 想 和 大 家 分 享 的 内 容 。 接 下 来 请 Cathy 为 大 家 具 体 介 绍 一 下 财 务 的 情 况 。
This concludes my remarks today. I will now pass the call over to Cathy for the financial review. Cathy, please.
Thank you, Tang and Ashley. Hello, everyone. Thank you for joining our conference call today. Now let me briefly take you through the financial review. Total revenue for the third quarter 2022 was 3.23 billion RMB, exceeding the high end of our revenue guidance, down 14% year-on-year, but up 4% quarter-over-quarter. Non-GAAP net income attributable to the company was 535.8 million RMB, compared to 571.6 million RMB from the same period of 2021 or a 6% decrease. The year-on-year decrease on bottom line was significantly narrowed from the previous quarters. Looking into the key revenue items for the quarter. Firstly, on live streaming.
Total revenue from live broadcasting business for the third quarter 2022 was RMB 1.66 billion, down 24% year-over-year, but up 9% quarter-over-quarter. Core Momo's live broadcasting revenue totaled RMB 1.52 billion for the third quarter, down 21% year-over-year, but up 8% quarter-over-quarter. The year-over-year decrease was mainly due to the pressure caused by the COVID and the regulatory factors. The sequential growth was mainly attributable to an increase in the number of high-paying users driven by product and operational efforts. Tantan's live broadcasting revenue amounted to RMB 139.7 million, down 40% from Q3 last year, but up 20% from the previous quarter.
The year-over-year decrease was mainly due to product adjustments to improve user experience in September last year, as well as the negative impact of the pandemic resurgence on the channel investment reduction. In the third quarter, our efforts to reform Tantan's live streaming service to make it more geared toward facilitating social interactions started to bear fruit, which, coupled with the supply side optimization, drove a meaningful sequential decrease, sequential increase in Tantan's live streaming revenue. Revenue from value-added service was RMB 1.54 billion, the same as in Q3 last year and flattish sequentially. Revenue from value-added service on an ex-Tantan basis reached RMB 1.34 billion in the third quarter of 2022, a 6% increase year-over-year and a 1% increase sequentially.
The growth in value-added service on an ex-Tantan basis was driven by incremental revenue contributed by the standalone new applications. Tantan's value-added service revenue amounted to RMB 201.6 million, down 27% from Q3 last year and 6% from the previous quarter. The year-on-year decrease was due to the demonetization process to improve user experience and retention in the latter half of 2021, as well as the pressure on Tantan's MAUs and paying conversion caused by the COVID resurgence and reduction on marketing spend. The sequential decrease in Tantan's value-added service was largely attributable to the latter factor. Non-GAAP cost of revenue for the third quarter of 2022 was RMB 1.88 billion, compared to RMB 2.16 billion for the same period last year.
Non-GAAP gross margin for the quarter was 41.7%, down less than 1 percentage point, both from a year ago and from the last quarter. The decrease was mainly due to a couple of Tantan related factors. One, the decrease in Tantan's revenue contribution to the group as Tantan bears higher gross margin than the Momo app. Two, lower gross margin from Tantan as its live streaming contributed to more to the top line. With respect to the Momo application, gross margin in the third quarter remained largely stable compared to the same period last year and the previous quarter, thanks to our team's operational strategy to focus on gross profit and margin instead of just revenues.
Non-GAAP R&D expenses for the third quarter was CNY 223.4 million, compared to CNY 231.8 million for the same period last year, or a 4% decrease year-over-year, which was due to the continuous optimization in personnel costs since the beginning of the year. We ended the quarter with 1,750 total employees, of which 479 are from Tantan, compared to 2,050 total employees, of which 548 from Tantan a year ago. The R&D personnel as a percentage of total employee for the group was 62% compared with 59% Q3 last year.
Non-GAAP sales and marketing expenses for the third quarter was CNY 458.6 million or 14% of total revenue, compared to CNY 637.1 million or 17% of total revenue for the same period last year. The significant year-over-year decrease, both in terms of absolute renminbi amount and as a percentage of revenue, was primarily attributable to Tantan's shift in marketing strategy to cut spending on low ROI channels and methods in order to take care of ROI amid COVID and lockdowns. With respect to Momo application, we also trimmed low efficiency marketing spend and shifted our savings to promote new applications such as TieTie. We will continue to reallocate resources to support growth of those with higher ROI and promising potentials.
Non-GAAP G&A expenses was CNY 82.6 million for Q3 2022, compared to CNY 114.8 million for the same quarter last year. The decrease was again the reflection of our continuous efforts to improve cost efficiency as well as some one-off cost items occurred in Q3 2021. G&A expenses as a percentage of revenue remained stable. Non-GAAP operating income was CNY 605.1 million, a decrease of 5% from Q3 2021, up significantly by 30% from the previous quarter. Non-GAAP operating margin for Q3 was 19%, up 2 percentage points from the same period last year and 4 percentage points from the previous quarter.
Non-GAAP OpEx as a percentage of total revenue was 24%, a decrease from 26% from Q3 2021, and 29% from last quarter. Non-GAAP operating expenses on a year-on-year and sequential basis decreased 22% and 15% respectively. The decrease in both absolute renminbi amount and as a percentage of revenue for OpEx was mainly due to a reduction in sales and marketing expenses, and to a lesser degree, our cost optimization strategy applied to other operating expenses line items since the beginning of the year in response to the macro and pandemic uncertainties. Now briefly on the below-the-line items. During the third quarter, the company generated RMB 40.4 million other gain, mainly from the repurchase of our convertible senior notes from certain bondholders, which was partially offset by impairment loss on other long-term investments. Now briefly on income tax expenses.
Total income tax expenses was CNY 156.0 million for the quarter, with an effective tax rate of 22%. In Q3, the company accrued withholding income tax of CNY 42.9 million, which is 10% of undistributed profit generated by our WFOE. Without the withholding tax, our estimated Non-GAAP effective tax rate was around 16% in the third quarter. Now turning to balance sheet and cash flow items. As of September 30, 2022, Hello Group's cash equivalents, short-term deposits, long-term deposits, and restricted cash totaled CNY 13.02 billion compared to CNY 15.71 billion as of December 31, 2021.
The decrease was due to a number of cash flow items, including our cash dividend payment of CNY 841 million to shareholders, an aggregate payment of CNY 2.14 billion for the repurchase of the company's convertible notes, an aggregate of CNY 288 million in relation to the share repurchase program, and CNY 300 million payment to Chinese tax authorities to repatriate cash from our WFOE in China to our offshore entity in the first nine months of 2022. Net cash provided by operating activities in the third quarter 2022 was CNY 445 million compared to CNY 560 million in the third quarter of 2021. Lastly, on business outlook.
We estimated our fourth quarter revenue to come in the range from RMB 3.15 billion to RMB 3.25 billion, representing a decrease of 14.3%-11.5% year-over-year, or a decrease of 2.6% to an increase of 0.5% quarter-over-quarter. For Q4 2022, on a sequential basis, we expect the total revenue for the core Momo to be flattish toward a slight decrease due to the negative impact on FAAS from the continuous COVID control measures. On the Tantan side, we expect revenue to decline low single digits. Tantan's membership revenue will decrease quarter-over-quarter due to a decline in user base as we further reduce marketing spend on low efficiency channels.
The membership subscription revenue decrease will be partially offset by the growth of live streaming. 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 over to Ashley to start Q&A. Ashley, please.
Thanks. Just a quick reminder before we take questions. For those who can speak Chinese, please ask your questions in Chinese first, followed by English translation by yourself. Operator, we're ready for questions, please.
Thank you. 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 cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question. Today's first question comes from Thomas Chong with Jefferies. Please go ahead.
Thanks management for taking my questions. As Tang Yan returns as CEO, should we expect there would be any changes to the group overall strategies? Thank you.
Thank you for your question. While I was not directly involved in the daily management of the company over the past two years, I, in my role of Executive Chairman of the Board, was closely following the overall operations and financial performance of the group. I was involved in setting strategic priorities and in the decision-making process on major issues. Therefore, our strategy will generally remain unchanged, focusing on Momo, Tantan, and our new endeavors. If there is anything different between my approach to strategic execution and the past, I would say that we will step up our efforts on new products and businesses with enhanced results, allocation and execution. Let me elaborate a bit on these three aspects. First off for Momo app.
As the product with the largest user scale and the most mature commercial experience in our brand portfolio, Momo's main goal for now is to maintain a steady user base and profit contribution to the group and seek growth on top of that. Especially when we are facing uncertainties created by the pandemic and the macro environment, the most important task for Momo app is to continuously and steadily generate decent level of net profit and cash flow. This requires our team to continuously improve cost control and capital utilization efficiency while doing an excellent job in product operations. We believe that by improving product and operational efficiency, maintaining stable profit is a very achievable goal for Momo, even in the current difficult external environment. Secondly, Tantan.
As the second biggest brand of the group, in terms of connecting people for romantic purposes, we are seeing very clear growth potential for Tantan, both in China and in overseas markets. Especially in the Asian markets, we do not see any other product that can do a better job than us in meeting users', dating needs.
However, COVID control measures in the past few quarters went beyond our expectation at the beginning of the year. We therefore decided to control cost and reduce low efficiency marketing spend. Tantan's user scale declined somewhat as we expected, and based on Tantan's user retention and financial performance in the recent months, I'm very confident that we will drive Tantan into a positive business cycle and achieve our strategic goal of profitable growth through product innovation.
第 三 部 分 是 创 新 业 务 。 过 去 两 年 ， 团 队 在 这 方 面 取 得 了 不 错 的 进 展 。RY 导 向 的 产 品 在 盈 利 的 基 础 上 保 持 快 速 增 长 。 我 们 的 目 标 是 未 来 三 到 五 年 内 ， 我 们 可 以 再 有 几 款 这 样 的 app 跑 出 来 ， 为 集 团 贡 献 更 多 的 利 润 。 另 一 方 面 ， 非 RY 导 向 的 产 品 ， 我 们 今 年 也 首 次 取 得 了 突 破 。 年 初 我 们 抓 住 这 个 代 替 代 际 更 替 的 这 个 机 遇 ， 推 出 了 首 个 面 向 零 零 后 的 大 DAU 产 品 贴 贴 ， 用 户 规 模 很 快 就 达 到 了 非 常 可 观 的 体 量 ， 验 证 了 团 队 在 社 交 领 域 发 现 新 市 场 并 把 握 新 机 遇 的 优 势 。
Thirdly, with respect to new products and businesses, our team has made encouraging progress over the past 2 years. Our ROI-oriented products maintained strong growth momentum on top of profitability. Our goal is to develop a few more apps like this in the next 3-5 years so that collectively they can make more contribution to the group's bottom line. On the other hand, this year we've also made an initial breakthrough in non-ROI-oriented product. At the beginning of the year, we captured the opportunity of a generational transition and launched our first large DAU product, TieTie, for Gen Z and Gen Alpha, and its user base reached a very considerable level within a short period of time. This demonstrated our ability to discover new markets and seize new opportunities in the social space and creating a competitive advantage in the process.
近 期 我 们 对 集 团 的 组 织 架 构 进 行 了 一 些 调 整 ， 以 便 在 明 确 各 个 产 品 职 能 定 位 的 同 时 ， 更 好 地 利 用 技 术 和 渠 道 的 综 合 优 势 ， 将 我 们 积 累 的 成 功 经 验 用 于 支 持 新 业 务 的 发 展 。 我 本 人 将 会 直 接 领 导 创 新 业 务 团 队 ， 探 索 并 开 辟 集 团 新 的 业 务 增 长 路 径 。
Recently we've made some adjustments to the organizational structure in order to clarify the functional positioning of each product and at the same time better leverage R&D and channel marketing capabilities so that we can apply the successful experiences that we accumulated to support the development of new products. I personally will directly lead our new endeavors team to explore and open new growth paths for the group. I think that's it for the questions. Maybe let's move on to the next person. Operator?
Absolutely. Our next question today comes from Leo Chen with Deutsche Bank. Please go ahead.
感谢管理层接受我的提问。我的提问是关于Tantan的，想请问一下Tantan当前的用户规模是否已经见底？我们怎么看2023年的用户趋势以及投放策略。第二个问题是，也是关于Tantan，想问一下2023年的收入预期，以及我们实现盈亏平衡的抓手有哪一些。Thank you management for taking my question. I have two questions about Tantan. The first question is, has Tantan's MAU already reached bottom?
What is the strategy, sales and marketing strategy in 2023, and how can we expect the MAU trend in 2023? My second question is what is the revenue outlook in 2023 and what is the key measures to help reach breakeven? Thank you.
好的。我们 在 启动 降本增效 的 策略 之前 做过 一个 测算，我们 预计 Tantan 的 减投 将会 令 MAU 发生 20% 左右 的 下降，左右 个 5% 吧。这个 浮动 区间 主要 是 看 疫情 封控 的 情况。目前 Q3 的 这个 降幅 呢，超过 我们 预期，主要 是 因为 这个 疫情 比 我们 August 份 的 预期 还要 严重。就 目前 的 情况 来看，我们 估计 最后 Tantan 用户 可能 会 在 CNY 18 million-CNY 19 million 左右 见底。当然 因为 疫情 的 不确定性，这个 数字 会 比较 动态。
Before we initiating our strategy to reduce cost and improve marketing efficiency, we estimated that the reduction in Tantan's channel investment will lead to a roughly 20% decrease in MAUs, plus or minus 5%, depending on the extent of the pandemic control measures. The decline in MAUs in the third quarter exceeded our expectations as the COVID resurgence was worse than we expected in August. Based on the current situation, we expect Tantan's MAU to bottom out around 18 million-19 million. Of course, the number can fluctuate because of the uncertainties around the pandemic.
明 年 也 就 是 2023 年 ， Tantan 的 用 户 趋 势 我 觉 得 取 决 于 这 个 疫 情 的 情 况 。 一 来 取 决 于 疫 情 情 况 ， 二 呢 取 决 于 我 们 的 投 放 策 略 。 Tantan 的 投 放 策 略 会 以 ROI 为 导 向 ， 也 就 是 说 我 们 会 在 ROI 为 正 的 基 础 上 适 度 地 加 大 投 放 力 度 。 这 里 面 有 两 方 面 的 影 响 因 素 ， 一 是 封 控 。 这 个 政 策 逐 步 放 开 ， 然 后 线 下 的 社 交 恢 复 ， 这 会 带 来 留 存 和 付 费 转 化 的 提 升 。 另 一 方 面 是 我 们 自 身 的 产 品 体 验 提 升 带 来 的 留 存 和 ARPU 的 提 升 。 如 果 以 上 任 何 的 因 素 变 化 ， 令 这 个 ROI 转 正 ， 我 们 的 投 入 能 够 算 得 过 来 账 ， 我 们 就 会 增 加 这 个 市 场 投 入 ， 从 而 实 现 正 循 环 基 础 上 的 增 长 。
As for Tantan's user trend in 2023, it depends first on how the pandemic evolves, second, on our marketing strategy. Tantan's channel investment will be ROI oriented. In other words, we will moderately increase marketing spend based on positive ROI. There are 2 factors at play here. One is the recovery of the offline social sentiment as China relaxes its COVID control policy, which should lead to improvement in user retention and paying conversion. The other is the enhancement in product experience, which should also drive retention ARPU growth. If any of those 2 factors can drive ROI to turn positive, or in other words, to generate profit with what we spend, then we will increase marketing investment and pursue growth on top of a self-sustaining positive cycle.
那 你 刚 才 还 有 这 个 问 具 体 的 财 务 预 期 ， 开 始 给 大 家 介 绍 一 下 。
With respect to financials, I'll leave it to Cathy.
Okay. I've heard two questions. One is how we're gonna reach breakeven point, and the other thing is about the revenue outlook for 2023. Maybe I'll answer the breakeven question first. As you can see from Tantan's segment reporting in Q3, by cutting down on the low efficiency channels, we've already narrowed the net loss from close to RMB 120 million in Q2 to within RMB 40 million in Q3. From there, I guess several things need to happen before we reach ultimately reach breakeven point. One is that COVID has to calm completely off people's mind as a deterrent that keeps young people away from dating and more generally from meeting someone that you just got to know on the internet in real life occasions.
Right now, we are indeed seeing a pretty substantial relaxation on COVID containment measures as well as lockdowns. Sentiment-wise, I think it's still gonna take some time for the dating sentiment to fully come back. The second is that we need to continue, as Tangyan said, to make progress on the product side, including both consumer experience as well as monetization features in order to drive retention and ARPU. These are the key operational targets for the Tantan team next year. With regards to the financial outlook, I hate to say this, but it's, as you can imagine, it's still a little bit too early to give any reliable guidance into 2023.
Here are some things I can point toward which hopefully can give you guys some color about how to think about 2023. I'll generally put them into two buckets. One is external factors and the other one is internal factors. With respect to the external factors, of course, as I said, COVID is the biggest swing factor here, which unfortunately we do not have much control over. However long it may take for the dating sentiment to ultimately come back, eventually we're gonna come completely out of it, and the social sentiment is going to come back. What we need to focus on right now is internally, what we can do so we can better capture the growth opportunities post-COVID when the sentiment does come back.
On that front, we are looking at several drivers that we need to work on. One is new product launches that may drive ARPU growth. For example, the chat room and some other social entertainment services that we're working on. A lot of these will be structured as non-subscription revenues, which will be more effective in driving top-line growth than, you know, subscription revenues. The second internal driver is, of course, MAU growth. COVID aside, we do expect the MAU to bottom out after Chinese New Year, especially, you know, as the COVID fear gradually tails out. As MAU gradually comes back, top line is gonna recover as well. These are the few things that I can share at this point in time to help you build the Tantan model next year.
Next question please.
Thank you. Our next question comes from Daniel Chen at JP Morgan. Please go ahead.
感 谢 管 理 层 接 受 我 的 提 问 。 我 有 两 个 问 题 。 第 一 个 是 可 不 可 以 请 管 理 层 分 享 一 下 新 App 和 海 外 业 务 的 发 展 情 况 和 收 入 预 期 。 第 二 个 是 能 否 分 享 一 下 贴 贴 的 产 品 进 展 、 投 放 安 排 和 商 业 化 方 面 的 想 法 。 Thanks, management for taking my question. This is Henry speaking on behalf of Daniel Chen. I have two questions. First, could you share the progress of new apps and overseas business, and what's your revenue expectation for the next year? The second question is about TieTie. What's the progress of TieTie and can management share more color on marketing and monetization strategies?
Thank you.
公 司 从 去 年 开 始 加 强 了 对 海 外 业 务 的 关 注 度 和 投 入 主 要 原 因 在 于 以 我 们 的 产 品 和 运 营 经 验 在 海 外 市 场 可 以 触 达 更 大 的 用 户 群 体 和 收 入 机 会. 在 社 交 出 海 这 一 块 我 们 跟 当 地 的 单 一 品 牌 或 者 缺 乏 社 交 行 业 经 验 的 大 厂 比 还 是 有 比 较 明 显 的 竞 争 优 势. 我 们 的 投 入 方 式 还 是 以 ROI 为 导 向 的 逐 个 市 场 尝 试 与 之 相 适 应 的 发 展 方 式. 我 们 不 会 采 取 一 次 性 大 规 模 的 投 入 的 方 式 来 以 不 计 成 本 的 代 价 换 取 用 户 增 长.
We have increased our focus and investment in our overseas businesses since last year. This is because with our product and operational experiences, we can access a larger group of users and greater revenue opportunities in overseas markets. In terms of social products, overseas expansions, we have very obvious competitive advantage compared with standalone local apps or large platforms lacking experiences in social space. We will pursue our ROI oriented marketing strategy and explore the most suitable model for local markets one at a time. We will not be pouring money into the market to into marketing to pursue user growth regardless of cost.
我 们 这 个 涉 及 海 外 的 业 务 ， 包 括 探 探 、 独 立 的 社 交 app 以 及 独 立 游 戏 app 三 部 分 。 今 年 海 外 收 入 呢 ， 在 集 团 层 面 的 占 比 呢 ， 有 中 个 位 数 ， 较 去 年 同 期 有 百 分 之 大 几 十 的 增 长 ， 而 且 整 体 处 于 一 个 微 利 的 一 个 状 态 。 我 们 的 想 法 是 在 坐 稳 有 利 润 的 市 场 后 ， 将 赚 到 的 钱 投 入 到 该 产 品 在 新 市 场 推 广 当 中 ， 尤 其 是 很 多 共 性 比 较 强 的 发 展 中 国 家 市 场 ， 我 们 都 会 尝 试 投 放 。
Our overseas business consists of three parts: Tantan, standalone social apps and standalone gaming apps. Revenue from our overseas business this year accounted for mid-single digit % of our total revenue. Revenue from the overseas business for the first three quarters increased a high double-digit % from the same period last year and achieved a small profit. Our plan is to reinvest the profit from each product in the established market into the promotion of that product in new markets, especially with many developing countries that share a lot of commonalities. We will try to explore opportunities across them all.
那 么 TT 自 春 节 发 布 之 后 呢 ， 经 历 了 二 季 度 的 快 速 增 长 和 较 高 的 市 场 投 入 。 到 目 前 来 看 呢 ， 已 经 是 一 款 有 可 观 规 模 的 社 交 产 品 。 目 前 团 队 的 重 点 在 于 拓 展 社 交 关 系 链 ， 并 提 升 使 用 时 长 。 在 这 两 方 面 达 到 目 标 之 前 ， 我 们 在 市 场 方 面 的 投 入 会 采 取 相 对 保 守 的 态 度 。 目 前 TT 还 没 有 到 海 外 拓 展 的 计 划 ， 但 未 来 产 品 比 较 成 熟 之 后 ， 我 们 也 不 会 排 除 海 外 发 展 的 可 能 性 。
TT delivered rapid user growth since its launch after Chinese New Year this year, we stepped up our marketing efforts to support its strong growth momentum in the second quarter. It now has become a social app with a sizable user scale. The current focus of our team is to encourage users to invite more of their friends to join TT and increase their time spent on the app together. We will take a relatively conservative approach to marketing investment before we achieve these two targets. As for now, we have no plans for TT to expand overseas, we will not rule out this possibility when it gets into a more mature stage. Next question, please.
Thank you. Our next question comes from Raphael Chen with BOCI. Please go ahead.
谢 谢 管 理 层 接 受 我 的 提 问 。 我 的 问 题 是 关 于 Momo 主 站 的 。 想 请 问 管 理 层 如 何 在 持 续 的 降 本 增 效 策 略 下 稳 定 主 站 的 用 户 规 模 ， 以 及 能 否 对 2023 年 Momo 主 站 直 播 和 VAS 的 收 入 做 出 展 望 ？ 我 自 己 翻 译 一 下 。Thank you for taking my question. My question regarding Momo. I'm just wondering how to maintain the users of Momo app with disciplined cost control strategy. Can management share some color on the revenue outlook of live streaming and VAS of Momo next year? Thank you.
嗯 OK 陌 陌 在 移 动 互 联 网 时 代 作 为 一 个 有 十 来 年 的 这 个 历 史 老 品 牌 ， 想 要 保 持 一 个 稳 定 的 用 户 规 模 并 不 是 一 件 非 常 容 易 的 事 情 ， 这 需 要 产 品 和 渠 道 的 共 同 努 力 。 产 品 方 面 呢 ， 我 们 需 要 不 断 地 完 善 存 量 用 户 的 社 交 体 验 ， 同 时 在 此 基 础 上 尝 试 做 加 法 ， 不 断 地 尝 试 新 的 社 交 场 景 ， 场 景 来 打 中 心 用 户 的 需 求 。 渠 道 方 面 ， 考 虑 到 外 部 环 境 对 陌 生 人 社 交 造 成 的 压 力 ， 我 们 会 将 有 限 的 预 算 重 点 向 这 个 使 用 需 求 更 明 显 ， 复 购 意 愿 ， 复 购 意 愿 更 强 的 用 户 群 体 倾 斜 ， 呃 ， 以 此 来 提 升 整 体 的 获 客 效 率 。
As a mature brand with a history of more than a decade, in the mobile Internet era, it's not a very easy thing for Momo to maintain a stable user base. This requires the joint efforts of both product and channel marketing. On the product front, we need to keep improving the social experience for existing users. On top of that, continuously explore new social experiences to cater to the needs of new users. In terms of channel marketing, considering the pressure of the external environment on open social sentiment, we intend to tilt our limited marketing budget towards users with more obvious demand and stronger inclination to pay for our services so as to improve the overall user acquisition efficiency. How could you characterize the revenue estimate for next year?
Again, with the uncertainties on the macro front and the COVID front, it's hard to be very prescriptive at this point and look too far into the year 2023. Here are some things that I can share with the limited visibility that we have at this point, which hopefully could help you guys build out a preliminary outlook for next year. For live streaming, as you guys can see, Q3 turned out to be better than what we originally thought, both in terms of top line and in terms of gross profit. We were able to see both top line growth and a stable gross margin.
As the macro remains quite uncertain at this point of time, at least for the coming six months, we'd rather stay on the conservative side about the revenue and profit growth outlook for live streaming. Value-added service, I would say it's not completely immune from the macro uncertainty, and in comparison with live streaming VAS is actually more susceptible to COVID and the weak social sentiment as a result of it. For Momo's value-added service, if COVID lingers and takes longer for the dating sentiment to fully come back, we'll try to keep the value-added service revenue line stable as we did pretty successfully for the past few quarters. It has not been an easy task because the one-on-one and some of the interest group activities are seeing pretty significant impact from the COVID.
What we have been doing and will continue to do, I guess, next year, is to pull the levers that we have in social entertainment experiences to make it up. For the value-added service from the bucket of new applications, especially SoulChill, the oversea app, the picture is much brighter. I think this year, value-added service from the new applications has been growing at a triple digit on a year-over-year basis. Despite the fact that it's now already at a pretty sizable revenue size, the pace of growth is not really slowing down much from the year 2021. We do expect the value-added service from the new bucket of applications to continue to grow at a pretty rapid pace in 2023.
Although, at this point it's hard to pin it down to a specific number. The other thing worth mentioning is that although these new applications are still at a fast-growing pace, fast-growing phase, we're not just, you know, we're not merely focused on revenue and user growth at the expense of bottom line. In Q3, as a matter of fact, we've successfully turned all of the three new applications bottom line positive. The goal next year is to continue to pursue profitable growth, meaning growth across all the three important lines, including users, revenues, as well as profits. I, you know, hopefully this answers your questions about the outlook for revenue and value-added service for the Momo segment next year.
I think we have, perhaps, what, time for one last question.
Right. Rocco, do we have any more questions on the line?
We do. We have one more question.
Oh, please.
Our final question today comes from Xueqing Zhang with CITIC. Please go ahead.
Thanks management for taking my question. My question related to margin. As you mentioned in the prepared remarks, reducing costs and improving efficiency is a key strategy in the second half of 2022. Can management share more on the cost control strategy and the overall margin trend in the 1Q in 2023? Thank you.
Okay. I'm gonna take this one last margin question quickly, so we can end the call before market is open. The three biggest cost items that we have are, number one is payouts to the broadcasters and the performers and the moderators in the value-added service line. The second and third biggest are marketing expenses and payroll. For, I guess I'll take them one by one. For payout, as you can see, Q3 versus Q2 this year has been largely stable. The dip in gross margin was really caused by the mix shift in between different business line items. Q4, we do expect payout to go up a couple of percentage points due to the year-end promotional events. That should be Q4 specific.
It happens every year and will bounce back early next year when the year-end gala is gone. For next year at this point of time, my view is that payout is likely to remain largely stable because, A, no one that we are currently seeing out there in the market is still aggressively boosting the supply side by pulling up the payout ratio. And B, internally, we do not see it as an effective strategy to grow revenues by sacrificing margins. You know, that's my view on the payout. Gross margin-wise, it may fluctuate a little bit around the current level due to the mix shift one way or another. Moving down to payroll and marketing. This year we've done a pretty good job in controlling these two cost items.
This can be evidenced by the decrease in R&D and marketing expenses. I guess in Q4, because we have the year-end bonus, the double pay, et cetera, the payroll might increase a little bit, but overall, we have that overall downward trend in the payroll and marketing due to the cost optimization. We are going to continue to apply the same strategy next year, and investors can expect tighter control and more focus on the cost efficiency for payroll and marketing. The other thing worth mentioning as far as cost control and the overall strategy to increase efficiency is concerned, is that in terms of the allocation of resources internally, we won't treat every business line in an equal manner.
What that means is that we're going to lean more towards new businesses with higher ROI. In the second half of this year, we've been reallocating engineering resources and marketing dollars from Momo to new applications. I'm happy to see that while the overall payroll and marketing expenses went down, we did not under-invest in the new applications, and they've been growing pretty well. That will continue to be the case next year. I guess, you know, these are the answers to the margin question. With that, I'm handing back to Ashley for the closing remarks. Well, we're very much over time, thank you very much for participating in today's call, we'll see you next quarter.
Thank you. That does conclude our conference for today, and thank you for participating. You may now disconnect your lines, and have a wonderful day.