On December 8th, Zhiwen Group announced its unaudited financial performance for the third quarter of 2023. According to the financial report, in the third quarter of 2023, Zhiwen Group's net revenue reached 3.0428 billion yuan, not measured according to US GAAP. The net profit attributable to Zhiwen Group was 605.9 million yuan, a year-on-year increase of 21%.
Tang Yan, Chairman and CEO of Zhiwen Group, stated that all business lines of Zhiwen Group were steadily advancing in the execution of their respective strategic priorities in the third quarter. Compared with the same period last year, the profitability at the group level continued to grow, mainly due to the effective cost reduction and efficiency increase strategy driving stable output of Momo's Jinniu business, exploring ways to turn losses into profits, and providing support for the growth of new businesses.
According to public information, Zhiwen Group was established in 2011 and listed on the NASDAQ stock exchange in December 2014. It has multiple mobile applications such as Momo and Tantan, as well as diversified businesses such as film production and distribution, and program production.
According to the financial report, the total net revenue of Zhiwen Group in the third quarter of 2023 was RMB 3.0428 billion, a decrease of 5.9% from RMB 3.233 billion in the third quarter of 2022. Looking at different sectors, the revenue of live streaming services in the third quarter was 1.5308 billion yuan, a decrease of 7.6% from 1.6575 billion yuan in the same period of 2022. The financial report stated that this decline is mainly attributed to weak consumer sentiment in the current macro environment. In addition, the revenue from mobile marketing is 30.7 million yuan; The revenue from mobile games is 7.9 million yuan.
It is worth mentioning that in terms of value-added service revenue, including virtual gift service revenue and member subscription service revenue, the total value-added service revenue in the third quarter was RMB 1.4667 billion, a decrease of 4.6% from RMB 1.5377 billion in the same period of 2022. The financial report stated that this decline is mainly due to the impact of macroeconomic factors on consumer sentiment and the proactive product adjustments made by Zhiwen to improve the ecosystem of Momo applications. At the same time, the financial report also mentioned that the group's reduction in marketing expenses has to some extent led to a decrease in the number of paid users for exploration. However, the rapid growth in revenue brought by new independent applications partially offset this downward trend.
From the revenue of two famous social media apps, Momo and Tantan, under Zhiwen Group, the financial report shows that the net revenue of the Momo department decreased from RMB 2.891 billion in the third quarter of 2022 to RMB 2.7431 billion in the third quarter of 2023. The financial report states that this is mainly due to a decrease in net revenue from value-added services and video live streaming services on the Momo application, And this decrease is partially offset by the revenue growth of new independent applications; The net revenue of the exploration department decreased from RMB 3413 million in the third quarter of 2022 to RMB 295 million in the third quarter of 2023. The financial report stated that this was mainly due to a decrease in net revenue from value-added services and to a lesser extent, a decrease in video live streaming services.
In terms of product users, the financial report shows that the monthly active users of Tantan in September 2023 were 15.7 million; In the third quarter of 2023, the number of paid users for Momo was 7.8 million, and the number of paid users for Tantan was 1.4 million.
In terms of costs and expenses, the financial report shows that Zhiwen Group's costs and expenses in the third quarter were 2.4611 billion yuan, a decrease of 10.0% from the same period last year's 2.7342 billion yuan. According to the financial report, the decrease in costs and expenses is mainly due to three reasons: firstly, the decrease in revenue sharing between live streaming service providers on the Momo App and virtual gift recipients in the virtual gift service, partially offset by the increase in revenue sharing between independent new Apps and virtual gift recipients; The second is the continuous optimization of personnel costs by the company, as well as the decrease in compensation expenses and option reward expenses due to the lower fair value of newly granted options; The third is to explore the strategy of reducing investment control costs and to a lesser extent, the marketing and promotion expenses caused by Momo's strategy of reducing inefficient channel marketing expenditures.