Prepared remarks
Ladies and gentlemen, thank you for standing by, and welcome to Hello Group's First Quarter 2026 Earnings Conference Call. 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 First Quarter 2026 Earnings Conference Call. The company's results were released earlier today and are available on the company's IR website. On the call today are Mr. Tang Yan, CEO of the company; Ms. Zhang Sichuan, COO of the company; and Ms. Peng Hui, CFO of the company, who 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 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, unknown 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 statements as a result of new information, future events or otherwise, except as required under law. I will now pass the call over to our COO, Ms. Zhang Sichuan. Ms. Zhang, please?
Thank you, Ashley. Hello, everyone. Thank you for joining today's call. The group maintained steady business momentum in Q1 guided by the strategic priorities set last year. Our domestic business remained healthy through focused product innovation and refined operations despite external pressures. Leveraging the synergy of a diversified product portfolio, our overseas business has remained on a positive trend. Looking ahead, we have full confidence in each business line to continue to advance along the strategic roadmap in 2026. Now I'll walk you through the key updates. Starting with the financials. For Q1 2026, total group revenue was RMB 2.39 billion, down 5% year-over-year. Domestic revenue reached RMB 1.79 billion, down 15% year-over-year. Overseas revenue was RMB 597 million, up 44% year-over-year. Overseas revenue accounted for 25% compared to 16% in the same period last year. Adjusted operating income was RMB 349 million, up 1% year-over-year with a margin of 14.6%. Building on the strategic direction from 2025, our 2026 priorities continue along three main tracks. For Momo, the focus remains ensuring stable, sustained productivity of our cash cow business. For Tantan, we continue to explore updated experiences and efficient business models tailored for Asian users. And for our new business, we aim to deepen overseas presence, enrich our brand portfolio and build a long-term growth engine. Let me walk you through each. Starting with Momo. On the product side, our key focus in recent years has been to optimize user experience and stabilize our user base. This year, we have continued to refine the matchmaking experience. Our network feature improves connections by analyzing users' historical check-in patterns to optimize the matching algorithm, driving sustained growth in DAU and MAU. In real-time chat scenarios, building on a steady ramp-up of voice features, we have also introduced video features to enrich our portfolio of instant interactions. The combined upgrades in Argo recommendation and product experience have lowered the barrier for users to engage. In tandem, we undertook a number of meaningful initiatives leveraging AI to improve users' social efficiency with encouraging initial results. For example, our AI icebreakers and AI chat assist features improve the female user experience. This drove higher engagement from male users and more in-depth conversations overall. In Q1, the product team explored AI-driven innovations such as voice capture, guiding users to complete voice profiles, also generating voice content and releasing it onto the platform in voice message format to spotlight users' desire to connect. For user acquisition, China ROI has remained fully profitable since the beginning of the year. Ongoing audio room gameplay updates and better channel conversions lifted payment intent among new and small-spending users. This drove steady ARPU growth and channel ROI improved quarter-over-quarter. Overall, acquisition spend continued a refined, disciplined approach, narrowing slightly from last quarter. It is worth noting that Q1 was affected by the Chinese New Year as some users shifted their activity to offline gatherings with close friends and family. This temporary pullback in platform activity and paying scale resulted in Momo's paying users decreasing by 200,000 quarter-over-quarter to 3.7 million. Thanks to a year of product refinements focused on chat experience, organic traffic grew compared to last year and retention among existing users improved slightly. Turning to Chinese New Year, the team ran targeted operational events at a low point in the cycle, narrowing the decline in user activities compared to last year's holidays. As a result, the post-holiday recovery was meaningfully better than in the same period last year. This set a solid foundation for stabilizing our user base over the full year. Turning to commercial performance. In Q1, Momo's gross revenue was RMB 1.52 billion, down 15% year-over-year and 9% quarter-over-quarter. The year-over-year decline mainly reflects the ongoing impact of the new tax regulations and stricter local enforcement that came into effect in the second half of 2025. The monetization of some high grossing agencies and broadcasters is still recovering. The quarter-over-quarter decline was largely seasonal, driven by the Chinese New Year alongside persistently soft consumer spending sentiment. In response to these external shifts, the teams continue to direct gameplay innovation and operational resources towards mid-tier and long-tail users, which made revenue from audio scenarios and social games relatively resilient. This has partially absorbed the external pressure on overall revenue. On the product and operations side, our live streaming business organized a series of user-oriented events during the Chinese New Year effectively cushioning the reduction in online behavior from the long holiday. As a result, the post-holiday recovery in key operational metrics, including user engagement, paying conversion rate and streamer return rate, was meaningfully stronger than in the same period last year. At the same time, we continue to introduce and selectively support high-quality talent streamers, lifting organic revenue through content quality improvements. In audio scenarios, we rolled out the new PA gameplay to further motivate users to give to one another. With some mid-tier and non-core broadcasters and agencies on our platform facing ongoing profit pressure during the tax compliance process, we have rolled out a new incentive-based revenue sharing policy. This is designed to enable quality performers to deliver greater value to the platform while ensuring their stable mixed income in turn. Now let's turn to Tantan. As of the end of Q1, Tantan had 0.6 million paying users, a modest decrease of 30,000 quarter-over-quarter. This decline was driven by two factors. First, the carryover from ongoing MAU decline and second, Alipay changes to its auto-renewal billing rules, which placed short-term pressure on our membership conversion. Under the continued impact of our strategic marketing cuts, the core user base remained on a downward trajectory; however, the magnitude of the decline has narrowed meaningfully through algorithm innovation and refined operations. Engagement and retention among younger users showed slight improvement, contributing positively to user base stability. On the product side, the team optimized recommendation strategies in our core web-based scenario. For example, we introduced stricter restrictions on female user matching metrics, allowing only higher-quality or upward matching to benefit female users' expectations. This drove a near three percentage point increase in average swipe rate for female users, improving retention. In new scenarios and portions, we piloted MAC-based matching and AI chat assist features. Our year-over-year reduction in China investment led to a lower required volume. This meaningfully narrowed unit acquisition costs, partially offset by other factors. Additionally, because organic traffic outperformed channel traffic on both user engagement and retention, the overall decline in our user base was far smaller than the channel-driven decline implied by our strategic adjustments. Sequentially, both spend and user acquisition costs narrowed by various degrees. So the China volume decline was relatively limited. While Alipay policy created near-term ARPU pressure, channel ROI was sustained well above 100% throughout the quarter. On the financial side in Q1, Tantan's domestic business generated RMB 125 million in revenue, down 25% year-over-year and 8% quarter-over-quarter. The primary driver remains MAU contraction leading to fewer paying users compounded by the short-term impact of Alipay's policy adjustments on auto-renewal payments. On monetization, the team unbundled membership features into standalone card offerings while enriching fresh chat gameplay and stepping up in-app promotion to ease top-line pressure. On profitability, thanks to ongoing cost control in channel investment and personnel costs, net profit grew significantly year-over-year. Lastly, our new businesses. Our 2026 goal carries forward from 2025 to deepen our overseas presence, expand our brand portfolio and build our long-term growth engine. In Q1, overseas revenue totaled RMB 597 million, up 44% year-over-year with a slight 2% sequential decline. Overseas now accounted for 25% of group revenue compared to 16% in the same period last year. The sequential softness was mainly due to some external challenges that surfaced during the quarter, which impacted our overseas business overall. Excluding Soulchill, the rest of our overseas businesses continued to deliver healthy growth this quarter, further validating the value of a diversified product portfolio in hedging risk from single-product volatility. Our two new products in MENA continue their rapid growth trajectory with both delivering triple-digit revenue growth year-over-year in Q1, driven by continuously improving localized operations, more precise understanding of local user preferences and sustained gameplay innovation. Both products achieved concurrent improvement in revenue and profit. This quarter, one product is approaching net income breakeven, and Amar achieved positive marginal contribution for the first time. This is a significant milestone, reflecting our shift in MENA from a social-dominated model to a multi-product portfolio. Beyond our audio and video social products in the MENA region, our dating business focused on developed markets is another important pillar of our overseas footprint and also delivered satisfying progress this quarter. Tantan International, managed by our Singapore team, completed a full upgrade of product positioning and branding over the past year. In the second half of 2025, the team began migrating from a shared domestic-international app build to a localized overseas app. The migration was completed in Q1 with 99% of paying users successfully transferred, minimizing the revenue impact of the version split. Starting in Q2, the team's focus is to further optimize product experience and improve monetization efficiency. Happn, which the group acquired last year, has continued a steady healthy growth trajectory since the beginning of this year. Happn's user base has remained relatively stable over the past year and our year-over-year revenue growth came mainly from improvements in paid conversion rate and ARPU, reflecting greater efficiencies in operating the existing user base. In Q1, we began testing Happn's entry into new markets, laying the foundation for the brand's mid- to long-term growth. As a relatively newer segment for our overseas footprint, we remain confident in the dating businesses' continued release of growth potential in 2026. This concludes my remarks. Now let me pass the call to Cathy for the financial review. Cathy, please.
Thanks, Sic. Hello, everyone. Thank you for joining our conference call today. Now let me take you through the financial review. Total revenue for the first quarter 2026 was RMB 2.39 billion, down 5% year-on-year and 7% quarter-over-quarter. Non-GAAP net income attributable to the shareholders of the company was RMB 288 million compared to RMB 403.8 million in the same period of 2025 and RMB 281.3 million in the previous quarter. Looking into the key revenue items for Q1. Total value-added services revenue for the first quarter of 2026 was RMB 2.35 billion, down 6% year-over-year and 7% quarter-over-quarter. On a geographic basis, PRC Mainland value-added service revenue was RMB 1.76 billion, down 15% year-over-year and 9% quarter-over-quarter. The decrease was primarily due to heightened tax scrutiny on the agencies for Momo's entertainment business, combined with softened consumer sentiment amid broader macro pressures and, to a lesser degree, a decline in paying users on Tantan. BaaS and overseas revenue reached RMB 593.7 million, up 44% year-over-year driven by the rapid expansion of our diversified product portfolio. Overseas VAS revenue decreased slightly by 2% sequentially due to seasonal factors, namely Ramadan, as well as some external challenges in the MENA area during the quarter. Turning to cost and expenses. Non-GAAP cost of revenue for the first quarter of 2026 was RMB 1.46 billion, compared to RMB 1.57 billion for the same period last year. Non-GAAP gross margin for the quarter was 38.8% compared to 37.9% from the year-ago period. Gross profit margin in Q1 2026 rose by around one percentage point year-over-year. The increase was primarily driven by improved margins in MENA products after lowering the revenue sharing ratio to promote quality growth, together with a greater revenue mix from higher-margin overseas dating products. This was partially offset by a decline in Momo's gross margin resulted from increased payout ratios to agencies in order to cushion the impact from the tax scrutiny. Non-GAAP R&D expenses for the first quarter was RMB 165.2 million compared to RMB 185.9 million for the same period last year, representing an 11% decrease year-over-year. The decrease was due to overall labor cost savings from the optimization of our personnel structure. Non-GAAP R&D expenses as a percentage of revenue was 7%, the same as Q1 last year. We ended the quarter with 1,396 total employees compared to 1,336 a year ago. R&D personnel as a percentage of total employees for the group was 56% compared with 58% from Q1 last year. Non-GAAP sales and marketing expenses for the first quarter was RMB 335.4 million compared to RMB 392.1 million for the same period last year, representing 14% and 13% of total revenue, respectively. The year-over-year increase in sales and marketing expenses was mainly driven by increased marketing investments in our new overseas apps. This was partially offset by continued cost control in our PRC Mainland operations as both Momo and Tantan reduced marketing spend while Soulchill also temporarily scaled back channel investments amid external challenges. Non-GAAP G&A expenses were RMB 89.4 million for the first quarter compared to RMB 114.8 million for the same period last year, representing 4% and 5% of total revenue, respectively. The decrease in G&A expenses was primarily attributable to a high base effect in Q1 2025, resulting from a self-inspection related to tax matters. Non-GAAP operating income was RMB 349.2 million representing a margin of 14.6% compared with RMB 345.3 million and a margin of 13.7% from Q1 2025. The increase was driven by improvement in gross profit. Non-GAAP operating expenses as a percentage of total revenue stood at 25%, unchanged from the year-ago period. Now briefly on income tax expenses. Total non-GAAP income tax expenses was RMB 81.5 million for the quarter with an effective tax rate of 20%. In Q1, the company accrued withholding income tax of RMB 21.2 million, which is 10% of undistributed profit generated by our RODs. Without the withholding tax, our estimated non-GAAP effective tax rate was around 15% in the first quarter. Now turning to balance sheet and cash flow items. As of March 31, 2026, Hello Group's cash, cash equivalents, short-term deposits, long-term deposits from investments and restricted cash totaled RMB 8.56 billion compared to RMB 8.68 billion as of December 31, 2025. Net cash provided by operating activities in the first quarter of 2026 was RMB 158.9 million. The difference between operating net cash and non-GAAP net income was mainly due to a significant increase in accounts receivable caused by temporary payment collection delays on one of our apps as well as higher other current liabilities from the accrual of year-end bonuses and the 13-month payroll. Lastly, on business outlook. We estimated our second quarter revenue to come in the range from RMB 2.45 billion to RMB 2.55 billion, representing a decrease of 6.5% to 2.7% year-on-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-50s 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 concluded our prepared portion of today's discussion. With that, let me turn the call back to Ashley to start Q&A. Ashley, please.
Operator, we're ready for questions, please. Thank you.
Questions and answers
Your first question today comes from Xueqing Zhang with CICC.
My question is about the overseas business. Regarding the prepared remarks, you mentioned challenges from external factors in the first quarter. Could management provide more details on what happened and whether this will have an impact on full-year overseas revenue? In addition, you also mentioned that the two new products continue to see revenue growth while losses have been narrowing. Could management share when this new business will turn profitable? Going forward, will the company continue to increase marketing investment to scale these products or will you focus more on narrowing losses and moving to profitability?
The management responded in Chinese, outlining that the sequential revenue decline in Q1 was driven by three main factors: tighter Turkish regulation affecting app availability, softer consumer sentiment in MENA during Ramadan, and prolonged geopolitical tensions in parts of the Middle East. The team is working on compliance and localization to mitigate the impact and is monitoring recovery trends.
Let me start with the Q1 drivers. The sequential revenue decline came down to three main things. Number one: the Turkish government tightened regulation on social and streaming apps which temporarily resulted in removal of related products across the industry. That created a headwind for us in terms of user acquisition in Turkey. Number two: consumer sentiment in the MENA region during Ramadan was relatively softer. As a large and rather mature product, Soulchill was more noticeably impacted by this seasonal softness. And number three: ongoing geopolitical complexities in the Middle East also had some drag on Soulchill's revenue in the Gulf region. We are confident that our apps will comply with all applicable Turkish laws and regulations governing social platforms. Our team is actively working with the relevant authorities to bring the app back to the app stores as soon as possible. In the meantime, we are accelerating localization efforts in other markets to offset the temporary impact from Turkey. The overseas business has already begun to see a steady recovery from the Q1 low, and we do not believe investors need to be overly concerned about it. Regarding the two newer products, they had strong triple-digit year-over-year revenue growth with losses narrowing rapidly. As the businesses scale, the teams have been able to gradually adjust the revenue sharing structure, driving meaningful and sustained gross margin improvement over the past year. We have been selectively increasing marketing spend where ROI targets are being met and actively testing markets while keeping the loss trajectory moving in the right direction each quarter. Our path for these two products is clear: build scale first, optimize gross margin structure, keep marketing ROI-driven, and let net profitability follow. We expect net profitability for those products to come within a quarter to about half a year behind the current trajectory, depending on market conditions. For the full year overseas revenue outlook, I'll hand it over to Cathy for more detail.
Let me break the overseas business into three pieces. First, our flagship overseas app, Soulchill. As Ashley mentioned, Soulchill faced pressure in Q1 mainly due to regulatory changes in Turkey and prolonged geopolitical tensions in parts of the Middle East. That said, the team has adapted reasonably well. While revenue in Turkey remained pressured, performance in other Middle Eastern markets has been quite solid. Overall, social is likely to come in a bit below our original expectations in the first half, but the business itself remains fundamentally healthy. Second, our two newer social entertainment apps that we are scaling in the MENA region— their trends are developing in line with our plans. Third, our dating and membership-oriented business outside the MENA region has remained on track; membership businesses tend to provide higher revenue visibility and forecasting clarity compared with entertainment-driven platforms. Putting these three pieces together, if you recall on the last earnings call we mentioned overseas revenue for 2025 was around RMB 2 billion and that we were targeting RMB 3 billion for 2026. Based on what we see today, we remain comfortable with the RMB 3 billion milestone for 2026, with a possible variation of around +/- RMB 100 million depending on how market expansion progresses across regions. But our overall view has not changed materially.
Operator, next question please.
Our next question comes from Thomas Chong with Jefferies.
In Q1, we saw domestic revenue decline by 15% year-on-year and the year-over-year decline widened versus 2025. Management commented this is related to new tax rules which affected Momo. May I understand when we should expect these external factors to be fully digested? On the other hand, management commented Alipay automatic renewal had some changes which caused short-term impact to Tantan paying conversion. Can management comment on the scope of this adjustment and how long it might last? Should we expect this will affect Momo and other subscription products as well? Lastly, how should we think about the full-year outlook for domestic revenue?
Management responded in Chinese, stating that the new tax regulations introduced in the second half of 2025, combined with stricter local tax collection, affected agency-operated chatroom scenarios. They noted further tightening in early 2026 that affected agency-related revenue in March and April. Management has been assisting select high-quality agencies with tax compliance since May, introducing incentives and financial support, and has observed a rapid rebound in activity and revenue among these agencies. They expect performance to normalize by Q3.
Let me first address the impact of tax policies on Momo. New tax regulations introduced in the second half of 2025, combined with stricter local tax collection and enforcement, affected agencies operating chatroom scenarios and elevated pressure on the supply side. We moderately adjusted the revenue sharing ratios for key agencies in the latter half of last year to help those affected. However, tax authorities further tightened policies targeting agencies in early 2026, resulting in a decline in agency-related revenue during March and April. In response, we selected a group of high-quality agencies in May and began assisting them with tax compliance to help offset the profit pressure caused by additional compliance costs. We introduced a new incentive program and provided further financial support to these selected agencies. Since late May, both operational enthusiasm and revenue among these agencies have rebounded rapidly. We expect their performance to return to normal levels by Q3. So as for when Momo's VAS will return to year-over-year growth, beyond the tax issue, it also depends on when broader consumer sentiment picks back up. What we can control is making sure the product fundamentals are rock solid and operating efficiency is maximized. We are very confident in Momo's modernization capabilities. On the Alipay auto-renewal policy changes: yes, this did impact Tantan's membership business, primarily manifesting as a temporary decline in renewal rates and resulting in some subscriber churn. The team responded swiftly. On the monetization side, we launched an unbundling strategy, separating high-frequency perks that were previously bundled into membership packages—such as super likes and boosters—and offering them as standalone purchases. We have also enhanced features like FlashChat to help offset headwinds in membership renewals. In addition, we are diversifying payment channels, encouraging users to shift towards less affected options and promoting longer-term membership plans. The Alipay policy changes primarily affected subscription or membership products. Momo's core payment model is based on consumable virtual gifts which do not rely on auto-renewal, so the impact on Momo was minimal. Our overseas business uses App Store and Google Play payment channels, which remain unaffected. Overall, this is a relatively contained issue, primarily impacting Tantan's domestic membership business. On timing, we expect the impact to be concentrated in the first half of the year with gradual improvement in the second half as we diversify payment channels and membership structures. For the full-year domestic revenue outlook, I'll hand it to Cathy.
Okay, time for an update on how we are thinking about the revenue outlook for the rest of 2026. I will, as in previous quarters, use the same framework, which is built on three key elements: the macro environment, the regulatory environment and our own platform fundamentals. Starting with the macro side, consumer sentiment looks largely unchanged from what we saw at the end of last year and through Q1; it remains relatively soft but importantly we are not seeing any meaningful deterioration. On the regulatory front, this is where most of the incremental pressure came from in Q1 and Q2. The year-over-year decline in Q1 widened versus last year, and our Q2 guidance reflects that the domestic revenue decline is expected to widen further from Q1's level. The main reason is tighter tax scrutiny on some of the small- and medium-sized agencies in our ecosystem, which hit March, April and early May particularly hard. In response, we rolled out new agency incentive policies to encourage tax compliance. The goal is straightforward: maintain the long-term health and stability of the content ecosystem and continue supporting the agencies that create the most value on the platform. Since rolling out these measures in late May, we've already started seeing encouraging feedback and some improvement in operating trends and we expect June performance to benefit from these adjustments. That said, April and May were clearly impacted by the tightened regulatory environment and that pressure is reflected in our Q2 guidance. Some of the impact could still carry into Q3, but at this stage we believe the most difficult period is likely behind us already. Now turning to platform fundamentals. As Sic mentioned in the prepared remarks, the core business itself remains very solid. So outside of the regulatory pressure, there really hasn't been any material change in the underlying business fundamentals compared with what we saw in Q1. Looking into the second half of the year, we still expect the year-over-year decline rate to narrow meaningfully. Part of this is because the regulatory impact should gradually normalize as the year progresses. And part of it is because the comparison base becomes significantly easier in the second half of 2025. So for the second half, we still expect the domestic business decline rate to improve to somewhere below 15% year-over-year. That said, given the additional disruption that we saw in the first half from tax tightening, we are modestly adjusting our full-year outlook. Previously, we were guiding to a low-teens decline for the domestic business. Based on what we see so far in the first half, we now expect the full-year decline to be closer to mid-teens year-over-year. So that's how we are currently thinking about the domestic revenue outlook.
Yes. In the interest of time, we'll take one last question before we close the line. Operator, please.
Your next question comes from an analyst with UBS.
Could you please share more details on the group's AI product roadmap going forward? More broadly, how do you view the contribution of AI-driven innovation to longer-term earnings growth? Should we expect any notable impact on near-term profitability from AI investments? And given the external challenges in some overseas markets, how should we assess the group's full-year prospects?
Management responded in Chinese, emphasizing that AI is particularly meaningful for social product companies. They described two main directions: enhancing user-to-user connections by lowering social barriers, and enabling new product formats that are AI-native. They highlighted several ongoing pilots and early monetization in China and overseas.
AI is particularly meaningful for a company like ours where social products are core. The essence of our product features and recommendation logic is to lower the barriers for users to form connections, enable long-term and effective interactions, and deliver emotional value. AI can genuinely transform the user experience in this space. Based on what we have built so far, AI is advancing in two distinct directions on the product side. First, enhancing connections between users by breaking the ice and lowering social barriers. Examples include our AI-assisted chat features and the AI voice 'drift bottle' which we are currently testing. The concept is that AI guides users to provide basic profile information through voice input and then automatically generates a more vivid and engaging self-introduction and greeting using the user's actual voice. This is then published on the platform as a 'bottle'. These AI tools are particularly valuable for users who have dating needs but relatively weaker social skills. Second, enabling new product formats. For example, Donut is a fully AI-powered voice social product that has already begun monetization in China. On the overseas side, our AI role-play dating app has shown solid early traction in Japan and is now expanding to other Asian markets. These products represent our exploration of what next-generation social experience can look like. Regarding the impact of AI investment on profitability, our view is that AI spending is high return in nature: it directly improves user experience and drives higher propensity to pay. From an execution standpoint, AI penetration across our products is still in a rapid expansion phase. Over the past year, we focused on refining the AI greeting and AI chat algorithms on the Momo platform. Going forward, we will be replicating that technology across more use cases, including AI agents for Momo live streaming, AI-generated short drama content based on broadcasters' images, smart matching and content distribution optimization, and AI-assisted chatting features. This kind of horizontal reuse of the tech helps maximize the return on investment. I'll pass it to Cathy for comments on the profitability outlook.
On profitability outlook, I'll go back to the framework that we laid out at the beginning of the year. Starting from the top line, if you combine our updated view on the domestic business with what I discussed on the overseas side, we now expect group revenue for 2026 to see a slight year-over-year decline versus 2025, probably down by a couple of percentage points at the top level. At the beginning of the year, we said we were targeting adjusted operating margin in the low teens, and based on what we see today that target still looks quite achievable. That said, because the domestic business faced additional pressure from tax-related disruption in Q1 and the early part of Q2, our full-year revenue outlook in absolute terms is now somewhat lower than where we started the year. Naturally, that creates more pressure on absolute profit amounts. So internally, we are looking at additional opportunities to optimize spending where appropriate and necessary, whether on personnel, marketing efficiency or other operating areas where we believe we can improve productivity without affecting long-term growth initiatives. Overall, we remain broadly on track to achieve the profitability targets that we laid out at the beginning of the year.
Well, thank you for participating today, and that's going to be the end of the call. We will see you next quarter. Thank you. Bye.
That does conclude our conference for today. Thank you for participating. You may now disconnect.