Hello Group Inc. (NASDAQ: MOMO), a leading player in Asia's online social networking space, saw its stock price surge 5.28% in the 24-hour period following the release of its first quarter 2025 financial results. The company reported significant improvements in profitability, despite a slight dip in revenues.

The Q1 2025 results showed a remarkable increase in net income attributable to Hello Group Inc., which rose to RMB358.0 million (US$49.3 million) from just RMB5.2 million in the same period last year. This translated to a diluted earnings per ADS of RMB2.07 (US$0.29), up from RMB0.03 in Q1 2024. On a non-GAAP basis, net income per ADS reached RMB2.34 (US$0.32), significantly higher than the RMB0.31 reported in the previous year.

While total net revenues decreased slightly by 1.5% year-over-year to RMB2,520.8 million (US$347.4 million), the company's profitability improved dramatically. This was attributed to ongoing cost reduction efforts and efficiency improvements, as well as the stabilization of external factors. Notably, Hello Group's overseas business showed strong growth, with revenues increasing by 71.9% year-over-year to RMB414.6 million (US$57.1 million). The company's chairman and CEO, Yan Tang, expressed optimism about the increasing contribution of overseas products to the Group's financials in the coming quarters.

Despite the positive results, Hello Group provided a cautious outlook for Q2 2025, projecting total net revenues between RMB2.57 billion to RMB2.67 billion, representing a year-over-year decrease of 0.8% to 4.5%. However, investors seem to be focusing on the strong profitability metrics and the potential for growth in overseas markets, driving the stock's significant intraday gain.