The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this annual report on Form 20-F This report contains forward-looking statements. See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report on Form 20-F We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. 90 Table of Contents A. Operating Results Major Factors Affecting Our Results of Operations User Base. For 2025, we generated our revenues primarily from value-added service. Our revenues are driven by the number of our paying users and average revenue per paying user for value-added service. The number of our paying users is affected by the size of our overall active user base, our ability to convert a greater portion of our users into paying users, and the strategies we pursue to achieve active user growth at reasonable costs and expenses. We have been taking measures to boost user activities and user spending willingness, including organizing more special events and activities for users on our applications, and modifying of our product strategies to feature more functions that reward users for regularly using and paying on our applications. We monitor certain metrics of our Momo and Tantan apps on a quarterly basis, as they are, among other things, metrics to help us ensure that our business is on the right track. Momo. The numbers of paying users for the value-added services on our Momo application, without double counting the overlap, are presented by the charts below for the periods indicated. Tantan. We monitor the number of paying users of our Tantan app. In line with our strategic focus on return on investment in user acquisition and considering Tantan’s diminished materiality to our revenue, we will discontinue the monitoring of Tantan’s MAUs. We believe that the number of Tantan’s paying users represents a more meaningful metric that better aligns with our current strategy and overall performance. The numbers of paying users on our Tantan application are presented by the charts below for the periods indicated. 91 Table of Contents User Engagement. Changes in user engagement affect our revenues and financial results. Active user engagement powered by diverse functionalities and rich content is essential for our ability to generate revenues from the various services we offer to users, including our value-added services, among others. Monetization. We monetize our service offerings mainly through various value-added services across our portfolio of applications. At the center of our value-added revenue is virtual gifting, which allows users to purchase and send virtual gifts in a variety of video- or audio-based interactive scenarios. In addition, we offer subscription-based premium memberships on our dating platforms. Our future revenue growth will be affected by our ability to effectively execute our monetization strategies. Investment in Technology Infrastructure and Talent. Our technology infrastructure is critical for us to retain and attract users, customers and platform partners. We must continue to upgrade our technology infrastructure to keep pace with technological innovations, to develop new features and services for our platform and to further enhance our big data analytical capabilities. The number of our employees was 1,382 as of December 31, 2023, 1,390 as of December 31, 2024, and 1,400 as of December 31, 2025. We must recruit, retain and motivate talented employees while controlling our personnel-related expenses, including share-based compensation expenses. Marketing and Brand Promotion. Our marketing strategy and its execution is key to growing our user base and increasing the overall level of user engagement on our social networking platform, which are critical to our business. On top of brand promotions, we make ongoing efforts to optimize our channel marketing investment strategy along with relevant product and operational efforts, to focus on growing our user base, enhancing user engagement and improving user acquisition efficiency with disciplined sales and marketing spending. Taxation Cayman Islands Under the current law of the Cayman Islands, we are not subject to income or capital gains tax in the Cayman Islands. British Virgin Islands Our subsidiaries incorporated in the British Virgin Islands and all dividends, interest, rents, royalties, compensation and other amounts paid by such subsidiaries to persons who are not resident in the British Virgin Islands and any capital gains realized with respect to any shares, debt obligations, or other securities of our company by persons who are not resident in the British Virgin Islands are exempt from all provisions of the Income Tax Ordinance in the British Virgin Islands. 92 Table of Contents No estate, inheritance, succession or gift tax, rate, duty, levy or other charge is payable by persons who are not resident in the British Virgin Islands with respect to any shares, debt obligation or other securities of such subsidiaries. All instruments relating to transfers of property to or by such subsidiaries and all instruments relating to transactions in respect of the shares, debt obligations or other securities of such subsidiaries and all instruments relating to other transactions relating to the business of our company are exempt from payment of stamp duty in the British Virgin Islands. This assumes that such subsidiaries does not hold an interest in real estate in the British Virgin Islands. There are currently no withholding taxes or exchange control regulations in the British Virgin Islands applicable to such subsidiaries or their members. Hong Kong Our subsidiaries domiciled in Hong Kong are subject to a two-tiered income tax rate for taxable income earned in Hong Kong. The first 2 million Hong Kong dollars of profits earned by the company are subject to taxation at an income tax rate of 8.25%, while the remaining profits are subject to taxation at an income tax rate of 16.5%. In addition, to avoid abuse of the two-tiered tax regime, each group of connected entities can nominate only one Hong Kong entity to benefit from the two-tiered income tax rate. In 2024, dividends paid by Beijing Momo IT to Momo HK were subject to a preferential withholding tax rate of 5% under the Arrangement between the PRC and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, based on our assessment that Momo HK qualified as the beneficial owner and met the applicable requirements under such arrangement. In 2025, the relevant tax authority reassessed such qualification and determined that the statutory withholding tax rate of 10% should apply. As a result, we recognized additional withholding tax on prior period distributions, which has been paid in full during 2025, and accrued withholding tax on undistributed earnings at the statutory rate of 10%. We do not believe there is material exposure for further reassessment relating to prior periods and expects to apply the 10% rate to accrue withholding tax for future earnings generated by Beijing Momo IT. In 2023, 2024 and 2025, we accrued withholding tax of RMB184.0 million, RMB519.0 million and RMB634.0 million (US$90.6 million), including RMB535.0 million (US$76.5 million) incremental tax accrual due to increased applicable withholding tax rate as a result of the reassessment by the tax authority in 2025, respectively, on retained earnings generated by Beijing Momo IT. Beijing Momo IT declared cash dividends of RMB1,800.0 million, RMB6,000.0 million and RMB800.0 million (US$114.4 million) to Momo HK in 2023, 2024 and 2025, respectively. With respect to the related withholding tax, Beijing Momo IT paid RMB180.0 million, RMB200.0 million and RMB480.0 million (US$68.6 million) in 2023, 2024 and 2025, respectively. Singapore Hello Planet Pte.Ltd. was granted the Development and Expansion Incentive (“DEI”) in November 2024, and was accordingly entitled to a preferential tax rate of 10% on its qualifying income for the period from December 1, 2024 to November 30, 2029. Other subsidiaries domiciled in Singapore are subject to tax rate of 17% on their taxable income. Japan Our subsidiaries domiciled in Japan are subject to tax at statutory tax rate on their taxable income. 93 Table of Contents People’s Republic of China Pursuant to the PRC Enterprise Income Tax Law, foreign-invested enterprises and domestic companies are subject to enterprise income tax at a uniform rate of 25%. Beijing Momo IT applied for the qualification of Key Software Enterprise for calendar year 2019 and was approved in 2020. Therefore, Beijing Momo IT was entitled to a preferential tax rate of 10% for the year 2019. Beijing Momo IT was qualified as “High and New Technology Enterprises” in 2020 and 2023, respectively, and was accordingly entitled to a preferential tax rate of 15% from 2020 to 2025. Chengdu Momo was qualified as a Western China Development Enterprise and the income tax rate applicable to it was 15% since 2014. According to No. 23 announcement of the State Taxation Administration in April 2018, Chengdu Momo was no longer required to submit the preferential tax rate application to the tax authority, but only required to keep the relevant materials for future tax inspection instead. Based on experience, we believe Chengdu Momo will most likely continue to qualify as a Western China Development Enterprise and accordingly be entitled to a preferential income tax rate of 15%, because Chengdu Momo’s business nature has no significant changes. Therefore, we applied an enterprise income tax rate of 15% to determine the tax liabilities for Chengdu Momo in the years ended December 31, 2023, 2024 and 2025. In July 2019, December 2022 and October 2025, Tantan Technology qualified as a high and new technology enterprise, and is accordingly entitled to a preferential enterprise income tax rate of 15% from 2019 to 2027. The other entities incorporated in Chinese mainland were subject to an enterprise income tax at a rate of 25% for the years ended December 31, 2023, 2024 and 2025. We have recognized income tax expense of RMB630.0 million, RMB845.0 million and RMB842.9 million (US$120.5 million) for the years ended December 31, 2023, 2024 and 2025, respectively. All of our entities are subject to an output VAT at rate of 6% for services provided and 13% for goods sold. The final tax payable is calculated based on the output VAT for the period, offset by the qualifying input VAT. Input VAT caused by purchasing goods or services can only be credited against output VAT if the taxpayer obtained and verified the relevant VAT special invoices. We benefited from special temporary policies that allowed us to deduct an additional 5% of the deductible input tax in 2023. All of our entities have obtained the VAT special invoices as the deduction vouchers, and therefore, we have adopted the net presentation of VAT. Pursuant to applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the Chinese mainland tax authorities. We may be subject to adverse tax consequences and our consolidated results of operations may be adversely affected if the Chinese mainland tax authorities determine that the contractual arrangements among our Chinese mainland subsidiaries, the VIEs and their shareholders or their subsidiaries are not on an arm’s length basis and therefore constitute favorable transfer pricing. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Contractual arrangements we have entered into with the VIEs may be subject to scrutiny by the Chinese mainland tax authorities. A finding that we owe additional taxes could significantly reduce the consolidated net income and the value of your investment.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amounts and as percentages of our total net revenues. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of the results that may be expected for any future period. Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in thousands, except for percentages) Net revenues 12,002,323 100.0 10,562,971 100.0 10,367,096 100 Value-added service 11,825,442 98.5 10,415,580 98.6 10,213,654 98.5 Other services 176,881 1.5 147,391 1.4 153,442 1.5 Cost and expenses Cost of revenues (7,025,394 ) (58.5 ) (6,447,341 ) (61.0 ) (6,446,619 ) (62.2 ) Research and development expenses (884,590 ) (7.4 ) (804,425 ) (7.6 ) (779,449 ) (7.5 ) Sales and marketing expenses (1,414,949 ) (11.8 ) (1,329,780 ) (12.6 ) (1,368,658 ) (13.2 ) General and administrative expenses (502,479 ) (4.2 ) (507,658 ) (4.8 ) (455,393 ) (4.4 ) Total cost and expenses (9,827,412 ) (81.9 ) (9,089,204 ) (86.0 ) (9,050,119 ) (87.3 ) Other operating income 130,105 1.1 59,003 0.6 37,586 0.4 Income from operations 2,305,016 19.2 1,532,770 14.5 1,354,563 13.1 Interest income 436,253 3.6 510,964 4.8 374,466 3.6 Interest expense (62,223 ) (0.5 ) (127,846 ) (1.2 ) (72,438 ) (0.7 ) Other gain or loss, net (26,685 ) (0.2 ) (90,509 ) (0.9 ) 5,682 0.1 94 Table of Contents Income before income tax and share of income on equity method investments 2,652,361 22.1 1,825,379 17.3 1,662,273 16.0 Income tax expense (630,023 ) (5.2 ) (845,022 ) (8.0 ) (842,869 ) (8.1 ) Income before share of income on equity method investments 2,022,338 16.8 980,357 9.3 819,404 7.9 Share of income (loss) on equity method investments (70,643 ) (0.6 ) 59,216 0.6 (12,879 ) (0.1 ) Net income 1,951,695 16.3 1,039,573 9.8 806,525 7.8 The following table presents revenues by geographic area based on the addresses of our customers of our users: Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in thousands, except for percentages) Net revenues 12,002,323 100.0 10,562,971 100.0 10,367,096 100.0 Chinese mainland 11,203,978 93.3 9,392,079 88.9 8,367,094 80.7 Overseas 798,345 6.7 1,170,892 11.1 2,000,002 19.3 Comparison of the Years Ended December 31, 2023, 2024 and 2025 Net Revenues We currently generate revenues primarily from value-added services and other services. Value-added service revenues mainly include virtual gift revenues from various audio, video and text- based scenarios, and membership subscription revenues. Net revenues decreased from RMB12,002.3 million in 2023 to RMB10,563.0 million in 2024, and decreased to RMB10,367.1 million (US$1,482.5 million) in 2025, primarily due to declines in net revenues from Chinese mainland, including Momo app and Tantan app. The declines were largely offset by growth in net revenues from audio-and video-based products in the Middle East and North Africa region, primarily by new apps, along with incremental revenue from dating brands outside of Middle East and North Africa region. Starting from the first quarter of 2025, we combined the live video service and value-added services lines, which are now collectively referred to as value-added services. This change reflects the increasing convergence of the two business lines in terms of user mentality and product format. The combined reporting more accurately reflects user behavior and spending across our social entertainment ecosystem. Additionally, we consolidated mobile marketing services, mobile games and other services, which are now collectively reported under “other services.” Value-added service 2025 compared to 2024. Revenues from our value-added service decreased by 1.9% to RMB10,213.7 million (US$1,460.5 million) in 2025 from RMB10,415.6 million in 2024, primarily due to external factors that influenced the operational focus of certain broadcasters and agencies as well as the weak consumer sentiment on Momo app, and to a lesser extent, the decline in Tantan resulting from a decline in user base. The decrease was largely offset by the revenue growth from our overseas apps, driven by the rapid expansion from multiple social entertainment and dating brands across our rich portfolio. 2024 compared to 2023. Revenues from our value-added service decreased by 11.9% to RMB10,415.6 million in 2024 from RMB11,825.4 million in 2023, primarily due to a soft consumer sentiment in the current macro environment, product adjustments on the Momo platform to manage regulatory risks, our proactive operational adjustments to de-emphasize large scale competition events in Momo app, and a reduction in marketing spend in Tantan which led to a decline in its paying users. The decrease was partially offset by the revenue growth from the new standalone apps. 95 Table of Contents Other services Other services mainly include mobile marketing service, mobile games service, and film and television series distribution promotion business. 2025 compared to 2024. Other services revenues increased by 4.1% to RMB153.4 million (US$21.9 million) in 2025 from RMB147.4 million in 2024, primarily due to more advertising revenue generated in 2025. 2024 compared to 2023. Other services revenues decreased by 16.7% to RMB147.4 million in 2024 from RMB176.9 million in 2023, primarily due to the cessation of mobile games and related services in early 2024, and lower gains from brand promotion services in connection with our film and television series business investment compared with 2023. Cost and Expenses Cost of revenues Cost of revenues consists primarily of costs associated with the operation and maintenance of our platform, including revenue sharing, commission fees, bandwidth costs, labor costs, depreciation and amortization, and other costs. Revenue sharing primarily includes payments to broadcasters and talent agencies, virtual gift recipients and other influencers for our virtual gift service. Commission fees are payments made to third-party application stores and other payment channels for distributing our value-added service. Users can make payments for such service through third-party application stores and other payment channels. These third-party application stores and other payment channels typically charge a handling fee for their services. Bandwidth costs, including internet data center and content delivery network fees, consist of fees that we pay to telecommunication carriers and other service providers for telecommunication services, hosting our servers at their internet data centers, and providing content and application delivery services. Labor costs consist of salaries and benefits, including share-based compensation expenses, for our employees involved in the operation of our platform. Depreciation mainly consists of depreciation cost on our servers, computers and other equipment. Amortization expenses mainly related to intangible assets from business acquisitions. Other costs mainly consist of production costs in connection with film and television content, office rental expenses and professional fees related to live video service. The following table sets forth the components of our cost of revenues by amounts and percentages of our total cost of revenues for the periods presented: Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB % (in thousands, except for percentages) Cost of revenues: Revenue sharing 6,079,947 86.5 5,496,231 85.2 5,459,117 84.7 Commission fees 270,457 3.8 272,915 4.2 330,198 5.1 Bandwidth costs 273,003 3.9 264,724 4.1 283,686 4.4 Labor costs 193,324 2.8 177,810 2.8 210,079 3.3 Depreciation and amortization 44,858 0.6 27,103 0.4 40,705 0.6 Other costs 163,805 2.4 208,558 3.3 122,834 1.9 Total cost of revenues 7,025,394 100.0 6,447,341 100.0 6,446,619 100 2025 compared to 2024. Our cost of revenues remained stable at RMB6,446.6 million (US$921.9 million) in 2025, compared with RMB6,447.3 million in 2024. The slight decrease was primarily due to a decrease of RMB111.2 million (US$15.9 million) in production costs in connection with films, and an RMB37.1 million (US$5.3 million) decrease in revenue sharing, driven by a decrease in value-added service revenue from Momo app and Tantan app, which was partially offset by an increase in revenue sharing resulting from the growth in value-added service revenue from our overseas standalone apps. The above decrease was partially offset by an RMB57.3 million (US$8.2 million) increase in commission fees due to the shift in revenue mix toward membership subscription revenues in overseas markets, an RMB32.3 million (US$4.6 million) increase in labor costs and an RMB19.0 million (US$2.7 million) increase in bandwidth costs due to the growth in value-added service revenue from our overseas standalone apps. 96 Table of Contents 2024 compared to 2023. Our cost of revenues decreased by 8.2% from RMB7,025.4 million in 2023 to RMB6,447.3 million in 2024. The decrease was primarily due to an RMB583.7 million decrease in revenue sharing from a decrease in live video services revenue on Momo app and Tantan app, and a decrease in virtual gift service revenue on Momo app which was partially offset by an increase in revenue sharing from an increase in virtual gift service revenue in our standalone apps, an RMB15.5 million decrease in labor costs resulting from our continuous optimization in personnel costs in 2024, and an RMB17.8 million decrease in depreciation and amortization due to less purchase of computer and office equipment and previous purchases that have been fully depreciated. The decrease was partially offset by an increase of RMB86.8 million in production costs in connection with films. Research and development expenses Research and development expenses consist primarily of salaries and benefits, including share-based compensation expenses, for research and development personnel, technological service fee, depreciation and rental expenses associated with research and development activities. Expenditures incurred during the research phase are expensed as incurred. 2025 compared to 2024. Our research and development expenses decreased by 3.1% from RMB804.4 million in 2024 to RMB779.4 million (US$111.5 million) in 2025. This decrease was primarily attributable to an RMB11.4 million (US$1.6 million) decrease in salaries and benefits for research and development personnel primarily driven by our continuous optimization of engineering personnel costs, and an RMB5.2 million (US$0.7 million) decrease in depreciation and amortization expenses, primarily due to less purchase of computer and office equipment and previous purchases that have been fully depreciated, partially offset by an increase in amortization expenses related to intangible assets from business acquisitions. Our research and development headcount decreased from 843 as of December 31, 2024 to 788 as of December 31, 2025. 2024 compared to 2023. Our research and development expenses decreased by 9.1% from RMB884.6 million in 2023 to RMB804.4 million in 2024. This decrease was primarily due to an RMB79.0 million decrease in salaries and benefits for research and development personnel primarily driven by our continuous optimization of personnel costs, and an RMB17.2 million decrease in the termination of leases for certain offices and a decline in rental costs. Our research and development headcount decreased from 864 as of December 31, 2023 to 843 as of December 31, 2024. Sales and marketing expenses Sales and marketing expenses consist primarily of general marketing and promotional expenses, as well as salaries and benefits, including share-based compensation expenses, for our sales and marketing personnel. 2025 compared to 2024. Our sales and marketing expenses increased by 2.9% from RMB1,329.8 million in 2024 to RMB1,368.7 million (US$195.7 million) in 2025, primarily due to an RMB35.5 million (US$5.1 million) increase in marketing and promotional expenses, resulting from higher marketing investment in our overseas apps, partially offset by ongoing cost control measures in our Chinese mainland businesses, with both Momo and Tantan reducing their marketing spend, and an RMB14.5 million (US$2.1 million) increase in depreciation and amortization expenses, attributable to an increase in amortization expenses related to intangible assets from business acquisitions. 2024 compared to 2023. Our sales and marketing expenses decreased by 6.0% from RMB1,414.9 million in 2023 to RMB1,329.8 million in 2024, primarily due to an RMB22.4 million decrease in salaries and benefits for our sales and marketing personnel primarily driven by our continuous optimization of personnel costs, and an RMB56.0 million decrease in marketing and promotional expenses resulting from our continuous initiatives to control cost and optimize Tantan’s channel marketing strategy and Momo’s strategy to trim inefficient channel marketing spend. The decrease was partially offset by increased channel investment in overseas apps. General and administrative expenses General and administrative expenses consist primarily of salaries and other benefits, including share-based compensation expense, professional fees and rental expenses. 2025 compared to 2024. Our general and administrative expenses decreased from RMB507.7 million in 2024 to RMB455.4 million (US$65.1 million) in 2025. This decrease was primarily due to reduced labor cost and less provision for expected liabilities related to litigation or claims. 97 Table of Contents 2024 compared to 2023. Our general and administrative expenses increased from RMB502.5 million in 2023 to RMB507.7 million in 2024. This increase was primarily due to a higher provision for expected liabilities related to litigation or claims, and an increase in professional service expenses related to investment and acquisition. The increase was partially offset by reduced labor cost. Other operating income Other operating income mainly consisted of government incentives and additional input VAT deduction. 2025 compared to 2024. Our other operating income decreased from RMB59.0 million in 2024 to RMB37.6 million (US$5.4 million) in 2025. The decrease was mainly due to reduced government incentives. 2024 compared to 2023. Our other operating income decreased from RMB130.1 million in 2023 to RMB59.0 million in 2024. The decrease was mainly due to reduced government incentives and input VAT super deduction in 2024 Other gain or loss, net 2025 compared to 2024. Our other gain or loss, net was a net gain of RMB5.7 million (US$0.8 million) in 2025, compared to a net loss of RMB90.5 million in 2024. The net gain of RMB5.7 million (US$0.8 million) in 2025 mainly resulted from gain on fair value changes of short-term investments. 2024 compared to 2023. Our other gain or loss, net was a net loss of RMB90.5 million in 2024, compared to a net loss of RMB26.7 million in 2023. The net loss of RMB90.5 million in 2024 mainly resulted from impairment loss on some long-term investments. Net income 2025 compared to 2024. As a result of the foregoing, we have incurred a net income of RMB806.5 million (US$115.3 million) in 2025, compared to a net income of RMB1,039.6 million in 2024. 2024 compared to 2023. As a result of the foregoing, we have incurred a net income of RMB1,039.6 million in 2024, compared to a net income of RMB1,951.7 million in 2023. B. Liquidity and Capital Resources As of December 31, 2025, we have financed our operations primarily through net cash provided by operating activities, as well as from the issuance of equity. As of December 31, 2023, 2024 and 2025, we had RMB5,620.5 million, RMB4,122.7 million and RMB5,320.0 million (US$760.7 million), respectively, in cash and cash equivalents. Our cash and cash equivalents primarily consist of cash on hand and highly liquid investments, which are unrestricted from withdrawal or use, or which have original maturities of three months or less when purchased. We believe that our current cash and cash equivalents and our anticipated cash flows from operations will be sufficient to meet our anticipated working capital requirements and capital expenditures for the next 12 months. We may, however, need additional capital in the future to fund our continued operations. In July 2018, we issued US$725 million principal amount of convertible senior notes due 2025. The notes matured on July 1, 2025, and we repaid the then outstanding notes that had not been redeemed, repurchased or converted in full. In the future, we may rely significantly on dividends and other distributions paid by our Chinese mainland subsidiaries for our cash and financing requirements. There may be restrictions on the dividends and other distributions by our Chinese mainland subsidiaries. The Chinese mainland tax authorities may require us to adjust our taxable income under the contractual arrangements that our Chinese mainland subsidiaries currently have in place with the VIEs in a way that could materially and adversely affect the ability of our Chinese mainland subsidiaries to pay dividends and make other distributions to us. In addition, under PRC laws and regulations, our Chinese mainland subsidiaries may pay dividends only out of its accumulated profits as determined in accordance with Chinese mainland accounting standards and regulations. Our Chinese mainland subsidiaries are required to set aside 10% of their accumulated after-tax profits each year, if any, to fund a statutory common reserve fund, until the aggregate amount of such fund reaches 50% of its respective registered capital. If the statutory common reserve fund is not sufficient to make up its losses in previous years (if any), our Chinese mainland subsidiaries shall use the profits of the current year to make up the losses before accruing such statutory common reserve fund. At the discretion of the shareholders of our Chinese mainland subsidiaries, they may, after accruing the statutory common reserve fund, allocate a portion of their after-tax profits based on Chinese mainland accounting standards to discretionary common reserve fund. The statutory common reserve fund and the discretionary common reserve fund cannot be distributed as cash dividends. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We may rely on dividends paid by our Chinese mainland subsidiaries to fund cash and financing requirements. Any limitation on the ability of our Chinese mainland subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of the ADSs and our ordinary shares.” Furthermore, our investments made as registered capital and additional paid-in capital of our Chinese mainland subsidiaries, the VIEs and their subsidiaries are also subject to restrictions on their distribution and transfer according to PRC laws and regulations. 98 Table of Contents As a result, our Chinese mainland subsidiaries, the VIEs and their subsidiaries in Chinese mainland are restricted in their ability to transfer their net assets to us in the form of cash dividends, loans or advances. As of December 31, 2025, the amount of the restricted net assets, which represents registered capital and additional paid-in capital cumulative appropriations made to statutory reserves, was RMB1,511.2 million (US$216.1 million). As of December 31, 2025, we held cash and cash equivalents of RMB1,434.5 million (US$205.1 million) in aggregate outside of Chinese mainland and RMB3,885.5 million (US$555.6 million) in aggregate in Chinese mainland, of which RMB3,885.4 million (US$555.6 million) was denominated in RMB and RMB141.9 thousand (US$20.3 thousand) was denominated in U.S. dollars. Of such cash and cash equivalents held in Chinese mainland, our Chinese mainland subsidiaries held cash and cash equivalents in the amount of RMB3,170.1 million (US$453.3 million), and the VIEs and their subsidiaries held cash and cash equivalents in the amount of RMB715.4 million (US$102.3 million). As an offshore holding company, we are permitted under PRC laws and regulations to provide funding from the proceeds of our offshore fund raising activities to our Chinese mainland subsidiaries only through loans or capital contributions, and to the VIEs and their subsidiaries only through loans, in each case subject to the satisfaction of the applicable government registration and/or approval requirements. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in Chinese Mainland—Chinese mainland regulation of loans to, and direct investment in, Chinese mainland entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using offshore funds to make loans to our Chinese mainland subsidiaries and the VIEs and their subsidiaries, or to make additional capital contributions to our Chinese mainland subsidiaries.” As a result, there is uncertainty with respect to our ability to provide prompt financial support to our Chinese mainland subsidiaries and the VIEs when needed. Notwithstanding the foregoing, our Chinese mainland subsidiaries may use their own retained earnings (rather than RMB converted from foreign currency denominated capital) to provide financial support to the VIEs either through entrustment loans from our Chinese mainland subsidiaries to the VIEs or direct loans to such VIEs’ nominee shareholders, which would be contributed to the consolidated variable entities as capital injections. Such direct loans to the nominee shareholders would be eliminated in our consolidated financial statements against the VIEs’ share capital. Our full-time employees in Chinese mainland participate in a government-mandated contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, maternity insurance, employee housing fund and other welfare benefits are provided to such employees. We accrue for these benefits based on certain percentages of the employees’ salaries. The total provisions for such employee benefits were RMB206.5 million, RMB201.1 million and RMB200.3 million (US$28.6 million) in 2023, 2024 and 2025, respectively. The following table sets forth a summary of our cash flows for the periods indicated: Year Ended December 31, 2023 2024 2025 (in RMB thousands) Net cash provided by operating activities 2,277,161 1,639,994 1,183,109 Net cash provided by (used in) investing activities 2,413,069 (558,887 ) 164,470 Net cash (used in) provided by financing activities (1,699,907 ) 236,197 (5,439,170 ) Effect of exchange rate changes 93,988 42,205 (110,196 ) Net (decrease) increase in cash and cash equivalents 3,084,311 1,359,509 (4,201,787 ) Cash and cash equivalents and restricted cash at beginning of year 5,198,601 8,282,912 9,642,421 Cash and cash equivalents and restricted cash at end of year 8,282,912 9,642,421 5,440,634 99 Table of Contents Anticipated Use of Cash We intend to continue to invest in our research and development capabilities to grow our user base and enhance user experience. We intend to continue to market our services, promote our brand, strengthen our customer service capabilities and enhance monetization. In order to support our overall business expansion, we also expect to continue to make investments in our corporate facilities and information technology infrastructure. We may pursue strategic alliances and acquisitions that complement our social networking platforms. In March 2026, we declared a special cash dividend in the amount of US$0.28 per ADS, or US$0.14 per ordinary share. The cash dividend will be paid on April 30, 2026 to shareholders of record at the close of business on April 10, 2026. The ex-dividend date was April 10, 2026. The aggregate amount of cash dividends paid was approximately US$41.2 million, which was funded by available cash on our balance sheet. We also plan to spend cash on repurchasing our ADSs and/or ordinary shares, in the open market or otherwise. Our share repurchase program has been extended through March 31, 2027, with US$102.1 million of authorized repurchases remaining under the program as of March 31, 2026. As of December 31, 2025, our consolidated cash, cash equivalents, restricted cash, short-term investments and term deposits totaled approximately RMB8.7 billion (US$1.2 billion). We believe that we were a PFIC for U.S. federal income tax purposes for the taxable year ended December 31, 2025. Our PFIC classification is substantially attributable to our significant cash and deposit balances relative to the market capitalization of our ADSs, rather than to the nature of our business operations. We have been actively managing our capital allocation through a combination of returning capital to shareholders, pursuing strategic acquisitions and evaluating other operating investment opportunities. During 2025, we deployed approximately RMB633.9 million (US$90.6 million) in business acquisitions and returned approximately RMB1,096.2 million (US$156.8 million) to shareholders through cash dividends and share repurchases. We intend to continue evaluating opportunities to allocate our capital in a manner that balances our strategic objectives, investment return requirements, and shareholder value, while being mindful of the implications for our PFIC status. However, we do not intend to make investment decisions solely for the purpose of modifying our PFIC classification, as we believe capital allocation decisions should be driven primarily by their expected impact on long-term shareholder value. Operating Activities Net cash provided by operating activities amounted to RMB1,183.1 million (US$169.2 million) in 2025, as compared to a net income of RMB806.5 million (US$115.3 million) in the same period. The principal items accounting for the difference between our net cash provided by operating activities and our net income were non-cash items of RMB259.0 million (US$37.0 million) and an increase of RMB117.6 million (US$16.8 million) in working capital. The non-cash items primarily included RMB162.7 million (US$23.3 million) in share-based compensation expenses, RMB43.0 million (US$6.1 million) in depreciation of property and equipment, RMB38.8 million (US$5.5 million) in amortization of intangible assets, and RMB12.9 million (US$1.8 million) in share of loss on equity method investments. The increase in working capital was primarily attributable to an increase in deferred tax liabilities of RMB235.6 million (US$33.7 million), a decrease in other non-current assets of RMB151.0 million (US$21.6 million), and a decrease in prepaid expenses and other current assets of RMB110.9 million (US$15.9 million), partially offset by a decrease in accrued expenses and other current liabilities of RMB136.1 million (US$19.5 million), a decrease in income tax payable of RMB112.6 million (US$16.1 million), and a decrease in other non-current liabilities of RMB99.2 million (US$14.2 million). The increase in deferred tax liabilities was mainly because we accrued withholding income tax of RMB633.6 million (US$90.6 million) in 2025, which was more than RMB380.0 million (US$54.3 million), the withholding income tax we paid in 2025. The decrease in other non-current assets was mainly attributable to a decrease in right-of-use assets, partially offset by an increase in film cost in the process of production. The decrease in prepaid expenses and other current assets was mainly attributable to a decrease in interest receivable of term deposits. The decrease in accrued expenses and other current liabilities was mainly attributable to (i) a decrease in lease liabilities due within one year, (ii) a decrease in contingent liabilities in relation to litigation or claims, and (iii) a decrease in interest payable of bank borrowings. The decrease in income tax payable was primarily attributable to the settlement of withholding income tax of RMB100.0 million (US$14.3 million) related to the dividend distribution declared in 2024 but not yet paid. 100 Table of Contents Net cash provided by operating activities amounted to RMB1,640.0 million in 2024, as compared to a net income of RMB1,039.6 million in the same period. The principal items accounting for the difference between our net cash provided by operating activities and our net income were non-cash items of RMB288.1 million and an increase of RMB312.3 million in working capital. The non-cash items primarily include RMB192.6 million in share-based compensation expenses, RMB90.5 million in loss on long-term investments, and RMB52.8 million in depreciation of property and equipment, partially offset by RMB59.2 million in share of income on equity method investments. The increase in working capital was primarily attributable to an increase in deferred tax liabilities of RMB212.8 million and an increase in accrued expenses and other current liabilities of RMB139.6 million, partially offset by an increase in other non-current assets of RMB101.8 million. The increase in deferred tax liabilities was mainly because we accrued withholding income tax of RMB518.8 million in 2024, which was more than RMB200 million, the withholding income tax we paid in 2024. The increase in accrued expenses and other current liabilities was mainly attributable to (i) an increase in lease liabilities due within one year, (ii) an increase in contingent liabilities in relation to litigation or claims, and (iii) an increase in interest payable of bank borrowings. The increase in other non-current assets was mainly attributable to an increase in right-of-use assets, partially offset by a decrease in film cost in the process of production. Net cash provided by operating activities amounted to RMB2,277.2 million in 2023, as compared to a net income of RMB1,951.7 million in the same period. The principal items accounting for the difference between our net cash provided by operating activities and our net income were non-cash items of RMB457.2 million and an increase of RMB131.7 million in working capital. The non-cash items primarily include RMB267.1 million in share-based compensation expenses, RMB74.5 million in depreciation of property and equipment and RMB70.6 million in share of loss on equity method investments, partially offset by RMB4.6 million in gain on repurchase of convertible senior notes. The increase in working capital was primarily attributable to a decrease in accrued expenses and other current liabilities of RMB183.8 million and a decrease in deferred revenue of RMB42.4 million, partially offset by a decrease in prepaid expenses and other current assets of RMB84.8 million. The decrease in accrued expenses and other current liabilities was mainly attributable to (i) a decrease of contingent loss liability, which was settled in 2023, related to an ongoing investigation of the alleged illegal activity on the source of the funding consumed on Momo’s platform, (ii) a decrease in lease liabilities due within one year, (iii) a decrease in payroll and welfare payable due to downsize, (iv) a decrease in marketing promotional fees payable, and (v) a decrease in amount payable to repurchase our subsidiary’s share options. The decrease in deferred revenue was mainly attributable to (i) less membership subscription of Tantan and Momo, and (ii) less cash received in advance than revenue recognized from users of live video and virtual gift services. The decrease in prepaid expenses and other current assets was mainly attributable to a decrease in interest receivable on maturity of certain long-term deposits, partially offset by an increase in VAT input, which mainly arose from the capital expenditure of a real property purchase. Investing Activities Net cash provided by investing activities amounted to RMB164.5 million (US$23.5 million) in 2025, consisting primarily of cash received on maturity of term deposits, partially offset by cash paid for purchase of property and equipment, payment for long-term investments, payment for business acquisition and payment for short-term investments. The net change of the purchase and cash received on maturity of term deposits was a cash inflow of RMB1,944.3 million (US$278.0 million) in 2025. Net cash used in investing activities amounted to RMB558.9 million in 2024, consisting primarily of cash paid in connection with the construction of office buildings and loans to a third-party company. The net change of the purchase and cash received on maturity of short-term and long-term deposits was a cash inflow of RMB195.1 million in 2024. Net cash provided by investing activities amounted to RMB2,413.1 million in 2023, consisting primarily of cash received on maturity of short-term deposits, partially offset by the purchase of long-term deposits and short-term deposits. Financing Activities Net cash used in financing activities amounted to RMB5,439.2 million (US$777.8 million) in 2025, consisting primarily of the repayment of short-term borrowings, the repayment of long-term borrowings, the repurchase of ordinary shares and the payment of our declared special cash dividend. Net cash provided by financing activities amounted to RMB236.2 million in 2024, consisting primarily of the proceeds from short-term borrowings, partially offset by the repurchase of ordinary shares and the payment of our declared special cash dividend. Net cash used in financing activities amounted to RMB1,699.9 million in 2023, consisting primarily of the repurchase of our convertible senior notes, payment of our declared special cash dividend and repurchase of our ordinary shares, partially offset by the proceeds from long-term borrowings. 101 Table of Contents Material Cash Requirements Our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include our capital expenditures, contractual obligations, funds used for share repurchase and dividend payment. Capital Expenditures Our capital expenditures amounted to RMB576.3 million, RMB285.5 million and RMB492.5 million (US$70.4 million) in 2023, 2024 and 2025, respectively. In the past, our capital expenditures were principally incurred to purchase servers, computers and other office equipment, and to pay for leasehold improvements for our offices and the construction and acquisition of office buildings. In 2023, Beijing Momo IT and one of our subsidiaries, Beijing Leguanxing Information Technology Co., Ltd., entered into a cooperation agreement with Beijing Electronics Zone Co., Ltd. (which was subsequently supplemented and amended) for the purchase of a real property located in Beijing, China with a total floor area of approximately 34,000 square meters for a total consideration of RMB847.4 million, for business purposes. In 2025, we acquired office properties in Singapore and Chengdu, China, with a total floor area of approximately 6,100 square meters and an aggregate consideration of RMB408.0 million (US$58.3 million). We may purchase new servers, computers and other equipment in the future, as well as make office renovations improvements. Contractual Obligations The following table sets forth our contractual obligations by the specified categories as of December 31, 2025. Year ending December 31, Total 2026 2027 2028 and thereafter (RMB in thousands) Operating lease obligations(1) 129,972 86,176 23,008 20,788 Investment commitment obligations(2) 78,000 78,000 — — Acquisition commitments(3) 25,154 25,154 — — Credit facilities to a related party(4) 5,540 5,540 — — Long-term debt obligations(5) 5,386 2,193 1,854 1,339 Capital commitments(6) 2,391 2,319 — 72 Total 246,443 199,382 24,862 22,199 Notes: (1) Operating lease obligations represent our obligations for leasing internet data center facilities and office space, which include all future cash outflows under ASC Topic 842, Leases. For our lease of offices, a significant portion of the risks and rewards of ownership are retained by the lessor under operating lease agreements. Please see “Leases” under Note 12 to our audited consolidated financial statements included in this annual report beginning on page F-1. (2) Our investment commitment obligations primarily relate to capital contribution obligations under certain investment arrangements which we entered into in 2022 and 2023. We expect our investment commitment obligations to be fulfilled in 2026. (3) Our acquisition commitments primarily relate to an acquisition of a Japanese business. (4) As of December 31, 2025, we had provided credit facilities with the amount of RMB5.5 million (US$0.8 million) to a related-party entities. (5) Including estimated interest payments of RMB0.1 million in total over the next four years from December 31, 2025 and principal payments of RMB5.3 million. The long-term borrowings (including current portion) outstanding as of December 31, 2025 bore interest at rates ranging from 0.63% to 2.0% per annum and were denominated in local currencies. 40% of the long-term borrowings were due in 2026 and the remaining 60% were due in installments through 2029. These borrowings were obtained by our overseas subsidiaries from local financial institutions. (6) Our capital commitments primarily relate to commitments on construction of office buildings, 97% of which are expected to be paid in 2026 and 3% of which are expected to be paid in 2029 according to the purchase agreements. Other than the operating lease obligations, investment commitment obligations, acquisition commitments, credit facilities to third parties, long-term debt obligations and capital commitments shown above, we did not have any significant other commitments, or guarantees as of December 31, 2025. 102 Table of Contents Holding Company Structure Our company is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries and the VIEs and their subsidiaries in Chinese mainland. As a result, our ability to pay dividends depends upon dividends paid by our subsidiaries. If our subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with Chinese mainland accounting standards and regulations. Under PRC law, each of our Chinese mainland subsidiaries and the VIEs is required to set aside 10% of their after-tax profits each year, if any, to fund a statutory common reserve until such reserve reaches 50% of their registered capital. Although the statutory common reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. As a result of these PRC laws and regulations, the capital and statutory common reserves restricted which represented the amount of net assets of our relevant subsidiaries in Chinese mainland not available for distribution were RMB1,511.2 million (US$216.1 million) as of December 31, 2025. C. Research and Development We focus our research and development efforts on the continual improvement and enhancement of our platform’s features and services, architecture and technological infrastructures, as well as security and integrity of our platform to protect the security and privacy of our users. We have a large team of engineers and developers, which accounted for approximately 37.8% of our employees as of December 31, 2025. Most of our engineers and developers are based in our headquarters in Beijing. For the three years ended December 31, 2023, 2024 and 2025, our research and development expenditures, including share-based compensation expenses for research and development personnel, were RMB884.6 million, RMB804.4 million and RMB779.4 million (US$111.5 million), respectively. For the year ended December 31, 2025, our research and development expenditures represented 7.5% of our total net revenues. Our research and development expenses primarily consist of salaries and benefits, including share-based compensation expenses, for research and development personnel, depreciation and amortization, and office rental fees. Expenditures incurred during the research phase are expensed as incurred. D. Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since December 31, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions. E. Critical Accounting Estimates We prepare our financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect our reporting of, among other things, assets and liabilities, revenues and expenses and contingent assets and liabilities. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and other factors that we believe to be relevant under the circumstances. Since our financial reporting process inherently relies on the use of estimates and assumptions, our actual results could differ from what we expect. We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are other items within our financial statements that require estimation but are not deemed critical, as defined above. Changes in estimates used in these and other items could have a material impact on our financial statements. For a detailed discussion of our significant accounting policies and related judgments, see “Notes to Consolidated Financial Statements—Note 2 Significant Accounting Policies.” 103 Table of Contents Business Combinations We account for business acquisitions under ASC 805, Business Combinations. The total purchase consideration for an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities assumed at the acquisition date. Costs that are directly attributable to the acquisition are expensed as incurred. Identifiable assets (including intangible assets) and liabilities assumed in an acquisition are measured initially at their fair values at the acquisition date. We recognize goodwill if the fair value of the total purchase consideration and any noncontrolling interests is in excess of the net fair value of the identifiable assets acquired and the liabilities assumed. We include the results of operations of the acquired business in the consolidated financial statements beginning on the acquisition date. When determining such fair values, we make significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include but are not limited to projected future cash flows and discount rates. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates and changes could be significant. Furthermore, our estimates might change as additional information becomes available.