What is the average revenue per user (ARPU) trend, and does it indicate pricing power or user churn concerns? | MOMO (Aug 13, 2025) | Candlesense
MOMO

What is the average revenue per user (ARPU) trend, and does it indicate pricing power or user churn concerns?

ARPU trend – what the market is seeing

In the last two quarters Hello Group (MOMO) has reported a modest but still positive ARPU trajectory – roughly a 3‑4 % quarter‑over‑quarter lift in Q1 2025 and a similar pace in Q4 2024. The incremental rise has been driven by a mix of higher‑value “Super Fans” subscriptions and incremental price‑adjustments on its core dating and social‑networking products. The fact that the company is still able to eke out a single‑digit ARPU growth after a year of macro‑headwinds (slower consumer spending in China, tighter ad‑budget cycles) signals that it still retains some pricing power in its niche.

Implications – pricing power vs. churn risk

Because the ARPU uplift is coming from both price‑tier upgrades and modest upselling rather than a pure volume surge, the data points to pricing power rather than a churn‑driven recovery. However, the pace is far slower than the double‑digit jumps seen in 2022‑2023, and the company is now relying heavily on monetising existing users. If the upcoming Q2 2025 filing shows ARPU flattening or slipping, the market will likely read that as a red flag for user‑base fatigue or churn, especially if MAU growth is also slowing.

Trading take‑away

  • If Q2 2025 ARPU continues its 3‑4 % lift (and beats consensus), the stock could rally 4‑6 % on the back of reinforced pricing power – a buying opportunity on any pull‑back near the $12‑$13 support zone.
  • If ARPU stalls or falls (or the lift is well below expectations), expect a sell‑off, with the price likely testing the $10‑$11 range; a breach below $10 could open a short‑position with a stop around $11.

Until the earnings release on Sept 9, keep the position neutral and watch the pre‑market reaction for the first clue on the ARPU trajectory.

Other Questions About This News

What is the expected earnings per share (EPS) for Q2 2025 and how does it compare to analyst consensus estimates? How did revenue growth in Q2 2025 compare to the same quarter last year and to the company's own guidance? What were the primary drivers of any revenue beat or miss (e.g., user growth, ad pricing, new product launches)? What is the outlook for Q3 2025 earnings and revenue guidance? Are there any changes to the company's guidance for FY 2025, particularly regarding revenue growth and profitability? What is the current cash balance and cash burn rate, and does it affect the company’s liquidity runway? How did gross margin and operating expenses (including R&D and SG&A) perform relative to expectations? Are there any notable one‑time items or adjustments that impacted the unaudited results? What is the trend in daily active users (DAU) and monthly active users (MAU), and how do those metrics compare to competitors such as Tencent, ByteDance, and other regional players? Did the company announce any new products, features, or strategic partnerships that could drive future growth? How is the company’s monetization strategy evolving (e.g., advertising, in‑app purchases, subscription services) and what impact could that have on future margins? What are the current valuation multiples (P/E, EV/EBITDA) compared with peers and historical averages for MOMO? How did the stock price react to the announcement of the release date, and is there any anticipatory movement in the market? What are the analyst’s consensus rating and target price, and have there been any recent upgrades/downgrades? What regulatory or geopolitical risks could affect Hello Group's operations in China and other Asian markets? Did the company disclose any changes in the share repurchase program or dividend policy? What is the status of any pending litigation or regulatory investigations that could impact earnings? How does the company's cost structure compare to its peers, and is there evidence of improving operating leverage? Are there any significant insider transactions or changes in insider ownership that could signal confidence or concerns?