Match Group forecasts lower Q2 revenue but sees Tinder growth signs

Match Group recently projected second-quarter revenue below analysts’ expectations, yet indicated signs of potential growth at its dating platform, Tinder. The company implemented changes to product and marketing execution at Tinder and, although not yet evident in financial results, has observed early indications of increased momentum, according to a letter to shareholders.

Following the announcement, the firm’s stock, whose revenue per paying user increased by about 2% compared to a year ago, rose by 3% in fluctuating trading post-market. Furthermore, Match announced a US$1 billion share buyback programme, stating little change in paying users and direct revenue for Tinder in the first quarter compared to the previous year.

“Online dating, although resilient in recent history, is beginning to feel the pressure of tightening wallets, and ARPU (average revenue per user) can be expected to decline industry-wide throughout the rest of 2023,” Nicholas Cauley, an analyst at Third Bridge, commented.

The company predicts current-quarter revenue to range between US$805 million and US$815 million, compared with analysts’ average estimate of US$822.3 million, according to Refinitiv data.

Dating app Hinge, owned by Match Group, introduced a two-tier subscription model to provide users with more options. This is expected to boost the average revenue per user and attract more paying users. The firm stated that the negative foreign exchange impact in the reported quarter was US$35 million, US$7 million more than anticipated in its fourth-quarter earnings call.

Match Group revealed a 3% year-on-year decline in paying users across its dating apps portfolio, totalling 15.9 million users. Revenue for the three-month period ending March 31 amounted to US$787 million, compared to analysts’ average estimate of US$793.8 million. Meanwhile, net profit decreased to US$120.8 million, down from US$180.5 million a year earlier, reports Channel News Asia.