Contributed by: kellyseal on Monday, November 07 2022 @ 09:43 am
Last modified on Monday, November 07 2022 @ 09:46 am
Dating app conglomerate Match Group reported third quarter earnings that beat analyst expectations, with more of its users paying for subscriptions on dating app Tinder. The company’s stock rose 16 percent in response.
Despite the effects of inflation and a slow first half of the year, along with poor execution of some new features and executive team changes made by new CEO Bernard Kim, Match Group turned things around and impressed investors and analysts with better-than-expected revenue gains. Match Group revenue reached $810 million for the quarter ending September 30th, beating analysts’ estimate of $793 million according to Refinitiv data.
Tinder’s revenue grew 6 percent and its paying users jumped 7 percent according to Reuters[*1] . Tinder users account for the vast majority of Match Group’s estimated 100 million active users.
Kim still warned that fourth quarter earnings could come in below expected estimated earnings of $809.2 million, and instead come in between $780 million and $790 million, due to a stronger U.S. dollar.
He also noted that while subscriptions for Tinder were up, users were spending less money on in-app purchases like Super Likes and Boosts which historically have been really popular. Plenty of Fish has also struggled to grow revenue, with many of its low income users affected by the economic downturn, according to BBC[*2] .
Kim also noted in the shareholder report that product rollouts were stronger this quarter, despite the CEO position for Tinder still being vacant.
Overall, Match Group reported 16.5 million paying customers across its brands worldwide in the third quarter, up from 16.3 million in the second quarter of this year, according to BBC. Most of this growth came from outside the U.S. and European markets, where the majority of its users reside. In these markets, revenue slightly decreased, according to BBC.
In recent weeks, both tech giants Apple and Amazon reported their sales going down because consumers were holding back from spending. They also noted that the rising cost of living (inflation) was “eroding consumer buying power,” according to BBC. Meta stock dropped 20 percent after its reported earnings and forecast, with investors still wary of the tech market and social media platforms.
Match Group expects the slowdown to continue through 2023, and has plans to reduce headcount and marketing spend to have flat margins next year, according to Reuters. Still, the company seems to be faring better than most despite the setbacks in the first half of the year.