Contributed by: kellyseal on Wednesday, August 10 2022 @ 07:46 am
Last modified on Wednesday, August 10 2022 @ 07:50 am
Revenue growth for dating conglomerate Match Group has fallen in a disappointing second quarter for the company. The market responded and the company’s stock fell more than twenty percent, bringing its stock price down 42 percent of its value since the beginning of the year.
Match Group held its earnings call with investors, reporting revenue of $795 million compared to $804 million that analysts expected. In addition to this, Match Group lowered revenue forecasts for Q3 from $800 to $790 million according to CNBC News[*1] , which includes the impact from foreign exchange rates falling compared to the dollar. To complicate things for Match Group, it also means that there would be no growth at all between the quarters.
There were some hopeful signs despite the news. The company pointed out that overall revenue grew twelve percent compared to this time last year. In addition, the number of paid users increased 10 percent to 16.4 million according to the shareholder report, and revenue per paid user rose three percent to $15.86.
Revenue at Tinder grew 13 percent in the second quarter despite the overall drop, and Match Group CEO Bernard Kim pointed out that Hinge was a “bright spot” for the company in terms of growth. Still, he announced the departure of Tinder CEO Renate Nyborg as well as the “disappointing execution” of Tinder Coins and the launches of the app’s new features. He restructured his corporate team, including promoting OkCupid CMO Melissa Hobley to Match Group CMO overseeing all brands.
A recent lawsuit settlement related to Tinder also cost the company $441 million, with a negative free cash flow of $7 million according to CNBC.
Match Group had seen continued growth for the past two years as more people than ever joined dating apps in the midst of Covid lockdowns. Subscribers and usage rates soared through 2021 following the rollout of vaccines and the lifting of restrictions, but this year, people are resuming normal socializing and usage rates have declined. “We are not seeing a similar surge of activity in 2022,” the company said, according to CNBC.
The company also reported weakness in its live streaming business, though Match Group CEO Bernard Kim did point out that Plenty of Fish’s livestream features were very successful in keeping users engaged.
The ongoing war between Russia and Ukraine has also impacted its business. In May, Match Group told investors that it would lose roughly $10 million per week despite keeping its platforms operating in the countries. It also pointed out that its subscriptions and usage numbers were weak in Japan.
Kim announced several changes to help curb expenses in addition to the executive shakeup, including pausing development of metaverse dating and Tinder Coins.