Contributed by: kellyseal on Monday, February 12 2024 @ 10:19 am
Last modified on Monday, February 12 2024 @ 10:22 am
Match Group released its first quarter revenue forecast, falling below Wall Street analyst expectations as users continue to cut back on their dating app spending.
According to Reuters, the company also authorized a $1 billion share buyback plan.
The company, which owns Tinder, Hinge, OkCupid and Match among other dating apps, said paying users declined 5 percent in the fourth quarter of 2023 compared to the previous year, to 15.2 million. It expects revenue between $850 and $860 million for the first quarter, down from analysts’ forecasts of $867 million on average, according to Reuters[*1] .
Match Group has been fighting a trend along with other dating apps in the wake of rising inflation – offering new features and new pricing plans to entice users of its apps to spend money on their platforms. But when people are tightening belts, they aren’t spending extra money on their love lives.
Most of the revenue decline is due to the lack of spending on Match Group’s most popular app, Tinder. Hinge Dating meanwhile continues to grow its user base and revenue, with an increase in users up 33 percent in the fourth quarter, a bright spot in Match Group’s portfolio.
The company has also been putting a lot of resources and focus on AI-driven features that it can use across its apps, a smart move for dating apps as more and more people turn to services like ChatGPT to help them with their messages and profiles.
Match Group also promoted Faye Iosotaluno to CEO of Tinder in early January in a bid to turn things around as the app tries to retain paying subscribers.
Despite the drop in paying users, Match Group’s fourth quarter revenue grew 10 percent from the previous year to $866.2 million, beating analyst expectations of $861.2 million. The company also forecasted revenue between $3.57 billion and $3.67 billion for 2024, according to Reuters. So while fewer people are spending money on dating apps, those who are seem to be spending more.
Revenue from Tinder in the first quarter of 2024 is expected to be in the range of $480-$485 million, which means year-over-year growth of 9-10 percent, due in part to declines in paying users. Hinge however is projected to grow revenue by 45 percent in the same quarter, with approximately $120 million in revenue. Match Group expects its other apps to grow between 7-8 percent year-over-year.
The company has also been focused on the Asian market, but revenue declined 1 percent year over year to $73.56 million in the fourth quarter. But its Asian-based app Azar had double-digit growth year over year, according to Zacks.com[*2] , and Hakuna app outperformed thanks to its rebranding.