Match Group Exceeds Revenue Expectations for Q3

Match Group’s revenue numbers increased more than expected for Q3, signaling that its customers are willing to pay for premium services in the midst of a pandemic.

According to Market Watch, Match Group reported revenue of $639.8 million for the third quarter, up from $541.5 million. Analysts had lowered expectations due to the raging pandemic and continued lockdowns, with a projection of $606 million for the quarter, which Match Group blew past. 

The company also reported a net income of $132.1 million, compared to $108.5 million in the same quarter the year before. This was due in part to star app Tinder, and also to the growth in revenue the company is seeing in its other apps, particularly Hinge, which was projected to triple its revenue growth this year.

Match Group’s revenue varied globally however, with Western countries bouncing back more quickly than other countries. Still, the company expects that its numbers will continue to grow worldwide, if at a slower rate among coveted markets like India, which has seen an economic slump in the wake of COVID-19 lockdowns.

“Western market businesses have performed extremely well despite the COVID challenges, while some developing markets, several of which have been hard hit by the pandemic, are recovering more slowly,” the company said in a statement to shareholders.

Tinder is the star revenue generator for the company, with an average of 6.6 million subscribers reported for the third quarter, compared to 6.2 million in the second quarter, according to Market Watch. The company shared that Tinder’s direct revenue grew 15% since the third quarter of 2019, and the app had a 16% increase in subscribers during the same period.

"Tinder remains the highest grossing app in the Lifestyle category in ~100 countries and has grown direct revenue from essentially zero in 2014 to an expected nearly $1.4 billion this year," the company also wrote in its shareholder letter.

Hinge performed well in the third quarter, too. According to Business Insider, subscriptions overall are up 82% this year, and revenue has grown more than 200% year-over-year. The company expects this growth will continue, especially going into the holidays as people are seeking more connection.

Match Group has rushed to add video features to its apps to drive engagement, and now Tinder, Hinge, and Plenty of Fish all have video chat features.

"I think people thought [a dating app] was the only avenue, and they didn't want to give it up," Gary Swidler, Match Group's chief financial officer, told The Wall Street Journal in August when talking about dating app usage as lockdowns went into effect earlier in the year. "So they were willing to engage with the products more, and in some cases pay for the product."