Match Group Exceeds Revenue Expectations in Q2

Match Group announced that it had exceeded Wall Street revenue expectations for Q2 despite concern over drops in paying subscribers and a la carte services in April, as coronavirus began to spread through the U.S. The company also saw its stock tick up in value immediately following this news.

Match Group reported second quarter earnings that grew 15% year over year, and an 18% increase in subscribers year over year. Their earnings report also shows an increase in subscribers and downloads over pre-pandemic levels, and according to Business Insider, paid subscriptions are also back to the same level as before. 

The company saw a second quarter profit of $103.1 million according to Market Watch, on sales of $555.5 million, compared to $498 million in sales the same time last year and exceeding Match’s expectations from three months ago when it predicted a decline. Now, the company is projecting another increase to $600 million or more for Q3.

But most surprising according to analysts was that ARPU (average revenue per user) for Match Group increased in Q2 despite a drop in April, and surpassed pre-COVID levels.

"As the pandemic took hold, we saw an increase in product usage, particularly among younger users and females," CEO Shar Dubey said in a letter to shareholders. Several dating app companies also saw an increase in activity as people went into lockdown and looked for connection online. Still, with the troubled economy, fewer users were interested in paying for dating apps.

In an effort to respond to the moment, dating apps rushed to add video features as virtual dating became the only option for many singles to meet people. Match Group was among them. In addition to Tinder, Match Group also owns OkCupid, Hinge, and Plenty of Fish – all of which debuted new in-app video features in the last few months. (Tinder introduced a new video chat feature in July.) 

The investment in these video features boosted the income streams of Match Group’s other apps, too. Match Group saw a 9% rise in revenue among its other brands besides Tinder according to Business Insider, and it was the first time since 2016 that these brands saw two quarters of consecutive growth.

Match Group noted that international revenue has been more volatile than the U.S., particularly in India and Brazil who have been hit hard economically. Match Group has invested heavily in marketing for the fast-growing dating market in India, and noted that it was the most impacted of any regions they’ve seen so far.