Match Group Reports Fourth Quarter and Full Year 2016 Results

Match.com
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Match Group reported fourth quarter and full year 2016 financial results, revealing a mix of highs and lows.

“Match Group executed well in our first full year as a public company,” said Greg Blatt, Chairman and CEO. “We had strong double digit revenue, operating income, Adjusted EBITDA and PMC growth, generally on track with our expectations at the time we went public. As we roll into 2017, we’re confident we can maintain that momentum.”

Q4 2016 highlights include:

  • Average PMC grew 23% to 5.7 million over the prior year quarter led by continued strength at Tinder, Meetic and Pairs (in Japan), as well as from the acquisition of PlentyOfFish in October 2015
  • Tinder more than doubled ending PMC in 2016, growing from 0.8 million PMC at the end of 2015 to over 1.7 million PMC at the end of 2016
  • Dating revenue was $295 million, a 22% increase from the prior year quarter, while Dating Revenue, Excluding Foreign Exchange Effects (a non-GAAP measure) was $297 million
  • Dating operating income grew to $113 million, a 61% increase over the prior year quarter, while Dating Adjusted EBITDA grew to $128 million, a 28% increase over the prior year quarter
  • Operating income margin and Adjusted EBITDA margin for Dating improved to 38% and 43%, respectively, compared to 29% and 41%, respectively, in the prior year quarter
  • Dating ARPPU was $0.53 for the quarter, consistent with the prior year quarter
  • Operating cash flow for the year ended December 31, 2016 increased 12% to $234 million compared to 2015. Match Group ended the year with $254 million of cash and cash equivalents

Match Group also announced that it has signed an agreement to sell its non-dating businesses, which operate under the umbrella of The Princeton Review, to ST Unitas, a global education technology company. The sale is expected to close in the first half of 2017.

“The Princeton Review is a great company,” said Mr. Blatt, “but it has become increasingly clear to us that its differences from our core dating businesses meaningfully exceed its similarities. Accordingly, this transaction allows us to focus on businesses closer to home, while placing TPR in an environment where we expect to see our vision of an integrated, digital one-stop shop for students realized soon, albeit in different hands.”

All told, the company earned revenue of $1.26 billion to $1.305 billion in 2016, which is well below the average estimate for $1.408 billion. Following the reveal of revenue that missed analysts’ expectations, shares of Match Group dropped nearly 6%.