Finances

Match Group stock rose considerably after its second quarter earnings report was better than expected, thanks in large part to its star dating app Tinder.

According to Reuters, Match Group revenue for the three months ended June 30 was revealed in a recent earnings call with investors. It rose about 18% to $498 million, about $10 million higher than forecast. The company grew its average subscriber base 40.5% to 5.2 million in the same quarter, more than expected, thanks to its new features and the launch of Tinder Lite. Match now expects to add over 1.6 million average subscribers in 2019, much higher than the 1 million the company had forecast earlier. With all this good news, Match Group stock rose 17 percent.

Tinder Lite provides a version of the app that uses less storage and provides faster service, thanks to a scaled-down version of the famous swiping technology. It launched for Android phones in certain countries in both Southeast Asia and South America, where most people use less expensive Android phones and Internet speed is slower.

Gay dating app Grindr is headed towards an IPO again, now that the U.S. national security panel CFIUS has dropped its opposition.

Chinese gaming company Beijing Kunlun Tech purchased Grindr fully in 2018, but the Committee on Foreign Investment in the U.S. found this problematic and forced Beijing Kunlun to sell the app by June 2020. According to a report from CNBC, a source familiar with the situation said the efforts to sell Grindr by the deadline were continuing, even as plans for the IPO were moving forward.

The Meet Group, parent to an ecosystem of social networking and dating apps focused on livestreaming, has released financial results for the second quarter of 2019. The Meet Group’s portfolio of brands includes MeetMe, LOVOO, Skout, Tagged, and Growlr.

For Q2 2019, the Meet Group reported revenue of $52 million, an increase of $9.2 million (or 22%) from $42.8 million in the second quarter of 2018. GAAP net income for the period was $2.2 million ($0.03 per diluted share) compared to a GAAP net loss of $0.2 million ($0.00 per diluted share) in the prior year quarter. Adjusted EBITDA for the second quarter of 2019 was $9.8 million, compared to $7.6 million in the second quarter of 2018. Non-GAAP net income for the second quarter of 2019 was $8.8 million ($0.11 per diluted share) compared to $6.4 million ($0.08 per diluted share) in the second quarter of 2018. The Meet Group ended the quarter with $26.1 million in cash and cash equivalents.

“Strong execution in video continued to drive our business growth,” said Geoff Cook, Chief Executive Officer of The Meet Group. “We grew revenue 22% from the prior year quarter to a new record high fueled by video revenue growth of 150% over the same period. We increased adjusted EBITDA by 29% and we generated $10.2 million in free cash flow – the highest quarterly free cash flow in our history.”

App companies are growing frustrated with splitting their increasing revenues with Google Play and the Apple Store, as they continue to pay 30 percent to the tech giants on every transaction made through their app stores. But now, Tinder is offering its customers a direct payment method, a way to bypass Google Play altogether.

The popular dating app is allowing its Android users to enter their credit card information directly into the app rather than using Google Play to buy premium subscriptions like Tinder Gold and Tinder Plus. Once you’ve entered the information, the app automatically defaults to this payment system for all future in-app purchases and renewal fees as well.

According to The Verge, Tinder isn’t the first company to side-step app stores. Epic Games, a popular video game developer, last year released its hit game Fortnite via its own downloadable launcher to avoid giving Google 30 percent of its revenues. Popular music service Spotify has filed an anti-trust complaint against Apple with the European Union for alleged anti-competitive tactics. Apple is now being investigated by the Union for disadvantaging other companies in favor of its own offerings, specifically Apple Music, which competes directly with Spotify. Netflix is also looking at options to avoid the Apple and Google Play stores, especially with Apple now entering the content business.

Image: Zoosk

Online dating conglomerate Spark Networks announced its purchase of Zoosk for $258 million USD. The popular dating app was acquired with a combination of cash and stock, and Spark will have full ownership of Zoosk shares.

According to the terms of the deal, Spark will issue 12,980,000 ADSs (American Depository Shares) to former Zoosk shareholders, valued at $152 million based on the closing price of Spark ADSs of $11.78 on June 28, 2019. It also provides for a cash consideration of $150 million, subject to adjustment, according to the company’s press release. Former Zoosk shareholders owned 49 percent of the company.

The dating industry’s trial of the century is one step closer to taking place. Tinder co-founder Sean Rad’s $2 billion lawsuit against the dating app’s parent company, IAC, can move forward after a New York Supreme Court judge rejected IAC’s motion to dismiss the case. Rad and his co-plaintiffs may pursue their allegations that IAC purposely undervalued Tinder to avoid paying out billions of dollars in stock options to the dating app’s original team.

“We are pleased by the court's ruling denying IAC/Match's motion to dismiss and paving the way for this case to go to trial,'' Orin Snyder, Rad's lawyer, said in a statement. “IAC/Match robbed the Tinder founders and early employees and will now be held accountable by a jury for their multi-billion dollar scheme.”

Justine Sacco, a spokesperson for Match Group, also issued a statement: “This baseless lawsuit has no more merit today than it did a year ago when it was filed. We’re pleased the court dismissed some of these bogus claims and look forward to defeating the rest of them, both on appeal and in the trial court.”