Finances

Dating apps found their foothold with younger users. Tinder launched on college campuses in 2012, and 90% percent of its earliest users were aged between 18 and 24. It wasn’t chance; it was strategy.

“They thought if this product is successful among that young college demographic, who also happens to be the most social group of people on the planet [and] the least likely to need an app to meet people, it can [work] for anyone,” Tinder spokesperson Rosette Pambaki told Complex.

Tinder’s wager was right, and in the years that followed, it and other apps like it became explosively popular amongst younger users. But times change, and if a company is to survive, it must change with them. The Wall Street Journal reports that dating apps are now welcoming singles in their late 30s and beyond for one simple, but essential, reason: their money.

Hinge just announced the relaunch of its new self-dubbed “relationship app” as an alternative to dating apps, which have garnered a reputation over the years that the people using them aren’t all that interested in finding relationships. Hinge developers overhauled the app's look and feel as well as its functionality, and are now charging $7 per month for members to use it.

Hinge has been working on the new app for a year, though details weren’t disclosed. However, the company did launch a website revealing its escape from the “dating apocalypse” that is now online dating, named for the controversial New York Times article declaring the end of dating culture thanks to apps like Tinder.

Tinder has become an incredibly popular way to meet, but it has led to a lack of serious online daters looking for real relationships. The game-like swiping functionality of Tinder has created several copycat dating apps in the industry, each one claiming to produce better results and cut down on the fake profiles. So far however, nothing has made a significant dent in Tinder’s appeal or market share.

Dating app Hinge started out with some stiff competition against Tinder. Since its debut in 2012, several other new dating apps have launched and attracted a growing user base as well as media attention, including female-centric dating app Bumble. Meanwhile, after steady growth since its launch, this year Hinge has seen its numbers declining.

Hinge’s marketing and product development have always focused on attracting more serious daters. The app is geared toward young professionals in their late twenties and thirties who are looking for long-term relationships, as opposed to the hook-up reputation that has followed Tinder since its inception. The app is billed as a “grown-up” alternative to the young users of Tinder, which at first seemed to serve the market well.

Dating app Momo, China’s answer to Tinder, has been a popular dating app among the country’s singles with a record 75 million users. But in recent weeks, Momo seems to be expanding out of the dating business and into something more lucrative.

For its latest update, Momo executives decided to supplement the app's location-based dating service that matches people through swiping and messaging. Now, the app offers a live-streaming function, catering to music lovers and even musicians themselves. The update allows users to watch their favorite musicians perform live, as well as giving them the ability to interact with the musicians.

It’s good news all around for MeetMe. The social discovery service, founded in 2005 to connect users on mobile devices, has posted better-than-anticipated financial results for the second quarter of 2016. The company also announced plans to acquire Skout, a leading global mobile network for meeting new people.

Wall Street’s initial projections predicted $15.27 million in revenue for MeetMe. Instead, revenue exceeded expectations, climbing 48% from last year and clocking in at $16.4 million. Mobile revenue rose 82% to $15.1 million year-over-year. Mobile represented more than 92% of MeetMe’s total revenue in the second quarter.

Adjusted EBITDA increased 109% year-over-year to $6.0 million, reflecting a 37% adjusted EBITDA margin. Non-GAAP net income reached $4.8 million, a 103% increase over Q2 of last year.

Match Group released first quarter 2016 financial results on May 3. The company went public last November, and in its first earnings announcement as a publicly-traded company, Match Group fell short of earnings estimates by 5.3%. This time around, things are looking up.

Match Group reported sharply higher sales and profits in Q1 2016. Last quarter, the company’s dating revenues rose 14%, driven by a 30% increase in paid members. With that momentum, Match Group continued to perform well. Highlights of the quarter include:

• Total revenue rose 21% year over year to $285 million
• Dating revenue grew 24%, led by strong contributions from Tinder and PlentyOfFish
• Adjusted EBITDA nearly doubled over the prior year to $64.6 million
• Average PMC (paid member count) grew 36% to 5.1 million
• Tinder surpassed 1 million PMC as of the end of the quarter and successfully launched its first à la carte paid feature
• Operating income was up 8%, reflecting the strong Adjusted EBITDA growth
• Adjusted Net Income increased 30% as a result of the increase in Adjusted EBITDA
• Cash Flow nearly doubled to $68.5 million, while operating cash flow increased 88% to $75.0 million

Leading the charge is Tinder. “Tinder is really killing it. The numbers are great,” said Chairman and CEO Greg Blatt in an earnings call. “We're spending a lot of time improving the core product experience, experimenting with new product experiences, and yet continuing to rollout modernization initiatives, each of which has basically exceeded our expectations at the time of rolling it out.”

Along with its successes, the quarter saw Match Group slip in a few areas. Average revenue per paying user (ARPPU) declined 10% to $0.54, mostly due to the growth of relatively low-cost services such as Tinder, as well as the continued shift to mobile platforms. Non-dating revenue was flat at $25 million as a result of lower SAT test preparation course volume at The Princeton Review.

Looking forward, Match Group management expects second quarter dating revenue to grow by between 4% and 5% compared to Q1, with EBITDA margin percentage in the low to mid-30s. For the full year, the company predicts total dating revenue between $1.1 billion and $1.14 billion and overall adjusted EBITDA between $410 million and $425 million.

"Match Group posted very strong revenue and adjusted EBITDA growth in the first quarter, driven by exceptional growth at Tinder, solid performance of Meetic and Match, and the PlentyOfFish acquisition," Blatt said in a press release. "We expect solid year over year performance throughout the balance of 2016."

The Match Group list of dating services which we have reviewed include Match, OkCupid, Tinder, and Plenty of Fish.