Memberships

Dating app conglomerate Match Group reported third quarter earnings that beat analyst expectations, with more of its users paying for subscriptions on dating app Tinder. The company’s stock rose 16 percent in response.

Despite the effects of inflation and a slow first half of the year, along with poor execution of some new features and executive team changes made by new CEO Bernard Kim, Match Group turned things around and impressed investors and analysts with better-than-expected revenue gains. Match Group revenue reached $810 million for the quarter ending September 30th, beating analysts’ estimate of $793 million according to Refinitiv data.

Tinder’s revenue grew 6 percent and its paying users jumped 7 percent according to Reuters. Tinder users account for the vast majority of Match Group’s estimated 100 million active users.

Dating app company Bumble has lowered its revenue forecasts through the end of the year, signaling that the boost from pandemic dating might be over.

Bumble adjusted its annual revenue to be between $920 million and $930 million for the year, lower than previous forecasts and market estimates of $934-$944 million. The company’s stock fell 13 percent after the news according to Reuters.

This news follows that of competitor Match Group, which also fell short of expected earnings for Q2. In the wake of the downturn, Match Group announced the lowering of its projected revenue for Q3, with a company shake-up that included halting development for metaverse dating and virtual currency and a restructuring of its executive leadership. Match Group’s stock also took a hit, dropping 20 percent in value after the company released its letter to shareholders.

Match Group is making changes to its executive team and pausing its metaverse plans on the heels of a disappointing second quarter earnings report. Its stock fell 20 percent after the earnings call with investors.

According to reports, Tinder CEO Renate Nyborg is exiting after less than a year at the helm of the app. Bernard Kim, the new Match Group CEO following Shar Dubey’s exit two months ago, wrote this as explanation in his letter to shareholders: “Tinder’s current revenue growth expectations for the second half of the year are below our original expectations as a result of disappointing execution. We need to do more to excite our user base.”

Kim also announced a new COO, chief product officer, chief marketing officer, and chief technology officer according to Gizmodo, promoted from other parts of the company.

Revenue growth for dating conglomerate Match Group has fallen in a disappointing second quarter for the company. The market responded and the company’s stock fell more than twenty percent, bringing its stock price down 42 percent of its value since the beginning of the year.

Match Group held its earnings call with investors, reporting revenue of $795 million compared to $804 million that analysts expected. In addition to this, Match Group lowered revenue forecasts for Q3 from $800 to $790 million according to CNBC News, which includes the impact from foreign exchange rates falling compared to the dollar. To complicate things for Match Group, it also means that there would be no growth at all between the quarters.

There were some hopeful signs despite the news. The company pointed out that overall revenue grew twelve percent compared to this time last year. In addition, the number of paid users increased 10 percent to 16.4 million according to the shareholder report, and revenue per paid user rose three percent to $15.86.

Dating Group has made several high-profile acquisitions in the past year, thanks to a new round of seed funding and rising user numbers. The moves indicate the dating conglomerate is one of the main players in the fast-growing industry, expanding its competitive advantage by offering more niche dating apps.

In the fall of 2021, the company added Cupid Media to its growing portfolio, and now oversees more than 33 dating platforms, making it one of the world’s largest dating conglomerates along with Match Group, according to DatingNews.com. This acquisition also grew the company’s annual revenue to $300 million, which was already growing in the wake of the pandemic. Cupid Media owns dating apps AsianDating, LatinAmericanCupid, Muslima, FilipinoCupid, and ThaiCupid among others.

Dating Group has also acquired Dil Mil, a fast-growing dating app specifically for South Asian singles. At the time of acquisition, the app was growing at a rate of around 50% in overall downloads, with a 38% increase in active users, according to a press release from Dating Group. Dil Mil has become increasingly popular among South Asians in the U.S. and other countries who want a more targeted dating app experience. Dil Mil offers a diverse array of regional preferences with multiple language and religious options, something that the larger apps like Tinder can’t provide.

Match Group triumphed over federal regulators in a lawsuit that would have had them pay $844 million for failing to remove fake messages and profiles from its Match dating app.

According to Bloomberg, U.S. District Judge Ed Kinkeade delivered the ruling and cited the Communications Decency Act, deeming Match a publisher, which means that since the company isn’t creating the profiles but instead just publishing them, they are ultimately protected from blame.  

In 2019, the FTC filed a lawsuit against Match for fraud, saying that it exposed customers to increased risk of being scammed and engaged in other deceptive and unfair practices, including tricking hundreds of thousands of consumers into buying subscriptions. According to Tech Crunch, the agency claimed Match knowingly profited from these practices, and it made deceiving users a core part of its business practices. It also said that 25 to 30 percent of registrations on Match came from scammers.