Meetic

Match Group Reports Fourth Quarter and Full Year 2016 Results

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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:

Tinder, Match, and OkCupid Prepare For IPO

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If only all breakups ended as well as this one.

IAC/InterActiveCorp announced recently that Match.com, Tinder, OkCupid, and other dating services would become part of their own spinoff unit. The subsidiary will be called The Match Group and will be a publically traded company. Following the news, shares of IAC rose over 5%.

According to the announcement, The Match Group is likely to issue less than 20% of its common stock. The IPO is expected to be completed in the fourth quarter of this year, after which investors will be able to buy stock in the company. So far, the ticker symbol (the three-or-four letter identifications that represent companies on stock exchanges) is unknown.

The Match Group is starting out on top. IAC/InteractiveCorp is a $6 billion media conglomerate, and revenue of the new Match Group accounted for nearly one third of IAC's total revenue in the most recent quarter.

Last quarter, The Match Group reported revenues of $239.2 million, marking an increase of 13% on a year-over-year basis. Reports say Match Group’s revenues are expected to increase 18% in 2015, bringing the number to $1.24 billion.

The hope with separating the Match Group, and combining more established businesses (like Match and Meetic) with earlier stage businesses (like Tinder), is that the move will lead to significant cash flow generation and meaningful growth potential.

Or, as Chariman and Senior Executive Barry Diller colorfully put it, “I'm not a believer in simply agglomerating assets in perpetuity. I've long felt that as entities grow into size and maturity it's healthy to give them separation and independence from a mother church."

It's an exciting time for the industry, but dating services haven't always done well on Wall Street. AshleyMadison forfeited an IPO in 2011. Zoosk filed for an IPO in April 2014, but withdrew the application in May 2015. Hinge, on the other hand, skipped the IPO entirely, instead relying on raising capital from venture capitalists. In 2014, Hinge had raised $12 million.

The Match Group will also face stiff competition from other key listed players like Spark Networks and Jiayuan.com. Still, IAC believes this IPO can give new life to the Group. Estimated EBITDA for The Match Group in 2015 is $264.9 million – and that's excluding the $75 million EBITDA anticipated from Tinder alone.

A well-received IPO could not only put IAC significantly ahead of its competitors, but also serve as a litmus test for the entire dating industry.

The Big Four Release Third Quarter 2013 Financials

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Four of the biggest names in the dating industry have released their 2013 third quarter financial info. And it's probably a surprise to no one actively involved in online dating that IAC, Meetic, Spark Networks, and MeetMe all saw growth.

IAC

Revenue for Q3 2013 was $756.9 million, a growth of 6% from Q3 2012, the majority of which came from Search & Applications. Websites revenue increased primarily due to the contribution from About.com (acquired September 24, 2012) and CityGrid Media (moved from Local to Search & Applications in July 2013).

IAC also saw growth in Match revenue. Core, Meetic, and Developing revenues grew 7%, 11% and 58% to $118.8 million, $56.3 million and $26.0 million, respectively, thanks to increased subscribers and the contribution of the introduction service Twoo. As of September 30, 2013, IAC had $768.0 million in cash and cash equivalents and marketable securities as well as $580.0 million in long-term debt.

Meetic

At the end of Q3, Meetic, the European leader in online dating, had increased revenue over the first nine months of 2013 by 2.7% to €126.1 million. Meetic's subscribers for the same period of 2013 increased by 72,998 or 9.5% year over year to 840,801 as of September 30 , 2013. Meetic owes the majority of its growth to its online offerings, but mobile is playing an increasingly important role in the company's success.

Spark Networks

Total revenue for Spark Networks grew for the 11th consecutive quarter in Q3 2013. Divided, Christian Networks revenue grew for the 12th consecutive quarter and Jewish Networks revenue grew for the 2nd consecutive quarter. Q3 2013 revenue totaled $17.4 million, up from $15.9 million in Q3 2012. Most importantly for Spark Networks, revenue growth outpaced the growth of marketing expense, meaning company-wide contribution hit its highest level since the first half of 2012.

MeetMe

MeetMe's 10.1 million in quarterly revenue for Q3 2013 was primarily driven by its mobile segment. Mobile revenue reached another quarterly record of 2.9 million, up 65% year-over-year and 12% sequentially from the second quarter of 2013. The MeetMe team is now focused on driving engagement and bringing new audiences to the MeetMe application, with a significant update planned for the first quarter of 2014.

David Clark, Chief Financial Officer of MeetMe, added, "Third quarter results build on the improvement in top and bottom line financial performance achieved in the second quarter. Together with the launch of our new apps, we are encouraged by the start of what is traditionally our seasonally strongest quarter.

Meetic Buys Twoo.com

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Meetic announced on December 21st, 2012 that they had acquired Massive Media. Massive Media owns Twoo a popular social discovery service and the social network Netlog. Twoo.com was launched in April of 2011 and in under 2 years now receives 9.6 million unique visitors a month. Twoo's main competition in Europe according to information available is Badoo.

Meetic purchased Massive Media for $25 million USD (18.9 Euros) and interestingly enough is mostly owned themselves by IAC, which owns Match.com.

To find out more about this story you can read the press release.

IAC Offers to Buy Meetic

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The owners of Match.com, IAC announced plans on May 30, 2011 to buy all outstanding shares of Meetic for 15 euros a share. IAC currently owns 27 percent of Meetic already through a deal where the sold their European business to Meetic in early 2009 (see Story).

Meetic is valued at 347 million euros which works out to about $497 million in USD. The share offer by IAC is about 12 percent higher than the closing price last Friday. Since then trading has been suspended at Meetic's request.

Meetic's co-founder Marc Simoncini has entered into an agreement with IAC to sell about 3.7 million shares which works out to about 7% of the total outstanding shares. He also still plans to remain on Meetic's board of directors.

To find out about IAC's most popular dating site you can read our Match.com review.

Meetic and Match.com Integration Completed

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Back in February of 2009 Match.com sold its European Operations to Meetic. Well according to Informatica, a independent provider of data integration software, they completed the post-merger integration of Match.com in Europe with Meetic 40 percent faster than by using a home grown solution. It took only 4 months on the Informatica Platform.

The data, which required integration from Match.com in Texas (Orcale Databases) to Meetic in Paris, included millions of profiles from 15 countries. Photos from the profiles as well as all messages were migrated over as well. All this integration was done seamlessly and without interruption to any online services.

To find out about the dating site, you can read our Match.com UK review.