- Total Revenue: $864 million, up 4% year over year; FX neutral total revenue was $892 million, up 8% year over year.
- Tinder Direct Revenue: $480 million, up 1% year over year; up 4% FX neutral.
- Hinge Direct Revenue: $134 million, up 48% year over year.
- MG Asia Direct Revenue: $74 million, down 4%; up 9% FX neutral.
- Evergreen & Emerging Brands Direct Revenue: $161 million, down 8% year over year.
- Operating Income: $205 million, down 5% year over year; margin of 24%.
- Adjusted Operating Income (AOI): $306 million, up 2% year over year; margin of 35%.
- Revenue Per Payer (RPP): Increased 9% year over year.
- Tinder Payers: Declined 8% year over year to approximately 9.6 million.
- Hinge Payers: Up 24% year over year to nearly 1.5 million.
- Cash and Cash Equivalents: $844 million.
- Share Repurchases: 6.4 million shares repurchased at an average price of approximately $31 per share, totaling $197 million.
- Q3 2024 Revenue Guidance: $895 million to $905 million, up 2% to 3% year over year; 4% to 5% FX neutral.
- Q3 2024 Tinder Direct Revenue Guidance: $505 million to $510 million, roughly flat year over year; up approximately 2.5% FX neutral.
- Q3 2024 Hinge Direct Revenue Guidance: Approximately $145 million, year-over-year growth of 35%.
- Q3 2024 AOI Guidance: $335 million to $340 million, up slightly year over year; margin of 37.5% at midpoints.
- Workforce Reduction: Approximately 6% globally, expected to result in incremental annual cost savings of approximately $13 million.
Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tinder is showing signs of stabilization with improving user and payer trends.
- Hinge's direct revenue grew nearly 50% year over year in Q2, demonstrating strong performance.
- Azar continues to perform strongly, driven by AI product innovation and successful expansion into Europe.
- Match Group Inc (MTCH, Financial) is integrating AI more deeply into Tinder to enhance user experience and trust.
- The company is committed to returning at least 75% of its free cash flow to shareholders through buybacks.
Negative Points
- Tinder payers declined 8% year over year, indicating ongoing challenges.
- Live streaming services are being exited due to declining novelty and significant investment requirements.
- Match Group Inc (MTCH) expects a workforce reduction of approximately 6% globally, indicating cost-cutting measures.
- The company experienced $6 million more in FX headwinds than anticipated, impacting financial performance.
- Evergreen brands' direct revenue declined 13% year over year, showing weakness in some parts of the portfolio.
Q & A Highlights
Q: Congrats on the stabilization and Tinder user growth in the quarter. Is there anything outsized that led to that stabilization or more so stacking of a variety of individual improvements? And can you help us contextualize how much of that is due to new user trends versus retention? Thank you.
A: Thanks, Nathan, for that question. I really like how you framed it around stacking Tinder product improvements. Our work is really a combination of product initiatives, building on each other over time. And this is reinforced with really strong marketing that is helping drive stabilization and start contributing to improvements on the back half of this year. The trust and safety moves that we made last year is a great example of stacking initiatives, which we know were the right decisions. And the good news is we've worked through a lot of that noise and has led to better user outcomes. And say that the user base has stabilized, retention is improving and growing and we're making strides in top of funnel again, so a really exciting time period for Tinder.
Q: Has Tinder returned to normal payer seasonality in 3Q now that MAU has stabilized? And how should we be looking at more normal seasonality? Or should we be looking at more normal seasonality in the first half of next year? Thank you.
A: Thanks for the question, Jason. Let me jump in and try to address it. So just a few things to point out. I mean if you look historically, I think, what you'll see is that we commonly see sequential improvement in payers Q3 over Q2, and it's really because of two reasons which are actually related to one another. The first is that Q3 tends to be strong seasonally because it includes the summer vacation season, which is an active season for dating. And it also includes the back-to-school period where college students return to campus and also start to date actively. And we actually take advantage of the fact that people are focused on dating in that Q3 period by rolling out a lot of new features and initiatives in that period. And we often even reinforce that with marketing spend to call attention to the apps and to the new features. So Q3 does tend to be very seasonally strong for us. When you look at Q4 by contrast, it tends to be a weaker period than Q3, and that's because people tend to start focusing on the holiday period and thinking about the holidays, whether it's Thanksgiving in the US, Christmas across the world, et cetera, and they focus less on dating. And so we lose a lot of the fourth quarter as people think about other activities besides dating. And of course, we tend not to roll out as many product initiatives in that fourth quarter and we generally tend to pull back on marketing, both because the audience isn't as focused and also because, of course, Q4 tends to be a much more expensive period to market against holiday marketing and so we tend to reduce our marketing spend in that quarter. And so you're right that when you look at kind of typically what happens Q3 to Q4 from a user and a payer perspective, we do tend to see some level of sequential weakness in Q4 over Q3 after the strength we've seen Q3 over Q2. I would say that this year, we plan to follow a similar pattern from the marketing perspective. We've got the new global marketing campaign going at Tinder, which is seeing great success and I would expect us to invest into marketing in Q3. But then given the holiday period, I would expect us to pull back on a year-over-year basis and, frankly, sequentially in Q4 as well on the marketing side. So those are just some of the factors to consider as you think about the seasonal trends. And I think you're also right that as we think about 2025 and it's early and so we'll provide more of an outlook on 2025 as we get a little bit later into this year as we typically do. But I think that with the stabilized MAU base at Tinder, we would expect a return to more seasonal trends in 2025 as we've seen historically. So I think you're right for both the rest of '24 and '25 from a seasonality perspective. I hope that answers your question.
Q: Can you talk a little bit more about kind of practical green shoots you're seeing from some of the changes you've made and from increased product velocity in Tinder? And maybe, Gary, do you believe -- I know you're not guiding quite yet for '25, but do you believe that the improvement you're seeing in Tinder if they sustain themselves into next year are enough to get the overall business back to maybe high single-digit, low double-digit growth in 2025? Or do you need to see other drivers maybe to get you there? Thank you very much.
A: Great. Let me take a stab at describing the progress that we're making in Tinder. The turnaround is in progress and we're seeing great momentum. The team is super nimble when it comes to making decisions as some changes work and some changes don't, but the product velocity continues to be strong. We're making behind the scene improvements like recommendation changes and that's increasing user engagement and doing really positive things with driving better user outcomes. At the same time, the marketing velocity continues to be strong. Like Gary mentioned, we continue to market and we're solidifying Tinder's brand position in the marketplace. We're investing in product marketing where it matters most. If I were to describe the green shoots that you were looking for, the things that get me really excited is when product and marketing really come together. A good example of that is what's happening right now with the Olympics. We're actually seeing a 25% increase in swipe activity in France and a 105% increase in Tinder Passport mode and that activity that's happening in Paris. We actually purposefully unbundled Tinder Passport, so anyone around the world can teleport into Paris and interact with real athletes. And that's with integrated marketing at the same time, something that I'm really proud of. Our Olympics content that our marketing team has been working on has seen over 15 million impressions and over 10 million views. It's super exciting. Now we have a clear vision for Tinder's future and I can't wait to share more around that in our upcoming Investor Day.
A: On your question about 2025, I'm going to resist the temptation to provide our outlook now and wait as we typically do until the fall period to do that. But I would say the following, which is we've been pretty clear that 2024 needed to be a year of progress. First, stabilizing things and then starting to show improvement. And I think if you look at the outlook we're providing, and as BK mentioned in his remarks, that's exactly what's happening in the business. We've reached a point of stabilizing users. We think it will get better on a year-over-year basis as we get into the back half of this year. And you can also see the same thing following through in payer trends, as you would expect, stabilization, and an expectation for improvement. And so we're checking the boxes here that we expected to check in that regard. And obviously, we don't consider that to be
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
