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Amid a challenging Q3 2022, Match Group realized $810 million over the $793 million expected, but predicts flat Tinder revenue growth for Q4.
Tinder parent Match Group (NASDAQ: MTCH) has posted a Q3 2022 earnings report that surpassed quarterly estimates. Shares of the Dallas-based company went up 16% as more people paid subscriptions to dating app Tinder during the period that ended September 30th.
Considering the turbulent phases Match Group went through this year, the company warmly received positive news. So far, in 2022, Match Group has experienced executive shake-ups and a poor rollout of new features on its dating apps. In addition, the internet and technology company also saw rising inflation impact consumer spending on its suite of online dating services. Tinder also suspended plans to enter the metaverse space after the transaction pointed at a huge debt for the company.
Match Group Q3 2022
Against all odds, the Q3 2022 Match Group revenue came in at a commendable $810 million. This figure comfortably beat out the consensus estimate of $793 million for the same period. The company said that it also expects to rake in an additional $14 million from a stronger US dollar than previously expected.
Match Group also reported third-quarter earnings of $128.7 million and a net income of 44 cents per share. In addition, the company stated that it made 58 cents per share on earnings adjusted for stock option expense and amortization costs. However, this share figure fell short of Wall Street’s expectations which had it at earnings of 64 cents per share.
During the third quarter, Tinder’s revenue grew 6%, with paying users climbing 7% on the return of a “swipe left” and “swipe right” mate selection feature. “Product execution is already improving,” Match Group CEO Bernard Kim and finance lead Gary Swidler explained in a note to shareholders. However, Match Group has forecast flat growth in Tinder revenue for the fourth quarter of the year. Furthermore, the dating-oriented platform stated that it expects a revenue haul of between $780 million to $790 million for the period ending December 31st.
Microeconomic & Macroeconomic Headwinds
Match Group explained that its suite of services geared towards low-income consumers suffered the adverse effects of a stagnating economy. Furthermore, the company also stated that there was consumer discretionary spending across its apps.
Match Group intends to address the slowdown by cutting back on expenses linked to headcount. In addition, the Dallas-headquartered company also plans to reduce marketing expenses and expects to have flat margins in 2023. Some analysts had already foreseen this development, with Jefferies analyst Brent Thill stating back in August:
“We worry that the decision to slow hiring and reduce marketing investments could make it more difficult to achieve next year’s loftier revenue expectations.”
Match Group’s shares were trading at $51.21 during the extended trading session, and are down 66.1% year-to-date. The company says that it is searching for a new Tinder chief executive following the sudden departure of Renate Nyborg in August. The position has remained vacant since.
Match Group Suite
In addition to Tinder, Match Group’s other online dating services include Match.com, Meetic, OKCupid, Hinge, PlentyOfFish, Ship, and OurTime. In total, the company has over 45 global dating companies.