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Match Group's Dismal Prognosis Sends Shares Tumbling: A Tinder-Owner's Bleak Outlook

Match Group's Bleak Q4 Outlook Sparks 8% Stock Plunge Amid Economic Uncertainties

October 31, Reuters — Match Group, the parent company of Tinder, delivered a gloomy forecast for the fourth quarter on Tuesday, projecting revenue below expectations. Factors such as persistent inflation and unrest in certain markets have cast a shadow on the growth of its major dating platforms, prompting a nearly 8% drop in its shares. The company anticipates total revenue between $855 million and $865 million for the quarter ending December, factoring in a strong dollar and potential revenue risks from Israel. Analysts, in contrast, were anticipating $895.2 million, as per LSEG data.

The reluctance of U.S. consumers to spend on discretionary items, including dating app subscriptions, amid economic uncertainties has contributed to Match's challenges. Advertisers tightening their budgets have further impacted its dating platforms, including Hinge, OKCupid, and Plenty of Fish. Tinder, its flagship brand, exhibited a 7% revenue growth last year, trailing behind its primary competitor Bumble, which doubled that growth rate.

In an effort to reignite growth and counter the threat posed by Bumble, Match has introduced various features, including weekly subscription plans and new engagement and privacy features across Tinder and Hinge. Last month, Tinder launched an exclusive $499 per month offering with perks aimed at enhancing user visibility.

For the third quarter ending September 30, Match reported a 9% revenue growth to $882 million, surpassing analysts' estimates. Sales in the Americas, contributing to more than half of its revenue, rose by 10%, while European sales saw a 17% increase. Direct revenue at Tinder and Hinge, its leading dating platforms, grew by 11% and 44%, respectively. However, paying users across its apps declined by 5% to 15.7 million.

Match recently settled with Google, allowing it to use payment systems other than Google's by March next year. The company emphasized that its outlook does not incorporate the impact of this settlement.

Reporting by Yuvraj Malik in Bengaluru; Editing by Anil D'Silva

In conclusion, Match Group faces a challenging road ahead as economic uncertainties, inflation, and market unrest cast a pall over its fourth-quarter projections. The company's cautious outlook, marked by anticipated revenue below analyst expectations, triggered an 8% decline in its shares. The reluctance of U.S. consumers to invest in discretionary items, coupled with tightened advertiser budgets, has directly impacted Match's dating platforms, including Tinder, Hinge, OKCupid, and Plenty of Fish.

While Match's flagship brand, Tinder, exhibited a 7% revenue growth last year, it lagged behind its competitor Bumble. Efforts to counter this competition include the introduction of new features and an exclusive premium offering on Tinder. Despite beating analysts' estimates in the third quarter, with a 9% revenue growth to $882 million, challenges persist, with a 5% decline in paying users across its apps.

Match's settlement with Google, allowing alternative payment systems by March next year, adds a layer of complexity to its future financial landscape. As Match navigates these headwinds, the company underscores that its outlook does not account for the settlement's impact. The road to sustained growth appears arduous for Match Group, and stakeholders will be closely watching how the company adapts its strategy to the evolving dynamics of the online dating market.