Match Group, Inc. Q3 FY2024 earnings call

Management Statement and Operational Highlights

• CEO Bernard Kim highlighted pride in Q3 financial results, emphasizing focus on innovation, product roadmaps, and building a durable business. Tinder is testing features like mandated face photos and expanded Explore tab. Hinge continued strong performance with user growth and product innovations using AI. MG Asia's Azar expanded into the US, and Pairs stabilized in Japan. E&E streamlined operations, with Emerging brands performing strongly.
• CFO Gary Swidler noted meeting total revenue expectations and exceeding AOI expectations, though growth levels were below targets. Mentioned impairments and charges related to live streaming exit. Discussed Tinder's delayed ALC initiatives impacting Q4 revenue, and Hinge's strong direct revenue growth. Outlined Investor Day on December 11th to share strategy and outlook.

Segment Performance

• Tinder: Direct revenue was $503 million, down 1% year-over-year but up 1% FX neutral. Payers declined 4% year-over-year, adding 311,000 sequentially. MAU was down 9% quarter-over-quarter. AOI margin was 52%.
• Hinge: Delivered $145 million of direct revenue, up 36% year-over-year, driven by 21% year-over-year payer growth and 12% year-over-year RPP growth. MAU grew 20% year-over-year. AOI margin was 35% with 65% year-over-year AOI growth.
• MG Asia: Direct revenue was $72 million, down 6% year-over-year (down 1% FX neutral). Payers increased 14%, while RPP fell 18% year-over-year. Azar MAU grew 14% year-over-year, with European expansion solid. Pairs showed stabilization in the Japanese market.
• E&E: Direct revenue was $158 million, down 9% year-over-year (down 4% excluding live streaming revenue). AOI margin was 26%. Indirect revenue was $16 million, up 10% year-over-year.

Guidance

• Q4 2024: Total revenue expected $865M-$875M, flat year-over-year (excluding exited services +2%-3% year-over-year). Tinder direct revenue expected $480M-$485M, down 2%-3% year-over-year. Hinge direct revenue expected ~$145M, +25% year-over-year. AOI expected $335M-$340M, margin midpoint 39%.
• Full-Year 2024: Total revenue growth ~4%, FX neutral ~5%. Tinder direct revenue 1%-2% growth, FX neutral ~3%. AOI margins at least 36% despite charges, free cash flow expected ~$1 billion.

Risks

• iOS Impact: Tinder MAU and payers affected by iOS issues, including new OS and trust/safety enhancements.
• Delayed Initiatives: ALC initiatives at Tinder delayed, impacting Q4 revenue more than expected.
• Advertiser Pullback: Indirect revenue affected by holiday advertiser pullback.
• Product Transformation Time: Tinder's product transformation taking time to show full results, with MAU trends not improving as expected in Q3.

Question and Answer

• Q: Ross Sandler on Tinder top of funnel trends, margin.

A: Bernard Kim discussed iOS issues and product innovation vs marketing; Gary Swidler talked about margin outlook and product investment balance.

• Q: Benjamin Black on a la carte delays, unbundling features.

A: Bernard Kim explained testing, cannibalization, and rollout plans for unbundled features.

• Q: Jason Helfstein on Tinder payers, MAU trends.

A: Gary Swidler discussed iOS impact, product transformation, and sequential comparisons affecting payer numbers.

• Q: John Blackledge on Hinge revenue growth.

A: Gary Swidler explained Q4 comps against prior year's weekly subscription rollout at Hinge.

• Q: Nathan Feather on Hinge's Your Turn Limits feature.

A: Bernard Kim talked about feature impact, user response, and product innovation benefits.

• Q: Ygal Arounian on Tinder products, cadence.

A: Bernard Kim discussed Spotlight Drops, Explore tab, and iteration of Tinder products.

• Q: Cory Carpenter on 2025 outlook.

A: Gary Swidler spoke about Hinge trajectory, margin improvement, and Investor Day details.

• Q: Justin Patterson on Evergreen vs Emerging, margins.

A: Gary Swidler discussed Emerging offsetting Evergreen declines and margin expansion potential at E&E.

• Q: James Heaney on margin investment trade-offs.

A: Gary Swidler talked about portfolio management, brand stages, and divestiture considerations.

• Q: Daniel Salmon on divestitures, portfolio.

A: Gary Swidler discussed portfolio evaluation and enhanced disclosures for transparency.

• Q: Shweta Khajuria on brand perception, CFO transition.

A: Bernard Kim talked about Tinder's Gen Z/women focus and Steve Bailey's transition as CFO.

• Q: Curtis Nagle on advertiser pullback, marketing spend shift.

A: Gary Swidler explained advertiser timing, marketing allocation to Hinge vs Tinder based on product and brand performance.