Match Group, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Phase 1: Reset
  • Spent initial months learning businesses, rebooting culture to emphasize urgency and accountability.
  • Match Group is a multi-brand company with over 20 dating apps; brands like Hinge and Azar need resources, while others like Tinder require focused attention.
  • At Tinder, organizational design was flattened, product and engineering pods created, culture retooled, release cadence doubled, and product strategy realigned to prioritize low-pressure connections.
• Phase 2: Revitalize
  • Tinder: Product road map addresses authenticity, dating fatigue, and outcomes with initiatives like Double Date (launched globally in June with strong traction), interactive matching pilots, and plans for recommendations engine updates, contextual liking, and UI refresh.
  • Hinge: Strong momentum with 25% YOY revenue growth, driven by product innovation (AI-powered recommendation algorithm, prompt feedback), user growth (MAU up nearly 20% YOY), and international expansion (planned launches in Mexico and Brazil).
  • Portfolio brands aligned around delivering real user outcomes, with Hinge focused on intentioned dating, Tinder on casual connections, E&E on unified platform, and MG Asia on growing brands in Asia.

Segment Performance

• Tinder: Q2 direct revenue was $461 million, down 4% year-over-year and down 5% on an FX-neutral basis. Payers declined 7% year-over-year to $9.0 million, while RPP grew 3% to $17.14. Operating income (OI) was $217 million, down 1% year-over-year, with an OI margin of 46%. Adjusted operating income (AOI) was $246 million, down 2% year-over-year, with an AOI margin of 52%.
• Hinge: Q2 direct revenue was $168 million, up 25% year-over-year and up 24% on an FX-neutral basis. Payers grew 18% year-over-year to $1.7 million, and RPP grew 6% to $31.96. OI was $39 million, up 29% year-over-year, with an OI margin of 23%. AOI was $54 million, up 27% year-over-year, with an AOI margin of 32%.
• E&E: Q2 direct revenue was $148 million, down 8% year-over-year and down 10% on an FX-neutral basis. Payers declined 15% year-over-year to $2.3 million, while RPP rose 8% to $21.34. The segment delivered an operating loss of $4 million, with AOI of $16 million, down 62% year-over-year, and an AOI margin of 11%.
• Match Group Asia: Q2 direct revenue was $69 million, down 6% year-over-year and down 8% on an FX-neutral basis. Azar direct revenue was up 3% year-over-year and up 6% on an FX-neutral basis. Payers increased 6% year-over-year to $1.1 million, while RPP declined 12% to $21.53. The segment had an operating loss of $0.3 million, with AOI of $16 million, up 16% year-over-year, and an AOI margin of 23%.

Guidance

• Q3 2025: Match Group expects total revenue to be $910 million to $920 million, up 2% to 3% year-over-year (assuming a 1-point FX tailwind). AOI is expected to be $330 million to $335 million, representing a year-over-year decline of 3%.
• Full Year 2025: Total revenue is towards the high end of guidance primarily due to positive FX impacts. FXN ex live, total revenue growth is within initial guidance. Indirect revenue is expected to grow mid-teens. AOI margin is expected to be approximately 35.4% on an as-reported basis after excluding restructuring costs and legal settlement charges. Free cash flow is expected to be $1.06 billion to $1.09 billion. Testing alternative payments across brands, with plans to change reporting metrics (e.g., renaming AOI to adjusted EBITDA and changing MAU definition).

Risks

• Execution Risks: Challenges in fully executing the turnaround plans across brands, including integrating new product strategies and cultural changes.
• Trust and Safety Impact: Changes in trust and safety features (e.g., face check, bot detection) could impact audience and revenue if not properly received by users.
• Macroeconomic Factors: Continued pressure on younger users at Tinder due to macroeconomic conditions, although overall macro environment is improving.
• Regulatory Pressures: Risks associated with alternative payments testing and potential regulatory changes affecting in-app purchases.

Question and Answer

• Q: Cory Carpenter with JPMorgan asks about U.S. users under 30 and Tinder engagement A: Spencer Rascoff discusses Double Date's strong traction with under-30 users, college-specific features, interactive matching pilots, and metrics like contact exchange trending up.
• Q: Nathan Feather with Morgan Stanley asks about tracking turnaround metrics A: Spencer Rascoff mentions tracking metrics like regs, MAU, 4-way chats, and contact exchange, with improvements in the rate of decline of these metrics.
• Q: Unidentified Analyst asks about face check expansion and alternative payments A: Spencer Rascoff talks about studying face check's impact on trust and safety and perception, while Steven Bailey discusses positive results from alternative payments testing on iOS, with net revenue increases and plans for Hinge testing.
• Q: Brad Erickson with RBC Capital Markets asks about Gen Z behavior and industry trends A: Spencer Rascoff emphasizes Gen Z's continued use of dating apps but need for different offerings, and mentions 100 million messages sent daily across Match Group apps as evidence of category vibrancy.
• Q: William John Kerr with TD Securities asks about macro trends and Hinge revenue acceleration A: Steven Bailey notes no further macro pressure seen, and Spencer Rascoff highlights Hinge's drivers including AI usage, female experience improvement, onboarding, and international expansion.
• Q: Ygal Arounian with Citi asks about trust and safety impact on payers and alternative payments A: Spencer Rascoff states trust and safety initiatives are tailwinds to audience and metrics, while Steven Bailey discusses similar reception of alternative payments across brands.