Tinder parent Match sees 'transformation' for the dating app, which has been losing users

By Claudia Assis

Match Group's stock jumps after hours, as company plans to cut jobs

Shares of Match Group rallied about 8% in the extended session Tuesday after the online-dating company said it sees a clear path for growth at Tinder, which has been losing users, and said it plans to cut about 6% of its workforce.

"We're pleased that Tinder's initiatives have led to stabilization" in year-over-year monthly active users and "improving" payer trends, Match said in a letter to shareholders.

Match (MTCH) said it expects to see more improvement in Tinder's MAUs and payer trends in the third quarter. "More importantly, we believe Tinder has begun to lay the foundation for a broader transformation to better meet the evolving needs of today's daters," it said.

The company said it decided to end some of its live-streaming services in some of its dating apps, including Plenty of Fish, and end its Hakuna app, which provides live-streaming services mostly in South Korea and Japan.

"These businesses lack scale in a competitive market, require substantial further investment, and we expect they will deliver margins below the total company's desired level," Match said.

With the end of the these live-streaming services, along with "other ongoing initiatives," Match will cut about 6% of its workforce globally. The company said it expects savings of about $13 million.

Match's revenue grew 4% to $864 million, topping FacSet consensus expectations of $857 million. Tinder's direct revenue was up 1%, and Hinge revenue up 48%.

The number of paying customers, however, dropped 5% to 14.8 million people, as compared to the year-ago quarter.

Match earned $133 million, or 48 cents a share, matching FactSet consensus and prior-year earnings of $137 million, and also 48 cents a share.

At Tinder, the company started to see the effects of trust and safety initiatives implemented last year, which "improved ecosystem health but meaningfully reduced Tinder's user base," Match said.

The company is testing product changes that include the addition of more inclusive gender identities, which are particularly important for Gen Z, as well as more trust and safety features. Tinder also plans on new swipe gestures expected to follow.

"Tinder intends to build on these over the coming year, with an emphasis on deeply integrating AI across the experience to create a safer, more effective, and fun experience that addresses key user concerns and positions the app for sustained long-term growth," Match said.

-Claudia Assis

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07-30-24 1728ET

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