Online-dating company is seeing stronger recovery in markets with higher vaccination rates and drops in COVID-19 case numbers
Online-dating powerhouse Match Group Inc. says that people are feeling incrementally more comfortable wading out into the dating scene amid an easing of pandemic-driven restrictions in many regions, helping the company deliver better-than-expected results for its first quarter and an upbeat revenue outlook for the current period.
Match MTCH, -6.41% posted net earnings of $174.3 million for the March quarter, or 57 cents a share, whereas the company recorded a net loss of $202.8 million, or $1.00 a share, for the year-earlier quarter, with that loss a byproduct of Match’s official separation from IAC/InterActiveCorp IAC, -6.53%.
Analysts surveyed by FactSet were expecting 39 cents a share in GAAP earnings for the latest quarter.
The company generated revenue of $668 million, up from $545 million a year earlier and ahead of the $651 million that analysts tracked by FactSet had been projecting.
Direct revenue for Match’s Tinder service grew 18% in the quarter, fueled by a 15% increase in the subscriber base on average and 4% growth in average revenue per user.
“[W]ith the onset of the new year, we saw a seasonal spike in first-time subscribers that the business has been able to maintain,” Match said in its letter to shareholders. “Exiting the first quarter, we are seeing a new normalization level as vaccines continue to roll out globally, even as several countries are experiencing a third wave of cases.”
Tinder is relatively more exposed than other Match Group brands to non-recurring revenue due to the service’s broader geographic reach, and that exposure à la carte purchases means that Tinder has “felt the impact of higher COVID cases on propensity to pay the most acutely during the pandemic,” Match executives said in their shareholder letter.
In some regions like North America and Western Europe, non-recurring revenue is showing a “strong recovery,” reaching “the highest levels since the pandemic began,” and Match expects other regions to follow once their COVID-19 vaccination rates improve. “Engagement on Tinder remains well above pre-COVID levels,” the company continued.
For the second quarter, Match expects revenue of $680 million to $690 million and adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of $255 million to $260 million. Analysts tracked by FactSet were modeling $679 million in revenue and $267 million in adjusted Ebitda.
Match anticipates that its Tinder and non-Tinder brands will each grow upwards of 20% in the quarter, and the company plans that it will be “investing into this momentum by spending an incremental ~$40 million on sales and marketing compared to Q2 2020,” after taking on lower marketing costs in the year-prior quarter due to the pandemic.
“As we head into summer, with a growing number of people getting vaccinated, we cannot help but be excited about the future,” the company said.