Match Group (NASDAQ:MTCH) has released its financial results for the third quarter of 2023, with earnings of 57 cents per share, slightly surpassing the year-ago quarter’s 58 cents per share. The company’s earnings exceeded the Zacks Consensus Estimate by 7.55%. Revenues for the quarter totaled $881.6 million, marking a 9% increase compared to the previous year and narrowly beating the Zacks Consensus Estimate by 0.1%.
A Closer Look at the Quarter
In the third quarter, the total number of payers declined by 5% YoY, totaling 15.7 million, just shy of the Zacks Consensus Estimate by 0.15%. The Americas and Europe both experienced a decrease in the number of payers, with 9% and 2% reductions, respectively, while the Asia Pacific (APAC) region saw a 1% drop compared to the previous year.
Total revenues per payer (RPP) saw a healthy 15% YoY increase, reaching $18.39, surpassing the Zacks Consensus Estimate by 0.23%. Region-wise, RPP saw a 21% increase in America, a 19% increase in Europe, and a 4% decrease in APAC on a YoY basis.
Direct revenues from the Americas reached $455.2 million, a 10% increase. Europe also experienced a 17% boost, reaching $252 million, while APAC declined by 4% to $159.6 million.
Direct revenues from Tinder increased by 11% YoY, totaling $509 million and surpassing the Zacks Consensus Estimate by 0.54%. Tinder’s RPP also grew by 18% YoY to $16.28, driven by pricing optimizations and new weekly subscription packages. The number of payers declined by 6% YoY to 10.4 million due to pricing adjustments in the United States, which reduced conversion. However, Tinder witnessed accelerated growth in subscription revenue throughout the quarter.
Hinge, on the other hand, experienced a remarkable 44% YoY surge in revenues, reaching $107 million. The number of payers increased by 33% YoY to 1.3 million, and RPP grew to nearly $27, an 8% YoY increase. Hinge’s growth extended into English-speaking markets and European expansion markets, resulting in a nearly 44% YoY increase in overall downloads during the third quarter.
Match Group Asia’s direct revenues declined by 5% YoY to $77 million, while Azar revenues increased by 20% YoY, partially offsetting ongoing weaknesses at Pairs and Hakuna. Evergreen and Emerging revenues declined by 3% YoY, totaling $174.3 million.
Operating Details
Total operating costs and expenses, accounting for 72% of revenues, increased by 7% YoY to $638 million in the third quarter. The adjusted operating income reached $333.1 million, a 17% YoY increase, with an adjusted operating margin of 38%, expanding by 270 basis points.
Balance Sheet
As of September 30, 2023, Match Group held cash and cash equivalents of $713 million, compared to $741 million as of June 30, 2023. The long-term debt remained unchanged sequentially at $3.9 billion. During the quarter ending on September 30, 2023, the company repurchased 6.7 million shares of common stock for $300 million, with $667 million worth of Match Group shares still available under the previously announced share repurchase program as of October 31, 2023.
Guidance
For the fourth quarter of 2023, Match Group anticipates revenues in the range of $855 million to $865 million. The guidance takes into account potential challenges stemming from adverse forex and global macroeconomic conditions that could impact MTCH’s advertising business. Tinder revenues are expected to grow by 11%, driven by stronger year-over-year RPP growth, offset by a larger decline in the Payer base. Adjusted operating income for the fourth quarter is projected to be in the range of $305 million to $310 million, indicating a roughly 7-9% YoY growth, with an expected operating margin of 36% at the midpoint of the range.
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