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Match Group Inc. delivered solid quarterly results Tuesday, and the dating leader’s chief executive said she is not worried about competition from Facebook Inc.
Match which operates Match.com, Tinder and other dating properties, beat expectations across the board with its first-quarter earnings report. Revenue grew 36% from a year earlier, to $407.4 million, whereas analysts had been expecting $386 million, according to FactSet. The company also reported net income of $100 million, or 33 cents per share. Analysts projected 19 cents. Shares were up 4.7% in after-hours trading.
Tinder was once again the bright point of Match’s results, thanks to continued momentum for Tinder Gold, a paid option that allows users to see who’s already liked them on the app. Match said that Tinder added a net average of 368,000 paying members during the quarter. That was below last quarter’s record of 544,000, but Match had previously told investors to brace for a slowdown and analysts in general seemed to be predicting net additions of 355,000 or less.
The big question for investors, however, is how Tinder and Match’s other offerings will fare once Facebook’s dating product, announced at the social giant’s annual f8 developers conference last week, is up and running.
“We don’t think Facebook will have any impact on Tinder, which is our growth engine,” CEO Mandy Ginsberg told MarketWatch in a statement.
While Tinder traditionally required new users to sign in with Facebook first to authenticate their accounts, the company rolled out an alternative sign-up option last summer, and Ginsberg said that about 75% of new users now choose not to register with Facebook when given the option.
“They didn’t want to mix Facebook with their dating lives,” she said.
Ginsberg also argued that Facebook’s entry into the category could help “chip away at the stigma” against online dating, especially with older individuals and those in international markets.
“Facebook’s move could be category-expansive,” she said, since Match believes that users of online-dating products tend to use an average of three at a time.
Match said that prior to the introduction of Tinder Gold in the second half of 2017, the company added an average of 220,000 paid Tinder members a quarter over the prior 10 quarters. A new revenue-generating feature” is “actively in development and on track” for launch in the second half of this year, according to Match’s investor presentation.
The company indicated in the presentation that Tinder’s new “feed” feature, which tries to encourage members to chat after matching, has “increased time on app, return visits, and conversations” since its March launch. Tinder is also testing in-app video loops, location-based features, and an option that allows women to message first.
Match raised its full-year revenue outlook to $1.6 billion to $1.7 billion, “primarily due to Tinder exceeding our expectations.” Analysts had been expecting $1.6 billion. Match anticipates that it will generate $405 million to $415 million during the current quarter, whereas analysts were projecting $391 million.
Match shares were up 88% over the past 12 months, as of Tuesday’s close, while the S&P 500 had gained 11% in that time.