Match Falls After a Disappointing Outlook on Pandemic-Era Dating

(Bloomberg) -- Match Group Inc. gave a forecast for revenue growth this year that disappointed analysts, reflecting the toll that nearly a year of social distancing and lockdowns has taken on the dating scene.

The Dallas-based owner of some of the world’s most popular dating apps is predicting revenue of $2.75 billion to $2.85 billion in 2021. Analysts had forecast revenue of $2.84 billion. In the first quarter, the company sees sales of as much as $655 million, beating Wall Street’s estimate of $647.5 million. The shares fell about 5% in extended trading after the report Tuesday.

The revenue outlook reflects some continued impact from the pandemic across the globe, the company said.

“2020 has been a year of steep changes in so many behaviors, with more of our lives moving online,” Chief Executive Officer Shar Dubey said in a letter to shareholders accompanying quarterly earnings. “More of the dating journey is also happening online, through innovations like video dates.”

Dubey said Match plans to continue investing in new products to push beyond traditional profile discovery.

Revenue in the three months ended Dec. 31 rose 19% to $651.4 million, beating the average analyst estimate of $648.8 million. The company reported earnings per share of 48 cents, in line with estimates.

Match is seeing increasing growth in its products from international users, where some markets were less impacted by lengthy lockdowns than in North America. The company saw a 14% boost in international subscriptions in the fourth quarter, compared with a 9% increase in North America.

In Japan, Match’s second-highest grossing market behind the U.S., revenue has grown 600% over the last five years, with users split between Tinder and the more-serious Pairs, which includes a service aimed at getting users married within one year.

“Our success in a market as culturally distinct as Japan gives us confidence that our expertise will enable us to also be successful in other non-Western markets,” said Chief Financial Officer Gary Swidler, in an email.

Tinder is by far Match’s biggest contributor, contributing direct revenue of $1.4 billion in 2020. However, non-Tinder brands collectively grew quickly in the fourth quarter, up 28% from a year earlier. Match didn’t disclose Tinder’s growth rate in that period. Hinge, another Match dating app, saw full-year revenue increase threefold, and global downloads increase 63%.

Match completed its spinoff from IAC/InterActiveCorp in July 2020.

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