Match Group:Quarterly Results/2025 Q2

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Q2 2025 earnings call summary

Q2 2025 Earnings Call Webcast | Q2 2025 Earnings Call Transcript

Products

CEO Spencer Rascoff said they now ship new code every week instead of every two weeks.
"For the first time in a long time, Tinder's pace of product innovation is strong," Rascoff said.
Rascoff compared progress in metric improvement to being in the “second of 9 innings”, meaning they still have a lot more work ahead (Q&A).

Tinder products

Double Date was launched globally in June, six months earlier than schedule.
Rascoff said Double Date is showing strong early traction with 92% of Double Date users under age 30.
Rascoff said women using Double Date are 3x more likely to send a like and 4x more likely to pair than when using Tinder solo.
Rascoff said between 3% and 6% of Tinder users are using Double Date (Q&A).
They have pioneered Daily Drop or AI-enabled discovery in New Zealand and will expand to other regions shortly. They are seeing good market fit with under 30 users (Q&A).
Rascoff said they have made strides in trust and safety with the launch of r face check service in new markets such as California.
Face check has been live in Canada and Colombia for the last 6 months (Q&A).
Rascoff said they also made strides with authenticity by enhancing their bot detection systems, reducing false positives.
They are also testing height feature as a premium preference option.
Rascoff said they are on tract to test the first version of see who (Gold Home) like you tap this fall, helping users connect with people who are more likely to be interested in them and drive more revenue.
They are preparing to introduce a new feature called Modes, a new navigation system that lets users toggle between different dating goals in real time.
They plan to launch a new UI in Q3, which is cleaner, faster and more modern.
Rascoff said they are about to launch college-specific features to improve college dating experience (Q&A).
Rascoff said their trust and safety initiatives are having positive outcome on users unlike in the past when it led to a decline in users (Q&A). "What we're experiencing right now on most of these trust and safety initiatives are having the effect of increasing audience and that's one of the reasons that we're starting to see some of these green shoots in audience and engagement, mid-funnel and bottom funnel metrics because we're reducing the number of false positives that -- of people that -- basically, we're letting in more good people or we're keeping out fewer good people that we otherwise would have been kept out in the past. So that's all been a good tailwind to the metrics over the last couple of months with respect to trust and safety," he said.

Hinge products

AI-Powered recommendation algorithm launched in March is driving 15% increase in matches and contact exchanges.
They rolled Prompt Feedback, an AI feature that gives users real-time suggestions during onboarding. Rascoff said this reduced generic answers by a third and more than doubled high-quality responses.

Users

Rascoff said he is focused on metrics that are connected with user outcomes such as match rate, contact exchange, and inferred IRL meet-ups. He said all these metrics are trending up. “All of these metrics are doing better today than they were just a couple of months ago,” he said.
Rascoff said they are determining which other useful metrics on turnaround they can start providing investors (Q&A).
Rascoff said registrations/new accounts created are down 7% y/y compared to a decline of 15% y/y a couple of months ago. MAU is down 8% to 9% y/y compared to a decline of 9% to 10% y/y in the last quarter yet MAU is a metric that is hard to move (Q&A).

Restructuring

Rascoff said they reduced the number of managers at by 20% and created autonomous product and engineering teams with greater accountability.
They centralized functions like shared data and content moderation. For instance, they now allow over 1,000 engineers at Match Group to see each other's code in GitHub.
Rascoff said decision-making is now informed by the data and no longer burdened by analysis paralysis.
Racoff said phase one of restructuring is now complete: learning the company and rebooting the culture.
Rascoff said they are now in phase two of restructuring where the product offensive begin to show up in user outcomes.
Rascoff praised Hinge's execution. He said that Hinge's success shows that a highly motivated team can build great products. He said they are using Hinge's success to turn around Tinder. "Hinge is crushing it. Hinge's success should put to rest any doubts about whether the online dating category is out of favor among users. Hinge shows that a great team that is highly motivated can build great products, which attracts huge audiences and create significant revenue and shareholder value. This is the formula we are following in the turnaround at Hinge's sister brand, Tinder, and Hinge's success gives me pride in Hinge, but also confidence in Tinder." "Hinge is firing on all cylinders. I mean it's got a really impressive and distinctive company culture, very highly engaged employees, shipping innovative products. They've got a terrific brand and a clear product strategy and they understand their users incredibly well and what users want from them. And the last compliment I'll pay is that more than any of our other brands, they've infused AI into the product at an even greater rate than others, and it really shows."
Rascoff said they have a new CTO, new head of design and new head of products at Tinder(Q&A).

Alternative payment systems

CFO Steven Bailey said they continue to test alternative payment systems across the brands and expect to have alternative payment options at Hinge by the end of Q3.
Bailey said savings from alternative payment options are not included in the guidance and could lead to margin upside or fund growth initiatives.
They are testing 3 to 5 variants across any brand (Q&A).
So far, they have seen more than 30% shift in transactions from IP to the web, resulting in 10% increase in net revenue (Q&A).
The impact on adjusted operating income (AOI) so far in 2025 has been small (around $5 million) given Tinder tests are relatively low percentage and they haven't rolled it at Hinge (Q&A).
It could equate to $65 million AOI savings opportunity in 2026 when you extrapolate the current test results across all brands and the US (Q&A).

Pricing

Rascoff said they are not planning to increase price as a result of early product success at Tinder since they are prioritizing the recommendation algorithm more towards user outcome and less towards revenue. "We're not planning on taking price as a result of this product road map at Tinder."
Bailey said they continue to test various merchandising and monetization strategies that help with pricing and macro pressures (Q&A).

$50 million investment in second half

Bailey said a third of the $50 million that they plan to spend this year will go to Tinder products. Another one-third will go to marketing at Tinder and Hinge while the last one-third will go to geographic expansion at Hinge, Azar, The League, and investments in new growth bets like Archer, Her and a new dating concept (Q&A).

Macro

Bailey said they are feeling a lot better about macro in general compared to last quarter (Q&A). "But I think at the highest level, we feel much better about the macro environment and impacts on our business than we did a quarter ago. We're not really seeing it aside from some small pressure at Tinder that we mentioned last call," he said.

Market expansion

In the first half of the year, Hinge's MAU in European markets was up 60% y/y, as they enter their year of expansion.
Hinge plans to expand to Mexico and Brazil later this year.
Rascoff said Hinge is in 25 countries while Tinder is in 188.
Rascoff said two-third of Hinge's revenue come from US while 45% of Tinder's revenue comes from US, hence there is a lot of expansion opportunities for Hinge (Q&A).

Q2 2025 results

Excluding the exist of streaming business, total revenue was up 1% y/y and flat y/y FXN.
Indirect revenue was up 15% y/y driven by advertising revenue.
Operating margin was 22%. Excluding $18 million restructuring costs and $14 million legal settlement cost, operating income margin would have been 26%.
Hinge's RPP rose 6% y/y driven by continued monetization optimization.
Cost of revenue fell 1% y/y driven by reduced variable expenses from shutdown of live streaming services mid-last year and lower web services costs at Tinder but offset by increased IP fees primarily at Hinge.
Selling and marketing costs fell 4% y/y due to lower marketing spend at Tinder and E&E.
G&A increased 19% y/y driven by restructuring costs and legal settlement charge.
Gross leverage was 2.8x, and net leverage was 2.5x at the end of Q2.

Taxation

Bailey said Canada announced its intention to rescind its digital service tax (as soon as September), which could lead to a one time benefit to adjusted operating income (AOI) margin. This benefit is not included in the guidance.

Management guidance and analysts expectations

Management guidance


Key metrics^[1]	Q2 2025						2025
	Lower-point	Y/Y	Mid-point	Y/Y	Upper point	Y/Y	Lower-point	Y/Y	Mid-point	Y/Y	Upper point	Y/Y
Revenue	$850 million	-1.6%	$855 million	-1.1%	$860 million	-0.5%	$3,375 million	-3.0%	$3,437.5 million	-1.2%	$3,500 million	0.6%
Adjusted operating income (AOI)	$295 million	-3.7%	$297.5 million	-2.9%	$300 million	-2.1%	$1,232 million	-1.6%	$1,255 million	0.2%	$1,278 million	2.1%
Adjusted operating margin	34.71%		34.80%		34.88%		36.5%		36.51%		36.51%

Match Group expects 2025 AOI to come roughly in the middle of the range when excluding approximately $25 million related to restructuring.
It expects AOI margin target of 36.5% when the $25 million restructuring expense is excluded.
It expects FX to be a tailwind to Q2 2025 results.
It expects a 1% tailwind from FX and a 1% headwind from the exit of Hakuna on Q2 revenue.
It expects costs associated with restructuring to be $17 million in Q2.
During the release of earnings in May 2025, Match Group said it has seen some weakness on à la carte (“ALC”) Tinder revenue in recent weeks due to macro slowdown. "We’ve started to see some impact to ALC revenue at Tinder in recent weeks, which we are monitoring closely. We are prepared to take pricing, merchandising, or other actions to minimize the impact to our financial performance should these trends persist," the press release reads.

Analysts expectations


Key metrics	Q2 2025	Y/Y	Q3 2025	Y/Y	2025	Y/Y
Revenue^[2]	$854.48 million	-1.1%	$889.91 million	-0.62%	$3,450 million	-0.8%
EPS^[3]	$0.58	20.8%			$2.51	12.6%

Pre-earnings analysts' opinions

Match Groups second quarter results likely to meet expectations

Equal Weight, $31->$32: Wells Fargo expects Match Group's Q2 results to meet expectations, with a possibility of higher guidance for Q3, partly due to the weakening of the US dollar. It pointed out that focus should be given to user engagement metrics as the company progresses under its new CEO.

Tinder's revenue is stabilizing

Buy, $38: TD Cowen analyst John Blackledge said Match Group’s valuation (P/E: 13x) is attractive and Hinge’s outlook is solid (Revenue growth: 26% y/y). He pointed to the stabilization in Tinder’s revenue and workforce reduction that will lead to cost-savings of $100 million per year. He also acknowledged management’s commitment to maintaining 2025 outlook despite macro uncertainties.

Financial indicators and key metrics will experience volatility in Q2 and 2025

Morgan Stanley expects volatility in key performance indicators and financial metrics for Match Group and Bumble in Q2 and 2025 due to product offensive and restructuring efforts.

Key insights from Q1 2025 earnings call

Q1 2025 Earnings Call Transcript

Strategy

Rascoff said one of his priorities is to unify the four brands into an organization that prioritizes innovation and user outcome.
Match Group will centralize key functions: "Today, we announced a reorganization, centralizing key functions, including select technology and data services, customer care and content moderation, media buying and international go-to-market functions, while still allowing each brand to maintain their independence and product road maps," Rascoff said.
Job cut reduction of 13% will save the company around $100 million in annual costs, including $45 million in 2025.
Plan to reduce stock-based compensation (SBC) by 15%.
They will reinvest the cost-savings in international expansion (including products).
Reduced 18% of Tinder workforce and eliminated 24% of Tinder managers.

Product

Rascoff said they recently launched Double-Date feature in several European markets.
"Nearly 90% of Double Date profiles are from users under 29 and women using Double Date are 3x as likely to swipe right on a pair than on an individual," Rascoff said.
The Game Game on iOS (interaction assistant) tested in April with 0.75 million Tinder users.
Testing AI-enabled Experience in New Zealand and early signs are promising.
Testing new safety features i.e in collaboration with World ID and have seen more than 15% reduction in bad actor reports.
AI-Powered Recommendation Algorithm has driven 15% increase in matches at Hinge since launching in March.
Rascoff said they are operating at twice the pace they had in a couple of quarters ago, adding they have had two quarters of great product momentum.
Rascoff flagged that product turnarounds take time.

User trends at Tinder

CFO Bailey said they expect user trends at Tinder to continue declining at a stable rate until product innovation bears fruit.

Market

Hinge is on track to launch in Brazil and Mexico in H2 2025.
The League is planning to launch in Middle East and India.
Pairs recently launched in South Korea.
Azar continues its expansion in USA and Western Europe.

Q1 2025 results

Excluding the exit of livestreaming business, Q1 revenue was down 2%.
Indirect revenue rose 31% y/y driven by increase in their top advertisers. Bailey doesn't expect this performance to repeat and they are reiterating their guidance for indirect revenue to be flat y/y in 2025.
Hinge's RPP rose 3% y/y driven by price optimization across several regions.
Cost of revenue declined 8% driven by lower IAP fees and reduced variable expenses from the shutdown of live streaming business mid of last year.
Selling and marketing expenses declined 5% due to lower marketing expenses at Tinder and Match Group Asia.
G&A increased 5% driven by severance and other employee compensation costs.
Product development costs rose 4% driven by SBC expense.

Apple app store

CFO Steven Bailey said 45% of their revenue comes from the US and two-third of that are in Apple App stores and they pay Apple around 27% in commission.
If they save 10% on Apple app store fees, that would be savings of around $25 million.
Apple-EPIC court ruling impact has not been included in the guidance.

Marketing

Performance marketing has no limited impact on Tinder and Hinge. They mainly use brand marketing at Tinder and Hinge.

References

[1] ttps://s203.q4cdn.com/993464185/files/doc_financials/2025/q1/1Q-2025-Prepared-Remarks-vFinal.pdf?utm_source=chatgpt.com

[2] ttps://finance.yahoo.com/quote/MTCH/analysis/

[3] ttps://finance.yahoo.com/news/match-group-earnings-preview-expect-130532336.html

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