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Match Group:Quarterly Results/2025 Q2: Difference between revisions
→Q2 2025 earnings call summary
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* Rascoff said Double Date is showing strong early traction with 92% of Double Date users under age 30. | * 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 women using Double Date are 3x more likely to send a like and 4x more likely to pair than when using Tinder solo. | ||
* They have pioneered Daily Drop or AI-enabled discovery in New Zealand and will expand to other regions shortly. | * 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. | * 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. | * 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. | * They are also testing height feature as a premium preference option. | ||
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* 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 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.''' | * '''They plan to launch a new UI in Q3, which is cleaner, faster and more modern.''' | ||
* Rascoff said | * Rascoff said they are about to launch college-specific features to improve college dating experience (Q&A). | ||
===== '''Hinge products''' ===== | ===== '''Hinge products''' ===== | ||
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* AI-Powered recommendation algorithm launched in March is driving 15% increase in matches and contact exchanges. | * 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. | * 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.''' | |||
* 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 ==== | ==== Restructuring ==== | ||
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* Racoff said phase one of restructuring is now complete: learning the company and rebooting the culture. | * 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 said they are now in phase two of restructuring where the product offensive begin to show up in user outcomes. | ||
* Rascoff 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." | * '''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." | ||
* Rascoff said '''they have a new CTO''', new head of design and new head of products (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).''' | |||
==== Outlook ==== | |||
* 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). | |||
* | |||
==== Market expansion ==== | ==== Market expansion ==== | ||
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* 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. | * 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. | * Hinge plans to expand to Mexico and Brazil later this year. | ||
* | |||
==== 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 and analysts expectations == | ||