Key Takeaways:
- Tinder MAUs improved from down 10% to down 7% after product changes.
- Hinge revenue grew 28% in Q1, on track for $1 billion by 2027.
- Match Group targets 5% to 7% annual share count reduction through buybacks.
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Match Group says Tinder turnaround gains traction as Hinge grows 28%
Match Group CFO Steven Bailey said Tinder's turnaround is gaining traction, with monthly active users improving from down 10% to down 7%.
"The thesis for improving Tinder is starting to be proven out," Bailey said at an investor conference.
Tinder recorded 1% year-over-year growth in registrations, the first such increase in many years, driven by lower-funnel marketing, higher overall investment and features such as Double Date. One in four Gen Z women in the US are using Double Date, a feature that lets users pair with a friend and match with other pairs, Bailey said.
The improvements come as Match Group seeks to stabilize its largest revenue source while Hinge continues to drive growth. Hinge posted 28% revenue growth in the first quarter and remains on track for $1 billion in revenue by 2027.
Bailey attributed about two-thirds of the improvement in Tinder's engagement and retention metrics to changes in the app's recommendation algorithms. The company shifted weighting away from generating as many likes as possible and toward user outcomes and meaningful connections, he said. Tinder currently has six algorithm tests live and is testing AI-enabled camera roll features that could help users select better photos.
Hinge's revenue in European expansion markets has grown 100% year-over-year for the past three quarters, Bailey said. The app has shown early promise in Latin America, becoming the No. 2 or No. 3 dating app in Mexico and entering Brazil. Bailey said those results give Match Group confidence that Hinge can become a global brand, with Asia representing a largely untapped opportunity.
Match Group has generated about $100 million in headcount-related savings and roughly $125 million in in-app payment fee savings, much of which has been reinvested into Tinder and Hinge product development and marketing. The company's margin, excluding one-time costs, is roughly flat year-over-year at about 37.5 percent by design, Bailey said.
The company also invested $100 million in Sniffies, a dating platform with about 3 million monthly active users that is the No. 2 player in the non-heterosexual male category. Match Group is shutting down Archer, which did not find the product-market fit the company wanted.
On capital allocation, Bailey said Match Group expects to reduce its share count by 5 percent to 7 percent annually over the next few years through buybacks. Free cash flow per share grew more than 20 percent year-over-year last year and is expected to grow in the high teens this year.
The Tinder turnaround narrative gaining credibility and Hinge's sustained growth trajectory provide a dual-engine story for Match Group investors. The next catalyst will be the company's second-quarter earnings report, where investors will watch for further improvement in Tinder's payer and revenue trends.
This article is for informational purposes only and does not constitute investment advice.
