Match's weak quarterly revenue forecast masks improving trends at Tinder
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Match Group brands are seen in this illustration taken, May 1, 2022. REUTERS/Dado Ruvic/Illustration
By Juby Babu
Aug 4 (Reuters) - Match Group forecast third-quarter revenue below Wall Street estimates on Tuesday, overshadowing signs of improvement in its struggling Tinder dating app and continued growth at Hinge, sending its shares down 9% in extended trading.
The weak outlook stems from the company's Everyone Everywhere brands, including its Asia-based Pairs and Azar businesses, Chief Financial Officer Steve Bailey told Reuters in an interview.
Everyone Everywhere is Match's portfolio of brands including OkCupid, Pairs and Azar, catering to diverse communities across geographies, identities, lifestyles and life stages.
Match expects mid-teens percentage declines in Everyone Everywhere revenue, compared with a low double-digit decline forecast in February, largely due to the Azar app redesign.
It forecast third-quarter revenue of $885 million to $895 million, with the midpoint below analysts' estimate of $891.5 million, according to data compiled by LSEG.
Match's ability to meet the forecast will largely depend on execution at Tinder and Hinge, according to Chandler Willison, analyst at M Science.
"The Tinder redesign and engagement will bear fruit or it won't, and the new Hinge plan may be successful or it may not," Willison said.
Dating apps are betting on AI-powered features to adapt to changing user preferences and improve matchmaking.
Tinder is using AI to speed up product development and rolling out social features aimed at helping younger users make real-world connections. Its Events feature, piloted in Los Angeles in March, has hosted more than 60 gatherings.
The Events product currently focuses on driving user growth rather than direct revenue, but is expected to become a revenue driver by 2027 and beyond, Bailey said.
Tinder's daily active user decline narrowed to 4% in the second quarter, the smallest percentage drop in 10 quarters.
Hinge's global monthly active users rose 13%, driven by strong growth in its expansion markets.
Match reported second-quarter revenue of $853 million, down 1%, missing the estimate of $856.8 million.
Paying users fell 6% to 13.3 million, though revenue per payer rose 6% to $21.13.
(Reporting by Juby Babu in Mexico City; Editing by Sriraj Kalluvila and Shilpi Majumdar)
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