Form 10-Q Match Group, Inc. For: Mar 31

May 6, 2022 4:06 PM EDT

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mtch-20220331
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As filed with the Securities and Exchange Commission on May 6, 2022
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period EndedMarch 31, 2022
Or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________                            
Commission File No. 001-34148
mtch-20220331_g1.jpg
Match Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware59-2712887
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
8750 North Central Expressway, Suite 1400, Dallas, Texas 75231
(Address of registrant’s principal executive offices)
(214576-9352
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common Stock, par value $0.001MTCHThe Nasdaq Stock Market LLC
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑    No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No ☑
As of April 29, 2022, there were 285,592,764 shares of common stock outstanding.



TABLE OF CONTENTS
  Page
Number


2

PART I
FINANCIAL INFORMATION
Item 1.    Consolidated Financial Statements
MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited)
 March 31, 2022December 31, 2021
(In thousands, except share data)
ASSETS  
Cash and cash equivalents$912,434 $815,384 
Short-term investments8,663 11,818 
Accounts receivable, net of allowance of $253 and $281, respectively
180,577 188,482 
Other current assets132,136 202,568 
Total current assets1,233,810 1,218,252 
Property and equipment, net of accumulated depreciation and amortization of $184,723 and $181,742, respectively
167,676 163,256 
Goodwill2,381,539 2,411,996 
Intangible assets, net of accumulated amortization of $47,729 and $35,674, respectively
746,109 771,697 
Deferred income taxes345,593 334,937 
Other non-current assets168,666 163,150 
TOTAL ASSETS$5,043,393 $5,063,288 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
LIABILITIES  
Current maturities of long-term debt, net$84,588 $99,927 
Accounts payable22,022 37,871 
Deferred revenue262,668 262,131 
Accrued expenses and other current liabilities704,749 768,366 
Total current liabilities1,074,027 1,168,295 
Long-term debt, net3,830,965 3,829,421 
Income taxes payable12,754 13,842 
Deferred income taxes124,022 130,261 
Other long-term liabilities123,399 116,051 
Redeemable noncontrolling interests 1,260 
Commitments and contingencies
SHAREHOLDERS’ EQUITY  
Common stock; $0.001 par value; authorized 1,600,000,000 shares; 285,505,836 and 283,470,334 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively
286 283 
Additional paid-in capital8,110,463 8,164,216 
Retained deficit(7,963,981)(8,144,514)
Accumulated other comprehensive loss(269,217)(223,754)
Total Match Group, Inc. shareholders’ equity
(122,449)(203,769)
Noncontrolling interests675 7,927 
Total shareholders’ equity
(121,774)(195,842)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $5,043,393 $5,063,288 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
3

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
 Three Months Ended March 31,
 20222021
 (In thousands, except per share data)
Revenue$798,631 $667,612 
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)
236,236 179,455 
Selling and marketing expense151,888 144,988 
General and administrative expense100,705 87,665 
Product development expense78,794 55,576 
Depreciation10,497 10,457 
Amortization of intangibles12,693 213 
Total operating costs and expenses590,813 478,354 
Operating income207,818 189,258 
Interest expense(34,896)(31,838)
Other income (expense), net
818 (1,319)
Earnings before income taxes
173,740 156,101 
Income tax benefit
6,867 17,747 
Net earnings
180,607 173,848 
Net (earnings) loss attributable to noncontrolling interests
(74)402 
Net earnings attributable to Match Group, Inc. shareholders
$180,533 $174,250 
Net earnings per share attributable to Match Group, Inc. shareholders:
     Basic$0.63 $0.65 
     Diluted$0.60 $0.57 
Stock-based compensation expense by function:
Cost of revenue$1,549 $989 
Selling and marketing expense1,653 1,265 
General and administrative expense23,899 18,480 
Product development expense15,194 9,382 
Total stock-based compensation expense$42,295 $30,116 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
4

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS (Unaudited)
Three Months Ended March 31,
20222021
(In thousands)
Net earnings
$180,607 $173,848 
Other comprehensive loss, net of tax
Change in foreign currency translation adjustment
(45,848)(20,609)
Total other comprehensive loss
(45,848)(20,609)
Comprehensive income
134,759 153,239 
Components of comprehensive loss (income) attributable to noncontrolling interests:
Net (earnings) loss attributable to noncontrolling interests
(74)402 
Change in foreign currency translation adjustment attributable to noncontrolling interests
385 33 
Comprehensive loss attributable to noncontrolling interests
311 435 
Comprehensive income attributable to Match Group, Inc. shareholders
$135,070 $153,674 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
5

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited)
Three Months Ended March 31, 2022
Match Group Shareholders’ Equity
 
Common Stock $0.001 Par Value
 
 Redeemable
Noncontrolling
Interests
$SharesAdditional
Paid-in
Capital
Retained Deficit
Accumulated Other Comprehensive Loss
Total Match Group Shareholders’ EquityNoncontrolling InterestsTotal
Shareholders’
Equity
 (In thousands)
Balance as of December 31, 2021$1,260 $283 283,470 $8,164,216 $(8,144,514)$(223,754)$(203,769)$7,927 $(195,842)
Net (loss) earnings for the three months ended March 31, 2022
(442)— — — 180,533 — 180,533 516 181,049 
Other comprehensive loss, net of tax
— — — — — (45,463)(45,463)(385)(45,848)
Stock-based compensation expense
— — — 45,105 — — 45,105 — 45,105 
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes— 3 2,036 (90,668)— — (90,665)— (90,665)
Adjustment of redeemable noncontrolling interests to fair value
(818)— — 818 — — 818 — 818 
Purchase of noncontrolling interest— 6,672 — — 6,672 (23,468)(16,796)
Adjustment of noncontrolling interests to fair value— — — (16,085)— — (16,085)16,085  
Other— — — 405 — — 405 — 405 
Balance as of March 31, 2022$ $286 285,506 $8,110,463 $(7,963,981)$(269,217)$(122,449)$675 $(121,774)


6

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited) (Continued)
Three Months Ended March 31, 2021
Match Group Shareholders’ Equity
Common Stock $0.001 Par Value
Redeemable
Noncontrolling
Interests
$SharesAdditional Paid-in CapitalRetained Earnings
Accumulated Other Comprehensive Loss
Total Match Group Shareholders’ EquityNoncontrolling InterestsTotal
Shareholders’
Equity
(In thousands)
Balance as of December 31, 2020$640 $267 267,329 $7,089,007 $(8,422,237)$(81,454)$(1,414,417)$1,042 $(1,413,375)
Net (loss) earnings for the three months ended March 31, 2021
(410)— — — 174,250 — 174,250 8 174,258 
Other comprehensive loss, net of tax
— — — — — (20,576)(20,576)(33)(20,609)
Stock-based compensation expense— — — 31,431 — — 31,431 — 31,431 
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes— 3 2,753 19,422 — — 19,425 — 19,425 
Adjustment of redeemable noncontrolling interests to fair value810 — — (810)— — (810)— (810)
Other— — — (3,227)— — (3,227)— (3,227)
Balance as of March 31, 2021$1,040 $270 270,082 $7,135,823 $(8,247,987)$(102,030)$(1,213,924)$1,017 $(1,212,907)
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
7

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 Three Months Ended March 31,
 20222021
 (In thousands)
Net earnings$180,607 $173,848 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Stock-based compensation expense42,295 30,116 
Depreciation10,497 10,457 
Amortization of intangibles12,693 213 
Deferred income taxes(14,828)(10,007)
Other adjustments, net993 4,601 
Changes in assets and liabilities
Accounts receivable6,144 (75,271)
Other assets27,074 19,626 
Accounts payable and other liabilities(24,868)(40,242)
Income taxes payable and receivable(9,957)(21,867)
Deferred revenue1,867 10,834 
Net cash provided by operating activities232,517 102,308 
Cash flows from investing activities:
Capital expenditures(17,657)(10,290)
Other, net2,997 (255)
Net cash used in investing activities(14,660)(10,545)
Cash flows from financing activities:  
Payments to settle exchangeable notes(47,677) 
Proceeds from the settlement of exchangeable note hedges
32,058  
Proceeds from issuance of common stock pursuant to stock-based awards6,304 29,973 
Withholding taxes paid on behalf of employees on net settled stock-based awards
(96,969)(10,548)
Purchase of noncontrolling interests(10,329) 
Other, net (730)
Net cash (used in) provided by financing activities(116,613)18,695 
Total cash provided101,244 110,458 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(4,197)(3,930)
Net increase in cash, cash equivalents, and restricted cash97,047 106,528 
Cash, cash equivalents, and restricted cash at beginning of period815,512 739,302 
Cash, cash equivalents, and restricted cash at end of period$912,559 $845,830 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
8

MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Match Group, Inc., through its portfolio companies, is a leading provider of digital technologies designed to help people make meaningful connections. Our global portfolio of brands includes Tinder®, Match®, Hinge®, Meetic®, OkCupid®, Pairs™, PlentyOfFish®, OurTime®, Azar®, Hakuna Live™, and more, each built to increase our users’ likelihood of connecting with others. Through our trusted brands, we provide tailored services to meet the varying preferences of our users. Our services are available in over 40 languages to our users all over the world. Match Group has one operating segment, Connections, which is managed as a portfolio of brands.
As used herein, “Match Group,” the “Company,” “we,” “our,” “us,” and similar terms refer to Match Group, Inc. and its subsidiaries, unless the context indicates otherwise.
Basis of Presentation and Consolidation
The Company prepares its consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company, all entities that are wholly-owned by the Company and all entities in which the Company has a controlling financial interest. Intercompany transactions and accounts have been eliminated.
In management’s opinion, the unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in management’s opinion, all adjustments, consisting of normal and recurring adjustments, necessary for the fair presentation of our consolidated financial position, consolidated results of operations and consolidated cash flows for the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. The accompanying unaudited consolidated financial statements should be read in conjunction with the consolidated statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Accounting Estimates
Management of the Company is required to make certain estimates, judgments, and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates, judgments, and assumptions impact the reported amounts of assets, liabilities, revenue, and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates.
On an ongoing basis, the Company evaluates its estimates and judgments including those related to: the fair values of cash equivalents, the carrying value of accounts receivable, including the determination of the allowance for credit losses; the determination of revenue reserves; the carrying value of right-of-use assets; the useful lives and recoverability of definite-lived intangible assets and property and equipment; the recoverability of goodwill and indefinite-lived intangible assets; the fair value of equity securities without readily determinable fair values; contingencies; unrecognized tax benefits; the valuation allowance for deferred income tax assets; and the fair value of and forfeiture rates for stock-based awards, among others. The Company bases its estimates and judgments on historical experience, its forecasts and budgets, and other factors that the Company considers relevant.
Accounting for Investments and Equity Securities
Investments in equity securities, other than those of our consolidated subsidiaries, are accounted for at fair value or under the measurement alternative of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, with any changes to fair value recognized within other income (expense), net each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or a similar investment of the same issuer; value is generally determined based on a market approach as of the transaction date. A security will be considered identical or similar if it has identical or
9


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
similar rights to the equity securities held by the Company. The Company reviews its equity securities without readily determinable fair values for impairment each reporting period when there are qualitative factors or events that indicate possible impairment. Factors we consider in making this determination include negative changes in industry and market conditions, financial performance, business prospects, and other relevant events and factors. When indicators of impairment exist, the Company prepares quantitative assessments of the fair value of our investments in equity securities, which require judgment and the use of estimates. When our assessment indicates that the fair value of the investment is below the carrying value, the Company writes down the security to its fair value and records the corresponding charge within other income (expense), net.
Revenue Recognition
Revenue is recognized when control of the promised services are transferred to our customers, and in the amount that reflects the consideration the Company expects to be entitled to in exchange for those services.
Deferred Revenue
Deferred revenue consists of advance payments that are received or are contractually due in advance of the Company's performance. The Company’s deferred revenue is reported on a contract by contract basis at the end of each reporting period. The Company classifies deferred revenue as current when the term of the applicable subscription period or expected completion of our performance obligation is one year or less. The current deferred revenue balance as of December 31, 2021 was $262.1 million. During the three months ended March 31, 2022, the Company recognized $208.5 million of revenue that was included in the deferred revenue balance as of December 31, 2021. The current deferred revenue balance at March 31, 2022 is $262.7 million. At March 31, 2022 and December 31, 2021, there was no non-current portion of deferred revenue.
Practical Expedients and Exemptions
As permitted under the practical expedient available under ASU No. 2014-09, Revenue from Contracts with Customers, the Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which the Company recognizes revenue at the amount which we have the right to invoice for services performed.
Disaggregation of Revenue
The following table presents disaggregated revenue:
 Three Months Ended March 31,
 20222021
 (In thousands)
Direct Revenue:
Americas$399,978 $344,262 
Europe215,328 189,059 
APAC and Other168,527 121,860 
Total Direct Revenue783,833 655,181 
Indirect Revenue (principally advertising revenue)
14,798 12,431 
Total Revenue$798,631 $667,612 
Recent Accounting Pronouncements
Accounting pronouncements not yet adopted by the Company
In October 2021, the FASB issued ASU No. 2021-08, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers. The update will generally result in an
10


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
entity recognizing contract assets and contract liabilities as if the acquirer had originated the contracts, which, for the most part, results in no change to the value of deferred revenue when measured in purchase accounting. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of the new standard is not expected to have a material impact on our operating results, financial position, or cash flows.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation.
NOTE 2—INCOME TAXES
At the end of each interim period, the Company estimates the annual effective income tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax provision or benefit related to significant, unusual, or extraordinary items, if applicable, that will be separately reported or reported net of their related tax effects, is individually computed and recognized in the interim period in which it occurs. In addition, the effect of changes in enacted tax laws or rates, tax status, judgment on the realizability of beginning-of-the-year deferred tax assets in future years or unrecognized tax benefits is recognized in the interim period in which the change occurs.
The computation of the estimated annual effective income tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected pre-tax income (or loss) for the year, projections of the proportion of income (and/or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of the realization of deferred tax assets generated in the current year. The accounting estimates used to compute the provision or benefit for income taxes may change as new events occur, more experience is acquired, additional information is obtained or our tax environment changes. To the extent that the estimated annual effective income tax rate changes during a quarter, the effect of the change on prior quarters is included in the income tax provision in the quarter in which the change occurs.
For the three months ended March 31, 2022 and 2021, the Company recorded an income tax benefit of $6.9 million and $17.7 million, respectively. The effective tax rates in both three-month periods benefited from excess tax benefits generated by the exercise and vesting of stock-based awards. In addition, the 2022 period benefited from a lower tax rate on U.S. income derived from foreign sources.
Match Group is routinely under audit by federal, state, local and foreign authorities in the area of income tax. These audits include a review of the timing and amount of income and deductions, and the allocation of such income and deductions among various tax jurisdictions. The Internal Revenue Service (“IRS”) has substantially completed its audit of the Company’s federal income tax returns for the years ended December 31, 2013 through 2017 and has begun its audit of the years ended December 31, 2018 and 2019. The statute of limitations for the years 2013 to 2019 has been extended to December 31, 2023. We are no longer subject to U.S. federal income tax examinations for years prior to 2013. Returns filed in various other jurisdictions are open to examination for tax years beginning with 2014. Although we believe that we have adequately reserved for our uncertain tax positions, the final tax outcome of these matters may vary significantly from our estimates.
At both March 31, 2022 and December 31, 2021, unrecognized tax benefits, including interest and penalties, were $51.7 million and $51.8 million, respectively. If unrecognized tax benefits at March 31, 2022 are subsequently recognized, income tax expense would be reduced by $45.8 million, net of related deferred tax assets and interest. The comparable amount as of December 31, 2021 was $46.0 million. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $1.2 million by March 31, 2023 due to settlements and expirations of statutes of limitations, all of which would reduce the income tax provision.
The Company recognizes interest and, if applicable, penalties related to unrecognized tax benefits in the income tax provision. Accruals of interest and penalties for the three months ended March 31, 2022 and 2021 were not material. At March 31, 2022 and December 31, 2021, noncurrent income taxes payable includes accrued interest and penalties of $1.2 million and $1.5 million, respectively.
11


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
NOTE 3—FINANCIAL INSTRUMENTS
Equity securities without readily determinable fair values
At both March 31, 2022 and December 31, 2021, the carrying value of the Company’s investments in equity securities without readily determinable fair values totaled $14.2 million, and is included in “Other non-current assets” in the accompanying consolidated balance sheet. The cumulative downward adjustments (including impairments) to the carrying value of equity securities without readily determinable fair values through March 31, 2022 were $2.1 million. For both the three months ended March 31, 2022 and 2021, there were no adjustments to the carrying value of equity securities without readily determinable fair values.
For all equity securities without readily determinable fair values as of March 31, 2022 and December 31, 2021, the Company has elected the measurement alternative. For the three months ended March 31, 2022 and 2021, under the measurement alternative election, the Company did not identify any fair value adjustments using observable price changes in orderly transactions for an identical or similar investment of the same issuer.
Fair Value Measurements
The Company categorizes its financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability. The three levels of the fair value hierarchy are:
Level 1: Observable inputs obtained from independent sources, such as quoted market prices for identical assets and liabilities in active markets.
Level 2: Other inputs, which are observable directly or indirectly, such as quoted market prices for similar assets or liabilities in active markets, quoted market prices for identical or similar assets or liabilities in markets that are not active, and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company’s Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.
Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities.
12


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:
 March 31, 2022
 Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Total
Fair Value
Measurements
 (In thousands)
Assets:  
Cash equivalents:  
Money market funds$308,628 $ $308,628 
Time deposits 126,643 126,643 
Short-term investments:
Time deposits 8,663 8,663 
Total$308,628 $135,306 $443,934 
 December 31, 2021
 Quoted Market
Prices in Active
Markets for
Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Total
Fair Value
Measurements
 (In thousands)
Assets:  
Cash equivalents:  
Money market funds$260,582 $ $260,582 
Time deposits 36,831 36,831 
Short-term investments:
Time Deposits 11,818 11,818 
Total$260,582 $48,649 $309,231 
Assets measured at fair value on a nonrecurring basis
The Company’s non-financial assets, such as goodwill, intangible assets, property and equipment, and right-of-use assets, are adjusted to fair value only when an impairment charge is recognized. The Company’s financial assets, comprised of equity securities without readily determinable fair values, are adjusted to fair value when observable price changes are identified or an impairment charge is recognized. Such fair value measurements are based predominantly on Level 3 inputs.
13


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
Financial instruments measured at fair value only for disclosure purposes
The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes.
March 31, 2022December 31, 2021
Carrying ValueFair ValueCarrying ValueFair Value
(In thousands)
Current maturities of long-term debt (a) (b) (c)
$(84,488)$(209,505)$(84,333)$(254,472)
Long-term debt, net (b) (c)
$(3,830,965)$(4,289,386)$(3,829,421)$(4,772,140)
______________________
(a)At March 31, 2022 and December 31, 2021, the carrying value excludes the $0.1 million and $15.6 million, respectively, aggregate principal amount of the exchanged 2022 Exchangeable Notes (described in “Note 4—Long-term Debt, net”) as that amount is carried at fair value as described below.
(b)At March 31, 2022 and December 31, 2021, the carrying value of current maturities of long-term debt, net includes unamortized debt issuance costs of $0.3 million and $0.6 million, respectively. At March 31, 2022 and December 31, 2021, the carrying value of long-term debt, net includes unamortized original issue discount and debt issuance costs of $44.0 million and $45.6 million, respectively.
(c)At March 31, 2022, the fair value of the 2022 Exchangeable Notes, 2026 Exchangeable Notes, and 2030 Exchangeable Notes (described in “Note 4—Long-term Debt, net”) is $209.5 million, $802.8 million, and $867.6 million, respectively. At December 31, 2021, the fair value of the 2022 Exchangeable Notes, 2026 Exchangeable Notes, and 2030 Exchangeable Notes is $302.2 million, $932.6 million, and $1,017.7 million, respectively.
At March 31, 2022 and December 31, 2021, the fair value of long-term debt, net, is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs.
14


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
NOTE 4—LONG-TERM DEBT, NET
Long-term debt consists of:
March 31, 2022December 31, 2021
(In thousands)
Credit Facility due February 13, 2025
$ $ 
Term Loan due February 13, 2027
425,000 425,000 
5.00% Senior Notes due December 15, 2027 (the “5.00% Senior Notes”); interest payable each June 15 and December 15
450,000 450,000 
4.625% Senior Notes due June 1, 2028 (the “4.625% Senior Notes”); interest payable each June 1 and December 1
500,000 500,000 
5.625% Senior Notes due February 15, 2029 (the “5.625% Senior Notes”); interest payable each February 15 and August 15
350,000 350,000 
4.125% Senior Notes due August 1, 2030 (the “4.125% Senior Notes”); interest payable each February 1 and August 1
500,000 500,000 
3.625% Senior Notes due October 1, 2031 (the “3.625% Senior Notes”); interest payable each April 1 and October 1 commencing on April 1, 2022
500,000 500,000 
0.875% Exchangeable Senior Notes due October 1, 2022 (the “2022 Exchangeable Notes”); interest payable each April 1 and October 1
84,906 100,500 
0.875% Exchangeable Senior Notes due June 15, 2026 (the “2026 Exchangeable Notes”); interest payable each June 15 and December 15
575,000 575,000 
2.00% Exchangeable Senior Notes due January 15, 2030 (the “2030 Exchangeable Notes”); interest payable each January 15 and July 15
575,000 575,000 
Total debt3,959,906 3,975,500 
Less: Current maturities of long-term debt84,906 100,500 
Less: Unamortized original issue discount
5,007 5,215 
Less: Unamortized debt issuance costs39,028 40,364 
Total long-term debt, net$3,830,965 $3,829,421 
Credit Facility and Term Loan
Our wholly-owned subsidiary, Match Group Holdings II, LLC (“MG Holdings II”), is the borrower under a credit agreement (as amended, the “Credit Agreement”) that provides for the Credit Facility and the Term Loan. The Credit Agreement provides for a benchmark replacement should the LIBOR rate not be available in the future. The rate used would be agreed to between the administrative agent and the Company and may be based upon a secured overnight financing rate at the Federal Reserve Bank of New York. Additional information about the benchmark replacement can be found in Amendment No. 6 to the Credit Agreement.
The Credit Facility has a borrowing capacity of $750 million and matures on February 13, 2025. At both March 31, 2022 and December 31, 2021, there were no outstanding borrowings, $0.4 million in outstanding letters of credit, and $749.6 million of availability under the Credit Facility. The annual commitment fee on undrawn funds, which is based on MG Holdings II’s consolidated net leverage ratio, was 25 basis points as of March 31, 2022. Borrowings under the Credit Facility bear interest, at MG Holdings II’s option, at a base rate or LIBOR, in each case plus an applicable margin, based on MG Holdings II’s consolidated net leverage ratio. If MG Holdings II borrows under the Credit Facility, it will be required to maintain a consolidated net leverage ratio of not more than 5.0 to 1.0.
At both March 31, 2022 and December 31, 2021, the outstanding balance on the Term Loan was $425 million. The Term Loan bears interest at LIBOR plus 1.75%, which was 2.22% and 1.91% at March 31, 2022 and December 31, 2021, respectively. The Term Loan matures on February 13, 2027. Interest payments are due at least quarterly through the term of the loan. The Term Loan provides for annual principal payments as part of an
15


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
excess cash flow sweep provision, the amount of which, if any, is governed by the secured net leverage ratio as set forth in the Credit Agreement.
The Credit Agreement includes covenants that would limit the ability of MG Holdings II to pay dividends, make distributions, or repurchase MG Holdings II’s stock in the event MG Holdings II’s secured net leverage ratio exceeds 2.0 to 1.0, while the Term Loan remains outstanding and, thereafter, if MG Holdings II’s consolidated net leverage ratio exceeds 4.0 to 1.0, or if an event of default has occurred. The Credit Agreement includes additional covenants that limit the ability of MG Holdings II and its subsidiaries to, among other things, incur indebtedness, pay dividends or make distributions. Obligations under the Credit Facility and Term Loan are unconditionally guaranteed by certain MG Holdings II wholly-owned domestic subsidiaries and are also secured by the stock of certain MG Holdings II domestic and foreign subsidiaries. The Term Loan and outstanding borrowings, if any, under the Credit Facility, rank equally with each other, and have priority over the Senior Notes to the extent of the value of the assets securing the borrowings under the Credit Agreement.
Senior Notes
The 5.00% Senior Notes were issued on December 4, 2017. At any time prior to December 15, 2022, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
The 4.625% Senior Notes were issued on May 19, 2020. At any time prior to June 1, 2023, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
The 5.625% Senior Notes were issued on February 15, 2019. At any time prior to February 15, 2024, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
The 4.125% Senior Notes were issued on February 11, 2020. At any time prior to May 1, 2025, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
The 3.625% Senior Notes were issued on October 4, 2021. At any time prior to October 1, 2026, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
The indenture governing the 5.00% Senior Notes contains covenants that would limit MG Holdings II’s ability to pay dividends or to make distributions and repurchase or redeem MG Holdings II’s stock in the event a default has occurred or MG Holdings II’s consolidated leverage ratio (as defined in the indenture) exceeds 5.0 to 1.0. No such limitations were in effect at March 31, 2022. There are additional covenants in the 5.00% Senior Notes indenture that limit the ability of MG Holdings II and its subsidiaries to, among other things, (i) incur indebtedness, make investments, or sell assets in the event MG Holdings II is not in compliance with specified financial ratios, and (ii) incur liens, enter into agreements restricting their ability to pay dividends, enter into transactions with affiliates, or consolidate, merge or sell substantially all of their assets. The indentures governing the 3.625%, 4.125%, 4.625%, and 5.625% Senior Notes are less restrictive than the indenture governing the 5.00% Senior Notes and generally only limit MG Holdings II’s and its subsidiaries’ ability to, among other things, create liens on assets, or consolidate, merge, sell or otherwise dispose of all or substantially all of their assets.
16


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
The Senior Notes all rank equally in right of payment.
Exchangeable Notes
During 2017, Match Group FinanceCo, Inc., a direct, wholly-owned subsidiary of the Company, issued $517.5 million aggregate principal amount of its 2022 Exchangeable Notes. During 2019, Match Group FinanceCo 2, Inc. and Match Group FinanceCo 3, Inc., direct, wholly-owned subsidiaries of the Company, issued $575.0 million aggregate principal amount of its 2026 Exchangeable Notes, and $575.0 million aggregate principal amount of its 2030 Exchangeable Notes, respectively.
The 2022, 2026, and 2030 Exchangeable Notes (collectively the “Exchangeable Notes”) are guaranteed by the Company but are not guaranteed by MG Holdings II or any of its subsidiaries.
The following table presents details of the exchangeable features:
Number of shares of the Company’s Common Stock into which each $1,000 of Principal of the Exchangeable Notes is Exchangeable(a)
Approximate Equivalent Exchange Price per Share(a)
Exchangeable Date
2022 Exchangeable Notes22.7331$43.99 July 1, 2022
2026 Exchangeable Notes11.4259$87.52 March 15, 2026
2030 Exchangeable Notes11.8739$84.22 October 15, 2029
______________________
(a)Subject to adjustment upon the occurrence of specified events.
As more specifically set forth in the applicable indentures, the Exchangeable Notes are exchangeable under the following circumstances:
(1) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the exchange price on each applicable trading day;
(2) during the five-business day period after any five-consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company's common stock and the exchange rate on each such trading day;
(3) if the issuer calls the notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or
(4) upon the occurrence of specified corporate events as further described in the indentures governing the respective Exchangeable Notes.
On or after the respective exchangeable dates noted in the table above, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may exchange all or any portion of their Exchangeable Notes regardless of the foregoing conditions. Upon exchange, the issuer, in its sole discretion, has the option to settle the Exchangeable Notes with cash, shares of the Company’s common stock, or a combination of cash and shares of the Company's common stock. Any shares issued in further settlement of the notes would be offset by shares received upon exercise of the Exchangeable Note Hedges (described below).
The Company’s 2022 Exchangeable Notes were exchangeable as of March 31, 2022. A total of $0.1 million of the 2022 Exchangeable Notes were presented for exchange during the three months ended March 31, 2022 and were subsequently settled in April 2022. No other Exchangeable Notes were presented for exchange during the three months ended March 31, 2022. During the three months ended March 31, 2022, $15.6 million aggregate principal amount of the 2022 Exchangeable Notes which were presented for exchange in 2021 were settled.
17


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
The following table presents the if-converted value that exceeded the principal of each Exchangeable Note outstanding as of March 31, 2022 and December 31, 2021 based on the Company’s stock price on March 31, 2022 and December 31, 2021, respectively.
March 31, 2022December 31, 2021
(In millions)
2022 Exchangeable Notes$124.8 $170.4 
2026 Exchangeable Notes$139.4 $293.9 
2030 Exchangeable Notes$167.4 $327.9 
Additionally, all or any portion of the 2026 Exchangeable Notes and 2030 Exchangeable Notes may be redeemed for cash, at the respective issuer’s option, on or after June 20, 2023 and July 20, 2026, respectively, if the last reported sale price of the Company’s common stock has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive), including at least one of the five trading days immediately preceding the date on which the notice of redemption is provided, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the applicable issuer provides notice of redemption, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
The following table sets forth the components of the outstanding Exchangeable Notes as of March 31, 2022 and December 31, 2021:
March 31, 2022December 31, 2021
2022 Exchangeable Notes2026 Exchangeable Notes2030 Exchangeable Notes2022 Exchangeable Notes2026 Exchangeable Notes2030 Exchangeable Notes
(In thousands)
Principal$84,906 $575,000 $575,000 $100,500 $575,000 $575,000 
Less: Unamortized debt issuance costs318 6,744 8,393 573 7,130 8,638 
Net carrying value included in current maturities of long-term debt, net
$84,588 $ $ $99,927 $ $ 
Net carrying value included in long-term debt, net$ $568,256 $566,607 $ $567,870 $566,362 
The following table sets forth interest expense recognized related to the Exchangeable Notes:

Three Months Ended March 31, 2022Three Months Ended March 31, 2021
2022 Exchangeable Notes2026 Exchangeable Notes2030 Exchangeable Notes2022 Exchangeable Notes2026 Exchangeable Notes2030 Exchangeable Notes
(In thousands)
Contractual interest expense$186 $1,258 $2,875 $1,132 $1,258 $2,875 
Amortization of debt issuance costs150 386 245 907 401 257 
Total interest expense recognized$336 $1,644 $3,120 $2,039 $1,659 $3,132 
18


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
The effective interest rates for the 2022, 2026, and 2030 Exchangeable Notes are 1.6%, 1.2%, and 2.2%, respectively.
Exchangeable Notes Hedges and Warrants
In connection with the Exchangeable Notes offerings, the Company purchased call options allowing the Company to purchase initially (subject to adjustment upon the occurrence of specified events) the same number of shares that would be issuable upon the exchange of the applicable Exchangeable Notes at the prices per share set forth below (the “Exchangeable Notes Hedge”), and sold warrants allowing the counterparty to purchase (subject to adjustment upon the occurrence of specified events) shares at the per share prices set forth below (the “Exchangeable Notes Warrants”).
The Exchangeable Notes Hedges are expected to reduce the potential dilutive effect on the Company’s common stock upon any exchange of Exchangeable Notes and/or offset any cash payment Match Group FinanceCo, Inc., Match Group FinanceCo 2, Inc. or Match Group FinanceCo 3, Inc. is required to make in excess of the principal amount of the exchanged notes. The Exchangeable Notes Warrants have a dilutive effect on the Company’s common stock to the extent that the market price per share of the Company common stock exceeds their respective strike prices.
The following tables present details of the Exchangeable Notes Hedges and Warrants outstanding at March 31, 2022:
Number of Shares(a)
Approximate Equivalent Exchange Price per Share(a)
(Shares in millions)
2022 Exchangeable Notes Hedge1.9$43.99 
2026 Exchangeable Notes Hedge6.6$87.52 
2030 Exchangeable Notes Hedge6.8$84.22 
Number of Shares(a)
Weighted Average Strike Price per Share(a)
(Shares in millions)
2022 Exchangeable Notes Warrants2.4$68.22 
2026 Exchangeable Notes Warrants6.6$134.76 
2030 Exchangeable Notes Warrants6.8$134.82 
______________________
(a)Subject to adjustment upon the occurrence of specified events.
19


MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
NOTE 5—ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table presents the components of accumulated other comprehensive loss. For the three months ended March 31, 2022 and 2021, the Company’s accumulated other comprehensive loss relates to foreign currency translation adjustments.
Three Months Ended March 31,
20222021
(In thousands)
Balance at January 1$(223,754)$(81,454)
Other comprehensive loss
(45,463)(20,576)
Balance at March 31$(269,217)$(102,030)
At both March 31, 2022 and 2021, there was no tax benefit or provision on the accumulated other comprehensive loss.
NOTE 6—EARNINGS PER SHARE
The following table sets forth the computation of the basic and diluted earnings per share attributable to Match Group shareholders:
Three Months Ended March 31,
20222021
BasicDilutedBasicDiluted
(In thousands, except per share data)
Numerator
Net earnings$180,607 $180,607 $173,848 $173,848 
Net (earnings) loss attributable to noncontrolling interests(74)(74)402 402 
Impact from subsidiaries’ dilutive securities
— (98)— (467)
Interest on dilutive Exchangeable Notes, net of income tax(a)
— 3,339 — 4,075 
Net earnings attributable to Match Group, Inc. shareholders
$180,533 $183,774 $174,250 $177,858 
Denominator
Weighted average basic shares outstanding284,459 284,459 268,649 268,649 
Dilutive securities(b)(c)
— 7,116 — 16,774 
Dilutive shares from Exchangeable Notes, if-converted(a)
— 15,327 — 25,162 
Denominator for earnings per share—weighted average shares(b)(c)
284,459 306,902 268,649 310,585 
Earnings per share:
Earnings per share attributable to Match Group, Inc. shareholders$0.63 $0.60 $0.65 $0.57 
______________________
(a)The Company uses the if-converted method for calculating the dilutive impact of the outstanding Exchangeable Notes. For the three months ended March 31, 2022 and 2021, the Company adjusted ne