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

May 8, 2024 4:07 PM
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As filed with the Securities and Exchange Commission on May 8, 2024
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, 2024
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
Match Group and related brands image.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 May 3, 2024, there were 265,668,115 shares of common stock outstanding.



TABLE OF CONTENTS
  Page
Number


2


Table of Contents


PART I
FINANCIAL INFORMATION
Item 1.    Consolidated Financial Statements
MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited)
 March 31, 2024December 31, 2023
(In thousands, except share data)
ASSETS  
Cash and cash equivalents$914,929 $862,440 
Short-term investments5,938 6,200 
Accounts receivable, net of allowance of $603 and $603, respectively
225,129 298,648 
Other current assets103,879 104,023 
Total current assets1,249,875 1,271,311 
Property and equipment, net of accumulated depreciation and amortization of $262,841 and $249,223, respectively
187,749 194,525 
Goodwill2,286,283 2,342,612 
Intangible assets, net of accumulated amortization of $127,200 and $121,489, respectively
287,527 305,746 
Deferred income taxes249,660 259,803 
Other non-current assets142,359 133,889 
TOTAL ASSETS$4,403,453 $4,507,886 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
LIABILITIES  
Accounts payable$21,193 $13,187 
Deferred revenue198,543 211,282 
Accrued expenses and other current liabilities299,154 307,299 
Total current liabilities518,890 531,768 
Long-term debt, net3,843,901 3,842,242 
Income taxes payable24,658 24,860 
Deferred income taxes22,072 26,302 
Other long-term liabilities101,604 101,787 
Commitments and contingencies
SHAREHOLDERS’ EQUITY  
Common stock; $0.001 par value; authorized 1,600,000,000 shares; 291,894,753 and 289,631,352 shares issued; and 265,536,852 and 268,890,470 outstanding at March 31, 2024 and December 31, 2023, respectively
292 290 
Additional paid-in capital8,585,987 8,529,200 
Retained deficit(7,007,831)(7,131,029)
Accumulated other comprehensive loss(454,933)(385,471)
Treasury stock; 26,357,901 and 20,740,882 shares, respectively
(1,231,325)(1,032,538)
Total Match Group, Inc. shareholders’ equity
(107,810)(19,548)
Noncontrolling interests138 475 
Total shareholders’ equity
(107,672)(19,073)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $4,403,453 $4,507,886 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
3


Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
 Three Months Ended March 31,
 20242023
 (In thousands, except per share data)
Revenue$859,647 $787,124 
Operating costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)
256,742 240,010 
Selling and marketing expense165,301 137,359 
General and administrative expense106,241 90,611 
Product development expense115,737 98,186 
Depreciation20,521 10,552 
Amortization of intangibles10,367 12,117 
Total operating costs and expenses674,909 588,835 
Operating income
184,738 198,289 
Interest expense(40,353)(39,351)
Other income, net
9,474 3,392 
Earnings before income taxes
153,859 162,330 
Income tax provision
(30,625)(41,639)
Net earnings
123,234 120,691 
Net (earnings) loss attributable to noncontrolling interests
(36)118 
Net earnings attributable to Match Group, Inc. shareholders
$123,198 $120,809 
Net earnings per share attributable to Match Group, Inc. shareholders:
     Basic$0.46 $0.43 
     Diluted$0.44 $0.42 
Stock-based compensation expense by function:
Cost of revenue$1,711 $1,317 
Selling and marketing expense2,838 1,913 
General and administrative expense24,211 13,117 
Product development expense35,060 25,216 
Total stock-based compensation expense$63,820 $41,563 
    
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
4


Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE OPERATIONS (Unaudited)
Three Months Ended March 31,
20242023
(In thousands)
Net earnings
$123,234 $120,691 
Other comprehensive loss, net of tax
Change in foreign currency translation adjustment
(69,498)(34,444)
Total other comprehensive loss
(69,498)(34,444)
Comprehensive income
53,736 86,247 
Components of comprehensive (income) loss attributable to noncontrolling interests:
Net (earnings) loss attributable to noncontrolling interests
(36)118 
Change in foreign currency translation adjustment attributable to noncontrolling interests
36 3 
Comprehensive loss attributable to noncontrolling interests
 121 
Comprehensive income attributable to Match Group, Inc. shareholders
$53,736 $86,368 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
5


Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited)
Three Months Ended March 31, 2024
Match Group Shareholders’ Equity
 
Common Stock $0.001 Par Value
 
 $SharesAdditional
Paid-in
Capital
Retained (Deficit) Earnings
Accumulated Other Comprehensive Loss
Treasury StockTotal Match Group Shareholders’ EquityNoncontrolling InterestsTotal
Shareholders’
Equity
 (In thousands)
Balance as of December 31, 2023
$290 289,631 $8,529,200 $(7,131,029)$(385,471)$(1,032,538)$(19,548)$475 $(19,073)
Net earnings for the three months ended March 31, 2024
— — — 123,198 — — 123,198 36 123,234 
Other comprehensive loss, net of tax
— — — — (69,462)— (69,462)(36)(69,498)
Stock-based compensation expense
— — 65,726 — — — 65,726 — 65,726 
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes2 2,264 (8,338)— — — (8,336)— (8,336)
Purchase of noncontrolling interest— — 397 — — — 397 (1,465)(1,068)
Purchase of treasury stock— — — — — (198,787)(198,787)— (198,787)
Adjustment of noncontrolling interests to fair value— — (996)— — — (996)996  
Noncontrolling interest created by the exercise of subsidiary denominated equity awards— — — — — — — 132 132 
Other— — (2)— — — (2)— (2)
Balance as of March 31, 2024
$292 291,895 $8,585,987 $(7,007,831)$(454,933)$(1,231,325)$(107,810)$138 $(107,672)
6


Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (Unaudited) (Continued)
Three Months Ended March 31, 2023
Match Group Shareholders’ Equity
Common Stock $0.001 Par Value
Redeemable
Noncontrolling
Interests
$SharesAdditional Paid-in CapitalRetained (Deficit) Earnings
Accumulated Other Comprehensive Loss
Treasury StockTotal Match Group Shareholders’ EquityNoncontrolling InterestsTotal
Shareholders’
Equity
(In thousands)
Balance as of December 31, 2022$ $287 286,817 $8,273,637 $(7,782,568)$(369,182)$(482,049)$(359,875)$994 $(358,881)
Net (loss) earnings for the three months ended March 31, 2023
(184)— — — 120,809 — — 120,809 66 120,875 
Other comprehensive loss, net of tax
— — — — — (34,441)— (34,441)(3)(34,444)
Stock-based compensation expense— — — 44,400 — — — 44,400 — 44,400 
Issuance of Match Group common stock pursuant to stock-based awards, net of withholding taxes— 1 1,394 9,146 — — — 9,147 — 9,147 
Adjustment of redeemable noncontrolling interests to fair value184 — — (184)— — — (184)— (184)
Purchase of noncontrolling interest— — — 734 — — — 734 (3,157)(2,423)
Purchase of treasury stock— — — — — — (113,006)(113,006)— (113,006)
Adjustment of noncontrolling interests to fair value— — — (2,100)— — — (2,100)2,100  
Other— — — (2)— — — (2)— (2)
Balance as of March 31, 2023$ $288 288,211 $8,325,631 $(7,661,759)$(403,623)$(595,055)$(334,518)$ $(334,518)
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
7


Table of Contents

MATCH GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
 Three Months Ended March 31,
 20242023
 (In thousands)
Net earnings$123,234 $120,691 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Stock-based compensation expense63,820 41,563 
Depreciation20,521 10,552 
Amortization of intangibles10,367 12,117 
Deferred income taxes6,777 11,711 
Other adjustments, net3,585 2,237 
Changes in assets and liabilities
Accounts receivable71,674 (65,728)
Other assets7,118 (1,282)
Accounts payable and other liabilities(22,538)(34,427)
Income taxes payable and receivable11,051 19,788 
Deferred revenue(11,506)3,165 
Net cash provided by operating activities284,103 120,387 
Cash flows from investing activities:
Capital expenditures(17,234)(19,843)
Other, net(8,814)53 
Net cash used in investing activities(26,048)(19,790)
Cash flows from financing activities:  
Proceeds from issuance of common stock pursuant to stock-based awards1,255 11,198 
Withholding taxes paid on behalf of employees on net settled stock-based awards
(9,591)(2,051)
Purchase of treasury stock
(188,593)(112,502)
Purchase of noncontrolling interests(737)(1,577)
Other, net(1,953) 
Net cash used in financing activities(199,619)(104,932)
Total cash provided (used)58,436 (4,335)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(5,947)1,820 
Net increase (decrease) in cash, cash equivalents, and restricted cash52,489 (2,515)
Cash, cash equivalents, and restricted cash at beginning of period862,440 572,516 
Cash, cash equivalents, and restricted cash at end of period$914,929 $570,001 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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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®, Hinge®, Match®, Meetic®, OkCupid®, Pairs™, Plenty Of Fish®, Azar®, BLK®, 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, 2023.
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”) equity securities guidance, 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 similar rights to the equity securities held by the Company. The Company reviews its equity securities
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
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, 2023 was $211.3 million. During the three months ended March 31, 2024, the Company recognized $167.0 million of revenue that was included in the deferred revenue balance as of December 31, 2023. The current deferred revenue balance at March 31, 2024 is $198.5 million. At March 31, 2024 and December 31, 2023, 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.
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
Disaggregation of Revenue
The following table presents disaggregated revenue:
 Three Months Ended March 31,
 20242023
 (In thousands)
Direct Revenue:
Americas$450,247 $405,927 
Europe239,359 212,516 
APAC and Other155,693 155,995 
Total Direct Revenue845,299 774,438 
Indirect Revenue (principally advertising revenue)
14,348 12,686 
Total Revenue$859,647 $787,124 
Direct Revenue:
Tinder$481,487 $441,146 
Hinge123,753 82,753 
Match Group Asia(a)
71,459 75,661 
Evergreen & Emerging(b)
168,600 174,878 
Total Direct Revenue$845,299 $774,438 
______________________
(a)Consists of the brands primarily focused on Asia and the Middle East including Pairs™ and Azar®.
(b)Consists primarily of the brands Match®, Meetic®, OkCupid®, Plenty Of Fish®, and a number of demographically focused brands.
Recent Accounting Pronouncements
Accounting pronouncements not yet adopted by the Company
In November 2023, the FASB issued Accounting Standard Update (“ASU”) No. 2023-07, which requires disclosure of significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. The additional disclosures required in ASU No. 2023-07 also apply to entities with only one segment. Additionally, ASU No. 2023-07 requires the disclosure of the title and position of the Chief Operating Decision Maker. ASU No. 2023-07 does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective on a retrospective basis for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We expect ASU No. 2023-07 to only impact our disclosures with no impacts to our results of operations, cash flows, or financial condition.
In December 2023, the FASB issued ASU No. 2023-09, which focuses on the income tax rate reconciliation and income taxes paid. ASU No. 2023-09 requires a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold on an annual basis. In addition, entities are required to disclose income taxes paid, net of refunds received, disaggregated by federal, state/local, and foreign, and by jurisdiction, if the amount is at least 5% of total income tax payments, net of refunds received. The new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU No. 2023-09
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all periods presented. We expect ASU No. 2023-09 to only impact our disclosures with no impacts to our results of operations, cash flows, or financial condition.
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, 2024 and 2023, the Company recorded an income tax provision of $30.6 million and $41.6 million, respectively. The effective tax rate for the three-month period in 2024 of 20% was lower than the statutory rate primarily due to the lower tax rate on U.S. income derived from foreign sources and the benefit realized upon the conclusion of certain state income tax audits. These decreases were partially offset by state income taxes, nondeductible stock-based compensation, and unfavorable tax adjustments upon the vesting of certain stock-based awards due to a lower stock price on the date the awards vested compared to the grant date fair value of such awards. The effective tax rate for the three month-period in 2023 of 26% was higher than the U.S. statutory federal rate primarily due to unfavorable tax adjustments upon the vesting of certain stock-based awards due to a lower stock price on the date the awards vested compared to the grant date fair value of such awards. This was partially offset by a lower 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 Company is open to U.S. federal audit for tax years after December 31, 2019, and 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 March 31, 2024 and December 31, 2023, unrecognized tax benefits, including interest and penalties, were $39.1 million and $45.8 million, respectively. If unrecognized tax benefits at March 31, 2024 are subsequently recognized, income tax expense would be reduced by $36.3 million, net of related deferred tax assets and interest. The comparable amount as of December 31, 2023 was $41.0 million. The Company believes that it is reasonably possible that its unrecognized tax benefits could decrease by $1.2 million by March 31, 2025 due to expirations of statutes of limitations, 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, 2024 and 2023 were not material. At March 31, 2024 and December 31, 2023, noncurrent income taxes payable includes accrued interest and penalties of $0.6 million and $0.9 million, respectively.
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
NOTE 3—FINANCIAL INSTRUMENTS
Equity securities without readily determinable fair values
At March 31, 2024 and December 31, 2023, the carrying value of the Company’s investments in equity securities without readily determinable fair values totaled $19.3 million and $14.3 million, respectively, 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, 2024 were $2.1 million. For both the three months ended March 31, 2024 and 2023, 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, 2024 and December 31, 2023, the Company has elected the measurement alternative. For the three months ended March 31, 2024 and 2023, 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.
The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:
 March 31, 2024
 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$215,371 $ $215,371 
Time deposits 100,000 100,000 
Short-term investments:
Time deposits 5,938 5,938 
Total$215,371 $105,938 $321,309 
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
 December 31, 2023
 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$125,659 $ $125,659 
Time deposits 75,000 75,000 
Short-term investments:
Time deposits 6,200 6,200 
Total$125,659 $81,200 $206,859 
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.
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, 2024December 31, 2023
Carrying ValueFair ValueCarrying ValueFair Value
(In thousands)
Long-term debt, net (a) (b)
$(3,843,901)$(3,556,289)$(3,842,242)$(3,586,177)
______________________
(a)At March 31, 2024 and December 31, 2023, the carrying value of long-term debt, net includes unamortized original issue discount and debt issuance costs of $31.1 million and $32.8 million, respectively.
(b)At March 31, 2024, the fair value of the 2026 Exchangeable Notes and 2030 Exchangeable Notes (described in “Note 4—Long-term Debt, net”) is $525.6 million and $495.6 million, respectively. At December 31, 2023, the fair value of the 2026 Exchangeable Notes and 2030 Exchangeable Notes is $517.2 million and $500.3 million, respectively.
At March 31, 2024 and December 31, 2023, the fair value of long-term debt, net, is estimated using observable market prices or indices for similar liabilities, which are Level 2 inputs.
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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, 2024December 31, 2023
(In thousands)
Credit Facility due March 20, 2029(a)
$ $ 
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
500,000 500,000 
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 debt3,875,000 3,875,000 
Less: Unamortized original issue discount
3,252 3,479 
Less: Unamortized debt issuance costs27,847 29,279 
Total long-term debt, net$3,843,901 $3,842,242 
______________________
(a)Subject to springing maturity, described below.
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.
On March 20, 2024, we entered into an amendment to reduce the borrowing availability under the Credit Facility from $750 million to $500 million and extend the maturity date of the Credit Facility. The maturity date of the Credit Facility is the earlier of (x) March 20, 2029 and (y) the date that is 91 days prior to the maturity date of the Term Loan or the existing senior notes due 2027, 2028, or 2029, or any new indebtedness used to refinance the Term Loan or such senior notes that matures prior to the date that is 91 days after March 20, 2029, in each case if and only if at least $250 million in aggregate principal amount of such debt is outstanding on such date.
At March 31, 2024 and December 31, 2023, the Credit Facility has a borrowing capacity of $500 million and $750 million, respectively. At both March 31, 2024 and December 31, 2023, there were no outstanding borrowings, and $0.4 million in outstanding letters of credit. At March 31, 2024 and December 31, 2023, there is $499.6 million and $749.6 million, respectively, 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, 2024. Borrowings under the Credit Facility bear interest, at MG Holdings II’s option, at a base rate or a term secured overnight financing rate plus an applicable adjustment (“Adjusted Term SOFR”), 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.
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
At both March 31, 2024 and December 31, 2023, the outstanding balance on the Term Loan was $425 million. The Term Loan bears interest at Adjusted Term SOFR plus 1.75% and the applicable rate was 7.23% and 7.27% at March 31, 2024 and December 31, 2023, 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 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 consolidated net leverage ratio exceeds 4.25 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. 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. 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. 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, 2024. 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.
The Senior Notes all rank equally in right of payment.
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
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 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
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).
No 2026 or 2030 Exchangeable Notes were presented for exchange during the three months ended March 31, 2024. Neither of the 2026 and 2030 Exchangeable Notes were exchangeable as of March 31, 2024.
At both March 31, 2024 and December 31, 2023, there was no value in excess of the principal of each of the 2026 and 2030 Exchangeable Notes outstanding on an if-converted basis using the Company’s stock price on March 31, 2024 and December 31, 2023, respectively.
Additionally, all or any portion of the 2026 Exchangeable Notes may be redeemed for cash, at the issuer’s option, at any time, and for the 2030 Exchangeable Notes on or after July 20, 2026, 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
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
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, 2024 and December 31, 2023:
March 31, 2024December 31, 2023
2026 Exchangeable Notes2030 Exchangeable Notes2026 Exchangeable Notes2030 Exchangeable Notes
(In thousands)
Principal$575,000 $575,000 $575,000 $575,000 
Less: Unamortized debt issuance costs3,578 6,372 3,976 6,630 
Net carrying value included in long-term debt, net$571,422 $568,628 $571,024 $568,370 
The following table sets forth interest expense recognized related to the Exchangeable Notes:
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
2026 Exchangeable Notes2030 Exchangeable Notes2026 Exchangeable Notes2030 Exchangeable Notes
(In thousands)
Contractual interest expense$1,258 $2,875 $1,258 $2,875 
Amortization of debt issuance costs398 258 391 250 
Total interest expense recognized$1,656 $3,133 $1,649 $3,125 
The effective interest rates for the 2026 and 2030 Exchangeable Notes are 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 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.
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
The following tables present details of the Exchangeable Notes Hedges and Warrants outstanding at March 31, 2024:
Number of Shares(a)
Approximate Equivalent Exchange Price per Share(a)
(Shares in millions)
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)
2026 Exchangeable Notes Warrants6.6$134.76 
2030 Exchangeable Notes Warrants6.8$134.82 
______________________
(a)Subject to adjustment upon the occurrence of specified events.
NOTE 5—ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table presents the components of accumulated other comprehensive loss. For the three months ended March 31, 2024 and 2023, the Company’s accumulated other comprehensive loss relates to foreign currency translation adjustments.
Three Months Ended March 31,
20242023
(In thousands)
Balance at January 1$(385,471)$(369,182)
Other comprehensive loss
(69,462)(34,441)
Balance at March 31$(454,933)$(403,623)
At both March 31, 2024 and 2023, there was no tax benefit or provision on the accumulated other comprehensive loss.
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
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,
20242023
BasicDilutedBasicDiluted
(In thousands, except per share data)
Numerator
Net earnings
$123,234 $123,234 $120,691 $120,691 
Net (earnings) loss attributable to noncontrolling interests(36)(36)118 118 
Impact from subsidiaries’ dilutive securities
— (8)— (30)
Interest on dilutive Exchangeable Notes, net of income tax(a)
— 3,171 — 3,179 
Net earnings attributable to Match Group, Inc. shareholders
$123,198 $126,361 $120,809 $123,958 
Denominator
Weighted average basic shares outstanding268,142 268,142 279,260 279,260 
Dilutive securities(b)(c)
— 4,672 — 3,993 
Dilutive shares from Exchangeable Notes, if-converted(a)
— 13,397 — 13,397 
Denominator for earnings per share—weighted average shares(b)(c)
268,142 286,211 279,260 296,650 
Earnings per share:
Earnings per share attributable to Match Group, Inc. shareholders$0.46 $0.44 $0.43 $0.42 
______________________
(a)The Company uses the if-converted method for calculating the dilutive impact of the outstanding Exchangeable Notes. For both the three months ended March 31, 2024 and 2023, the Company adjusted net earnings attributable to Match Group, Inc. shareholders for the cash interest expense, net of income taxes, incurred on the 2026 and 2030 Exchangeable Notes. Dilutive shares were also included for the same series of Exchangeable Notes.
(b)If the effect is dilutive, weighted average common shares outstanding include the incremental shares that would be issued upon the assumed exercise of stock options, warrants, and subsidiary denominated equity and vesting of restricted stock units. For the three months ended March 31, 2024 and 2023, 19.2 million and 17.3 million potentially dilutive securities, respectively, are excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.
(c)Market-based awards and performance-based restricted stock units (“PSUs”) are considered contingently issuable shares. Shares issuable upon exercise or vesting of market-based awards and PSUs are included in the denominator for earnings per share if (i) the applicable market or performance condition(s) has been met and (ii) the inclusion of the market-based awards and PSUs is dilutive for the respective reporting periods. For the three months ended March 31, 2024 and 2023, 3.7 million and 2.6 million shares, respectively, underlying market-based awards and PSUs, were excluded from the calculation of diluted earnings per share because the market or performance conditions had not been met.
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
NOTE 7—CONSOLIDATED FINANCIAL STATEMENT DETAILS
Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet to the total amounts shown in the consolidated statement of cash flows:
March 31, 2024December 31, 2023March 31, 2023December 31, 2022
(In thousands)
Cash and cash equivalents$914,929 $862,440 $569,879 $572,395 
Restricted cash included in other current assets
  122 121 
Total cash, cash equivalents, and restricted cash as shown on the consolidated statement of cash flows
$914,929 $862,440 $570,001 $572,516 
NOTE 8—CONTINGENCIES
In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See “Note 2—Income Taxes” for additional information related to income tax contingencies.
FTC Lawsuit Against Match Group
On September 25, 2019, the United States Federal Trade Commission (the “FTC”) filed a lawsuit in federal district court in Texas against the company formerly known as Match Group, Inc. See FTC v. Match Group, Inc., No. 3:19:cv-02281-K (Northern District of Texas). The complaint alleges that, prior to mid-2018, for marketing purposes Match.com notified non-paying users that other users were attempting to communicate with them, even though Match.com had identified those subscriber accounts as potentially fraudulent, thereby inducing non-paying users to subscribe and exposing them to the risk of fraud should they subscribe. The complaint also challenges the adequacy of Match.com’s disclosure of the terms of its six-month guarantee, the efficacy of its cancellation process, and its handling of chargeback disputes. The complaint seeks among other things permanent injunctive relief, civil penalties, restitution, disgorgement, and costs of suit. On March 24, 2022, the court granted our motion to dismiss with prejudice on Claims I and II of the complaint relating to communication notifications and granted our motion to dismiss with respect to all requests for monetary damages on Claims III and IV relating to the guarantee offer and chargeback policy. On July 19, 2022, the FTC filed an amended complaint adding Match Group, LLC as a defendant. On September 11, 2023, both parties filed motions for summary judgment. Our consolidated financial statements do not reflect any provision for a loss with respect to this matter, as we do not believe there is a probable likelihood of an unfavorable outcome. Further, we do not believe that there is a reasonable possibility of an exposure to loss that would be material to our business. We believe we have strong defenses to the FTC’s claims regarding Match.com’s practices, policies, and procedures and will continue to defend vigorously against them.
Irish Data Protection Commission Inquiry Regarding Tinder’s Practices
On February 3, 2020, we received a letter from the Irish Data Protection Commission (the “DPC”) notifying us that the DPC had commenced an inquiry examining Tinder’s compliance with the EU’s General Data
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MATCH GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
Protection Regulation (“GDPR”), focusing on Tinder’s processes for handling access and deletion requests and Tinder’s user data retention policies. On January 8, 2024, the DPC provided us with a preliminary draft decision alleging that certain of Tinder’s access and retention policies, largely relating to protecting the safety and privacy of Tinder’s users, violate GDPR requirements. We filed our response to the preliminary draft decision on March 15, 2024. Our consolidated financial statements do not reflect any provision for a loss with respect to this matter, as we do not believe there is a probable likelihood of an unfavorable outcome. However, based on the preliminary draft decision and giving due consideration to the uncertainties inherent in this process, there is at least a reasonable possibility of an exposure to loss, which could be anywhere between a nominal amount and $60 million, which we do not believe would be material to our business. We believe we have strong defenses to these claims and will defend vigorously against them.
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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
Key Terms:
Operating and financial metrics:
Americas includes North America, Central America, South America, and the Caribbean islands.
Europe includes continental Europe, the British Isles, Iceland, Greenland, and Russia (ceased operations in June 2023), but excludes Turkey (which is included in APAC and Other).
APAC and Other includes Asia, Australia, the Pacific islands, the Middle East, and Africa.
Match Group Asia (“MG Asia”) consists of the brands primarily focused on Asia and the Middle East, including Pairs™ and Azar®.
Evergreen & Emerging (“E&E”) consists primarily of the brands Match®, Meetic®, OkCupid®, Plenty Of Fish®, and a number of demographically focused brands.
Direct Revenue is revenue that is received directly from end users of our services and includes both subscription and à la carte revenue.
Indirect Revenue is revenue that is not received directly from an end user of our services, substantially all of which is advertising revenue.
Payers are unique users at a brand level in a given month from whom we earned Direct Revenue. When presented as a quarter-to-date or year-to-date value, Payers represents the average of the monthly values for the respective period presented. At a consolidated level, duplicate Payers may exist when we earn revenue from the same individual at multiple brands in a given month, as we are unable to identify unique individuals across brands in the Match Group portfolio.
Revenue Per Payer (“RPP”) is the average monthly revenue earned from a Payer and is Direct Revenue for a period divided by the Payers in the period, further divided by the number of months in the period.
Operating costs and expenses:
Cost of revenue - consists primarily of the amortization of in-app purchase fees, hosting fees, compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in data center and customer care functions, live video costs, credit card processing fees, and data center rent, energy, and bandwidth costs. In-app purchase fees are monies paid to Apple and Google in connection with the processing of in-app purchases of subscriptions and service features through the in-app payment systems provided by Apple and Google.
Selling and marketing expense - consists primarily of advertising expenditures and compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in selling and marketing, and sales support functions. Advertising expenditures include online marketing, including fees paid to search engines and social media sites, offline marketing, and production of advertising content.
General and administrative expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, and human resources, fees for professional services (including transaction-related costs for acquisitions), and facilities costs.
Product development expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing, and enhancement of product offerings and related technology.
Long-term debt:
Credit Facility - The revolving credit facility under the credit agreement of MG Holdings II. On March 20, 2024, we entered into an amendment to reduce the borrowing availability under the Credit Facility
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from $750 million to $500 million and extend the maturity date of the Credit Facility. As of March 31, 2024, there was $0.4 million outstanding in letters of credit and $499.6 million of availability under the Credit Facility. As of December 31, 2023, there was $0.4 million outstanding in letters of credit and $749.6 million of availability under the Credit Facility.
Term Loan - The term loan facility under the credit agreement of MG Holdings II. At December 31, 2023, the Term Loan bore interest at a term secured overnight financing rate plus an applicable adjustment (“Adjusted Term SOFR”) plus 1.75% and the then applicable rate was 7.27%. As of March 31, 2024, the applicable rate was 7.23% and $425 million was outstanding.
5.00% Senior Notes - MG Holdings II’s 5.00% Senior Notes due December 15, 2027, with interest payable each June 15 and December 15, which were issued on December 4, 2017. As of March 31, 2024, $450 million aggregate principal amount was outstanding.
4.625% Senior Notes - MG Holdings II’s 4.625% Senior Notes due June 1, 2028, with interest payable each June 1 and December 1, which were issued on May 19, 2020. As of March 31, 2024, $500 million aggregate principal amount was outstanding.
5.625% Senior Notes - MG Holdings II’s 5.625% Senior Notes due February 15, 2029, with interest payable each February 15 and August 15, which were issued on February 15, 2019. As of March 31, 2024, $350 million aggregate principal amount was outstanding.
4.125% Senior Notes - MG Holdings II’s 4.125% Senior Notes due August 1, 2030, with interest payable each February 1 and August 1, which were issued on February 11, 2020. As of March 31, 2024, $500 million aggregate principal amount was outstanding.
3.625% Senior Notes - MG Holdings II’s 3.625% Senior Notes due October 1, 2031, with interest payable each April 1 and October 1, which were issued on October 4, 2021. As of March 31, 2024, $500 million aggregate principal amount was outstanding.
2026 Exchangeable Notes - The 0.875% Exchangeable Senior Notes due June 15, 2026 issued by Match Group FinanceCo 2, Inc., a subsidiary of the Company, which are exchangeable into shares of the Company's common stock. Interest is payable each June 15 and December 15. As of March 31, 2024, $575 million aggregate principal amount was outstanding.
2030 Exchangeable Notes - The 2.00% Exchangeable Senior Notes due January 15, 2030 issued by Match Group FinanceCo 3, Inc., a subsidiary of the Company, which are exchangeable into shares of the Company's common stock. Interest is payable each January 15 and July 15. As of March 31, 2024, $575 million aggregate principal amount was outstanding.
Non-GAAP financial measure:
Adjusted Operating Income - is a Non-GAAP financial measure. See “Non-GAAP Financial Measures” below for the definition of Adjusted Operating Income and a reconciliation of net earnings attributable to Match Group, Inc. shareholders to operating income and Adjusted Operating Income.
Management Overview
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®, Hinge®, Match®, Meetic®, OkCupid®, Pairs™, Plenty Of Fish®, Azar®, BLK®, 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.
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.
For a more detailed description of the Company’s operating businesses, see “Item 1. Business” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
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Additional Information
Investors and others should note that we announce material financial and operational information to our investors using our investor relations website at https://ir.mtch.com, our newsroom website at https://mtch.com/news, Tinder’s newsroom website www.tinderpressroom.com, Hinge’s newsroom website at https://hinge.co/press, Securities and Exchange Commission (“SEC”) filings, press releases, and public conference calls. We use these channels as well as social media to communicate with our users and the public about our company, our services, and other issues. It is possible that the information we post on social media could be deemed to be material information. Accordingly, investors, the media, and others interested in our company should monitor the websites listed above and the social media channels listed on our investor relations website in addition to following our SEC filings, press releases, and public conference calls. Neither the information on our website, nor the information on the website of any Match Group business, is incorporated by reference into this report, or into any other filings with, or into any other information furnished or submitted to, the SEC.
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Results of Operations for the three months ended March 31, 2024 compared to the three months ended March 31, 2023
Revenue
Three Months Ended March 31,
2024$ Change% Change2023
(In thousands, except RPP)
Direct Revenue:
Americas$450,247 $44,320 11%$405,927 
Europe239,359 26,843 13%212,516 
APAC and Other155,693 (302)—%155,995 
Total Direct Revenue845,299 70,861 9%774,438 
Indirect Revenue14,348 1,662 13%12,686 
Total Revenue$859,647 $72,523 9%$787,124 
Direct Revenue
Tinder$481,487 $40,341 9%$441,146 
Hinge123,753 41,000 50%82,753 
MG Asia71,459 (4,202)(6)%75,661 
Evergreen & Emerging168,600 (6,278)(4)%174,878 
Total Direct Revenue$845,299 $70,861 9%$774,438 
Percentage of Total Revenue:
Direct Revenue:
Americas52%51%
Europe28%27%
APAC and Other18%20%
Total Direct Revenue98%98%
Indirect Revenue2%2%
Total Revenue100%100%
Payers:
Americas6,869 (1,120)(14)%7,989 
Europe4,499 102 2%4,397 
APAC and Other3,562 74 2%3,488 
Total14,930 (944)(6)%15,874 
(Change calculated using non-rounded numbers)
RPP:
Americas$21.85 $4.91 29%$16.94 
Europe$17.73 $1.62 10%$16.11 
APAC and Other$14.57 $(0.34)(2)%$14.91 
Total$18.87 $2.61 16%$16.26 
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Americas Direct Revenue grew $44.3 million, or 11%, in 2024 versus 2023, driven by 29% growth in RPP, partially offset by a 14% decrease in Payers. RPP growth was driven by higher average prices paid for subscriptions per Payer at Tinder and Hinge due to pricing optimizations and weekly subscription offerings, both of which we implemented beginning in the first half of 2023. The decrease in Payers was primarily driven by decreases at Tinder due to pricing optimizations and a decrease in users, as well as decreases in Payers at certain E&E brands, partially offset by increases at Hinge.
Europe Direct Revenue increased $26.8 million, or 13%, in 2024 versus 2023, driven by 10% growth in RPP and a 2% increase in Payers. RPP growth was driven by higher average prices paid for subscriptions at Tinder.
APAC and Other Direct Revenue decreased $0.3 million in 2024 versus 2023, driven by decreases at MG Asia primarily due to the strength of the U.S. dollar compared to the Turkish Lira and Japanese Yen, partially offset by increases in Payers at Hinge and Tinder.
Tinder Direct Revenue grew 9% in 2024 versus 2023, driven by growth in RPP due to pricing optimizations in the U.S. market and weekly subscription offerings that were initially introduced late in the first quarter of 2023, partially offset by a decrease in Payers attributed to the pricing optimizations and a decrease in users.
Hinge Direct Revenue grew 50% in 2024 versus 2023, driven by 31% growth in Payers and 14% growth in RPP due to pricing optimizations and weekly subscription offerings at Hinge that started in the second quarter of 2023.
MG Asia Direct Revenue declined 6% in 2024 versus 2023, primarily driven by the strengthening of the U.S. dollar compared to the Turkish Lira and Japanese Yen, partially offset by a 3% increase in Payers, primarily from Azar’s expansion into Europe.
E&E Direct Revenue declined 4% in 2024 versus 2023, driven by declines in our Evergreen brands of 9% partially offset by growth at our Emerging brands of 23%.
Indirect Revenue increased due to a higher price per impression received and higher ad impressions.
Cost of revenue (exclusive of depreciation)
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
Cost of revenue$256,742 $16,732 7%$240,010 
Percentage of revenue30%30%
Cost of revenue increased 7% primarily due to an increase in in-app purchase fees of $19.8 million, partially offset by net decreases in other expenses of $3.0 million.
Selling and marketing expense
For the three months ended March 31, 2024 compared to the three months ended March 31, 2023
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
Selling and marketing expense$165,301 $27,942 20%$137,359 
Percentage of revenue19%17%
Selling and marketing expense increased primarily due to higher marketing spend at Tinder, Hinge, and certain Emerging brands; partially offset by lower marketing spend elsewhere in the portfolio.
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General and administrative expense
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
General and administrative expense$106,241 $15,630 17%$90,611 
Percentage of revenue12%12%
General and administrative expense increased primarily due to an increase in employee compensation of $15.7 million, including stock-based compensation increases of $11.1 million as a result of lower forfeitures of equity-based awards in 2024 as compared to 2023.
Product development expense
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
Product development expense$115,737 $17,551 18%$98,186 
Percentage of revenue13%12%
Product development expense increased primarily due to an increase in compensation expense of $15.7 million related to higher headcount at Hinge and Tinder and an increase in stock-based compensation expense associated with new equity-based awards granted in the current year.
Depreciation
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
Depreciation$20,521 $9,969 94%$10,552 
Percentage of revenue2%1%
Depreciation was higher in 2024 compared to 2023 primarily due to an increase in internally developed software placed in service.
Amortization of intangibles
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
Amortization of intangibles$10,367 $(1,750)(14)%$12,117 
Percentage of revenue1%2%
Amortization of intangibles decreased primarily due to certain definite-lived intangible assets having been fully amortized in the prior year.
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Operating income and Adjusted Operating Income
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
Operating income$184,738 $(13,551)(7)%$198,289 
Percentage of revenue21%25%
Adjusted Operating Income$279,446 $16,925 6%$262,521 
Percentage of revenue33%33%
For a reconciliation of net earnings attributable to Match Group, Inc. shareholders to Adjusted Operating Income, see “Non-GAAP Financial Measures.”
Operating income decreased 7% and Adjusted Operating Income increased 6%. Operating income and Adjusted Operating Income each benefited from the increase in revenue of $72.5 million which was driven by growth at Tinder and Hinge. The benefit was partially offset by an increase in selling and marketing expense and increases in cost of revenue due to higher in-app fees. Operating income was further impacted by increases in stock-based compensation expense, primarily due to an increase in headcount and because forfeitures of equity-based awards were lower in 2024 than in 2023, and increases in depreciation expense due to increases in internally developed software placed in service.
At March 31, 2024, there was $524.4 million of unrecognized compensation cost, net of estimated forfeitures, related to equity-based awards, which is expected to be recognized over a weighted average period of approximately 2.3 years.
Interest expense
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
Interest expense$40,353 $1,002 3%$39,351 
Interest expense increased primarily due to a higher interest rate on the Term Loan in the current period.
Other income, net
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
Other income, net$9,474 $6,082 179%$3,392 
Other income, net in 2024 includes interest income of $10.0 million, partially offset by $0.5 million in net foreign currency losses.
Other income, net in 2023 includes interest income of $4.5 million, partially offset by $1.1 million in net foreign currency losses.
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Income tax provision
Three Months Ended March 31,
2024$ Change% Change2023
(Dollars in thousands)
Income tax provision$30,625 $(11,014)(26)%$41,639 
Effective income tax rate20%26%
In 2024, the income tax provision of $30.6 million represents an effective tax rate of 20%. The effective tax rate is lower than the statutory rate primarily due to the lower tax rate on U.S. income derived from foreign sources and a benefit realized upon the conclusion of certain state income tax audits. These decreases were partially offset by state income taxes, nondeductible stock compensation and unfavorable tax adjustments due upon the vesting of certain stock-based awards due to a lower stock price on the date the awards vested compared to the grant date fair value of such awards.
In 2023, the effective tax rate was higher than the U.S. federal statutory rate primarily due to unfavorable tax adjustments upon the vesting of certain stock-based awards due to a lower stock price on the date the awards vested compared to the grant date fair value of such awards. This was partially offset by a lower tax rate on U.S. income derived from foreign sources.
A number of countries have enacted or are actively drafting legislation to implement the Organization for Economic Cooperation and Development's ("OECD") international tax framework, including the Pillar II minimum tax regime. The Company analyzed the impact of enacted legislation and is continuing to monitor future developments. The enacted legislation does not have a material impact to the income tax provision.
For further details of income tax matters see “Note 2—Income Taxes” to the consolidated financial statements included in “Item 1—Consolidated Financial Statements.”
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NON-GAAP FINANCIAL MEASURES
Match Group reports Adjusted Operating Income and Revenue excluding foreign exchange effects, both of which are supplemental measures to U.S. generally accepted accounting principles (“GAAP”). Adjusted Operating Income is among the primary metrics by which we evaluate the performance of our business, on which our internal budget is based, and by which management is compensated. Revenue excluding foreign exchange effects provides a comparable framework for assessing how our business performed without the effect of exchange rate differences when compared to prior periods. We believe that investors should have access to the same set of tools that we use in analyzing our results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Match Group endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measures with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures, which we discuss below.
Adjusted Operating Income
Adjusted Operating Income is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of (i) amortization of intangible assets and impairments of goodwill and intangible assets, if applicable, and (ii) gains and losses recognized on changes in the fair value of contingent consideration arrangements, as applicable. We believe this measure is useful to analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. The above items are excluded from our Adjusted Operating Income measure because they are non-cash in nature. Adjusted Operating Income has certain limitations because it excludes the impact of certain expenses.
Non-Cash Expenses That Are Excluded From Adjusted Operating Income
Stock-based compensation expense consists principally of expense associated with the grants of stock options, restricted stock units (“RSUs”), performance-based RSUs and market-based awards. These expenses are not paid in cash, and we include the related shares in our fully diluted shares outstanding using the treasury stock method; however, performance-based RSUs and market-based awards are included only to the extent the applicable performance or market condition(s) have been met (assuming the end of the reporting period is the end of the contingency period). To the extent stock-based awards are settled on a net basis, we remit the required tax-withholding amounts from current funds.
Depreciation is a non-cash expense relating to our property and equipment and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.
Amortization of intangible assets and impairments of goodwill and intangible assets are non-cash expenses related primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as customer lists, trade names, and technology, are valued and amortized over their estimated lives. Value is also assigned to (i) acquired indefinite-lived intangible assets, which consist of trade names and trademarks, and (ii) goodwill, which are not subject to amortization. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairment charges of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.
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The following table reconciles net earnings attributable to Match Group, Inc. shareholders to operating income and Adjusted Operating Income:
Three Months Ended March 31,
20242023
(In thousands)
Net earnings attributable to Match Group, Inc. shareholders
$123,198 $120,809 
Add back:
Net earnings (loss) attributable to noncontrolling interests
36 (118)
Income tax provision
30,625 41,639 
Other income, net
(9,474)(3,392)
Interest expense
40,353 39,351 
Operating Income
184,738 198,289 
Stock-based compensation expense63,820 41,563 
Depreciation20,521 10,552 
Amortization of intangibles
10,367 12,117 
Adjusted Operating Income$279,446 $262,521 
Effects of Changes in Foreign Exchange Rates on Revenue
The impact of foreign exchange rates on the Company, due to its global reach, may be an important factor in understanding period over period comparisons if movement in exchange rates is significant. Since our results are reported in U.S. dollars, international revenue is favorably impacted as the U.S. dollar weakens relative to other currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other currencies. We believe the presentation of revenue excluding the effects from foreign exchange, in addition to reported revenue, helps improve investors’ ability to understand the Company’s performance because it excludes the impact of foreign currency volatility that is not indicative of Match Group’s core operating results.
Revenue excluding foreign exchange effects compares results between periods as if exchange rates had remained constant period over period. Revenue excluding foreign exchange effects is calculated by translating current period revenue using prior period exchange rates. The percentage change in revenue excluding foreign exchange effects is calculated by determining the change in current period revenue over prior period revenue where current period revenue is translated using prior period exchange rates.
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The following tables present the impact of foreign exchange effects on total revenue and Direct Revenue by geographic region, and RPP on a total basis and by geographic region, for the three months ended March 31, 2024, compared to the three months ended March 31, 2023:
 Three Months Ended March 31,
 2024$ Change% Change2023
 (Dollars in thousands)
Revenue, as reported$859,647 $72,523 9%$787,124 
Foreign exchange effects20,007 
Revenue excluding foreign exchange effects$879,654 $92,530 12%$787,124 
Americas Direct Revenue, as reported$450,247 $44,320 11%$405,927 
Foreign exchange effects7,232 
Americas Direct Revenue, excluding foreign exchange effects
$457,479 $51,552 13%$405,927 
Europe Direct Revenue, as reported$239,359 $26,843 13%$212,516 
Foreign exchange effects(4,843)
Europe Direct Revenue, excluding foreign exchange effects$234,516 $22,000 10%$212,516 
APAC and Other Direct Revenue, as reported$155,693 $(302)—%$155,995 
Foreign exchange effects17,481 
APAC and Other Direct Revenue, excluding foreign exchange effects$173,174 $17,179 11%$155,995 
Tinder Direct Revenue, as reported$481,487 $40,341 9%$441,146 
Foreign exchange effects10,726 
Tinder Direct Revenue, excluding foreign exchange effects$492,213 $51,067