Earnings call transcript: Match Group Q2 2025 sees revenue in line, stock dips

Match Group reported its second-quarter earnings for 2025, revealing steady revenue but a slight decline in operating income. The company met earnings per share (EPS) expectations, while revenue slightly surpassed forecasts. Despite these results, Match Group’s stock fell by 0.47% in after-hours trading, closing at $33.88. According to InvestingPro analysis, the company maintains a GOOD financial health score, with particularly strong profitability metrics. InvestingPro data suggests the stock is currently trading below its Fair Value, presenting a potential opportunity for investors.

Key Takeaways

• Match Group’s Q2 revenue was flat year-over-year at $864 million.
• Operating income decreased by 5% compared to the previous year.
• Tinder’s revenue declined, while Hinge experienced significant growth.
• Stock price fell by 0.47% in after-hours trading.
• The company is focusing on innovation and international expansion.

Company Performance

Match Group’s performance in Q2 2025 showed resilience in revenue, maintaining a flat year-over-year result at $864 million. Operating income saw a decrease of 5%, reflecting challenges in maintaining profitability. Tinder’s revenue fell by 4%, while Hinge reported a robust 25% increase, highlighting a shift in user preferences within the company’s portfolio. The company maintains an impressive gross profit margin of 71.92% and has demonstrated consistent growth with a 5-year revenue CAGR of 11%. InvestingPro subscribers can access detailed financial health metrics and 6 additional exclusive ProTips about Match Group’s performance.

Financial Highlights

• Revenue: $864 million (flat year-over-year)
• Operating Income: $194 million (down 5% year-over-year)
• Adjusted Operating Income: $290 million (down 5% year-over-year)
• Tinder Direct Revenue: $461 million (down 4% year-over-year)
• Hinge Direct Revenue: $168 million (up 25% year-over-year)

Earnings vs. Forecast

Match Group’s EPS for Q2 2025 was $0.49, meeting analyst expectations. Revenue slightly exceeded forecasts, reaching $863.7 million compared to the expected $853.39 million. The revenue surprise of 1.21% indicates a positive deviation, though not substantial enough to offset the decline in operating income.

Market Reaction

Following the earnings release, Match Group’s stock experienced a minor decline of 0.47% in after-hours trading. The stock closed at $33.88, moving away from its 52-week high of $38.77. Trading at a P/E ratio of 15.81 and maintaining strong liquidity with a current ratio of 1.62, the company shows fundamental strength despite market concerns. Management’s aggressive share buyback program and high shareholder yield, as highlighted by InvestingPro, demonstrate commitment to shareholder value. This reaction reflects investor concerns about declining operating income and the competitive pressures in the online dating market.

Outlook & Guidance

For Q3 2025, Match Group projects revenue between $910 million and $920 million, representing a 2-3% year-over-year growth. The company also anticipates adjusted operating income to be in the range of $330 million to $335 million. Analyst consensus data from InvestingPro indicates the company is expected to remain profitable this year, with targets ranging from $28 to $46 per share. Get comprehensive insights and access to the detailed Pro Research Report covering Match Group’s complete financial picture at InvestingPro. Match Group plans a $50 million investment in product testing, marketing, and geographic expansion, aiming to accelerate Hinge’s revenue growth in the latter half of 2025.

Executive Commentary

CEO Spencer Raskoff emphasized the strength of the online dating category, stating, "Rumors of the online dating category’s death are patently false." He also expressed optimism about the company’s future, noting, "We are operating like a company that is just getting started, and we believe the best chapters of this category and company are still ahead."

Risks and Challenges

• Declining operating income poses a challenge to profitability.
• Competitive pressures in the online dating market could affect market share.
• Economic uncertainties may impact user spending on premium services.
• Regulatory changes in international markets could affect operations.
• Technological disruptions could impact user engagement and retention.

Q&A

During the earnings call, analysts inquired about Match Group’s strategies to engage Gen Z users and improve trust and safety on its platforms. The company highlighted its focus on innovation and alternative payment options to enhance user experience and drive growth.

Full transcript - Match Group Inc (MTCH) Q2 2025:

Conference Operator: Welcome to the Match Group Second Quarter twenty twenty five Earnings Conference Call. All participants will be in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Tani Shelburne, Senior Vice President of Investor Relations.

Please go ahead, ma’am.

Tani Shelburne, Senior Vice President of Investor Relations, Match Group: Thank you, operator, and good morning, everyone. Today’s call will be led by CEO, Spencer Raskoff and CFO, Stephen Bailey. They’ll make a few brief remarks and then we’ll open it up for questions. Before we start, I need to remind everyone that during this call we may discuss our outlook and future performance. These forward looking statements may be preceded by words such as we expect, we believe, we anticipate, or similar statements.

These statements are subject to risks and uncertainties and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our earnings release and our periodic reports with the SEC. Also during this call, we will discuss certain non GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the published materials on our IR website. These non GAAP measures are not intended to be a substitute for our GAAP results.

With that, I’d like to turn the call over to Spencer.

Spencer Raskoff, CEO, Match Group: Thanks everyone for joining. Since stepping into the CEO role six months ago, my goal has been to confront the hard truths, take decisive action, and reshape Match Group and Tinder into an innovative product and engineering first company optimized for user outcomes and built for the long term. Over the last six months, that is exactly what we have done. This is a three phase turnaround: first, we reset the company, then we revitalize the products, and last, we undergo a resurgence with our audience and investors. Let’s start with a recap of phase one.

I spent the first few months of this reset phase learning the businesses, getting to know our teams, and rebooting the culture to emphasize urgency and accountability. Match Group is a multi brand company with over 20 different dating apps in the dating and human connection space. Some of them, like Hinge and Azar, are growing rapidly and simply need more resources and time to achieve their full potential. Other brands need more focused attention in order to improve their results. Tinder needs a lot of work and it is therefore my primary focus.

As the largest dating app in the world by revenue and usage, Tinder has unparalleled brand awareness and scale, but the product had grown stale through a lack of innovation and a focus on short term monetization. To address this, we acted quickly by installing new management, improving the product roadmap, and placing Tinder under my direct leadership given its central role in match groups performance. We started by fixing what wasn’t working at Tinder, beginning with organizational design. We flattened the org by removing over 20% of managers and reducing the size of teams. We then created autonomous product and engineering pods with greater accountability.

We retooled the culture to prioritize urgency and user outcomes. We doubled our release cadence. We now ship new code to production every week instead of every two weeks. We have changed decision making so it is informed by data but no longer burdened by analysis paralysis. We broke down silos between Tinder and other Match Group brands in order to gain the benefits of our company’s scale and centralized core functions like shared data and content moderation.

We now allow nearly 1,000 engineers at Match Group across all of our brands to see one another’s code in a shared GitHub repository, allowing for unprecedented cross brand visibility and collaboration. In addition to rolling out Cursor and other AI coding assistants globally, we created a centralized AI group building shared AI tooling for all of our brands. The most important changes at Tinder centered around our product strategy and our roadmap, which we realigned to prioritize low pressure ways to connect. More on that in a moment. An important part of phase one’s RESET was communicating with employees and shareholders about what needed to change, both internally in our culture and across our products.

I shared that directly with employees in a company wide letter in March, and then when I took the helm at Tinder followed through with new product principles that are already showing up in how we operate. We are now guided by a commitment to speed, accountability, and relentless product execution. We also aligned all of our brands around a single organizing principle, delivering real user outcomes. We now think about those outcomes across a broad spectrum from casual to serious, romantic to platonic, and we’re building apps that support the full range of user preferences. We have crystallized our brand strategy such that Hinge is singularly focused on winning in the intentioned dating category.

Tinder is focused on winning in the casual connections category. Our E and E brands are focused on unleashing the power of a unified platform and supporting communities with shared identities. And MG Asia is focused on launching and growing our brands in Asia and expanding Azar’s low pressure one on one video service globally. With phase one complete, we’re now entering phase two, Revitalize, where the products begin to reflect our renewed commitment to users and user outcomes. I’m going to talk through the rapid product acceleration at Tinder, the tremendous momentum and growth at Hinge, and how we’re scaling new brands across the portfolio with focus and intention.

Let’s start with Tinder. The product roadmap aims to solve three core user pain points authenticity, dating fatigue, and outcomes. In just the last few months, there has been a burst of energy and urgency to launch several initiatives at Tinder. We launched Double Date globally in June, giving users a new social way to connect as a pair. Rolled out six months ahead of schedule, it’s showing strong early traction with ninety two percent of double date users being 30.

Women who are pairing up are three times more likely to send alike and four times more likely to match compared to when using Tinder solo. In New Zealand, we’ve piloted an interactive matching product, sometimes referred to as daily drop or AI enabled discovery, which is a whole new way to use Tinder that goes deeper to deliver high quality personalized matches. We are expanding this to other regions shortly. We made substantial progress in trust and safety by expanding our face check service, a facial liveness check feature that helps confirm users are real and match their profile photos to new markets including California. At the same time, we’ve made strides on authenticity by enhancing our bot detection systems, reducing false positives, meaning fewer legitimate users are being mistakenly flagged, while also further reducing bad actors.

With more sophisticated detection models in place, we’re making the platform safer and more trustworthy at scale. We’ve started testing a more flexible preferences system like height as a premium preference option, which give users more control over their matches. This builds on what I shared in February, long term investments to strengthen the ecosystem and drive sustainable value. Here’s what we have planned through the end of the year on Tinder. We’re testing major updates to our recommendations engine to show users more compatible matches.

We’re rolling out contextual liking and messaging, giving users a low pressure way to engage by reacting to specific parts of a profile. This makes likes more purposeful and increases the chances of starting a real conversation. We’re on track to test version one of a redesigned see who likes you tab this fall with the goal of helping users connect with people they’re more likely to be interested in as well as to drive more revenue. We’re preparing to introduce a feature called modes, a new navigation system that lets users toggle between different dating goals and discovery experiences in real time for serendipitous connections. We’ll expand our interactive matching product with additional geographies coming online by year end.

And we’ll take the first steps towards a new UI refresh in q three with a cleaner, faster, and more modern look across the entire app. For the first time in a long time, Tinder’s pace of product innovation is strong. To track progress, I am focused on metrics connected with user outcomes, things like match rate, contact exchange, and inferred IRL meetups. Many of these deeper signals are trending up, and we’re actively exploring ways to give investors more visibility into these metrics. Turning now to Hinge.

This focus on real world outcomes applies across the portfolio, and nowhere is that clearer than at Hinge. Simply put, Hinge is crushing it. Hinge’s success should put to rest any doubts about whether the online dating category is out of favor among users. Hinge shows that a great team that is highly motivated can build great products which attract huge audiences and create significant revenue and shareholder value. This is the formula we are following in the turnaround at Hinge’s sister brand, Tinder.

And Hinge’s success gives me pride in Hinge, but also confidence in Tinder. At Hinge, everything ladders up to one north star, getting users on more great dates. It’s how we measure success and stay focused on delivering real world outcomes, and it’s been a huge driver of our success at Hinge. As a result, Hinge is well positioned to deliver accelerating year over year revenue growth in each subsequent quarter of 2025, a particularly impressive accomplishment at a business of this scale while also continuing to expand margins. So how is Hinge achieving this?

As one might expect, it’s the tried and true combination of product innovation leading to audience growth. Let’s start with product. Over the past several months, Hinge has rolled out a number of core initiatives designed to keep intentionality front and center in our users’ dating experience. We launched a new AI powered recommendation algorithm in March that is driving a 15% increase in matches and contact exchanges, driving meaningfully more dates for our users. And it’s important to note that while we are creating more value for users, we’re also observing meaningful upticks in payer conversion.

We rolled out prompt feedback, a first of its kind AI feature that gives users real time suggestions during onboarding to help them better express themselves on their profile. This reduced generic answers by a third and more than doubled thoughtful high quality responses, helping spark better first impressions and more meaningful connections. We rebuilt our notifications platform, unlocking faster delivery and robust metrics tracking. This has enabled us to launch chat specific notifications, helping users maintain momentum with matches they’re most interested in. Over the 2025, Hinge will continue to develop its product strategies to address user needs.

In the 2025, users’ Discover experience became more personalized and relevant to their preferences. Now in the second half, we’ll plan to noticeably improve recommendations throughout the app experience as more of our algorithms are powered by AI. Users will see and feel this difference in experiences, including Boost, Standouts, Most Compatible, and more. In the first half of twenty twenty five, we experimented with different coaching capabilities and dogfooded several AI powered features. In the second half, these experiences will move into test and they include warm intros, which will highlight small yet meaningful details on select profiles to give daters a deeper consideration of compatibility, and conversation starters, which offer personalized prompts to help daters break the ice and spark more meaningful conversations.

Turning now to user growth. Hinge is growing users in every geography it operates in. Hinge grew its MAU by nearly 20% year over year in the first half of the year. In European markets, its momentum continues to build as we enter our third year of expansion, with MAU up more than 60% year over year in European expansion markets in the 2025. This growth is driven by brand campaigns tailored to local dating culture, boosting awareness and perception.

While there still is much more room for growth in Europe, we’re excited to further hinge his growth ambitions with planned launches in Mexico and Brazil later this year. With strong user growth and continued product innovation, Hinge is delivering on its mission for users. It has become the most reliable growth engine in our portfolio and one of the most exciting businesses in consumer tech today. Across the rest of our portfolio, we’re applying the same focus, building for distinct audiences, prioritizing user outcomes, and driving urgency. With a stronger financial foundation from our recent restructuring, favorable foreign exchange trends, and reduced in app purchase fees through alternative payments testing, we believe we are in a position to reinvest savings while still delivering on our revenue and margin targets.

I’m excited by our plan to allocate approximately $50,000,000 in the 2025 toward product testing at Tinder, geographic expansion for Hinge, Azar, and The League, and early stage bets like Archer, Her, and a new dating app concept. These investments reflect our commitment to delivering more value to users through product innovation and to driving long term sustainable growth across the portfolio. In 2026 and 2027, we expect to enter the third phase of our product evolution: Resurgence. We intend to transform Tinder into a low pressure, serendipitous experience designed for Gen Z. We expect Hinge to extend its leadership in intentioned dating, powered by both continued AI innovation and international growth.

And across the board, we believe the category will enter a new era with renewed trust, strong demand, and long term growth potential. We are operating like a company that is just getting started, and we believe the best chapters of this category and company are still ahead. We are moving with urgency, we are obsessed with product, and we’re building for the long term. Thank you again for being with us. Now Steve will walk you through the financials.

Stephen Bailey, CFO, Match Group: Thanks, Spencer. We are pleased with the Q2 results as both Match Group total revenue and adjusted operating income exceeded the high end of our guidance, excluding a $14,000,000 charge for a preliminary settlement with the Federal Trade Commission relating to a case filed in September 2019, which we did not anticipate at the time of May earnings. The team is executing well against the three part turnaround Spencer laid out to drive sustainable long term user growth, revenue growth and profitability. In Q2, Match Group’s total revenue was $864,000,000 flat year over year, down one percent year over year on an FX neutral basis. FX was in line with our expectations at the time of our last earnings call.

Excluding the exit of our live streaming businesses, total revenue was up 1% year over year and flat year over year FXM. Payers declined five percent year over year to $14,100,000 while RPP grew 5% to $20 Indirect revenue was up 15% year over year, driven by continued strength in the advertising business. Moving to total company profitability. In Q2, Match Group’s operating income was $194,000,000 down 5% year over year, representing an OI margin of 22% and AOI was $290,000,000 down 5% year over year representing an AOI margin of 34%. Excluding the costs associated with restructuring of our operations of 18,000,000 and the legal settlement charge of $14,000,000 OI increased 10% year over year, representing an OI margin of 26% and AOI increased 5% year over year, representing an AOI margin of 37%.

Tinder direct revenue in Q2 was $461,000,000 down 4% year over year and down 5% year over year FXM. Payers declined 7% year over year to $9,000,000 and RPP grew 3% year over year to $17.14 OI in the quarter was two seventeen million dollars down 1% year over year, representing an OI margin of 46%. AOI in the quarter was $246,000,000 down 2% year over year representing an AOI margin of 52%. OI and AOI were negatively impacted by costs associated with the restructuring of our operations. Hinge continued its strong momentum in Q2 with direct revenue of $168,000,000 up 25% year over year and up 24% year over year FXN.

Pairs grew 18% year over year to 1,700,000 and RPP grew 6% to $31.96 driven by strong user growth across all markets combined with continued monetization optimization. OI was $39,000,000 in the quarter, up 29% year over year, representing an OI margin of 23 AOI was $54,000,000 up 27% year over year, representing an AOI margin of 32%. E and E direct revenue in Q2 was $148,000,000 down 8% year over year and down 10% year over year FXN. Ex Live, E and E direct revenue in Q2 was down 6% year over year and down 8% year over year FXN. Payers declined 15% year over year to $2,300,000 while RPP rose 8% year over year to 21.34 In Q2, E and E delivered an operating loss of $4,000,000 a decrease of $24,000,000 year over year and AOI of $16,000,000 down 62% year over year, representing an AOI margin of 11%.

OI and AOI were impacted negatively by the legal settlement charge and costs associated with restructuring of our operations. Match Group Asia delivered direct revenue in Q2 of $69,000,000 down 6% year over year and down 8% year over year FXM. Ex Live, direct revenue in Q2 was up 3% year over year and up 2% year over year FXM. Azar direct revenue was up 3% year over year and up 6% year over year FXM. Pairs direct revenue was up 3% year over year and down 5% year over year FXM.

Across Match Group Asia, Pairs increased 6% year over year to $1,100,000 while RPP declined 12% year over year to $21.53 partially due to the exit of Acuna mid last year. Match Group Asia had an operating loss of 300,000 in the quarter, an improvement of $5,000,000 year over year and delivered AOI of $16,000,000 up 16% year over year, representing an AOI margin of 23%. Looking at costs, including stock based compensation expense, total expenses were up two percent year over year in Q2. Cost of revenue decreased 1% year over year and represented 28% of total revenue, flat year over year, driven by reduced variable expenses from the shutdown of our live streaming services mid last year and lower web services costs at Tinder, offset by an increase in IP fees primarily at Hinge. Selling and marketing costs decreased $6,000,000 or 4% year over year due to lower marketing spend at Tinder and E and E and was down one point year over year as a percentage of total revenue at 17%.

General and administrative costs increased 19% year over year, up three points year over year as a percentage of total revenue to 16%, driven primarily by costs associated with the restructuring of our operations and the legal settlement charge. Product development costs grew 1% year over year and were flat year over year as a percentage of total revenue at 13%. Depreciation and amortization decreased by $3,000,000 year over year to $29,000,000 Turning to the balance sheet, our gross leverage was 2.8 times and net leverage was 2.5 times at the end of Q2. We ended the quarter with $340,000,000 of cash, cash equivalents and short term investments on hand. In Q2, we repurchased 7,600,000.0 of our shares at an average price of $29.45 per share on a trade date basis for a total of $225,000,000 and paid $47,000,000 in dividends, deploying nearly 120% of our free cash flow for capital return to shareholders.

We maintain our commitment to target returning 100 of free cash flow to shareholders on a full year basis through share buybacks and the dividend. Now turning to guidance. We expect Q3 total revenue for Match Group of $910,000,000 to $920,000,000 up 2% to 3% year over year. This range assumes a one point year over year tailwind from FX. FXN, we expect total revenue to be up 1% to 2% year over year.

We expect Match Group AOI of $330,000,000 to $335,000,000 in Q3, representing a year over year decline of 3% and AOI margin of 36% at the midpoint of the ranges. The expected year over year decline in AOI is driven by an expected 17% year over year increase in marketing spend due to the timing of brand campaigns at Tinder and Hinge and our savings reinvestments. For the full year 2025, we expect Match Group total revenue to be towards the high end of our guidance range, primarily due to positive FX impacts. We now expect a nearly zero five point tailwind from FX, which is nearly three points better than we expected when we provided our initial outlook in February. FXN ex Live, we expect total revenue growth to be within the initial guidance range we provided in February.

We expect year over year indirect revenue growth in the mid teens given strong performance in the first half of the year. We expect to achieve our 36.5% AOI margin target after excluding an expected $25,000,000 in costs associated with the restructuring of our operations, of which $18,000,000 was realized in Q2 and the $14,000,000 legal settlement charge, which would equate to an approximately 35.4% AOI margin on an as reported basis. Our margin expectations include the approximately $50,000,000 of reinvestments Spencer outlined earlier. We will continue to monitor the return on these investments as well as business and FX trends as the year progresses. We expect free cash flow of $1,060,000,000 to $1,090,000,000 a meaningful improvement from our initial guidance in February, driven by an increase in free cash flow conversion, partially due to expected lower cash taxes from the new U.

S. Tax law. We expect capital expenditures of 55,000,000 to $65,000,000 We expect SBC expense to be $260,000,000 to $270,000,000 an improvement from the guidance we provided at our last earnings in May due to restructuring of our operations and our continued focus on managing headcount costs. We continue to test alternative payments across our brands including Tinder and expect to have alternative payment options in test at Hinge by late Q3. Additional savings from further rollout and optimizations of alternative payments is not included in our guidance and could provide margin upside or fund growth initiatives.

In June, Canada announced its intention to rescind its digital services tax. If and when it enacts the change in the law, we expect a one time benefit to AOI related to expenses accrued in prior periods. We anticipate this change could be enacted into law as soon as September. However, we have not included it in our AOI guidance. In other updates, we plan to make changes to how we report certain financial measures and metrics to better align ourselves with our tech peers.

Starting next quarter, we will rename our non GAAP profitability measure from adjusted operating income to adjusted EBITDA. There’s no numerical difference between adjusted EBITDA and AOI. We plan to continue to include discrete expenses such as restructuring costs, but intend to reference such expenses if significant in our earnings materials. We also plan to change our MAU definition from a last twenty eight day to a calendar month basis. We plan to provide a reconciliation of MAU using both definitions.

Now let’s open it up to Q and A.

Conference Operator: We’ll now begin the question and answer session. And your first question today will come from Cory Carpenter with JPMorgan. Please go ahead.

Cory Carpenter, Analyst, JPMorgan: Hey, thanks. Good afternoon. Spencer, you’ve been clear that one of your big priorities at Tinder is to improve engagement with U. S. Users, particularly under the age of 30.

Hoping you could give us an update on how this cohort of users have responded to some of your recent product launches and how Tinder engagement trended during the quarter? Thank you.

Spencer Raskoff, CEO, Match Group: Thanks Corey. At Match Group and at Tinder, have incredible insights into Gen Z and millennials and how they want to connect. Nobody even comes close to understanding this generation’s attitudes and preferences towards dating better than we do. It’s through the excellent research functions that we have at Hinge, at Tinder, at Match, and our other brands as well as research at the MG corporate level. And I’ve also personally been doing focus groups in London and Los Angeles and spending a lot of time on college campuses doing direct consumer research.

So what we know about this generation of daters is that they’re different. They want to connect, they have a loneliness epidemic, and they’re exceedingly digital consumed by smartphone usage, but they went through high school or college through COVID and they want dating apps to have different offerings which are lower pressure. So that’s the roadmap that we’ve created and that we’re building at Tinder. Corey, I’ll just give you four quick examples. DoubleDate, which we’ve talked about is showing great product market fit between 36% of our users depending upon the country are using it already.

About 90% of our usage is under 30. Women are four times more likely to match through DoubleDate than they are when using Tinder solo. So DoubleDate is really resonating with this audience. Number two, we’re about to launch a series of college specific features on Tinder that I’m very optimistic about. It’ll allow users to just search within their college or other selected colleges and a number of other features just around the college experience.

Number three, the interactive matching experience we’ve been testing in New Zealand is specifically designed to appeal to this type of audience. Somebody who doesn’t just want to be judged based on their physical appearance, which is one of the ways that Tinder got its start, somebody who instead is willing to put in a little bit of time, answer some questions and then get a custom result back. We’re seeing very good product market fit with under 30 users on that feature in New Zealand and we’re getting ready to expand it to other countries. And number four, there’s a whole series of features, some of which I talked about in the prepared remarks around changing the way that users think of Tinder so that it’s less about assessing the attractiveness of a photo and more about assessing the compatibility with that individual. So these are things like contextual likes, where you’ll be soon responding to specific information in somebody’s profile rather than just swiping right saying, yes, I think you’re attractive.

It’s about having prompt information up in the photo carousel. So you’ll be seeing in what we call the tappy photo wheel information that comes from deeper in the profile so you can present a different version of yourself instead of just the attractiveness of your photo. So these are the types of things that we’re doing to regain product market fit among under 30. I’ll come back to the question about metrics in just a second. Next question, operator.

Conference Operator: And your next question today will come from Nathan Feather with Morgan Stanley. Please go ahead.

Nathan Feather, Analyst, Morgan Stanley: Hey, everyone. Thanks for taking the question. As it really came through in the letter, seems like product testing velocity has accelerated over the past few months. Given the large number of changes the company is making across brands, what’s the best way for investors to track the status of the turnaround as you go through this revitalized phase? And what are you monitoring internally?

Spencer Raskoff, CEO, Match Group: Yeah. So it’s a whole new team in place. I’m running Tinder personally. We have a new head of product. We have a new CTO.

We have several new product leads. We have a new head of design. And as we’ve discussed, it’s a new roadmap. All of this has happened within the last couple of months, but the team has really reacted incredibly well, and I’m very proud of what we’re building. To answer your question about the metrics that I look at, you should think of our product like a funnel.

And at the top of the funnel is what we call regs or new account creates, new accounts created registrations. Then just below that, you kind of layer in existing accounts, and just below that, you get to MAU or DAU or audience. So it goes from REGs to MAO. Then number three, a deeper funnel, you get to four way chats. This is the chats that go back and forth four or more times.

And then at the bottom of funnel, you get to what we call contact exchange. That’s when in chat, somebody shares their iMessage phone number to move to texting or their WhatsApp handle or their Instagram handle to be able to DM with the user. The reason we care about contact exchanges, that’s usually the purpose of that is to arrange a date. So those are the four points in the funnel that I look at every single day that the team looks at every day. Number one, REGs.

Number two, audience, MAU or DAO. Number three, four way chat. Number four, contact exchange. As I said in the prepared remarks, I understand and empathize from an external standpoint, it’s difficult for investors to track the progress of the turnaround without more visibility into some of these metrics. Steve and I and the team are actively trying to determine which of these metrics, if any, we can start providing investors more transparency on.

What I can tell you for now is that, all of these metrics are doing better today than they were just a couple months They’re also declining year over year, but the rate of decline has significantly lessened. For example, REGs or new accounts created is down around 7% year over year, and a couple months ago that metric was down about 15% year over year. MAU is today down around 8% to 9% year over year. And at the time of last earnings, it was down around 9% to 10% year over year. So even a metric like MAU, which is very hard to move, that is starting to show some improvement.

Frankly, I’m pleasantly surprised that we’re already starting to see some of these metrics start to move in right direction, given that it’s just been a couple of months that this new team has been shipping product. Operator, next question, please.

Conference Operator: And your next question today will come from Robert Coolbrith with Evercore ISI. Please go ahead.

Robert Coolbrith, Analyst, Evercore ISI: Great. Thank you very much for taking our questions. Really appreciate it. And congratulations on some of the early progress. But just curious on some of the things you’re rolling out or expanding like face check.

I wanted to just ask about that one in particular, the expansion there. Curious if you’ve made any changes to the experience or if you’re just seeing users more willing to make the trade off of verification in exchange for improved experience. And then I know it’s you said that there could be an opportunity for upside related to it, just wanted to ask about the alternative payments experiments and anything that you can share about your early learnings there and the financial potential and potential expansion there? Thank you very much.

Spencer Raskoff, CEO, Match Group: Regarding face check on Tinder, we’ve had it live in Canada and Colombia for a while more than six months and we just launched it in California just a month or two ago. What we’re studying in all three of those markets is the impact on trust and safety, the impact on revenue, the impact on audience, but perhaps most importantly, the impact on user perception of the safety of the community. Starting about a month ago, we launched an ad campaign, mostly on social media in Canada, promoting face check, and now we’re in market with research to assess what impact face check is having qualitatively on perception of Tinder’s safety. So that’s one of the metrics that we’re looking at and just assessing what the results are in California before we decide whether to move forward. I’ll let Steve answer the question about in app purchase and alternative payments.

Stephen Bailey, CFO, Match Group: Yes, happy to. Thanks for the question. We’re making really good progress testing alternative payments on iOS. The first thing I’ll say is this is a great example of the power of our portfolio. We mentioned this last quarter, we first started testing across E and E, the E and E brands who have a more mature web presence and now we’ve applied those learnings to help guide the testing we’re doing at Tinder today and start to inform the plans at Hinge where we plan to start testing later in Q3.

We’re testing a lot of different variants, three to five variants I would say across any particular brand and we’re continuing to optimize the experience. So the tests are ongoing. But if you look at the average results we’ve seen thus far, I would say we’re seeing more than a 30% shift in transactions from IP to the web. And that’s resulting in more than a 10% increase in what we call net revenue, which is revenue less IP fees. In some cases, we’re seeing a little bit of a top line revenue impact that we’re optimizing to improve.

But in nearly all cases, we’re seeing a net revenue increase across the board. The impacts to twenty twenty five AOI have been relatively small thus far, call it in the $5,000,000 range given the Tinder tester is still a relatively low percentage and we haven’t yet rolled it out at Hinge. But I think it’s a big opportunity for 2020 for later this year and in 2026 in particular. If you extrapolate the test results out to full rollout across all our brands including in The U. S.

Including Tinder and Hinge that equates to about at least $65,000,000 AOI savings opportunity in 2026. So it could be a big opportunity for us. We continue to test rapidly. We look forward to rolling it out in a tested hinge later in the quarter. And we’re also continuing to monitor the Epic versus Google case and growing regulatory pressure and other geos too.

So hopefully that gives you a little bit of guidance on the size of opportunity we’re seeing. Next question.

Conference Operator: Your next question today will come from Shweta Khajuria with Wolfe Research. Please go ahead.

Shweta Khajuria, Analyst, Wolfe Research: Thanks a lot for taking my questions. Let me try two please. So Spencer on understood on the MAU growth and context there, but when you think about just the trajectory of these metrics that you’re trying to improve, not payers necessarily, the registrations to contact exchanges, how are you thinking about it in terms of improvement, in terms of the magnitude of improvement? Any context there would be helpful. And then the second thing is on marketing spend.

Could you please provide a little bit more color on when you think about reinvesting it for Tinder and for Hinge, how are you thinking about it for the back half of this year and especially into Q1 of next year? Thanks a lot.

Spencer Raskoff, CEO, Match Group: Thanks, Queta. So the first thing we have to do is create new product offerings that we think will be well received by younger users, some of whom we had lost product market fit with. The next thing we have to do is drive reconsideration by making sure that people know that they should reconsider Tinder. Know there’s sports analogies are probably overused here, but it feels like we’re probably in the second of nine innings on this front. The team is really just assembled now.

We’re just starting to ship product. We have a really robust roadmap and then we have to drive reconsideration of it. So that’s how I think about moving these metrics. And while nobody here is particularly proud of seeing these metrics be down year over year, metrics like registrations or, the number of four way chats or the number of contact information exchanged, you know, it doesn’t feel good to see those down year over year. It feels great to start seeing the rates of decline lessen, before a line can go.

If a line has a negative slope, the only way to get it to a positive slope is first to get it to flat. So, to see the first derivative of that line, the slope of that line start to change is where it has to begin. Steve, I’ll let you answer the question about marketing expense as it relates to the reinvestment.

Stephen Bailey, CFO, Match Group: Sure. Why don’t we just take a little step back and talk about the $50,000,000 investment as a whole and give you a little bit more context there. The way I would think about it is about a third of that investment is going towards Tinder product tests that optimize user outcomes really in three main areas, the recommendation algos, trust and safety initiatives and UIUX improvements. These tests could have some impact on short term revenue that flow through to AOI. We’ll have to we’re going to test and see, but that accounts for about a third of the $50,000,000 investment.

The next third is in marketing at Tinder and Hinge to support product launches like Double Data to drive user growth in core markets. And then the last third is really in geographic expansion at Hinge, Azar, The League and in investments in new growth bets like Archer, Her and a new dating concept. So that’s really how the $50,000,000 investment splits up a third, a third, a third. If you look at Tinder marketing in particular of the sort of two thirds that are it’s going to largely towards marketing, the bulk of that is going towards Tinder and a piece is going to Hinge as well. Hinge has ample COA budget to begin with.

They’re spending up in line with revenue more or less year over year in COA. Tinder is where we’ve held marketing a little flatter year over year and this reinvestment allows us to really put some dollars behind exciting new rollouts like DoubleDate. Hopefully that helps. Next question please.

Conference Operator: And your next question today will come from Brad Erickson with RBC Capital Markets. Please go ahead.

Tani Shelburne, Senior Vice President of Investor Relations, Match Group0: Yes, thanks. So just had a follow-up on this kind of secular industry trend. Spencer, you mentioned the Gen Z cohort, just wanted to drill in a bit more there. COVID had these negative effects, but there’s a view out there that maybe we’re just sort of in an air pocket here and maybe the next cohort might be exhibiting different behavior and maybe more favorable behavior. In all of your research you mentioned, would be curious just to understand anything of your learnings that might support that view, and what might be going on there?

Thanks.

Spencer Raskoff, CEO, Match Group: I that would be welcome news. I don’t think we yet know how Gen Alpha is going to interact with online the online dating category overall. I’m focused for now on improving product market fit with Gen Z, so it’s eighteen to twenty eight and also millennials. But, you know, I’m I am optimistic that that Gen Alpha will be more drawn to the category, but that’s not the immediate focus. For us, the immediate focus is regaining product market fit, especially with eighteen to twenty four.

And, you know, the other thing I’d say about the category, Brad, is I read these articles or I see these headlines of reporters saying that online dating as a category is over and people have moved on. I just rumors of the online dating category’s death are patently false. All you have to do is look at Hinge’s results to know that that’s the case. Hinge’s audience is growing around 20% year over year. In some key markets in Europe, it’s growing around 60% year over year.

So clearly, young people are voting with their thumbs to continue to use the category. In fact, in all of the gen Z research and focus groups that I’ve been leading personally, young people say they’re in the category and they want to connect digitally. They just think that we need to offer different offerings for them. So they haven’t left the category per se. They’re just dissatisfied with the current offerings that Tinder in particular has not innovated on.

And I’ll give you one other stat to give you a sense of the scale of participation in the category. There are a 100,000,000 messages sent every day across all of Match Group apps. So to say that people aren’t using the category is sort of ridiculous. If you think for a moment, that’s a 100,000,000 messages inside of our apps a day. A 100,000,000 people are not people, a 100,000,000 instances of flirting or people sending one message to another.

There’s lots of vibrancy in this category. We just have to deliver for them the experiences that they seek. Operator, next question please.

Conference Operator: And your next question today will come from John Blackledge with TD Securities. Please go ahead.

Tani Shelburne, Senior Vice President of Investor Relations, Match Group1: Hi, this is Bill on for John. Thanks for the question. So could you please just talk about some of the you had seen some weakness in a la carte trends among younger users. Have you seen those persist and how are you addressing those weaknesses caused by macro factors and potential economic weakness? And then I had another follow-up question as well.

Stephen Bailey, CFO, Match Group: Yes, why don’t I take that one? You’re right. Last quarter we talked about some concern about macro more generally. I think a lot of companies were talking about it at that time and we specifically called out an area where we were starting to see some which was Tinder a la carte revenue amongst younger users. A quarter later, I think we’re feeling a lot better about the macro in general.

We haven’t seen any further macro pressure in any of the data we’re looking at. We do still see a bit at Tinder again amongst younger users. So it hasn’t necessarily gotten better, but it also hasn’t gotten worse. And it’s relatively small in the grand scheme of things. We’re continuing to test various merchandising and monetization strategies that help deal with the pricing and macro pressures on younger users today.

But I think at the highest level, we feel much better about the macro environment and impacts on our business than we did a quarter ago. We’re not really seeing it aside from some small pressure at Tinder that we mentioned last call. Great.

Tani Shelburne, Senior Vice President of Investor Relations, Match Group1: Thank you. Yes. And then just my follow-up was, you mentioned in the prepared remarks that you’re expecting Hinge revenue acceleration in the back half of the year. Could you just talk about some of the key drivers there that will get you to that accelerating growth? Thank you.

Spencer Raskoff, CEO, Match Group: Sure. Hinge is firing on all cylinders. I mean, it’s got a really impressive distinctive company culture, very highly engaged employees shipping innovative products. They’ve got a terrific brand and a clear product strategy, and they understand their users incredibly well and what users want from them. And the last compliment I’ll pay is that more than any of our other brands, they’ve infused AI into the product at an even greater rate than others.

And it really shows. In terms of the roadmap of where they’re going from here, there are a lot of features on Hinge coming that will increase AI usage towards the bottom of the funnel. That’s driving people from chats to dates. Number two, there’s a significant focus on the female experience and, making sure that we improve that even more. Number three, there’s a lot of work to be do to do on onboarding and profile creation.

And that’s a big focus of theirs over the next six months. And then number four, international expansion. So just to size it, for example, Hinge is only in 25 countries and Tinder’s in 188. And even that 25 really overstates it because there are many countries that Hinge of those 25 that Hinge is nominally in, but Hinge hasn’t really marketed in. Two thirds of Hinge’s revenue is still U.

S.-based, whereas only 45% of Tinder’s revenue is U. S.-based. So there’s a lot of opportunity for Hinge with global expansion, and that’ll be a focus in late ’twenty five going into 2026. Next question please.

Conference Operator: And your next question today will come from Jason Helfstein with Oppenheimer. Please go ahead.

Robert Coolbrith, Analyst, Evercore ISI: Thanks for taking the question.

Tani Shelburne, Senior Vice President of Investor Relations, Match Group2: Just one. So Spencer, to your point that the naysayers are about like just online dating is dead and just hit a secular wall. Some would again, it sounds like you believe a lot of this has to do with making the product better. So as you roll out more features in Tinder, do you think this helps you better understand kind of who either the bad actors are, or those who don’t really want to engage in real life? And then ultimately, can kind of use the algorithm to make sure those people don’t get surfaced and you just you have this improvement in the overall experience.

So just maybe elaborate a little bit more on how like the new feature and the feature roadmap could ultimately kind of pick some of the complaints that you’ve heard from users about that, right, like converting to the Yeah.

Robert Coolbrith, Analyst, Evercore ISI: So trust and safety is a huge

Spencer Raskoff, CEO, Match Group: driver of user satisfaction or lack of satisfaction, and it absolutely impacts brand perception of the category. So, as the category leader, it’s the extent that we can improve trust and safety that will start to change category perception of the prevalence of bad actors. The new product pods and organizational design that we talked about on last quarter call is helping address this quite significantly. So we now have an integrated trust and safety engineering team between Tinder and our E and D brands. That gives us better combined scale, better ability to use AI cross brand to stop bad actors, better AI models to detect bad actors, a better ability to reduce heuristic rules that were incorrectly banning good users, which is that false positive issue can be a real issue and we’ve gotten a lot better at that over the last six months.

So it’s, this is a, it’s a constant focus of ours, improving trust and safety. And as I said, one thing that we also now need to do, which we’re doing in Canada, for example, is marketing our improved trust and safety so we can start to change category perception. Well, I will not give an inch on the question of whether the category is dead or not, because it’s clearly not. I will concede that the category suffers from a perception issue with respect to trust and safety. And that’s something that we have to deliver actual improvements on, and then we have to tell that story to our users and to the media so they understand that meeting people through a dating app like Tinder or Hinge is the safest way to meet somebody actually.

It’s certainly safer than meeting a stranger in real life. Next question, please.

Conference Operator: And your next question today will come from Benjamin Black with Deutsche Bank. Please go ahead.

Nathan Feather, Analyst, Morgan Stanley: Hi, this is Jeff on for Ben. Thanks for taking my questions. Maybe could you just give a little bit of color on the RPP trends that you’re seeing at Tinder and maybe some of the initiatives that you have there, to improve that? You mentioned some of the upcoming features like the See Who Likes You tab could be a driver of revenue. Maybe you could talk about that feature and others, how they could drive monetization?

Thank you.

Spencer Raskoff, CEO, Match Group: Sure. Well, the See Who Likes You section or what we call Gold Home hasn’t been redesigned or that code has barely been touched in about five years. So it hasn’t there is a lot of opportunity there. We’ll have to do it carefully and test and learn our way through those changes because it is so important. But the revenue team, who’s excellent here at Tinder is totally focused on that redesign of the See Who Likes You section of the app.

We don’t really just to try to give you a little more insight into how we think about product roadmap, we don’t really have initiatives other than a small handful, an important one, like the redesign of Gold Home, which are specifically tied to revenue per payer. We have a very robust roadmap around improving audience growth through new regs, contact exchange, everything that I’ve discussed. And, we have a strong belief that as we grow audience and improve user outcomes at the bottom of funnel, that will generate more revenue and that will have the effect of growing RPP and payers. But we don’t go after RPP as a metric and we don’t go after the number of payers as a metric. We go after audience and user outcomes and corresponding revenue and then revenue per payer and number of payers are really outputs of those numbers.

Next question please.

Conference Operator: And your next question today will come from Yigal Aronian with Citi. Please go ahead.

Tani Shelburne, Senior Vice President of Investor Relations, Match Group3: Hey guys, just want to understand the puts and takes on the products for Tinder and kind of what’s embedded. I know you’re not giving payer guidance anymore, but just how to think about the trends in the back half. For example, are you seeing any payer headwinds from the trust and safety features like VOS and face check? Is that having an impact at all? Any of the products driving any kind of notable payer increase yet?

Or well, improvement I guess not increase or is that not happening? And then on the in app fees or not happening yet. And then on the in app fees, just want to see if we could bridge from what you’re experiencing at E and E, which like you said has more of the kind of web historical web model versus Tinder and what you might expect to see a change. I know you haven’t done that yet, but are you seeing similar reception from users and moving to web based and or is it kind of a different hurdle

Spencer Raskoff, CEO, Match Group: on that front? Thanks. I’ll take the first question around Tinder trust and safety. There are times and I’m sure there will be quarters under my watch where trust and safety changes have the effect of reducing audience. And I know there were quarters in the past know, where we’ve where that had, that’s what happened.

That was kind of the story of the quarter where we reduced the prevalence of bots and that had the effect of reducing audience. The changes that’s not what we’re experiencing right now. What we’re experiencing right now on most of these trust and safety initiatives are having the effect of, of increasing audience. And that’s one of the reasons that we’re starting to see some of these green shoots in audience and engagement, mid funnel and bottom funnel metrics. Because we’re, reducing the number of false positives that, of people that basically we’re letting in more good people or we’re keeping out fewer good people that we otherwise would have been kept out in the past.

So that’s all been a good tailwind to the metrics over the last couple of months with respect to trust and safety. Steve, I’ll let you answer the question about IAP I think it was.

Stephen Bailey, CFO, Match Group: Sure, I’d be happy to. Yeah, here’s the way I would think about it. You’re right, E and E is a little bit more mature and they’ve seen in some cases a bigger shift to web than the Tinder test, but in the few tests we’re running at Tinder right now, we are seeing that roughly 30% shift to web and at least a 10 increase in net revenue. So that’s applying to Tinder as well. And I would assume we don’t know, we haven’t started testing yet.

But that gives me confidence, Hinge should be on a path, a similar path as well. So that’s why I’m sort of extrapolating that 30% shift and 10 net revenue increase to the entire U. S.-based company and getting to that $65,000,000 plus AOI savings opportunity in 2026. Next question please.

Conference Operator: And your next question today will come from Chris Kontarc with UBS. Please go ahead.

Spencer Raskoff, CEO, Match Group: Great. Thanks for taking the question. You guys have talked a lot today about some really good early success on the product front for Tender. Are you expecting to capture any more value by taking price in the back half of the year? And Steve, believe you made a comment last quarter that you’re kind of expecting similar year over year payer declines at tender as you were kind of expecting similar year over year declines for MAUs.

Just want to make sure if that’s still the right way to be thinking about it. Thanks. The first answer is no. We’re not planning on taking price as a result of this product roadmap at Tinder. On the contrary, as Steve described, a significant portion of the $50,000,000 is actually about improving the value that users get from Tinder.

So I’ll give you a very specific example. In our recommendations algorithm, we, when we’re deciding whom to show to whom, we are changing the prioritization in that algorithm to be more focused on driving user outcomes. So more focused on showing the person that we think is the right match for you and less focused on driving revenue. So, you know, for example, if the AI is tuned more towards revenue optimization, it might put in front of me somebody that was potentially going to churn. And if I then indicate interest in her, maybe she will be less likely to churn and we’ll keep her revenue.

So, but if she’s not right for me, then I wouldn’t want to see her. So what by prioritizing the recommendation algorithm more towards user outcomes and less towards revenue, that’s what part of that $50,000,000 investment is geared towards. We think that over the medium term and definitely over the long term, improving user outcomes will have the effect of growing audience, improving user outcomes, and then in turn growing revenue. But in the short term, we’re willing to make those trade offs. I’m really pleased and proud that we’re able to continue to hit the commitments that we’ve made around Investor Day and around guidance and consensus, while still giving these user value improvements to Tinder users as part of this turnaround.

Steve, what was the last one?

Stephen Bailey, CFO, Match Group: Yes. I’ll just reiterate what Spencer already said, which is we’re not really focused on the payer metrics specifically or sort of giving guidance around payers. I would think about it as users and that’s what we’re focused on is turning around the MAU trends and some of the other funnel trends Spencer mentioned earlier on the call, which will I would expect payers to head in that same general direction when that happens.

Spencer Raskoff, CEO, Match Group: Operator, think we have time for one more please.

Conference Operator: Your last question today will come from Curtis Nagle with Bank of America. Please go ahead.

Tani Shelburne, Senior Vice President of Investor Relations, Match Group4: Great. Thanks very much for taking the question. So, not really sure how much you can say on this, Spencer, but just very curious about the point you made about a new dating app concept. Would this theoretically be a new form factor? Maybe something less holistic in terms of a brand focus on a demo group?

Just anything you could say on that would be very helpful and enlightening.

Spencer Raskoff, CEO, Match Group: I’m sorry to end on a disappointing answer, Curtis. For competitive reasons and other reasons we’re not going to share right now, but, we periodically incubate brand new apps and we got something that we’re cooking up, which I’m excited about. Thank you everyone for joining the call today. We are excited to update you on our progress and can’t wait to talk to you next quarter and maybe I’ll have an update for you then on this front as well, Curtis. Thanks very much everyone.

Conference Operator: Conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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