Tinder Parent Match Group Shares Tank On Q3 Outlook, Expected Higher Expenditure, Hiring Pullback

Match Group Inc MTCH reported second-quarter revenue growth of 12% year-over-year to $795 million, missing the consensus of $805.58 million. GAAP EPS loss was $(0.11), compared to $0.46 in 2Q21.

Adjusted operating income increased 9% Y/Y to $286 million, and the margin was 36%, down 1,100 bps. 

Payers increased 10% Y/Y to 16.4 million; RPP rose 3% Y/Y to $15.86. Tinder Direct Revenue grew 13% Y/Y, driven by 14% Y/y Payers growth to 10.9 million, partially offset by a RPP decline of 1%.

Match’s year-to-date operating cash flow was $20 million and free cash flow was $(7) million, driven by the $441 million payment related to the Tinder litigation settlement.

During the quarter ended June 30, 2022, the company repurchased 2.9 million shares at an average price of $73.30. AtQ2 end, Match had $473 million in cash and cash equivalents and short-term investments and $3.9 billion of long-term debt.

3Q22 Outlook: Match sees Q3 revenue of $790 million to $800 million, vs. a consensus of $885.21 million. It expects an adjusted operating income of $255 million to $260 million, implying a margin of 32% at the midpoints.

We expect higher overall app store fees, reduced year-over-year sales and marketing spend, and lower year-over-year growth in product and development spend compared to Q2 2022 as we begin to see the effects of a pullback in hiring.

For Q4, MTCH expects a limited improvement in year-over-year top-line growth rates compared to Q3 and expects margins to improve modestly.

Price Action: MTCH shares are trading lower by 22.11% at $59.75 during the post-market session on Tuesday.

Image by Solen Feyissa from Pixabay