Match Group Q2 Earnings Meet Estimates, Revenues Up Y/Y

Match Group MTCH reported second-quarter 2024 earnings of 48 cents per share, in line with the Zacks Consensus Estimate. The bottom line remained flat compared to the year-ago quarter's reported figure.

Revenues of $864.07 million increased 4% year over year and beat the Zacks Consensus Estimate by 0.9%. On a FX-neutral basis, revenues increased 8% from the prior-year quarter to $892 million.

Direct revenues were $848.13 million, up 4% year over year, whereas indirect revenues were $15.93 million, which increased 19% from the year-ago quarter.

Top-line growth was driven by strength in Tinder and Hinge. Also, solid momentum across the Americas and Europe regions was a positive.

Quarter in Detail

In the second quarter, the number of total payers decreased 5% year over year to 14.84 million. The figure beat the Zacks Consensus Estimate by 0.2%.

The number of total payers from the Americas decreased 13% year over year to 6.74 million, while the number of total payers from Europe increased 2% year over year to 4.5 million. Meanwhile, total payers of 3.61 million from Asia Pacific (APAC) witnessed a rise of 3% on a year-over-year basis.

Total revenues per payer (RPP) increased 9% year over year to $19.05. The figure beat the Zacks Consensus Estimate by 1%.

Region-wise, RPP increased 20% year over year in the Americas to $22.30 and 4% to $17.79 in Europe. However, in APAC, it declined 4% year over year to $14.55. 

Direct revenues from the Americas were up 5% to $450.55 million. Direct revenues from Europe increased 5% to $240.19 million, and the same from APAC decreased 1% to $157.39 million.

Direct revenues from Tinder were up 1% year over year (4% on a FX-neutral basis) to $479.95 million. The figure beat the Zacks Consensus Estimate by 0.8%. 

Tinder RPP rose 10% year over year to $16.61, driven by improved ecosystem health and a series of initiatives to raise the efficacy of Tinder by improving user outcomes.

Payers declined 8% year over year to 9.6 million. Tinder saw an acceleration in subscription revenue growth throughout the quarter.

Hinge revenues surged 48% year over year to $133.57 million, with a 24% year-over-year increase in payers to 1.5 million and a 19% year-over-year increase in RPP to $30. Hinge continued to grow in its English-speaking and Western European markets, with total downloads growing approximately 14% on a year-over-year basis.

Match Group Asia Direct revenues declined 4% year over year (up 9% on a FX-neutral basis) to $73.68 million, largely due to impacts of forex exchange fluctuations. On an FX-neutral basis, Direct revenues at Azar and Pairs increased 14% and 2% year over year, respectively.

Evergreen and Emerging revenues declined 8% year over year to $160.94 million.

Operating Details

Total operating costs and expenses (76% of revenues) increased 7% year over year to $659.54 million in the second quarter.

Adjusted operating income was $306.4 million, up 2% year over year, representing an adjusted operating margin of 35%, which contracted 90 basis points.

Balance Sheet

As of Jun 30, 2024, Match Group had a cash and cash equivalent and short-term investment of $844 million compared with $921 million as of Mar 31, 2024.

As of Jun 30, 2024, MTCH had a long-term debt of $3.9 billion, unchanged sequentially.

During the quarter ended Jun 30, 2024, the company repurchased 6.4 million shares of common stock for $197 million. As of Jul 26, 2024, $528 million in aggregate value of shares of Match Group stock was available under its previously announced share repurchase program.

Guidance

Match Group expects third-quarter 2024 revenues in the range of $895-$905 million, indicating year-over-year growth of 2% to 3% on a reported basis and 4% to 5% on an FX-neutral basis. The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $913.68 million, indicating growth of 3.6% on a year-over-year basis.

Tinder Direct revenues are expected to be in the range of $505-$510 million, roughly flat year over year on a reported basis and up 2.5% year over year on an FX-neutral basis.

Across other brands, Match Group expects Direct revenues to be in the range of $375-$380 million, implying 5% to 6% year-over-year growth on a reported basis and 7% to 8% on an FX-neutral basis, with Hinge Direct revenues anticipated to be approximately $145 million, indicating year-over-year growth of 35%. The company expects Indirect revenues to be approximately $15 million in the quarter.

Adjusted operating income for the third quarter is anticipated in the range of $335-$340 million, with an adjusted operating margin of 37.5%.

For full-year 2024, Match Group expects year-over-year revenue growth of 5% on a reported basis and 7.5% on an FX-neutral basis.

Tinder Direct revenues are expected to witness 3% year-over-year growth on a reported basis and 5.5% on an FX-neutral basis.

Adjusted operating margin is anticipated to be approximately 36%.

Zacks Rank & Stocks to Consider

Currently, Match Group carries a Zacks Rank #4 (Sell).

Investors interested in the broader retail-wholesale sector can consider some better-ranked stocks like The Gap GPS, Amazon and Best Buy BBY. While The Gap sports a Zacks Rank #1 (Strong Buy), Amazon and Best Buy carry a Zacks Rank #2 (Buy) each at present.

The Gap has gained 11.2% in the year-to-date period. The long-term earnings growth rate for GPS is currently estimated at 3.38%.

Shares of Amazon have gained 19.6% in the year-to-date period. The long-term earnings growth rate for AMZN is currently projected at 29.60%.

Best Buy has gained 11.5% in the year-to-date period. The long-term earnings growth rate for BBY is currently anticipated at 5.07%.

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