Match Group (NASDAQ:MTCH) saw its stock surge as much as 12.5% in pre-market Wednesday after the online dating company reported better-than-expected Q2 results and the outlook for the current quarter.
The company reported adjusted earnings per share of $0.48 on revenue of $830 million, ahead of the consensus for earnings of $0.44 per share on revenue of $811.36M. The adjusted operating margin came in at 36%.
“Our Q2 financial and operating results demonstrate Match Group’s ability to reignite momentum and position the company for consistent, long-term success. In the first half of 2023, Match Group capitalized on effective organizational improvements, which led to better product and marketing execution at our brands, to deliver strengthening financial performance. We expect these trends to continue, with momentum increasing through the rest of the year,” CEO Bernard Kim said in a shareholder letter.
The company said Tinder revenue rose 6% year-over-year to $475M.
“Tinder saw an acceleration of subscription revenue growth throughout the quarter. In addition, Tinder’s ongoing marketing and product efforts helped drive better new user and reactivation trends, which also contributed to improved revenue trends,” Match said in a letter.
For this quarter, the company sees revenue of $880M, ahead of the consensus for Q3 revenue of $863.4M. Tinder revenues are expected to rise 10% YoY.
BTIG analysts upgraded the stock to Buy, citing improving Tinder net add outlook.
"Tinder appears to be through the worst. Worry that Tinder’s issues were more about category saturation than execution are fading. MTCH still has to prove that it can consistently deliver innovative product to drive payer penetration, but getting back to growth was an important first step, and we will get a look at new product/features in the coming months (new Gen Z focused content, high-end subscription). If Tinder can consistently deliver on that front, the opportunity is large with payer penetration currently at ~15%," analysts wrote in a note.
Goldman Sachs analysts expected a positive investor given "better than expected Q2'23 revenue and Adj. OI growth with a Q3'23 guide and 2H commentary above Street expectations."