Match Group MTCH reported third-quarter 2024 earnings of 51 cents per share, beating the Zacks Consensus Estimate by 10.87%. The bottom line declined 10.5% compared to the year-ago quarter’s reported figure.
Revenues of $895.48 million increased 1.5% year over year and missed the Zacks Consensus Estimate by 0.54%. On an FX-neutral basis, revenues increased 3% from the prior-year quarter to $907 million.
Direct revenues were $879.19 million, up 1% year over year, whereas indirect revenues were $16.28 million, which increased 10% from the year-ago quarter.
Top-line growth was driven by strength in Hinge. Hinge Direct revenues increased 36% year over year and attained a record high in downloads in the reported quarter. Also, solid momentum in Azar across the Americas and Europe regions was a positive.
Match Group Inc. Price, Consensus and EPS Surprise
Match Group Inc. price-consensus-eps-surprise-chart | Match Group Inc. Quote
Quarter in Detail
In the third quarter, the number of total payers decreased 3% year over year to 15.21 million. The figure beat the Zacks Consensus Estimate by 0.39%.
Total revenues per payer (RPP) increased 5% year over year to $19.26. The figure missed the Zacks Consensus Estimate by 0.78%.
Direct revenues from Tinder were down 1% year over year (up 1% on a FX-neutral basis) to $503 million. The figure missed the Zacks Consensus Estimate by 0.49%.
Tinder RPP rose 4% year over year to $16.87, driven by improved ecosystem health and a series of initiatives to raise the app’s efficacy by improving user outcomes. However, with the sluggish new user growth rate, both registration and reactivation were headwinds.
Payers declined 4% year over year to 9.94 million. Tinder saw progress in product innovation to build the brand.
Hinge revenues surged 36% year over year to $145.4 million, with a 21% year-over-year increase in payers to 1.6 million and a 12% year-over-year increase in RPP to $30.26. Hinge continued to grow in its English-speaking and Western European markets and was the second most downloaded dating app, with total downloads growing approximately 20% on a year-over-year basis in the Nordic and DACH regions and increasing more than 40% year over year in France.
Match Group Asia Direct revenues declined 6% year over year (down 1% on a FX-neutral basis) to $72.16 million, largely due to impacts of forex exchange fluctuations. On an FX-neutral basis, Direct revenues at Azar and Pairs increased 5% and 2% year over year, respectively.
Evergreen and Emerging revenues declined 9% year over year to $158.39 million.
Operating Details
Total operating costs and expenses (76% of revenues) increased 7% year over year to $684.82 million in the third quarter.
Adjusted operating income was $342.5 million, up 3% year over year, representing an adjusted operating margin of 38%, which expanded 50 basis points.
Balance Sheet
As of Sept. 30, 2024, Match Group had a cash and cash equivalent and short-term investment of $861 million compared with $844 million as of June 30, 2024.
As of Sept. 30, 2024, MTCH had a long-term debt of $3.9 billion, unchanged sequentially.
During the quarter ended Sept. 30, 2024, the company repurchased 7.1 million shares of common stock for $241 million. As of Nov. 1, 2024, $252 million in aggregate value of shares of Match Group stock was available under its previously announced share repurchase program.
Guidance
Match Group expects fourth-quarter 2024 revenues in the range of $865-$875 million, remaining flat year over year. Excluding now-exited Hakuna and other live stream services, Match Group revenue is expected to be up 2% to 3% year over year. The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $903.18 million, indicating growth of 4.27% on a year-over-year basis.
Tinder Direct revenues are expected to be in the range of $480-$485 million, down 2% to 3% year over year on a reported basis due to MAU and ALC initiative deadly headwinds.
Across other brands, Match Group expects Direct revenues to be in the range of $370-$375 million, implying 3% to 5% year-over-year growth on a reported basis with Hinge Direct revenues anticipated to be approximately $145 million, indicating year-over-year growth of 25%. The company expects Indirect revenues to be roughly $15 million in the quarter.
Adjusted operating income for the fourth quarter is anticipated in the range of $335-$340 million, including $7 million of employee severance and other similar charges as well as Canada Digital Services Tax, with an adjusted operating margin of 39%.
Zacks Rank & Stocks to Consider
Currently, MTCH carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader retail-wholesale sector are Alibaba BABA, Boot Barn BOOT and Dutch Bros BROS, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
BABA shares have gained 24.4% in the year-to-date period. The long-term earnings growth rate for BABA is projected at 10.44%.
BOOT shares have gained 65.6% in the year-to-date period. The long-term earnings growth rate for BOOT is expected to be 12.99%.
BROS shares have gained 29.5% in the year-to-date period. The long-term earnings growth rate for BROS is anticipated to be 30%.
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