Tinder Owner Match Group's Revenue Hurt by Non-Dating Business

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By Reuters | Updated: 3 February 2016 10:06 IST
Match Group Inc, the owner of popular dating site Match.com and mobile app Tinder, on Tuesday reported quarterly revenue that fell short of analysts' expectations, hurt by a drop in revenue from its non-dating services.

Match's shares fell 3.2 percent to $11.80 in extended trading, below its IPO price of $12, after the company's released its first quarterly report since going public in November.

The company owns a portfolio of more than 45 dating brands, which contributed about 90 percent of total revenue in the fourth quarter as more people signed up for paid subscriptions, especially for "star performer" Tinder.

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The remaining 10 percent in revenue came from its educational websites Princeton Review and Tutor.com.

Match Group said revenue from these two sites fell 1.7 percent, to $26.1 million from $26.5 million, in the quarter. Analysts at Barclays and Cowen and Company were expecting revenue to rise to about $30 million.

"Anytime a newly public company misses estimates out of the gate, it can be cause for concern," Barclays' Chris Merwin said.

The company blamed the weak non-dating business on a bigger-than-expected slowdown in preparations for SAT exams due to the launch of a new course and on the later-than-expected start of an institutional contract.

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Match Group makes the bulk of its money from membership fees and paid features for its online dating services, such as Tinder.

The company said on Tuesday that subscriptions for the paid version of Tinder was growing at an unprecedented pace.

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But Barclay's Merwin said even that did not boost Match Group's dating business enough.

"It looks like, out of the gate, the reported dating revenue growth was only about in line, and I think the market was hoping for something better."

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Match Group, in which Barry Diller's Internet company IAC owns a majority stake, said total revenue rose 12 percent to $267.6 million.

Net income fell about 26 percent to $35.6 million, or 16 cents per share. Excluding items, profit was 24 cents per share.

Analysts on average had expected a profit of 20 cents per share on revenue of $277.3 million, according to Thomson Reuters I/B/E/S.

IAC, Match Group's parent, said its fourth-quarter revenue rose 2 percent to $848.7 million, weighed down by a 28 percent fall in revenue from Ask.com, CityGrid and ASKfm.

© Thomson Reuters 2016

 

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