Match Group's Q3 Earnings Beat Estimates, Revenues Up Y/Y

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%.

Free Today: Profiting from The Future’s Brightest Energy Source

The demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.

Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.

Our urgent report, Atomic Opportunity: Nuclear Energy’s Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.

Download Atomic Opportunity: Nuclear Energy’s Comeback free today.

Want the latest recommendations from Zacks Investment Research? Today, you can download 5 Stocks Set to Double. Click to get this free report