The value of Match Group stocks experienced a substantial 15% decrease on Wednesday, subsequent to the company's release of its fiscal reports on Tuesday. Said reports noted that the amount of individuals paying for Tinder had dropped 6% compared to the same period the previous year. Furthermore, Match Group also reduced its revenue expectations for the fourth quarter of 2023.
Match Group, parent company of Tinder and Hinge, hit its lowest price since it separated from IAC in July 2020 when it closed down over 15% to about $29 per share on Tuesday. This came after the company released its third-quarter earnings, which beat analyst estimates according to LSEG (formerly known as Refinitiv), reporting $881.6 million in revenue and earnings of 57 cents per share - three cents higher than expectations. Analysts, however, raised concerns over the lower fourth-quarter revenue projections and the decreasing number of users paying for Tinder.
JPMorgan analysts stated that the third-quarter results were "solid" but what took them by surprise was the fourth-quarter revenue projection of $855 million to $865 million - which is considerably lower than the consensus of more than $890 million. Baird Equity Research noted that there was a 6% y/y drop in pagans for Tinder during that period, which could impact how the company is evaluated.
Separately, Match announced that it had settled its lawsuit with Google, with the $40 million held in escrow being returned to the company as well as agreeing to use Google's User Choice Billing by 2024. This is likely to include favourable app store positioning for Match apps which could lead to a surge in downloads, similar to Bumble's experience. Deutsche Bank analysts commented on this in a note to investors.
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