Motley Fool
0
All posts from Motley Fool
Motley Fool in Motley Fool,

Match Group Inc Hits Pay Dirt With Tinder Gold

Match Group (NASDAQ: MTCH) saw its revenue growth accelerate in the third quarter, boosted by a new premium version of its most popular dating app.

Match Group results: The raw numbers

Metric

Q3 2017

Q3 2016

Year-Over-Year Change

Revenue

$343.4 million

$287.5 million

19%

Operating income

$91 million

$90.9 million

0.1%

Adjusted earnings per share

$0.19

$0.22

(14%)

Data source: Match Group Q3 2017 earnings release.

Match Group struck gold with Tinder in the third quarter. Image source: Getty Images.

What happened with Match Group this quarter?

Revenue rose 19% year over year to $343 million, fueled by an 18% spike in average paid member count (PMC) to 6.6 million.

Tinder added a record 476,000 paid members in the third quarter. That helped the popular dating app's average PMC top 2.5 million, a year-over-year increase of 85%.

Moreover, average revenue per paying user (ARPPU) improved 1% to $0.54. ARPPU was boosted by the launch of Tinder Gold on iOS in August and later on Android, which gives Tinder Plus users the option of paying $5 a month for premium features. Gold was well received by users, and Tinder became the highest-grossing app among all paid apps on the App Store soon after its release.

Tinder Gold is off to a solid start. Image source: Match Group.

All told, adjusted EBITDA -- which was impacted by the exercise of Tinder options that added $11 million in expenses -- increased 12% to $119.6 million. Adjusted net income, which was also negatively impacted by a higher effective tax rate, fell 7% to $56 million. And adjusted EPS declined 14%, due in part to a higher share count.

Looking forward

For the fourth quarter, Match Group expects revenue of $355 million to $365 million and adjusted EBITDA of $147 million to $152 million. That would represent year-over-year growth of 22% and 17%, respectively, at the midpoints of these ranges.

Looking even further ahead, CFO Gary Swidler gave a peek into what Match Group might have in store for 2018 during the conference call with analysts.

"We believe we are positioned for mid-teens revenue growth next year as Tinder's strength continues and the other brands are stable," Swidler said. "Overall, growth won't quite be at the exceptional exit rates we are seeing in late 2017, but Tinder's product work this year should set us up very well for 2018."

10 stocks we like better than Match Group
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Match Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 6, 2017

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Match Group. The Motley Fool has a disclosure policy.