Match Group (MTCH) Q1 Earnings Beat Estimates, Revenues Up Y/Y

Match Group MTCH reported first-quarter 2024 earnings of 44 cents per share, which increased 4.8% from the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 10%.

Revenues of $859.65 million increased 9% year over year and beat the Zacks Consensus Estimate by 0.4%. On a foreign-neutral basis, revenues increased 12% from the prior-year quarter to $880 million.

Direct revenues were $845.3 million, up 9% year over year, whereas indirect revenues were $14.35 million, which increased 13% from the year-ago quarter.

Top-line growth was driven by strength in Tinder and Hinge. Also, solid momentum across the Americas and Europe regions was a positive.

Match Group Inc. Price, Consensus and EPS Surprise

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 first quarter, the number of total payers decreased 6% year over year to 14.93 million. The figure missed the Zacks Consensus Estimate by 0.3%.

The number of total payers from Americas decreased 14% year over year to 6.87 million, while the number of total payers from Europe was up 2% year over year to 4.5 million. Meanwhile, total payers of 3.56 million from Asia Pacific (APAC) witnessed a rise of 2% on a year-over-year basis.

Total revenues per payer (RPP) increased 16% year over year to $18.87. The figure beat the Zacks Consensus Estimate by 0.6%.

Region-wise, RPP increased 29% year over year in the Americas to $21.85 and 10% to $17.73 in Europe. However, in APAC, it declined 2% year over year to $14.57.

Direct revenues from the Americas were up 11% to $450.25 million. Direct revenues from Europe increased 13% to $239.36 million, and the same from APAC decreased 0.2% to $155.69 million.

Direct revenues from Tinder were up 9% year over year (12% on a FX-neutral basis) to $481.5 million. The figure missed the Zacks Consensus Estimate by 0.3%.

Tinder RPP rose 20% year over year to $16.52, driven by pricing optimizations and new weekly subscription packages.

Payers declined 9% year over year to just under 10 million, primarily because of the impact of pricing optimizations on payers, which reduced conversion. Tinder saw an acceleration in subscription revenue growth throughout the quarter.

Hinge revenues surged 50% year over year to $123.75 million, with a 31% year-over-year increase in payers to 1.4 million and a 14% year-over-year increase in RPP to $28.96. Hinge continued to grow in its English-speaking and Western European markets, with total downloads growing approximately 20% on a year-over-year basis.

Match Group Asia Direct revenues declined 6% year over year (up 7% on a FX-neutral basis) to $71.5 million due to continued declines at Pairs and Hakuna. Nevertheless, the business kept improving, which is evident from Azar’s 4% growth year over year to $37 million.

Evergreen and Emerging revenues declined 4% year over year to $168.6 million.

Operating Details

Total operating costs and expenses (79% of revenues) increased 15% year over year to $674.91 million in the first quarter.

Adjusted operating income was $279.45 million, up 6% year over year, representing an adjusted operating margin of 33%, which contracted 80 basis points.

Balance Sheet

As of Mar 31, 2024, Match Group had a cash and cash equivalent and short-term investment of $921 million compared with $869 million as of Dec 31, 2023.

As of Mar 31, 2024, MTCH had a long-term debt of $3.9 billion, unchanged sequentially.

During the quarter ended Mar 31, 2024, the company repurchased 5.6 million shares of common stock for $197.6 million. As of May 3, 2024, $800 million in aggregate value of shares of Match Group stock was available under its previously announced share repurchase program.

Guidance

Match Group expects second-quarter 2024 revenues in the range of $850-$860 million, indicating year-over-year growth of 2% to 4% on a reported basis and 5% to 6% on an FX-neutral basis. The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $882.36 million, indicating growth of 6.4% on a year-over-year basis.

Tinder Direct revenues are expected to be in the range of $475-$480 million, suggesting year-over-year growth of 0% to 1% on a reported basis and 3% to 4% on an FX-neutral basis.

Across other brands, Match Group expects Direct revenues to be in the range of $360-$365 million, implying 5% to 7% year-over-year growth on a reported basis and 8% to 10% on an FX-neutral basis, with Hinge Direct revenues anticipated to be in the range of $125-$130 million, indicating year-over-year growth of 38% to 44%. The company expects Indirect revenues to be approximately $15 million in the quarter.

Adjusted operating income for the second quarter is anticipated in the range of $300-$305 million, with an adjusted operating margin of 35%.

For full-year 2024, Match Group expects revenue growth near the lower end of its previously stated year-over-year growth of 6% to 9%

Tinder Direct revenue growth is expected to be in the low-single digits.

Adjusted operating margin is anticipated to be approximately 36%. The company also expects a free cash flow generation of $1.1 billion for the full year.

Zacks Rank & Stocks to Consider

Currently, Match Group carries a Zacks Rank #4 (Sell).

Investors interested in the broader retail-wholesale sector can consider some better-ranked stocks like The Gap GPS, Amazon AMZN and Target TGT. While The Gap sports a Zacks Rank #1 (Strong Buy), Amazon and Target carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Gap has lost 3.9% in the year-to-date period. The long-term earnings growth rate for GPS is currently estimated at 12%.

Shares of Amazon have gained 50.7% in the year-to-date period. The long-term earnings growth rate for AMZN is currently projected at 29.60%.

Target has gained 11.5% in the year-to-date period. The long-term earnings growth rate for TGT is currently anticipated at 11.36%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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