Tinder Parent Match Group Shares Tank On Q3 Outlook, Expected Higher Expenditure, Hiring Pullback

Tinder Parent Match Group Shares Tank On Q3 Outlook, Expected Higher Expenditure, Hiring Pullback

Match Group Inc MTCH reported second-quarter revenue growth of 12% year-over-year to $795 million, missing the consensus of $805.58 million. GAAP EPS loss was $(0.11), compared to $0.46 in 2Q21.

Adjusted operating income increased 9% Y/Y to $286 million, and the margin was 36%, down 1,100 bps. 

Payers increased 10% Y/Y to 16.4 million; RPP rose 3% Y/Y to $15.86. Tinder Direct Revenue grew 13% Y/Y, driven by 14% Y/y Payers growth to 10.9 million, partially offset by a RPP decline of 1%.

Match’s year-to-date operating cash flow was $20 million and free cash flow was $(7) million, driven by the $441 million payment related to the Tinder litigation settlement.

During the quarter ended June 30, 2022, the company repurchased 2.9 million shares at an average price of $73.30. AtQ2 end, Match had $473 million in cash and cash equivalents and short-term investments and $3.9 billion of long-term debt.

3Q22 Outlook: Match sees Q3 revenue of $790 million to $800 million, vs. a consensus of $885.21 million. It expects an adjusted operating income of $255 million to $260 million, implying a margin of 32% at the midpoints.

We expect higher overall app store fees, reduced year-over-year sales and marketing spend, and lower year-over-year growth in product and development spend compared to Q2 2022 as we begin to see the effects of a pullback in hiring.

For Q4, MTCH expects a limited improvement in year-over-year top-line growth rates compared to Q3 and expects margins to improve modestly.

Price Action: MTCH shares are trading lower by 22.11% at $59.75 during the post-market session on Tuesday.

Image by Solen Feyissa from Pixabay

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