Match Group shares fell sharply after the operator of Tinder and other online dating sites posted disappointing second-quarter resultsand provided guidance that fell well shy of Street estimates.
Match (ticker: MTCH) also announced that Tinder CEO Renate Nyborg is leaving the company.
Apparently, online dating hasn’t returned to its pre-Covid levels.
For the quarter, Match posted revenue of $795 million, up 12% from a year ago, falling short of both the company’s guidance range of $800 million to $810 million and the Street consensus at $804 million. Adjusted operating income was $286 million, at the bottom end of the company forecast of $285 million to $290 million. The company lost 11 cents a share in the quarter, while the Street had expected a profit of 53 cents a share.
In premarket trading Wednesday, Match shares were off 20%, to $61.04.
“Although the overall market opportunity remains substantial, the current environment is presenting some unique trends related to consumer behavior,” Match CEO Bernard Kim in a letter to shareholders. “While people have generally moved past lockdowns and entered a more normal way of life, their willingness to try online dating products for the first time hasn’t yet returned to prependemic levels.”
Kim wrote that current revenue growth expectations for Tinder for the second half “are below our original expectations as a result of disappointing execution on several optimizations and new product initiatives.” Kim added that he’ll be “fully embedded with the team” at the Tinder office in Los Angeles “to oversee business progress” until a new CEO is selected.
The company also said it has reduced its hiring plans for 2022 and “cut back on marketing spend where it made sense to do so.”
“The business is facing a number of factors that are impacting our performance and outlook,” Kim added. “The most notable is the strengthening of the US dollar against several major global currencies, including the euro, Japanese Yen, Turkish Lira and British Pound.” He said currency has been a $74 million headwind for the year to date, and that it will continue to be an issue in the second half. Kim says the company expects an 8-percentage-point currency impact to revenue in the third quarter.
Match is projecting third-quarter revenue of $790 million to $800 million, well below the old Street consensus at $885 million, with adjusted operating income ranging from $255 million to $260 million. The company added that it expects “limited improvement” in year-over-year growth rates in the fourth quarter compared with the third quarter, but with modestly higher margins.
“We’re confident that Tinder and the overall company top-line growth rates will accelerate as 2023 progresses,” Kim added.
Write to Eric J. Savitz at eric.sa[email protected]
Credit: www.marketwatch.com /