UPDATE 2-Match Group expects quarterly revenue below estimates as spending on dating apps falls

(Adds share movement in paragraph 1, analysts’ comments in paragraph 4 and 8, details in paragraphs 10 and 12, adds graphic after paragraph 7)

By Jaspreet Singh

May 7 (Reuters) – Tinder-parent Match Group forecast second-quarter revenue below Wall Street estimates on Tuesday, as people dial back spending on dating apps, weighing on user growth.

Shares of the Dallas, Texas-based company fell more than 4% in aftermarket trading.

Match Group – which offers dating apps including Tinder, Hinge, OkCupid – has been grappling with slowing revenue due to weaker discretionary spending by users in an uncertain economy.

The company also competes with smaller rival Bumble’s eponymous dating app.

“With the lowered guidance and reportedly mixed impact of product improvement initiatives implemented by the company’s new management team, investors will have to wait longer for more solid news of a turnaround at Tinder,” M Science analyst Chandler Willison said.

In the first quarter, global Tinder downloads fell 6% from a year earlier, the third consecutive quarter of decreasing downloads, according to market intelligence firm Sensor Tower.

Total monthly active users (MAUs) for Tinder dropped 21% globally in the reported quarter, Sensor Tower added.

The company’s payers declined 6% to 14.9 million in the quarter ended March 31 from a year earlier.

“With Tinder maturing as a business, increasingly Match will need to rely on its other properties for growth. While Hinge continues to be a bright spot, Match will hope that its other segments can turn the corner soon,” Third Bridge analyst Jamie Lumley said.

It expects revenue to be between $850 million and $860 million for the second quarter ending in June, the mid-point of which is below analysts’ average estimate of $882 million, according to LSEG data.

The company now expects annual revenue growth near the lower end of its previously stated 6% to 9% range.

Its first-quarter revenue grew 9% to $859.6 million, beating estimates of $855.5 million.

Match Group reported first-quarter profit per share of 44 cents, compared with estimate of 40 cents per share, according to LSEG data.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Alan Barona)

(c) Copyright Thomson Reuters 2024. Click For Restrictions – https://agency.reuters.com/en/copyright.html