Match Group Reports Lower Q4 Revenue Forecast

(Reuters) – Match Group (NASDAQ:MTCH) announced on Wednesday that it expects its fourth-quarter revenue to be below earlier predictions due to significant currency exchange impacts and sluggish user growth at Tinder.

Stock Reaction

Following this announcement, the company's shares dropped nearly 5%, overshadowing the news of its first-ever quarterly dividend and a $1.5 billion share buyback.

Revised Revenue Expectations

Match now anticipates fourth-quarter revenue will be below the previously forecasted range of $865 million to $875 million. The midpoint of that range was slightly higher than analysts' average estimate of $869.6 million, according to LSEG data.

Market Challenges

Based in Dallas, Texas, Match has experienced a slowdown in demand since a pandemic-related peak. Economic uncertainty combined with a lack of new app features has led users to spend less on its various dating platforms, which include Hinge, OkCupid, and Plenty of Fish.

Currency Impact and Regional Revenue

The company indicated that the foreign exchange rate impact will be about $15 million more than initially expected, with roughly two-thirds attributed to Tinder, its largest unit by direct revenue. In the quarter ending in June, over 40% of Match's revenue came from Europe, Asia Pacific, and other regions, excluding the Americas.

Performance of Tinder

Tinder is also set to miss its direct revenue target of $480 to $485 million for the fourth quarter. Additionally, declines in new user additions on Apple (NASDAQ:AAPL) iOS have stabilized but have not yet returned to early September levels, as noted by Match.

Future Outlook

Despite these challenges, the company aims for a 36% adjusted operating income margin in 2024.