Match Group, the company behind dating apps Tinder and Hinge, issued a third-quarter revenue forecast that came in slightly below Wall Street's expectations, even as its newer app Hinge continued to attract users and Tinder's decline in daily active users slowed.
The Dallas-based company said it expects revenue of $885 million to $895 million for the third quarter. The midpoint of that range, $890 million, falls just under the $891.5 million analysts had penciled in, according to LSEG data cited by Reuters.
The cautious outlook follows a mixed second quarter. Revenue slipped 1% to $853 million, while the number of paying users across its apps dropped 6% to 13.3 million. However, the company managed to squeeze more money from each subscriber: revenue per paying user rose 6% to $21.13.
Tinder stabilizes, Hinge keeps climbing
Investors have been watching Tinder closely for signs that the app's user base is stabilizing after years of decline. In the second quarter, Tinder's daily active users fell 4% year over year—an improvement from the 9% drop in the previous quarter. That easing suggests the company's efforts to refresh the app and re-engage lapsed users may be starting to take hold.
Meanwhile, Hinge, Match's faster-growing brand, continued to add users. Monthly active users on Hinge rose 13% in the quarter, underscoring its role as the company's main growth engine. Hinge has been a bright spot for Match as it targets a younger demographic and positions itself as a more serious relationship-focused app.
Still, the overall revenue outlook suggests that growth at Hinge isn't yet enough to fully offset the drag from Tinder, which remains Match's largest source of revenue.
What this means for investors
For everyday investors, the key takeaway is that Match is still in a transition. The company is trying to stabilize its flagship app while nurturing a smaller but faster-growing one. The fact that revenue per paying user is rising is a positive sign—it means Match is getting better at monetizing the users it has, even if the total number of subscribers is shrinking.
But the soft revenue guidance raises questions about how quickly the company can return to growth. Dating apps face intense competition from free alternatives and changing consumer habits, and Match has been investing heavily in product updates and marketing to win back users.
Investors will likely focus on whether Tinder's improving user trends continue and whether Hinge can keep growing without heavy spending. The company's ability to raise prices or introduce new features that encourage users to pay will also be closely watched.
Match's situation is not unique. Many consumer-facing tech companies are grappling with slowing user growth and are leaning on pricing power to drive revenue. As seen with McDonald's recent sales miss, even well-known brands are finding it tough to meet expectations in a cautious consumer environment.
For those holding Match stock, the mixed report means patience may be required. The company is making progress on some fronts, but the overall picture remains uneven. As always, it's wise to consider how Match fits into a diversified portfolio rather than betting on a quick turnaround.
Looking ahead, analysts will be listening for management's comments on user trends, monetization strategies, and any plans to boost growth. The next earnings report will show whether the company can deliver on its guidance and whether the improving Tinder metrics are sustainable.
