2023-05-02 16:41:44 ET
Match Group ( NASDAQ: MTCH ) rose 2.2% after hours Tuesday following its report of first-quarter earnings where it missed financial expectations and guided to the light side for Q2, but also launched a new $1B share buyback and said a new dating app is arriving in the summer.
Revenues dipped 1% year-over-year to $787M. On a constant-currency basis, total revenue rose 3% to $822M. Earnings per share were also light at $0.42 vs. an expected $0.56.
Tinder direct revenue was flat, while Match's other brands together were down 3% year-over-year. One outlier was Hinge direct revenue, up 27% year-over-year.
Match's primary focus has been on Tinder, CEO Bernard Kim and Chief Financial Officer Gary Swidler said: "While not yet easily visible in the business’s financial results, we’re seeing early signs in April that the changes are leading to greater momentum, which should position Tinder to exit 2023 with much improved financial performance and bright prospects going forward."
Meanwhile, "to drive accountability and collaboration, we've flattened the organizational structure and combined similar businesses under one leadership team. This has led to the identification of opportunities to reduce duplication and better leverage our existing resources, especially at our Evergreen brands."
"We operate a highly profitable and cash flow generative business," they continued. "Our capital allocation priorities are to invest appropriately in the business, to maintain a strong balance sheet, and to pursue compelling acquisition opportunities." Accordingly, with a plan to return at least half of cash flow to shareholders, the board authorized a new $1B share repurchase program.
For the second quarter, the company's guiding to revenue of $805M-$815M, below consensus for $822.6M, and adjusted operating income of $275M-$280M (with a margin of 34% at the midpoint).
It also says it will increase marketing spend year-over-year -- on increases at Tinder to fund the ongoing brand campaign, at Hinge to fund expansion into new markets, at The League, and at a new dating app set to launch this summer.
As for the full year, "we remain confident that the company’s total revenue and Tinder direct revenue can both exit 2023 with double digit Y/Y growth. The lower than initially expected first half of 2023 business performance may contribute to full-year Match Group total revenue and Tinder direct revenue growth rates closer to the low end of our previously communicated ranges of 5% to 10% Y/Y."
It's also committing to delivering flat or better adjusting operating income margin for 2023.
Conference call to come tomorrow at 8:30 a.m. ET .
For further details see:
Match Group turns higher amid first-quarter earnings miss, new $1B buyback