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Home / Business / Match Group shares are shattered after the outlook falls short

Match Group shares are shattered after the outlook falls short



Match Group Inc. delivered another quarter of strong Tinder growth on Tuesday, but delivered a financially beaten financial forecast.

The company, which has received a separation offer from InterActiveCorp.

IAC, -1.50% ,

added 437,000 paying Tinder subscribers in the last quarter, setting up Match for its best year yet of Tinder subscriber growth. The dating app company estimates an annual increase of around 1.6 million paying users when 2019 is completed, compared to 917,000, 1.5 million and 1

.2 million respectively in 2016, 2017 and 2018, respectively.

Shares of Match was more than 15% in afternoon trading on Tuesday, after the company's outlook fell short. For the fourth quarter, Match expects $ 545 million to $ 555 million in revenue and $ 205 million to $ 210 million in adjusted profit before interest, taxes, depreciation and amortization (Ebitda). Analysts surveyed by FactSet requested revenue of $ 559 million and $ 228 million in adjusted Ebitda.

Match

MTCH, -3.43%

revealed that Tinder subscribers are becoming more engaged with the service. The number of users who visit the service seven days a week is up 30% on an annual basis and the average user comes to Tinder more than five days a week. About 85% of Tinder users return to the app the following month.

Read: IAC could become "a very different company" over the next year

Tinder's subscription moment translated into in-line financial income for parent company Match Group. The company had net income of $ 151.5 million, or 51 cents per share, up from $ 130.2 million, or 44 cents per share, the previous year. Analysts surveyed by FactSet predicted $ 0.44 in GAAP earnings per share. Revenues rose to $ 541.5 million from $ 443.9 million, roughly even with the $ 541 million FactSet consensus.

The company's adjusted Ebitda increased to $ 206.1 million from $ 165 million. Analysts asked for $ 204 million.

In a shareholder presentation, Match highlighted momentum for some of the other brands outside of Tinder. Hinge has seen 2.2 million global downloads so far this year, compared to 1.2 million in the comparable period one year ago. The app has partly gained traction due to ads that manufacture the product as focused on operating conditions, and Match plans to focus on monetizing the product next year.

The company has also seen OKCupid downloads increase by 1.4 million in India over the past year as Match places the brands' emphasis on deeper profiles for a market where there is more of a stigma around online dating.

A special committee of Match's board "evaluates" the IAC separation proposal.

Match shares have gained 62% so far this year, compared to a gain of 23% for the S&P 500

SPX, -0.12%

over that time. The stock is down 3.2% over the past three months, but among concerns about competition from Facebook Inc. as well as a lawsuit from the Federal Trade Commission.


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