Match Group just offered investors a mixed first look at the online dating business. The company behind Tinder, Hinge, OkCupid, and Match.com said second-quarter revenue slipped 1% from a year earlier to $853 million, just below the $856.6 million analysts were expecting.
Shares ended the regular session at $41.24 in New York, then fell 5% in post-market trading. Even after that drop, Match shares are still up more than 25% this year.
On Aug. 4, Match projected third-quarter revenue of $885 million to $895 million. The middle of that range sits below the $891.2 million consensus, which is Wall Street's average estimate.
Paying users totaled 13.3 million in the quarter, while analysts had expected 13.4 million. The revenue figure landed inside Match's own second-quarter outlook of $850 million to $860 million.
Match also declared a dividend of 20 cents per common share, with the payout set for October 20 and ownership locked in by October 5. It is a small payout, but it gives investors something to hold onto while they wait for the bigger story to play out.
The bigger story is Tinder, which is entering what might be its most important stretch in years. Tinder has generated more than half of Match's revenue in the past year, and people under 30 make up more than 50% of its audience. CEO Spencer Rascoff, who runs both Match and Tinder, became Match CEO last year with a goal of getting Gen Z interested in online dating. He has made Tinder the priority because of its size and growth potential.
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Tinder's active-user count is close to turning positive year over year, which would be its first gain in more than three years. Rascoff called the latest quarter "an important one" for Tinder and said the app's active users should flip to positive yearly growth "any day now."
How is Match pulling that off? Tinder is trying to move beyond its hookup-app image with a redesign, group and double dating, AI features, and live events. The company credits matching algorithms, safety improvements, Double Date, and a music compatibility feature for the progress.
Tinder expanded its singles events last month to more U.S. and European markets after a trial that began in Los Angeles in March. That expansion came with one stumble. Tinder paused its AI Photo Enhance test last month after the tool altered the looks of a small share of test users, and the company is investigating and adding safeguards.
Hinge is the other bright spot. The app aims at people seeking long-term relationships, and it posted a 22% revenue gain and a 13% rise in global monthly active users. Match expects Hinge revenue to hit $1 billion in 2027.
Rascoff is confident the strategy is working. "It's a turnaround you can see in numbers and we're delivering on both sides of the equation, which is investing in products that have long-term growth, while running a business with discipline," he said.
Investors are being asked to pay up for a turnaround that is not fully in the numbers yet. Match shares are up more than 25% this year, but revenue is down 1% and the near-term forecast came in soft.
Tinder has been the engine that matters most to Match's growth. Even a small user-count gain would help the investment case. Hinge's faster growth gives Match some breathing room, but Tinder remains the primary swing factor.
The next big test is Tinder's user count. If it turns positive, that would be the first real proof in more than three years that the app is growing again. Hinge gives the company a second engine to lean on while Tinder works through its changes.
For your portfolio, the story is still in progress. The 20-cent dividend gives you a small payment in October either way, but the bigger opportunity depends on whether Match can turn a dating app's cultural comeback into actual sales growth. That is the number to watch in the next report.
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