Match Group Q3 Earnings Call Highlights

Key Points

• Tinder’s user trends are improving: Global daily active users returned to year-over-year growth in September, while declines in monthly active users and payers narrowed in the third quarter. Match expects further improvement in the fourth quarter and is targeting flat monthly active users by year-end 2027.
• Hinge remains a key growth driver: Revenue increased approximately 19% year over year in the third quarter, with Match maintaining its goal of $1 billion in Hinge revenue by 2027. Expansion plans include secondary U.S. cities, older users, Latin America and Japan.
• Cash generation supports shareholder returns, but fee pressures loom: Match generated $832 million in year-to-date free cash flow and deployed $591 million toward buybacks, dividends and employee-equity settlements. Higher Apple and Google app-store fees are expected to pressure adjusted EBITDA margins in 2027.

Match Group NASDAQ: MTCH said Tinder’s user trends continued to improve in the third quarter, with global daily active users returning to year-over-year growth in September for the first time in three and a half years. The company also said it expects to finish 2026 slightly above the midpoint of its full-year revenue guidance range, while exceeding its adjusted EBITDA margin and free-cash-flow targets set earlier in the year.

CEO Spencer Rascoff said the company’s turnaround efforts at Tinder have focused first on improving user outcomes, including more relevant recommendations, stronger trust and safety features, and experiences designed to resonate with Gen Z users.

“Tinder has had multiple consecutive quarters of improvement in the metrics that matter,” Rascoff said. He pointed to the company’s strongest quarterly year-over-year performance in Sparks, which it defines as six-way conversations, and Sparks coverage, or the percentage of users receiving a Spark, since it began tracking those measures.

Tinder trends improve, but reconsideration remains a priority

Rascoff said Tinder’s monthly active-user decline has nearly halved over the past year. In October, markets representing nearly 70% of Tinder’s daily active users and 50% of revenue recorded year-over-year daily active-user growth or stability, while U.S. daily active users entered positive territory exiting the month.

During the question-and-answer session, management said Tinder’s monthly active users declined 6% year over year in the third quarter, improving from a 7% decline in the previous quarter. Payers declined 4%, compared with a 5% decline in the second quarter, while foreign-exchange-neutral direct revenue declined 2%, unchanged from the prior quarter.

The company expects further improvement in monthly active users, payers and direct-revenue trends during the fourth quarter. CFO Steve Bailey said Tinder’s full-year 2026 direct revenue is expected to decline at a low-single-digit year-over-year rate, better than management’s February outlook.

Match Group attributed part of that improvement to lower-than-expected “user givebacks,” or the expected revenue impact from product changes aimed at improving user experiences. The company had anticipated $60 million in givebacks during 2026 but now expects to use about $25 million. Bailey said the lower givebacks account for about two percentage points of improvement relative to the company’s February revenue expectations, with another point coming from improving underlying trends.

Management said it is targeting 2027 Tinder direct-revenue growth, year-over-year payer growth by the fourth quarter, and flat monthly active users by the end of the fourth quarter.

Rascoff said the next stage of the Tinder strategy is driving reconsideration among people who have not used the app or have not used it in years. Its “Better with Friends” roadmap includes Double Date, Groups and Events features intended to provide more social and lower-pressure ways for users to meet.

• Double Date has generated 30 million matches so far, according to Rascoff.
• Groups recently launched in the U.S. and selected international markets. In Norway, where the feature launched earlier, 15% of users ages 18 to 22 are already in a group.
• In a Canadian test of Missed Connections, which highlights users who have crossed paths in real-life locations, women were four times more likely to like profiles, according to management.

Hinge growth and expansion plans

Hinge continued to produce double-digit revenue growth, and Match Group said it remains on track to meet its 2026 guidance for the brand. Bailey said Hinge revenue grew about 19% year over year in the third quarter and is expected to be approximately flat to slightly better than that growth rate in the fourth quarter.

The company maintained its expectation for Hinge to generate $1 billion in revenue in 2027. Management said it sees opportunities to expand beyond major coastal U.S. cities and the 20-to-30 age group, estimating that the brand could add at least 1 million U.S. monthly active users by targeting secondary cities and users ages 30 to 40.

Hinge is also expanding internationally, including recent activity in Latin America and a planned Japan entry in 2027. Rascoff said Match Group sees whitespace in Japan between marriage-focused applications such as Pairs and more casual dating products such as Tinder. The company plans to customize Hinge’s product and marketing approach for the market.

Hinge is testing a lower-priced subscription option aimed especially at women and price-sensitive users. Bailey said the product includes offerings such as additional filters and custom location boundaries. Early tests have improved conversion among both men and women, with a larger improvement among women, he said.

Profitability, capital returns and app-store fees

Bailey said Match Group generated $832 million in free cash flow year to date and deployed $591 million toward buybacks, dividends and net settlement of employee equity awards. The company said it remains committed to deploying 100% of free cash flow toward those uses over time, though the quarterly pace may vary.

Match Group said diluted shares outstanding had declined 4% year over year through October and 10% since January 2025.

For 2027, management expects in-app purchase fees to create a one-percentage-point headwind to adjusted EBITDA margin. The company said Apple’s European Union in-app purchase fees increased to 26% from the low-20% range effective Oct. 1, an increase expected to cost Match Group an additional $20 million in 2027. It also expects Google Play Store fees to rise meaningfully beginning in the second quarter of 2027 following the expiration of a partnership agreement with Google.

Bailey said the company intends to remain disciplined on headcount, operating expenses and AI costs. Match Group will provide detailed 2027 revenue and profitability guidance during its fourth-quarter earnings call in February.

In its Evergreen & Emerging segment, management said it has prioritized a smaller set of brands, including Upward, BLK, HER and Match, while continuing shared technology development across the portfolio. The company expects segment revenue declines to improve only modestly in 2027 as it works toward a return to growth.

About Match Group (NASDAQ:MTCH)

Match Group, Inc is a global provider of online dating and social discovery services. The company operates a portfolio of dating applications and websites designed to help people form relationships, including Tinder, Hinge, Match, Meetic, OkCupid, Plenty of Fish, BLK, Chispa and The League.

Its platforms serve users across a broad range of geographies and relationship preferences. Match Group generates revenue primarily through paid subscriptions, premium features, à la carte purchases and advertising.

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