Match Group Inc (MTCH, Financial) released its Q3 2023 earnings report on October 31, 2023. The company reported a 9% increase in total revenue over the prior year quarter, reaching $882 million. Operating income rose by 16% compared to the same period last year, amounting to $244 million. This represents an operating margin of 28%.
Financial Highlights
Match Group Inc (MTCH, Financial) reported that Tinder Direct Revenue increased by 11%, while the collective Direct Revenue of other brands rose by 7% over the prior year quarter. Hinge Direct Revenue saw a significant increase of 44% compared to the same period last year. Adjusted Operating Income was $333 million, marking a 17% increase from the prior year quarter, and representing an Adjusted Operating Income Margin of 38%.
Operating Cash Flow and Free Cash Flow were reported at $621 million and $571 million, respectively, year-to-date as of September 30, 2023. However, the number of payers declined by 5% to 15.7 million over the prior year quarter. Revenue per payer (RPP) increased by 15% over the prior year quarter, reaching $18.39.
Company Performance and Future Outlook
Match Group Inc (MTCH, Financial) has been focusing on two key sets of initiatives in 2023. The first involves encouraging teams at each of their businesses to sharpen product and marketing execution and achieve clearly defined operating and financial objectives. The second initiative emphasizes innovation, with teams collaborating globally to build AI-driven features aimed at solving key user pain points and attracting new users.
The company's operating and financial performance has improved throughout the year. Tinder delivered double-digit year-over-year Direct Revenue growth in Q3, which was one quarter ahead of initial expectations. Hinge grew Direct Revenue by 44% year-over-year in Q3, achieving all-time highs in app downloads and global popularity. The company expects these positive trends to drive results in 2024 and beyond.
For Q4, Match Group Inc (MTCH, Financial) expects Total Revenue of $855 million to $865 million and anticipates Match Group AOI to be $305 to $310 million, up 7% to 9% Y/Y. For the full year 2023, the company expects to deliver Total Revenue growth towards the lower end of the range provided a year ago.
Capital Allocation and Google Lawsuit Settlement
In Q3, Match Group Inc (MTCH, Financial) repurchased $300 million of stock, totaling $445 million repurchased year-to-date. The company ended Q3 with a trailing twelve-month net leverage of 2.7x, which was below the previously articulated target of under 3x, and over $700 million of cash on hand.
Match Group Inc (MTCH, Financial) and Google have reached a binding term sheet for a settlement of their respective claims against each other in the Match Group, LLC et al vs. Google LLC et al lawsuit. Under the terms, the $40 million placed in escrow will be returned to Match Group and no other amounts will be owed by the Match plaintiffs to Google relating to the claims in the lawsuit for the period ending December 31, 2023.
Explore the complete 8-K earnings release (here) from Match Group Inc for further details.
