Match Group Inc (NASDAQ: MTCH) stock surged over 11.3% on Feb 7th, 2019 pre-market session (Source: Google finance) as the firm reported better-than-expected results due to an another strong quarter of growth at Tinder. Tinder showed strong momentum especially in the back half of the quarter, driven by some of the company’s efforts to improve the user experience. The company’s Tinder U product, geared toward college students, has demonstrated good traction with women in particular since their potential matches are all other university students and not older men.
Tinder has added 233,000 net new paying members on a sequential basis during the holiday quarter, bringing the dating app’s total subscriber count up to 4.3 million. That represented a deceleration from the September period, but Match had warned investors to brace for a slowdown as management anticipated a heavier-than-usual volume of “terminations” in the holiday quarter. Analyst estimates for Tinder subscribers to range from 150,000 to 265,000.
MTCH in the fourth quarter of FY 18 has reported the adjusted earnings per share of 39 cents, which is inline with the analysts’ estimates for the adjusted earnings per share of 39 cents. The company had reported the adjusted revenue growth of 21 percent to $457 billion in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $448 billion. The revenue growth is driven by 17% average subscriber growth and 4% average revenue per user growth. Average subscribers increased to 8.2 million from 7 million in the prior year quarter.
For the year ahead, Match expects the revenue growth in the mid-teens percentage range; the current FactSet consensus implies expected growth of 15%. Adjusted EBITDA is predicted to be $740 million to $790 million, depending on precise levels of marketing spend and investments in new and existing brands. Capital expenditures are anticipated to be about $35 million.
For the first quarter, Match expects revenue to be in the range of $455 million to $465 million, below the FactSet consensus of $469 million.
Meanwhile, Match has several key initiatives for 2019, including driving greater awareness of the Hinge app, of which it recently obtained full ownership, and growing its new Ship brand, which lets users weigh in on matches for their friends. Ship’s user base is currently about 80% female. The company is also ramping up its efforts to grow Tinder’s international presence, launching television campaigns in India and Korea