Why Match Group Inc (NASDAQ: MTCH) stock is going gangbusters today

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Match Group Inc (NASDAQ: MTCH) stock rose over 8% on 6th May, 2020 (As of 12:46 pm GMT-4; Source: Google finance) after the company posted better than expected earnings for the first quarter of FY 20 but quarterly revenue fell short of Wall Street estimates on the back of slowing growth in its popular dating app “Tinder” as fewer people signed up and paid for its premium features amid the COVID-19 pandemic. Tinder, which competes with rival Bumble, had added about 100,000 average subscribers in the first quarter, which is lowest in at least a year, taking its total average subscriber count to 6 million. The company had flagged earlier that in Europe, which is hard hit by the novel coronavirus, that fewer subscribers are signing up with more significant declines are in Italy and Spain. The company’s net earnings attributable to Match Group shareholders rose to $160.4 million for the quarter ended March 31, from $123 million, a year earlier. For the first quarter, the company had generated operating cash flow of $75 million and Free Cash Flow of $65 million. The company has not given the guidance for the second quarter due to COVID-19.

Moreover, the growth in International and North America Average Subscribers was on back of Tinder and, to a lesser extent, Hinge, with Pairs also contributing to subscriber growth internationally. North America ARPU increased mainly due to increased purchases of à la carte features at Tinder. International ARPU was unfavorably affected due to the strength of the U.S. dollar compared to the Euro and certain other currencies.

MTCH in the first quarter of FY 20 has reported the adjusted earnings per share of 46 cents, beating the analysts’ estimates for the adjusted earnings per share of 41 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 17 percent to $544.64 million in the first quarter of FY 20, missing the analysts’ estimates for revenue of 0.03%.

Meanwhile, in February, the company had completed a private offering of $500 million aggregate principal amount of 4.125% Senior Notes due 2030. the Company’s $500 million revolving credit facility in February got amended to, among other things, increase the available borrowing capacity to $750 million, reduced the interest rate margins by 0.125%, and extend its maturity to February 13, 2025. At the end of March, 2020, the Company had $791 million in cash and cash equivalents and $2.1 billion of long-term debt.

 

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