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Bear of the Day: Match Group (MTCH)

Match Group MTCH is the $13 billion host extraordinaire for the world’s foremost dating websites and operates a portfolio of more than 45 brands. Its biggest and best known outlets are Tinder, Match.com, PlentyOfFish, Meetic and OkCupid.

The Dallas, TX-based company offers dating products in 42 languages in more than 190 countries and will cross sales of $3 billion this year, up over 6.9%.

The company is currently enjoying moderate growth, driven by robust momentum at Tinder and solid performances from Meetic, Match, Pairs as well as PlentyOfFish.

Match came out with quarterly earnings of $0.58 per share recently, missing the Zacks Consensus Estimate of $0.64 per share. This compares to earnings of $0.53 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -9.38%. A quarter ago, it was expected that this media and internet company would post earnings of $0.69 per share when it actually produced earnings of $0.89, delivering a surprise of 28.99%.

Over the last four quarters, the company has surpassed consensus EPS estimates only two times.

Match Group, which belongs to the Zacks Internet - Commerce industry, posted revenues of $809.55 million for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 2.08%. This compares to year-ago revenues of $801.84 million. The company has topped consensus revenue estimates two times over the last four quarters.

Revenues of $810 million increased 1% year over year, beating the Zacks Consensus Estimate by 2.14%.

Excluding forex, the top line increased 10% year over year to $883 million, driven by 9% growth in revenue per payer (RPP).

Quarter in Detail

In the third quarter, the number of total payers increased 2% to 16.5 million. The number of total payers from America and Europe decreased by 0.9% and 1.31%, respectively, whereas the Asia Pacific (APAC) saw an increase of 11% on a year-over-year basis.

Total RPP was flat over the prior year’s quarter at $16.02. Region-wise, RPP increased 6.07% in America and decreased 14.5% in APAC, while remaining unchanged in Europe year-over-year.

America’s RPP increased primarily due to increases in subscriptions and a la carte purchases at Tinder and Hinge. Europe’s RPP was unfavorably impacted by the strength of the U.S. dollar relative to the euro and British pound, while APAC and Other’s RPPs were unfavorably impacted by the strength of the U.S. dollar relative to the Japanese yen and Turkish lira.

Direct revenues from the Americas were up 4.9% to $413.8 million. Direct revenues from Europe and APAC decreased 1.35% to $214.7 million and 4.72 to $166.5 million, respectively.

Direct revenues from Tinder grew 6% from the prior-year quarter, driven by 7% Payers growth to 11.1 million, partially offset by an RPP decline of 1%.

Direct revenues from All Other Brands collectively declined 5% year over year, along with an 8% Payers decline, which was offset by 3% RRP growth. Within All Other Brands, Hinge Direct Revenue grew nearly 40% year-over-year in the third quarter 2022.

Match, Meetic, OkCupid and Plenty of Fish, saw both direct revenue and payers decline 15% year-over-year basis. APAC-based businesses, Pairs and Hyperconnect, saw direct revenue decline 15% year-over-year basis.

Bottom line on MTCH: While we want to support people being able to find love online, we have to be wary of investing in the portals for it.

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