MTCH - Earnings call transcript Q2 2022

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Operator

Good morning, and welcome to the Match Group Second Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Tanny Shelburne, SVP of Investor Relations. Please go ahead.

Tanny Shelburne

good and operator, you, morning, everyone. Thank will CFO and call be led and Kim; Bernard CEO, COO, by Today's Gary Swidler. They questions. brief it will remarks, and then few make we'll up for a open

everyone and These Before I anticipate, we uncertainties, may our risks words actual may and we outlook believe, such statements or could to differ statements this performance. and forward-looking preceded need remind we discuss These start, future are be results call, subject that our from today. to as we statements. views the during similar by expect, we materially expressed

Some forth like and the release of to turn have these filed With SEC. risks over been to in our with reports periodic set the earnings I'd that, call our BK.

Bernard Kim

stop, All team bring Me Hands/Ask the each conducted Anything convey I've around for I've many expect team. been the of warm the with thank is table on the call. to connections and Match that's the will At the global joining Thanks, been start truly a call and to want offices work as at what job return. morning our for believe you my of a through CEO such earnings by millions a enough to Tanny. This and I I off to connecting of life. I the elated what the love, company fulfilling Group's to joy and creating two management rest to in people I've everyone and from and to pillars today's first everyone responsible that for months meetings welcome. I'm thanking for world. are fortunate team travel with Gary I relationships and happy Good

I'm our about as been As be expect will I the much integrity told to possible about what's that not our values mindset by to working to day. discipline. what's the team's honest during teams colleagues, my I I've I bring and we learning I and want as who's business every strategy. assessing promise work and thank same authentic, well and and This always partner strong balance I growth passionate been Gary, us to employees experience with well a ahead. as those people, culture also forge financial act product. build onboarding. very impressed our serve I'm will and as great beginning as my their

that the to we've next play. to As on COO CFO, are no factors portfolio we made that across growth. there eye and able key recommendations There challenging unlock macroeconomic set eye been value and up he doubt decisively at is and quickly and has to of the strategic see move phase

in our innovate have fully the don't know are is connections. of behavioral that and people experiences two to creates human the a believe and right It XX shareholder XXX observations over the and true that steps potential. maximize and mind. to real real-world to in the have industry touched forced society upon we in unlock go long-term my we've months, way our countries to be I long-term initial Over up teams set opportunity made that letter, Tinder provide the the Tinder's growth is management for languages. But is two in the to decisive best In those products. immediate app with a singles available responsibility I believe past that its generation the the the In has past phenomenon been dating also my XX to I adjust of are yet. our ability still in and are will style, that markets. was portfolio years for and our transform our enhance share understood opportunity Tinder to reopening the journey apps noting early over best global business. markets years, market next imperative innovating then it's and It's create I and COVID to I of only experience able impacts and business, around that to the in Western culture about what isolate to world. half connections in transformed its do dating continue non-Western

This place, Tinder report will I recruiting for put a lead leadership down, that new to well the team while that that's With to have throughout I've already by together year. current the time write new phase turnover the working confident but the stepping also great led team into able dynamic expertise apparent been work it I product take enhancements and growth. diversified new want and execute to that execution I've are experiment a who strategic will that me portfolio. But do there and experiences CEO a directly and in that new things the in product to build team CEO. momentum. misfires who our efforts innovation. Tinder's has I'm the to next and delays of ship, build team proven believe get by the this and team leaders, lead example dating the trenches brings have get I first some to half on of some can been acknowledge impressed to will They're and done. in passionate

as star. As international speaking team user campaign been our ones. a part have been deleted that I resonates English executed be product brand elegant design they The Hinge their a Group, to breakout base. They just have successful that of be has with on believe strong will Match differentiated in in including markets has building as

ensure long-term I'm brands set face While and challenges, we're organized tackle closely to for to them with to working that their the continue own the up brands other teams our success.

not to team to since that time technologies the by and the during team is see with elimination the we Hyperconnect innovation. have IDFA, in year, This first was last but trip of able expect acquisition While been My entrepreneurial deal. increased were finalized to the Their down that have the competition together sit we the products introduced the month and acquisition to completed built around the the struggled The our has in and I've lockdowns. teams. plan to of Korea has gone first teams more world. is spirit our been something across collaboration products strong adjusting our impressed I Hyperconnect core

We continue products of adoption acceptance Japan. our to markets increase and in like

that business and new to ground demographics we long-term when we users. to two a drives profitability. great impressed From have product found a a established in people with base, return team Amanda Pairs, love ensure are the Tinder brand on Their marketing our products, we my and our Bradford, are We messages We've In been Founder The resonating spend marketing they CEO, our as League. the brands, willing serve, And have other to rightsizing always this user pay and League’s are experience, ensuring and to. by and to engagement. service. innovation user opportunities significant think about ensuring has for continue built adoption premiums that

more up which few some the dynamic Gary the about be users with to day on and out great over and I calls, singles months, continue have is subscription I'll to but the set product details goals. will teens give I only strategy. I for committed start audacious next And our products. the models sign I business, up back momentum. execution unparalleled. I'm and my dating. more will new and share that understanding job, on We our to is more reasons compliment work building to we new carte to building plans but teams. Tinder product as product products, on At innovation expertise great The on come This future big developing want to to more be often XXrd features regain time la will a the à side of need our speed delivery bring and life to bring

strive collaborate, We shareholder to on and will that, to innovate, win. world. the future. I and over turn transform decisive way more people connect will expect to others the our growth team's long-term with And feel with push the about in the I ability people to drive drive bet be platforms I'll around great and value, Together, on always Gary. we our teams it

Gary Swidler

severe impact call in provided everyone. our excited FX total cover Thanks, year-over-year right solid quarter, basis. There QX going revenue BK. our headwinds was earnings $XXX as so up would to this had I'm expected I'm of what QX our May worse $XX on we And with QX BK's is together. FX to we XX% million The were outlook get than up FX lot million for a been The on first and call. an XX% revenue my when a into QX $XXX neutral have hello million it. We year-over-year.

X% brands, up including had purchases editions in year-over-year than APAC continues by with year-over-year in Match year-over-year increased and an in but declines It driven Match prior and aided X% XX% grew payers relative at Tinder of from Europe, in It performed our to the average RPP in in Tinder, RPP APAC Yen year-over-year. of Meetic, up XX% came strength Americas, and acquisition in well. was where British Hyperconnect. of X% neutral from aggregate. and impacted brands Payers XX.X the Tinder FX. payer Americas, the continued was growth. X% year-over-year, and the partially Total QX by PlentyOfFish, other, RPP cents the established and which million XX% declines well Hyperconnect were X% at up established and was neutral Europe X% basis, Americas grew and FX Tinder rates in adding on a basis. Euro the other. X% the grew other, was XX% X% saw basis, the war by increase year-over-year brands. up average from higher up in be quarter, the to was Payers the RPP to X% basis. million, was Tinder Payers contributions Tinder growth XX% as On APAC contributions driven while Direct X% Hinge, revenue were the Affinity and an strength XX% XX% over Lira. $XXX Ukraine offset other Europe, of up strength expected, direct on flat of on XX% stronger the grew an CHISPA X.X by of in brands BLK on Hyperconnect both growth. of in drive OkCupid payer revenue revenue the RPP neutral reflecting and and alacarte were by year coupled in neutral FX Europe decline had at XX% year-over-year dollar Hinge, FX X% for Tinder and APAC million XX% shows with pound. dollar were $XX.XX we company million, and to quarter, RPP neutral impact the direct and year-over-year FX where Our revenue other Europe FX the which in All RPP growth XX% an basis. XX% RPP BLK year-over-year subscriptions wide quarter. an was payers again an direct to the the QX. and of to compared in and year-over-year up CHISPA, in XX% Hyperconnect. by delivering the grew in XX.X offset Hinge. and

lifted, rates them intangibles related of in and million operating We the at there revenue million X% rates to lower the million strong impacts we quarter revenue see strength abated. revenue At seasonality. in its interest against $XX Hyperconnect’s as $XX brand QX, for FX, saw pressure impairment Some of Azar were PlentyOfFish, some sustained in XXXX, in to some Ramadan in financial year-over-year. roughly our Indirect couple the as time as to acquisition. had were a certain XX% in well. lower our impacts COVID of QX. met the year-over-year benefited attributable trends the the a XXX but revenue Japanese up the in the the to impaired ads well stimulus were business trade opportunities users million discount Pairsin operating income modest QX trends serve Meetic of excluding RPP our was COVID-related group attributed was half including a Adjusted and from in well in and only X% products other specific payer benefits year-over-year grew apps, finding impacted new the in in contributed demographic, from saw use margin typical for DCF and we markets, loss FX Lira restrictions outlook demand has SBC as from by but of to as as QX which of stems weaker but difficulties rising after X% payers QX And Hakuna Asia, rates stimulus burst The There direct Hyperconnect quarter other of trends softness. marketing given representing we expense Hyperconnect. tends continue of generally. were Overall user government only a as in year-over-year, primarily a brands, on conversion as were by the two XXXX, thresholds. increased had the improvement Japan expenses, ROI that The up heavily In established XX%. yen, Turkish by names income in to key new the the as model. and related a a especially higher intangibles or including Match $XXX expected was lingering saw calculations, its but QX, the

Excluding or as year-over-year established the the of XX% X total more year-over-year, show year-over-year second spend of of initial Store marketing the including discipline litigation. primarily we and $XX quarter cost our reduction down of revenue represented points Sales Cost brands ROI excluding XX% placed straight $X total and was to spend percentage continue a Google XX%. revenue amount marketing where reduce due to to million higher Sales as Hyperconnect marketing saw overall. Hyperconnect at year-over-year, we revenue. decreased of impact grew related App to escrow the and revenue into spend XX% fees, million to

For travel the the year. marketing Hyperconnect as increase cadence we from million $X cost to The the declined in lower year-over-year. grew unchanged continue development increased expenses first business and G&A more G&A travel. spend headcount year-over-year excluding Hyperconnect in $XX at expense, particularly G&A revenue, labor XX% comprised normal of increase highly and return X% Hyperconnect or rose year, and were market. to half XX% and of sales we legal X fees revenue prior Hinge expense excluding a of in million an as Tinder Product a of year-over-year. reflects XX% competitive

our X QX. leverage was related and of million approximately $XX the over buyback hand. X.X adjusted Tinder former levels million our on of net shares X.X cash Those have basis. just Our income, employee leverage declined times deployed trailing at in equivalent and currently We cash, of now approximately the $XXX [indiscernible] date investments resolved. $XXX payment on million and the under to $XXX leverage short-term million to operating gross authorization. to lawsuits matters per arbitrations. approximately remaining with reflect QX a buy-back shares X These at quarter our settlement trade million of times ended the end share the of We are of We

in As of and affecting stated are there number outlook. we the performance our a letter, key factors

half well. provide of savings We use been incremental outlooks FX, aside growth. the second outlook which competitive in has COVID expect for dollar The forward in from significantly to days we and is become this impact curve which payments, brands clear have users underestimated it's the monetization. COVID, QX a strength from why first year our impacts some benefited drove unusual FX and year The is environment which largely year, we less benefited the of stimulus our created the QX. and their curve that our early business. the behind consistently of first also Leaving the marketing buttress established trends And the the government and which will affected half as

people XXXX vaccinated. face being businesses strong second experienced have growth once As these factors very as socialize to these challenges. after Tinder of more again began half a abated

drove as we're other of optimizations not strong are these been Moreover and of on Additionally beneficial the we've and Tinder and lapping second delaying in optimizations that and expected revenue some product XXXX in that growth payer Tinder QX quarter. in XXXX, half delivering made several paywall the launches. initiatives revenue which counting sequential challenging now some record for we'd editions comps. We're

growth period Our sustained business rise. Japan continue in driven seen strength data's slowdown a a by in spending. cases haven't is in live And rebound of a revenue where streaming induced stimulus in remain and to reluctant we after showing PlentyOfFish COVID part performance

to relatively XXXX. these factors of half together second revenue the Taken for lead expect muted us growth

On which fully yet cost has the side, realities. the which feeling economic financial of we're impacts labor environment, caused to as adjusted the raise a marketing the us market, to tight as levels well not compensation

As XXXX. such slowed Store in continue will headwind. ROI the hiring the growth. Google up adjust to points were over our and for into App Store some amount all. fees Europe U.S., revenue our apt in their a fees revenues create we've including that fair the QX marketing Store our in effect escrow Play to the spend, in even the significantly App be goes remain expense in XXXX, prevail of from and we our to XX.X% discipline optimistic in We XXXX, X be The much Stores should which Google QX against ecosystem the App are our policies lawsuit at DMA of required to a also sticking related as

headwinds points For would be Match to $XXX in million meaning we $XXX neutral year-over-year. expect of total essentially anticipate FX QX, million total flat an on We QX, that of over Group over revenue million higher for $XX year-over-year revenue X FX growth basis.

revenue mid-single-digits, revenue neutral all to an on mid-single-digits, the basis FX basis. in down to direct expected low-teens other up Tinder's neutral be FX QX low-single-digits an expect is but while direct on We brands

declines offset helping the drive continue at BLK We expect growth, brands. Hinge, and will Chispa to the established

income of about at XX% $XXX in QX midpoint ranges. margins operating million $XXX expect to million of the the representing We adjusted of

product The year-over-year in meaningful and development rate in contribution a a margin much is our sales Store highest than spend, in overall negative fees. than lower year-over-year Tinder, a margins. from which and lower lower company expect expected our continued increase revenue growth QX XXXX effect and marketing on App has business We

in XXXX, is impacts, year, last when We $XXX more our year-over-year reduction $XXX now full year of and of FX full at we're is thoughts than our which estimate worse XXXX. $XX call. FX first estimating back gave we a our in XXXX million the in year-over-year about X-point November than revenue call the for growth points For causing earnings two time than earnings more million last million of

expect growth For in modest margins we our QX, compared improvement in limited AOI and year-over-year top-line rate to improvement QX.

While The we is The prices, to facing we half impact business. company relates the below Tinder. driven year its on revenue remains through our growth purchasing from our positioned at of the second be significant targets, accelerating by to and product to face we biggest pressure believe expect gas execution environment move deliver macroeconomic and consumer as we rising unknown food growth the improved power. constraining the XXXX,

product that is small a to Our happiness. purchase leads one and

modestly carte consumers consumers. which constitute the which reduce So may we that subscriptions, the la consumers to continues worsen, to lower economy remain some We particularly those to purchases, it's it. are our but effects brands, to we but resilient, back see at a on stop expect modest possible of business will If remain majority cater our or low our discretionary. of to will revenue, sticky, more tend believe be pull income vast

base more call. largely to next We We'll user remain affluent no to an and have overall earnings impact given pullbacks monitor update our and seen trends business provide expect to spending immune date. its from our continue on these Hinge consumer

us the at recent provides way and we growth, penetration up changes by can Our execute to have by on users which growing we position The achieve RPP. It and opportunities. payer runway to the Tinder category is better to made should perform us we've increasing ample for historically.

facing and is some we temporary business on the will disciplined remain especially in marketing challenges, While costs, hiring.

the well and remain line few combination achieve. can our We generation Our is for prospects operator our With as cash believe growth remains deliver I'll ask free as companies strong, to profitability flow our to that, goal open other and the for and shareholders. one of that bright longer-term profitability growth questions. our consistent

Operator

Thank you.

question-and-answer comes We from Please Instructions] will the go Evercore Khajuria first begin now ISI. question [Operator ahead. session. Our with Shweta

Shweta Khajuria

try Tinder, BK, on you. please. a question thank let me Okay,

there So Thanks. what been this new looking in the why are much CEOs? Tinder And has CEO? you in turnover for

Bernard Kim

Thanks, the Shweta, for question.

quickly team. have leading going into a tenure, OkCupid, newly our But moving improve I First formed it's joined done I to XX the to that we're will business. at my is entire bringing and to the I have at act not our to continue in Tinder to things biggest and her done and expertise Tom great she CPO, felt years in last transition assembled put from known of two is of early know stars Faye in great for COO departure, Tinder lead team is And execution be has I've Match engineering organization. confident to Group, as really a is and CEO happy two manage position that Mark he across of Tinder brought a engineering years. delighted CMO, all an a strong worked think a and we're and the first Tinder to that Tinder inspires finding in going award-winning years. at it product I in business. with driving And leading to search. working CEO, new team with in and the the With personally in the and our for joined really leader we I'm taking accomplishments leaders admired the motivates level in Arts together But I short-tenured him to place, someone after also will excited new growth really aligned foremost, I the Match Angeles Los next business place of forward. top comes and I CEO, have to once leading the comes tremendous want When to he teams. be with Group, at enjoy immerse is creative all, is Melissa to this and wasn't expecting and week working break for well opportunity job I've team, team product and and also ideal this and is one lead the I forward as as teams. CEOs to choice already in. Renate's Electronic five really really meantime, is to who's my we his wanted cycle change I with Tinder so decisive that growth. We've vision with leadership Tinder. look want Tinder over and Mark myself experienced, but who of team. his who's This team

Shweta Khajuria

Okay, thanks BK.

Operator

Our Cory Please go with next JPMorgan. question from Carpenter comes ahead.

Cory Carpenter

Thanks shareholder with in in the talked Great. Tinder, lot prepared execution. the for disappointing question. Sticking the you letter about a remarks,

And is, So wrong about question what it turned around? can how you. went quickly you Tinder? talk could be our at Thank think you just

Bernard Kim

on the but that Tinder the the on product and been growth happen first counting for initiatives year. in time we initiatives works on Typically, second And Thanks in half QX. did for revenue execution road of the payer not year half much, Tinder year, Cory, growth of deliver this were have map that the in on around. that so QX didn't materialize of big first a the for the delayed half number and its question. on of

that So don't the bump typically expect we revenue we same see.

a then It's there a great was a also building succeeded that haven't I but innovating do monetization ideas to spent building execution. example, gateway was – maximize building it's high is lot we Tinder, its engagement, lot features at experience of the an As all but Explore. about believe and strong yet product user potential. market and opportunity with time of on

I map, it of is that we road for on deliver Tinder. all lot problem product and with fixable short-term this think in I me team that gives a confident will now new and the a optimism the feel place,

Operator

Our next question Cowen. with comes ahead. from Please John Blackledge go

John Blackledge

Great, thanks.

in provide revenue revenue the expected thoughts color one Thank revenue the guide in confidence XQ guide, XQ on maybe puts and and your also takes can more On XXXX? you Gary, on this the growth the of and reacceleration revenue kind of you. for XQ

Gary Swidler

Sure, to Thanks John. happy for the I'm take question. it.

the would end and generally, what to what of XXXX. I kind between half our low QX for which deliver areas. QX, versus in to year results XX% about XX% a year the back range the hitting for the it now is Here's half way of and from which back expect for of really recent have that we and was There's gap think our the guidance, the resulted three there,

third the gap The from is first, additional the third rest that the has execution gap, talked the in of comes in about that. in we especially in effects how weakness weakness the more delivered about, other to year. weakness, variety business: of as be lack of a about think, established third rest, Of half factors initiatives, macro of across comes the Japan; piece other comes And is from of in much delivery APAC, and which half the one headwinds. the of remarks Tinder We of the and the about is well. we about the some talked that expected map first of and from of the brands; not a FX as and severe prepared a so lot streaming having or missed road hit product what total bucket generally, which from a BK just and live might gotten

third. over as and the think we that you move QX about carry now improve we and are And while not we're those expect compared in build through QX, improvement total gap, momentum after for much three to of which, do to to So the XXXX. one account buckets should I expecting

John Blackledge

Thank you.

Gary Swidler

welcome. you're Yes,

Operator

comes with next Steiger Our question Goldman Alexandra from Sachs. Please ahead. go

Alexandra Steiger

can. Hinge, my thank if questions. I Two Great, on for you taking

us the rollout? us give so sense going Thank Could a of the accelerated given time growth you sit about cadence then of we for like the of this also you contribution ramp despite in this year. reiterated monetization revenue terms launch the in line, and So think revenue much. half And second how faster trajectory investments maybe where and million you could of maybe understand you forward? next $XXX terms of year you help into year margin second, the in Hinge

Bernard Kim

this markets marketing has Hinge vectors very by in expertise. user experience user driven we've still markets with and great monetization growth. momentum, and already, culture, in and ample great I to coupled campaigns awesome Hinge runway singles Hinge's We've see we there's growth excel many and marketing features intentions been continue development, seen created on Match's as and for Hinge's two that has core One, love. product to drive team roll in it out accelerating successful growth. and

next the For monetization example, about really we're subscription excited which premium feature, tier. is a

that will as market has product help in accelerated and will many XXXX we beyond. revenue as drive stronger on expansion, fast that translating international markets fit created as growth This Hinge and which capitalizing is Second can. into

the years think combination multiple strong these of set for two up revenue growth. opportunities of I Hinge growth

Gary Swidler

And to jump want on as a question. let of it out the me relates point couple things margins. Hinge to I margin in and

The judicious both first on very hiring is and in being development forward, right is about as our spend now people. across the a on we brightest strongest well it as business. business, at very It's And marketing Hinge are as spot and company recognize And the portfolio. thing is, that while the cautious going well continue as side in marketing we business and invest to in the are product going important and levels us. growth that the to we to

issues thoughtful. sure don't way Hinge I So to on being growth in as continue expenses headcount. the we're has its And make to there or trajectory. relates we treating it needs to want the being see are marketing terms resources judicious, we're of And but we

to continue grow to I think for as Hinge resources we're to planning it grow. has exactly the

to we're the growing a understand more the grow, judicious investing to like be on distinctions between So I more versus strongly. going and nuances are is hiring in. and where make want to people And business marketing Hinge, sure that which business there struggling we're

As as of efficient we far I spend. that are smart our marketing very margins we and with kind still what achieve, think, can

organic it see the spending and the company what levels we to has now over we're continues at like are we are we traction playbook achieve that of time. that into business, to think That the playbook see Germany, our that's been market And like be in can traction, in margins. a margins achieve Hinge. our marketing with in We think already where is to we position Hinge Hinge investing close And spend. that

still we as we'll so, nicely levels the XX% on for overall strong We as be margins. Hinge been into providing margins think very and contribute we Hinge as think a we our which, will is drag company at XXXX don't and year grow we've be well. say, think to outlook, that talking our been about the will this And that we've

questions. answers that hopefully So your

Alexandra Steiger

Yes. so Thank much. you

Bernard Kim

to operator. one, go we And the please next

Operator

Deutsche Bank. Our next Benjamin from go ahead. with question Please Black comes

Benjamin Black

Good morning. for question. you Thank the

the challenges revenue the in the I a XXXX, sort growth and is sort But So rollout. the product leadership about the volatility you've given there to confidence be mid-teen you. to growth high-teens we And algorithm? returning in around what company. thinking look of when growth? in Thank been changes gives that should past we of XXXX, the understood some how to more you meaningful

Gary Swidler

Sure.

question. that the little that bit and weave and the a together. take as with I'll to well, XXXX, answer talked And so question in about for John's Let I thanks about as try to me jump

want execute say we to year. is needed we First revenue I us didn't to part and of teens, this can comes growth. as really off in and for of opportunity And to return lot to a right that the bat, of There the down to expected as first we it all, high confident execution. mid to business the remain now

team, BK in the to in on execution and So overall talked a a few has particular, as need to few momentum about quarters deliver we roadmap. And the their product get need business. Tinder to their extensively rebuild improve quarters the we

Obviously more in our starting that, terms but of place, And is we growth. quarters back and at deliver to takes move stronger and we as our goal that the goal least in into think deliver the at And strong to than as through that pace growth improving need will happen build XXXX. improving to into a stronger as we measured I through as know so, then you and XXXX growth. is move

we We as can on is XXXX upcoming I and the what, will provide more deliver details in for our think, specifics calls custom.

opportunity you But get is going to. goal long we particular, that, like executes think there. do execute as and We the we where of think what give to the we and do is a levels team we'll have Tinder better to exactly to on can there's to our And been. sense we in that. as will think we back get what we cadence be get So

Benjamin Black

Great. Thank you.

Gary Swidler

Sure.

Operator

next comes from go question Our Lauren Schenk Morgan ahead. with Stanley. Please

Lauren Schenk

ask why to the the sounds curious that to or testing product relative as it's What like half Coins. disappointing Tinder. your to wanted primary I'm second week And expectations? at aspects that driver of outlook I Great. of about were Tinder

wasn't those packages new shorter lastly, any pass, Thanks there? the you commentary previously the on back if day the pass. Any much. in kind bridge to the said there half gap then products subscription that other there. term think weekly just much And of so benefit I from

Bernard Kim

most goods to can compelling under that Mark Tinder confident and great I spent such career completely But are and are of it in table. questions. offering been that bring on approached significant in we monetized. expertise currency of power can monetization have take thanks Thanks, and currently this one. our gaming, the love I Tinder. I the in for building to goods the coins who Lauren lead focusing virtual believe, a and logical believe a I feel ecosystems, way. hasn't virtual of I users, in idea I and

currency launch out demand collectibles you items For for later. rolled get the goods these and and in then instance, my experience gaming first virtual are to

term Mark I I efforts, While the the right a deliver proposition to important frustrating and revenue it's stream. think, this super it's pause value be long can that so

offered term term different plan testing but shorter Match see going rollout short of of what our subscription around has question upcoming at We this to packages, variety points start Group price subscriptions not your to we of initial fall. these, works. terms a historically In programs are these

Gary Swidler

in we on goods. our maybe half around just delivery I clarify want second or outlook the if isn't that that virtual half then even targets. that anything, outlook. you is And for goods revenue coins to the said, on second of counting are And coins half I implies, into virtual and something the much, the case. second baked can wasn't which jump There

of the kind not half for of the the of expectations versus second back half second shortfall XXXX delaying a half. of the fact and optimizations is year series us we're half the that were deliver in deliver the our the initiatives that revenue of on revenue. notable were but plans. sure less and that to in less to more of first team keynote in changes initiatives why taken So it's of deliver help explains we at other expected But And driver less have help also series initiatives initiatives still to the not that there more very optimizations important sexy, that place. fully and that the Tinder it to half on our second really initiatives, make we made kind that the initiatives has have the been try in And

it's so and shortfall that's the issue. delay that And really causing kind of

have in and you And performance the QX that is note made year need I significant think QX in that really additions in changes where materialized and I that out more a of part you'll did payer drive And we do QX those And our strong confidence as materialized XXXX. in deliver that. Tinder we particularly strong think and look still to And about kinds had it has and XXXX. in back to we for into the important revenue but XXXX product needs deliver going of the optimizations in massive again. strong talked to be we'll revenue QX. to team I on as well growth get improvements we into the look deliver we'll the hasn't that be year, that and initiatives think, And we May, of called momentum I And initiatives. positioned back if down, as the back of in growth reason out. those QX and if year, we to and a remarks in XXXX happening in initiatives, into we we've and last series we on that the not initiatives, now, very now you positioned think were early were initiatives to of at do the and we in as propelled the that believe come half and right

Lauren Schenk

Very helpful. you. Thank

Operator

Please comes with Our Jason Helfstein next question ahead. go from Oppenheimer.

Jason Helfstein

Thanks. Maybe bigger of picture a question. kind

the better seeing perform this So, third earning and companies affluent more we're outlooks. that have with far in season, quarter customer bases their quarter

facing enough, of resistant, are cut on you're self-inflicted perspective And headwinds less are that of recession think what's and the who Thanks. about recession seeing? are your I alcohol of think kind thinking users historically there that or as is that have I in kind more tobacco. guess might some online dating like or has do been mature perceived as younger guess back I inflationary you vertical perhaps spending the you discretionary BK the now aspects that during pressure of income we're this?

Gary Swidler

dating in I our expect downturn we try believe impacted As don't I would as take economic a to is a this And well. business think, one? in why my category, be we remarks, jump and Jason downturns. that Hey, minimally said as I readily in resilient to

out, with to see, you there expect rightly serve point it that would which income. Hinge, brands wouldn't lower income discretionary customer. less our much if affluent business impact, the I were think example, at have to at We effect more any consumers for as tends like a be

at have And overall Hinge, seen definitely so impact not the from macroeconomic environment. far we any

downturn. more does in of and there discretionary is more on la carte think also would is nature hand, some probably with risk be from subscription the and other more, sticky à and revenue that's We that economic the business downturn. provide a our insulation at some us an at more But

any real well, So, macroeconomic we our to see factors. now business impacts for right don't

something globally. to for on our if are I the there continue downside think deteriorate. a We them do would even are things monitor But to because year, as going to we much see XXXX, say of we watching don't that crosswinds of get want It's closely. we did lot I out

the assumed potential in think we've I our there right of of level outlook. XXXX kind as well risk

consumers I that insulated, view So business, to in we'll your the right of discretionary kind way way on of our income, risk think see in about more the affluent the think, particular our the more next the are think people more I materialize the months. lower spending, what business. with resiliency six But of that

Operator

go question ahead. Truist. from Your comes next Squali with Please Youssef

Youssef Squali

much. actually very the This follow-up a question just you was to is that asked. Thank Great. one

people's in So budgets taken for try a hasn't time returned to BK, letter retail, yet at online our cetera. over from first when the that you things to the is willingness experiences this really are think, said time, level. et And I dating like pre-pandemic

you it of just most comes excited the structurally start and products kind what can maybe the about? that it's what talking needle moving think you and nature, not were in gives are confidence maturing you cause XXXX really that you growth about Tinder, Thanks. not when again, what So to if particularly this is re-accelerate as guys

Bernard Kim

the Youssef Thanks, question. great for

me is this right not if category saturated. taken do this I it on. Let hit wouldn't the I that believe job have was. like I thought

even tried as such more Western in apps. half U.S. As letter in developed we and have than the markets, singles shared of not Europe dating

greater in there's even opportunity So of – and APAC and a rest world. the the

innovate demonstrated our example which to in It's just that growth. to at new to is great products order drives user dating and online overall continue to leads teams category users. product we hinge, features, drive A new growth. strong we has introduce on Tinder it important adoption, have to same by great innovate has to product directly has product recently, feel We and level that funnel driven such right momentum innovation top like its exciting innovation have not marketing product the of voice of as seen next level in of now growth and prompts. but place

Youssef Squali

Okay. of Best Thank you. luck.

Operator

ahead. comes go Our Lu Please from with Barclays. question Mario next

Mario Lu

Great. Thanks for taking question. the

So like for it point looks decline midpoint. to guiding the EBITDA X margins the on have a quarter at guidance, third year-on-year you're margins one

App versus product product upon development higher touched How Thank spend? this you is down fees further? you expect Gary, we in your secondly, break but that to you. can from of then the help Store earlier, development should So again? And when much de-leverage compression

Gary Swidler

Sure. take to I'm it. happy

there's just and of sure kind everyone that understands clarity that. make me outlook our around Let

XXX QX, and from we're saying we're basis So XX% points the which midpoint there, the at margins, basis I as QX. points of about sequential then XXX AOI in read expecting improvement you of ranges in there'd basically improvement think be to modest could some

the In margin do my the let of in see top change if overall head. terms off can drivers, me year-over-year kind this of I the of

And Store so would and I half a of fees headwinds. are say point a App probably

maybe So there's X.X still and headcount on headwind. meaningful probably year-over-year headwind a is QX of points margins in

So App X we've points made. headwind of you have headcount from that the the moves and Stores

sales get marketing. and benefit probably You a from about point of

decline, head spend. count that think so little lower the that's rounds On small X%. to I marketing other there's hand so and X.X of year-over-year the from other other probably items of I bit or App am primarily and and But probably probably the would offset a around from a some your say fees it's some probably headwind, effects so I the Store with

the company have momentum margin margins as new accelerate as well there into because see that we'll XXXX, not pullbacks the effect And don't mentioned team the to I really that help business starts the effects to a is does product from making. which as in generation that on growth, upcoming company In a in Tinder and momentum, I revenue Tinder particular think development the as drive to as start has as do expect that overall contributing turn hiring revenue question, stronger and is we'll fact the should product remarks, quarters, see side also your on and of line my margin. to in start stronger build we're significant but very terms the leverage be development significant the on will second I corner been, of we it help the overall high

is perspective. but acceleration also So getting only revenue margin Tinder not going from improvement, a a growth margin important from perspective,

as we've XXXX reasons the and all So made it optimism to, corner are is into of the those key, it's business. turn driving the we we aspects I the think the on we have changes

Mario Lu

Thanks Gary. Great.

Gary Swidler

Sure.

Operator

with Thill Brent from comes ahead. question next Jefferies. Please go Our

Brent Thill

Gary. morning, Good

in shares million X quarter. the back bought You

just to, breather in to relative what you'd you it M&A? you're expecting ball, do not a you're Can that do can to feels implies ultimately open share say kind repurchases. have like follow Japan; your that said take just you You the What gets what on feel you And second on the market and like. increase are back as when going secondarily, up to needs magnitude crystal the largest if seeing normal? like happen you of think that more to you you

Gary Swidler

Okay.

me – them. both of let So I'll take

into to were initial dating a think the used dating that still to and I restrictions culture, to a so the there year kind apps. extent, so it lifted, them they if important of market. of have emergency the Five thing frozen I has really And and period take place some large of restrictions have understand their a who me do had because lift. behavior culture still forget demand, reluctant to I tendency out a is that what think think were that of eager you up second way. one was put In get probably improvement that the wanted were that restrictions Let Japan that's for getting a kind to a a of over states see people or and lot we don't in once pent first, I did I conservative to and who waiting

that the only of So follow is of the you little saw conservative kind a made no case also a out again in in again but on COVID And rising then that. people you there today, from improvement behavior. a of that was of which bump, their gate, bit market has have unfortunately bit little

take Japan. it's to to quarters think I normalize So a in more few going

have trends a good macro the that partner all market. a think us, in marriage low find to always your I market for made that hard that rate,

some to people's to market of are on in we behavior. full don't think still quite this And have the normal there, haven't a And behaviors. every I of full I in seen of of but kind return his COVID I remarks, think said understanding needs a think as BK all we normalize. impact

And some I in So important it to took bounce to right I Japan, back. now. and we're severely case look hoping given I faster. at see based going it we to think on it bounces back think is it's take way a everything and outlook, study where really that's COVID, response Obviously for our how time they that's think expecting to we're their the

that But is I will We market. dealing happen. to can what we're we everything Japan think do with make that to in that the try

M&A, good terms done In want in kind lot to in-dating acquisitions. of a particular of we've and out I think we buybacks of point

look you and phenomenal you a much a look PlentyOfFish more it's at in with Hinge If And go acquisition. at if acquisition run there's particular, acquisition, we just home do to business. prior can you Hinge, that

Pairs the those very optimistic very, at And acquisition trends we're League, the in look we've is space. very have about the dating in recent acquisition despite recent strong for made acquisitions that The as Japan been which in us the most You well. market,

more targets like the so. find to continue dating absolutely able compelling and won't we're we them do to if to hesitate act we So in would space, to on

look By the when contrast you there. no have that We acquisition of the would hoped. we made have at issues do the financial flexibility so to dating, there's it we way gone outside hasn't them,

on had worked not can no acquisition is first working team do are year. denying in but of we We the the it. there's the Hyperconnect There's more think business, We fantastic. way that with that has out that at we hoped still least

we levels. so path acquisitions, a need those wouldn't kinds from derived non-dating as if the profitability in need be that clear raised but do more, them, that well bar around the immediate And That's say to be the to we of we both to profitability. been And more as not growth can convinced not profitability has acquisitions. to see

will So standards dating. for I acquisition think of the outside higher be an

about our to year, bit have refine and excess a and maybe about, more, core BK of at. to and a we a maybe it have So a that it, being way good will capital, acquisition chatting right bit $X of a our number continue think now the kind think we less, All little how spent toolbox time a it's that's probably that's of because been something good kind thinking we we but I to M&A, and so generate or something at that billion we that or overall strategy element lot around little said about. look is

of fluid sense. to constantly Board think whatever a on discuss second at maintain our makes dislocation stock we the is as we do and do bet well. shares, bet. our to in the in quarter way. so our that in that continue third moment, and to and decisions, the in best we that our This to price continue expect we'll what that with effective the flexibility. be that it capital. with But betting We to returning out to is And M&A, did want need it set the capital we're we're to the this And use on is, where right the market betting It's this. that right And dynamic with operating and to we do. our can given is buyback We aggressively internally in we ourselves quarter And figure most thing ourselves highest make. that going do now, in absolutely always environment excess

over to two a for why hopefully so that close time, of I remarks? couple I questions. know don't bit getting a closing answers it little turn So your we're to BK

Bernard Kim

Gary. Thanks

buying and Group's $X to again I'm call, looking ahead. tomorrow. our in you all. Match market the of will the potential vote I work And you plan open with business I the tirelessly me committed this of close forward. speaking the much long-term to a board trusting shares building million November. and I forward to on we worth with shareholder runway really in I'm opportunity. thank the and so There's to confidence, investors for Before push as value, want employees, Thank

Operator

conference concluded. for now attending The Thank is presentation. today's you

disconnect. now may You

Match (MTCH) 3 Aug 222022 Q2 Earnings call transcript