A month has gone by since the last earnings report for Match Group (
MTCH Quick Quote MTCH - Free Report) . Shares have added about 1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Match Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Match Group Q2 Earnings Beat Estimates, Revenues Rise Y/Y
Match Group reported second-quarter 2023 earnings of 48 cents per share. The company incurred a loss of 11 cents per share in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 6.67%.
Revenues of $829.5 million increased 4% year over year and beat the Zacks Consensus Estimate by 2.24%. Quarter in Detail
In the second quarter, the number of total payers decreased 5% to 15.6 million from the prior-year quarter. The figure missed the Zacks consensus estimate by 1.34%.
The number of total payers from America and Europe decreased 6% and 3%, respectively, whereas the Asia Pacific (APAC) witnessed a decline of 3% on a year-over-year basis. Total revenue per payer (RPP) increased by 10% year over year to $17.41. The figure beat the Zacks consensus estimate by 4%. Region-wise, RPP increased 12% in America, 13% in Europe and remained flat in APAC on a year-over-year basis. Direct revenues from the Americas were up 5% to $429.9 million. Direct revenues from Europe increased 9% to $227.7 million, while the same from APAC decreased 3% to $158.4 million. Direct revenues from Tinder were up 6% over the prior-year quarter to $474.7 million. The figure beat the Zacks consensus estimate by 2.88%. RPP rose 10% year over year to $15.12, driven by pricing optimizations and new weekly subscription packages. Payers declined 4% year over year to 10.5 million, primarily because of pricing optimizations in the United States, which reduced conversion. Tinder saw an acceleration of subscription revenue growth throughout the quarter. In addition, Tinder’s ongoing marketing and product efforts helped drive better new user and reactivation trends, which also contributed to improved revenue trends. Hinge Direct revenues grew 35% year over year, with a 24% year-over-year increase in payers to 1.2 million and an 8% year-over-year increase in RPP to slightly above $25. Hinge continued to grow in English-speaking markets as well as in its European expansion markets, leading to overall downloads growing nearly 50% year over year in the second quarter. Match Group Asia Direct revenues declined 4% year over year, while Azar revenues increased 24% year over year, helping to partially offset ongoing weakness at Pairs and Hakuna. Operating Details
Total operating costs and expenses (74% of revenues) decreased 24% year over year to $614.7 million in the second quarter.
Adjusted operating income was $301 million, up 5% from the prior-year quarter, representing an adjusted operating income margin of 36%. Balance Sheet
As of Jun 30, 2023, Match Group had a cash and cash equivalent and short-term investment of $741 million compared with $578 million as of Mar 31, 2023.
As of Jun 30, 2023, MTCH had long-term debt of $3.9 billion, remaining same as the previous quarter. During the quarter ended Jun 30, 2023, the company repurchased 1 million shares of common stock for $33 million on a trade date basis at an average price of $31.84. As of Aug 1, 2023, $967 million in aggregate value of shares of Match Group stock remains available under previously announced share repurchase program. Guidance
Match Group expects third-quarter 2023 revenues in the range of $875-$885 million, indicating roughly 8-9% growth year over year.
Adjusted operating income for the third quarter is anticipated in the range of $320-$325 million, indicating roughly 13-14% growth year over year. How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
At this time, Match Group has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Match Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Match Group is part of the Zacks Internet - Commerce industry. Over the past month, eBay (
EBAY Quick Quote EBAY - Free Report) , a stock from the same industry, has gained 2.3%. The company reported its results for the quarter ended June 2023 more than a month ago.
eBay reported revenues of $2.54 billion in the last reported quarter, representing a year-over-year change of +4.9%. EPS of $1.03 for the same period compares with $0.99 a year ago.
eBay is expected to post earnings of $1.01 per share for the current quarter, representing a year-over-year change of +1%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for eBay. Also, the stock has a VGM Score of D.