Match Group (MTCH Quick QuoteMTCH - Free Report) reported fourth-quarter 2023 earnings of 81 cents per share, which jumped from 30 cents per share reported in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 65.3%.

Revenues of $866.23 million increased 10% year over year and beat the Zacks Consensus Estimate by 0.6%.

Direct revenues were $850.76 million, up 10% year over year, whereas indirect revenues were $15.47 million, which increased 3% from the year-ago quarter.

Top-line growth was driven by strength in Tinder and Hinge. Also, solid momentum across the Americas and Europe regions was a positive.

Quarter in Detail

In the fourth quarter, the number of total payers decreased 5% year over year to 15.2 million. The figure missed the Zacks Consensus Estimate by 1.9%.

The number of total payers from Americas decreased 12%, while the number of total payers from Europe was up 0.2% year over year. Meanwhile, total payers from Asia Pacific (APAC) witnessed a rise of 2% on a year-over-year basis.

Total revenues per payer (RPP) increased 17% year over year to $18.67. The figure beat the Zacks Consensus Estimate by 2.7%.

Region-wise, RPP increased 26% year over year in the Americas to $21.24 and 14% to $18.03 in Europe. However, in APAC, it declined 0.3% year over year to $14.41.

Direct revenues from the Americas were up 12% to $453.5 million. Direct revenues from Europe increased 15% to $241.2 million, and the same from APAC increased 1% to $156.06 million.

Direct revenues from Tinder were up 11% year over year to $493.22 million. The figure beat the Zacks Consensus Estimate by 0.3%.

Tinder RPP rose 21% year over year to $16.49, driven by pricing optimizations and new weekly subscription packages.

Payers declined 8% year over year to 10 million, primarily because of the impact of pricing optimizations on payers, which reduced conversion. Tinder saw an acceleration in subscription revenue growth throughout the quarter.

Hinge revenues surged 50% year over year to $116.14 million, with a 33% year-over-year increase in payers to 1.4 million and a 13% year-over-year increase in RPP to $28.42. Hinge continued to grow in core English-speaking markets, as well as in its European expansion markets.

Match Group Asia Direct revenues declined 1% year over year to $73.56 million. Nevertheless, the business kept kept improving, which is evident from Azar’s double-digit growth year over year. Also, new user registrations indicated signs of progress owing to ongoing TV advertising and product initiatives at Pairs. Additionally, Hakuna performed well, thanks to the growing momentum of its brand pivot.

Evergreen and Emerging revenues declined 4% year over year to $167.85 million.

Operating Details

Total operating costs and expenses (70% of revenues) decreased 11% year over year to $605.98 million in the fourth quarter.

Adjusted operating income was $361.6 million, up 27% year over year, representing an adjusted operating margin of 42%, which expanded 540 basis points.

Balance Sheet

As of Dec 31, 2023, Match Group had a cash and cash equivalent and short-term investment of $869 million compared with $713 million as of Sep 30, 2023.

As of Dec 31, 2023, MTCH had a long-term debt of $3.9 billion, unchanged sequentially.

During the quarter ended Dec 31, 2023, the company repurchased 3.2 million shares of common stock for $101.1 million. As of Jan 30, 2023, $1 billion in aggregate value of shares of Match Group stock is available under a new program, which replaced the existing share repurchase program.

Guidance

Match Group expects first-quarter 2024 revenues in the range of $850-$860 million, indicating year-over-year growth of 8% to 9%.

Tinder Direct revenues are expected to be in the range of $480-$485 million, suggesting year-over-year growth of 9% to 10%, driven by continued RPP expansion, partially offset by Payer declines in part due to daily new user softness.

Across other brands, Match Group expects Direct revenues to be in the range of $355-$360 million, implying 7% to 8% year-over-year growth, with Hinge Direct revenues anticipated to be approximately $120 million, indicating year-over-year growth of 45%.

Adjusted operating income for the first quarter is anticipated in the range of $270-$275 million.

For full-year 2024, Match Group expects revenues in the range of $3.565-$3.665 billion, suggesting year-over-year growth of 6% to 9%.

The company expects indirect revenues to be approximately $60 million.

Tinder Direct revenues are expected to be in the range of $2.025-$2.075 billion, implying year-over-year growth of 6% to 8%.

Across other brands, Match Group expects Direct revenues to be in the range of $1.48-$1.53 billion, indicating 6% to 10% year-over-year growth, with Hinge Direct revenues anticipated in the range of $535-$545 million, indicating year-over-year growth of 35% to 37%.

Zacks Rank & Stocks to Consider

Currently, Match Group carries a Zacks Rank #3 (Hold).

Shares of Match Group have lost 26.9% against the Zacks Retail and Wholesale sector’s return of 15.2% in the year-to-date period.

Investors interested in the broader retail-wholesale sector can consider some better-ranked stocks like The Gap (GPS Quick QuoteGPS - Free Report) , Amazon (AMZN Quick QuoteAMZN - Free Report) , and Booking Holdings (BKNG Quick QuoteBKNG - Free Report) . While The Gap sports a Zacks Rank #1 (Strong Buy), Amazon and Booking Holdings carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of The Gap have gained 35.7% in the past year. The long-term earnings growth rate for GPS is currently projected at 17.26%.

Shares of Amazon have gained 50.7% in the past year. The long-term earnings growth rate for AMZN is currently projected at 28.50%.

Shares of Booking Holdings have gained 44.5% in the same time frame. The long-term earnings growth rate for BKNG is currently projected at 19.82%.