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Match Group (MTCH) Down 6.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Match Group (MTCH - Free Report) . Shares have lost about 6.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Match Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Match Group Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Match Group 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 increased 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 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 8-9%.
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%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -17.63% due to these changes.
VGM Scores
At this time, Match Group has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward 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.
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Match Group (MTCH) Down 6.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Match Group (MTCH - Free Report) . Shares have lost about 6.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Match Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Match Group Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Match Group 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 increased 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 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 8-9%.
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%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -17.63% due to these changes.
VGM Scores
At this time, Match Group has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward 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.