A month has gone by since the last earnings report for Match Group (MTCH Quick QuoteMTCH - Free Report) . Shares have added about 5.4% 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 Q1 Earnings Beat Estimates, Revenues Up Y/Y

Match Group reported first-quarter 2024 earnings of 44 cents per share, which increased 4.8% from the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 10%.

Revenues of $859.65 million increased 9% year over year and beat the Zacks Consensus Estimate by 0.4%. On a foreign-neutral basis, revenues increased 12% from the prior-year quarter to $880 million.

Direct revenues were $845.3 million, up 9% year over year, whereas indirect revenues were $14.35 million, which increased 13% 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 first quarter, the number of total payers decreased 6% year over year to 14.93 million. The figure missed the Zacks Consensus Estimate by 0.3%.

The number of total payers from Americas decreased 14% year over year to 6.87 million, while the number of total payers from Europe was up 2% year over year to 4.5 million. Meanwhile, total payers of 3.56 million from Asia Pacific (APAC) witnessed a rise of 2% on a year-over-year basis.

Total revenues per payer (RPP) increased 16% year over year to $18.87. The figure beat the Zacks Consensus Estimate by 0.6%.

Region-wise, RPP increased 29% year over year in the Americas to $21.85 and 10% to $17.73 in Europe. However, in APAC, it declined 2% year over year to $14.57.

Direct revenues from the Americas were up 11% to $450.25 million. Direct revenues from Europe increased 13% to $239.36 million, and the same from APAC decreased 0.2% to $155.69 million.

Direct revenues from Tinder were up 9% year over year (12% on a FX-neutral basis) to $481.5 million. The figure missed the Zacks Consensus Estimate by 0.3%.

Tinder RPP rose 20% year over year to $16.52, driven by pricing optimizations and new weekly subscription packages.

Payers declined 9% year over year to just under 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 $123.75 million, with a 31% year-over-year increase in payers to 1.4 million and a 14% year-over-year increase in RPP to $28.96. Hinge continued to grow in its English-speaking and Western European markets, with total downloads growing approximately 20% on a year-over-year basis.

Match Group Asia Direct revenues declined 6% year over year (up 7% on a FX-neutral basis) to $71.5 million due to continued declines at Pairs and Hakuna. Nevertheless, the business kept improving, which is evident from Azar’s 4% growth year over year to $37 million.

Evergreen and Emerging revenues declined 4% year over year to $168.6 million.

Operating Details

Total operating costs and expenses (79% of revenues) increased 15% year over year to $674.91 million in the first quarter.

Adjusted operating income was $279.45 million, up 6% year over year, representing an adjusted operating margin of 33%, which contracted 80 basis points.

Balance Sheet

As of Mar 31, 2024, Match Group had a cash and cash equivalent and short-term investment of $921 million compared with $869 million as of Dec 31, 2023.

As of Mar 31, 2024, MTCH had a long-term debt of $3.9 billion, unchanged sequentially.

During the quarter ended Mar 31, 2024, the company repurchased 5.6 million shares of common stock for $197.6 million. As of May 3, 2024, $800 million in aggregate value of shares of Match Group stock was available under its previously announced share repurchase program.

Guidance

Match Group expects second-quarter 2024 revenues in the range of $850-$860 million, indicating year-over-year growth of 2% to 4% on a reported basis and 5% to 6% on an FX-neutral basis.

Tinder Direct revenues are expected to be in the range of $475-$480 million, suggesting year-over-year growth of 0% to 1% on a reported basis and 3% to 4% on an FX-neutral basis.

Across other brands, Match Group expects Direct revenues to be in the range of $360-$365 million, implying 5% to 7% year-over-year growth on a reported basis and 8% to 10% on an FX-neutral basis, with Hinge Direct revenues anticipated to be in the range of $125-$130 million, indicating year-over-year growth of 38% to 44%. The company expects Indirect revenues to be approximately $15 million in the quarter.

Adjusted operating income for the second quarter is anticipated in the range of $300-$305 million, with an adjusted operating margin of 35%.

For full-year 2024, Match Group expects revenue growth near the lower end of its previously stated year-over-year growth of 6% to 9%

Tinder Direct revenue growth is expected to be in the low-single digits.

Adjusted operating margin is anticipated to be approximately 36%. The company also expects a free cash flow generation of $1.1 billion for the full year.

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 -7.82% due to these changes.

VGM Scores

Currently, Match Group has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. 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.

Performance of an Industry Player

Match Group belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, Booking Holdings (BKNG Quick QuoteBKNG - Free Report) , has gained 4.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

Booking Holdings reported revenues of $4.42 billion in the last reported quarter, representing a year-over-year change of +16.9%. EPS of $20.39 for the same period compares with $11.60 a year ago.

For the current quarter, Booking Holdings is expected to post earnings of $39.22 per share, indicating a change of +4.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Booking Holdings has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.