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Tinder Stays a Hot Trend by Exceeding Expectations

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Online dating site company Match Group (MTCH - Free Report) recently reported their quarterly earnings. The company saw an increase in revenues by 36%, with 27% of it coming from its Tinder subscription rates. Shortly after the company posted its earnings, shares rose by almost 18%, the highest it’s ever been up.

Tinder became really popular in 2015 and it seemed like that was the only way people met one another. It appeared as though the craze may have died out, but from its subscription and user growth, it looks like Tinder is still on the rise.

Tinder Today

In Match Group’s recent report, Tinder's average subscribers were 3.8 million in Q2, increasing almost 300,000 sequentially and 1.7 million year-over-year. Apparently the business for dating sites and apps is doing well, hence Tinder’s success. According to Forbes, Tinder's rise to power has been "astronomical" even by dating app standards. The amount of increasing subscribers year by year was achievable through Tinder's successful marketing and branding strategies. They are able to understand that their users demand options on the go, therefore making their app and brand easily accessible and efficient.

The app saw a surge in users with their new premium feature called Tinder Gold. The company has found this feature to be popular among users, seeing as they are willing to pay $14.99 a month to get the best service.

The Online Dating Industry is Growing

According to a study done by the Pew Research Center, at least 15% of American adults had used some sort of online dating app in 2015, with the number increasing each year. There has been rapid growth in online dating, seeing as consumers are attracted to the simplicity and easiness of these apps. The U.S. online dating industry generates around $2 million in revenue each year.

A clear example of this is Match Group’s success since its IPO. The company priced itself at $12 per share when it first went public and today the share price lies at almost $50 per share. Although the stock might still be a little undervalued, the amount of success it has achieved through Tinder is unmatchable for any other dating app, like Hinge or Bumble.

Does Tinder Really Matter?

Although a dating app/site, Tinder and its parent company should matter. From its increasing subscriber growth it seems like Tinder isn’t slowing down as some of us might have expected. Even though Facebook (FB - Free Report) introduced its own version of a dating site, Match Group’s CEO Mandy Ginsberg said that investors shouldn't see Facebook's new feature as a threat. This is because the company posted better than expected earnings prior to Facebook’s announcement and saw user growth from Tinder as well.  

Among the 45 other dating sites that Match Group owns, Tinder was the one to bring in the most revenue and subscriber growth this year. The company plans to see $800 million in revenue this year and from the looks of it, it seems like a very realistic goal for the company.

Bottom Line

Tinder will continue to see a surge in its users as long as they sustain their branding and marketing efforts to the right target market. Match Group has seen increasing revenues from this quarter, and in order to keep the same momentum, the company will have to focus its efforts on what people want from its dating sites.

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