Match Investors Swipe Right on Stock as Tinder Boosts Growth

  • Shares surge most in five months, on `exceptional' Tinder
  • Tinder paid membership surpasses 1 million in first quarter

Investors swiped right on Match Group Inc.’s results Wednesday.

The provider of online dating services part owned by Barry Diller’s IAC/InterActiveCorp. surged the most since its November initial public offering after reporting first-quarter revenue that topped the highest analysts’ estimates.

The company, which includes dating websites Match, Tinder, OkCupid and PlentyOfFish, reported sales of $285.3 million compared with analysts’ average estimate of $281.1 million. The highest analyst estimate was $285 million.

Tinder, where users swipe to the right on their smartphones to accept potential partners, surpassed 1 million paid members in the quarter, Dallas-based Match Group said.

The strong results were “driven by exceptional growth at Tinder, solid performance of Meetic and Match, and the PlentyOfFish acquisition,” Chief Executive Officer Greg Blatt said in a statement. “We expect solid year-over-year performance throughout the balance of 2016.”

The shares jumped 15 percent Wednesday, the most since the November IPO. That brings their loss for the year to 5.5 percent.

IAC Rises

Shares of IAC/InterActiveCorp. were up 10 percent to $51.99 at the close, the biggest jump since December 2013. IAC, which owns 85 percent of Match, reported first-quarter revenue of $819.2 million, beating the average analyst estimate of $805.3 million. Profit excluding some items was 42 cents a share, compared with estimates for 34 cents. Match Group is IAC’s biggest sales unit.

Excluding some items, Match company earned 11 cents a share, while analysts had projected 8 cents. Average revenue per paying user fell 6 cents to 54 cents from a year earlier -- a decline primarily attributed to the growth of Tinder and PlentyOfFish, Match said in the statement. Tinder and PlentyofFish are among the company’s lower-cost websites.

Revenue from Match’s dating business, the company’s largest, rose 24 percent to $260.4 million, led by Tinder and PlentyOfFish, which Match agreed to acquire for $575 million in July last year. Its average paid member count rose 36 percent to 5.1 million, the company said, also boosted by growth at Tinder and the acquisition of PlentyOfFish. Non-dating revenue was unchanged at $24.9 million, less than Match’s own estimates due primarily to lower-than-expected SAT test preparation course volume.

Tinder Cannibalization

While some analysts cited concerns that Tinder may encroach on other Match properties, Blatt said cannibalization from Tinder is not a problem.

"Nothing we see in the numbers support the idea that Tinder is the driver of any softness in our business," he said on a conference call Wednesday discussing the results. "Tinder is a huge category expansion story. The category expansion far outweighs any cannibalistic impact."

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