Tinder, a leading dating app under Match Group, has experienced a notable decline in its monthly active users (MAUs) over the past year. In October, the app's MAUs fell by 10% compared to the previous year, with only a slight improvement to a 9% decline in the subsequent two months. This decreasing user engagement has been mirrored in the company's financial performance, as Match Group's earnings in the fourth quarter fell short of analyst expectations.
Match Group reported earnings of 82 cents per share for Q4, falling below the anticipated 84 cents. Moreover, the company's direct revenue did not meet internal guidance, totaling $476 million compared to the forecast range of $480-$485 million. Despite surpassing revenue estimates with $860 million for Q4, this figure marked a 0.7% year-over-year decline. In response to these challenges, Match Group plans to introduce new AI-powered features to revitalize user engagement and enhance its offerings.
The upcoming AI-driven matching feature aims to offer users "something other than swiping" as a way to connect with potential matches. Additionally, the AI Photo Finder will assist users in selecting optimal profile photos for their dating profiles. Match Group anticipates that these innovations will help reverse negative MAU trends and improve revenue projections. The company's Q1 2025 guidance indicates expected revenues between $820 million and $830 million, reflecting a 3 to 5% year-over-year decrease.
As part of its strategic shift, Match Group has appointed Spencer Rascoff, co-founder of Zillow Group, as its new CEO. Rascoff has expressed optimism about the transformative potential of AI in the online dating industry.
"this Cambrian explosion in AI is going to allow Match Group to have the same kind of business inflection that the shift from desktop to mobile created for our category and other categories around 10 years ago — when mobile exceeded desktop." – Spencer Rascoff
In addition to AI-driven features, Match Group plans to expand the accessibility of its "Friends in Common" feature, launched last year, to further enhance user connections. Gary Swidler, Match Group's CFO, believes these initiatives could positively impact user trends.
"I'd love to see us get back to growth, but I think we have to take the baby steps first. We've got to roll out these product initiatives, see them drive improved user trends," – Gary Swidler
Swidler emphasized the significance of user engagement and improved match quality in driving future growth for Tinder.
"We want to see a significant number of people engage with that feature and give it a try … We also want to see improvement in quality matches," – Gary Swidler
"We want to see that product really deliver for people in terms of enhanced quality matches that will improve the perception of the product, which should help us drive user growth." – Gary Swidler
Leave a Reply