It has been about a month since the last earnings report for Match Group (MTCH). Shares have lost about 6.2% 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 its most recent earnings report in order to get a better handle on the important catalysts.

MTCH Q4 Earnings Miss Estimates, Revenues Drop Y/Y, Shares Fall

Match Group shares fell 7% in after-hours trading as it reported fourth-quarter 2024 earnings of 82 cents per share, which missed the Zacks Consensus Estimate by 2.38%. The bottom line declined 0.7% from the year-ago quarter’s reported figure.

Revenues of $860 million decreased 0.7% year over year but exceeded the Zacks Consensus Estimate by 0.48%. On an FX-neutral basis, revenues increased 1% from the prior-year quarter to $866 million.

Direct revenues were $845.4 million, down 0.6% year over year, whereas indirect revenues were $14.8 million, which decreased 4.5% from the year-ago quarter.

Top-line growth was driven by strength in Hinge. Hinge Direct revenues increased 27.2% year over year and attained a record high in downloads in the reported quarter.

MTCH’s Quarterly Details

In the fourth quarter, the number of total payers decreased 4% year over year to 14.61 million. The figure beat the Zacks Consensus Estimate by 0.80%.

Total revenues per payer (RPP) increased 5% year over year to $19.29. The figure beat the Zacks Consensus Estimate by 0.98%.

Direct revenues from Tinder were down 3.5% year over year (down 1% on a FX-neutral basis) to $476 million. The figure surpassed the Zacks Consensus Estimate by 0.17%.

Tinder RPP rose 1% year over year to $16.72, driven by pricing adjustments aimed at enhancing revenues from existing users. Payers declined 5% year over year to 9.49 million.

Hinge revenues grew 27.2% year over year to $147.7 million, with a 19% year-over-year increase in payers to 1.62 million and a 7% increase in RPP to $30.42. 

Match Group Asia (MG Asia) direct revenues declined 9.5% year over year (down 5% on a FX-neutral basis) to $66.6 million due to the impacts of forex exchange fluctuations. MG Asia consists of the worldwide activity of the brands Pairs and Azar.

Evergreen and Emerging revenues declined 7.6% year over year to $155.1 million, with a 14% year-over-year increase in payers to 2.49 million and a 7% increase in RPP to $20.8.

Match Group’s Operating Details

Total operating costs and expenses (74% of revenues) increased 5.1% year over year to $636.8 million in the fourth quarter.

Adjusted operating income was $323.9 million, down 10.4% year over year, representing an adjusted operating margin of 37.7%, which contracted 410 basis points.

MTCH’s Balance Sheet

As of Dec. 31, 2024, Match Group had a cash and cash equivalent, and short-term investment of $970.7 million compared with $861 million as of Sept. 30, 2024.

As of Dec. 31, 2024, MTCH had a long-term debt of $3.8 billion compared with $3.9 billion as of Sept. 30, 2024.

In the quarter ended Dec. 31, 2024, the company repurchased 3.1 million shares of common stock for $117 million.

For 2024, MTCH repurchased 22.2 million shares of common stock for $753 million. As of Feb. 4, 2025, $1.75 billion in aggregate value of shares of Match Group was available under the current repurchase program.

MTCH Initiates Q1 & 2025 Guidance

Match Group expects first-quarter 2025 revenues of $820-$830 million, suggesting a 3-5% year-over-year decline, primarily driven by a decrease in Tinder’s direct revenues. This decline stems from stable but negative MAU trends, and the impacts of planned trust and safety initiatives.

On a FXN basis and excluding Hakuna and other live stream services, Match Group’s revenues are expected to be flat to up 1% year over year. The Zacks Consensus Estimate for first-quarter 2025 revenues is pegged at $853.39 million, indicating a decline of 0.73% on a year-over-year basis.

Adjusted operating income (AOI) for the first quarter is anticipated to be $260-$265 million, suggesting a 5-7% year-over-year decline, with an AOI margin of 32% at the midpoint. This is anticipated to be driven by lower cost of revenues, flat sales and marketing expenses, and slight increases in product development and general administrative costs as a percentage of revenues.

For 2025, the company expects revenues of $3,375-$3,500 million, implying a 3% year-over-year decline to 1% growth.

Adjusted operating income (AOI) for 2025 is expected to be $1,232-$1,278 million. The AOI margin is likely to be at least 36.5%, suggesting a year-over-year rise of 50 bps. AOI is projected to be flat year over year at the mid-point of the above-mentioned range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -14.04% due to these changes.

VGM Scores

At this time, Match Group has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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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This article originally published on Zacks Investment Research (zacks.com).

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