By Mark R. Long and Denny Jacob

Dating-app company Match Group said it replaced its chief executive as it posted a drop in quarterly earnings and forecast sales below market expectations, sending shares lower.

The owner of Tinder, Hinge and OkCupid said CEO Bernard Kim was stepping down, effective immediately, and it named board member Spencer Rascoff as his replacement. Rascoff was a co-founder and former CEO of home-listings portal Zillow Group.

The management shuffle comes as the Dallas company has come under pressure from activist investors to show how it will grow, particularly with Gen Z users who have snubbed the apps in favor of real-life interactions.

In particular, Tinder has faced challenges after the app took off in popularity during the pandemic as people desperate for connection swiped. The return of relative normalcy put Tinder in a bind as user spent less time on the app. Some opted to stop paying for premium offerings that became more expensive, in part a response to higher prices.

Shares of the Dallas company fell 8.9% to $33.20 after the bell Tuesday. The stock is now down about 80% from a peak of $175.53 in October of 2021.

Match posted fourth-quarter net earnings of $158.3 million, or 59 a share, down from $229.7 million, or 81 cents a share, a year earlier. Revenue slipped 0.7% to $860.2 million.

The company said it expected first-quarter total revenue of $820 million to $830 million, which would be down 3%-5% year-over-year. It forecast full-year revenue of $3.375 billion to $3.5 billion, a decline of 3% to an increase of 1%. Analysts polled by FactSet had forecast first-quarter revenue of $852 million, and $3.5 billion for the full year.

Direct revenue from Tinder slipped 3% to $476 million in the fourth quarter, driven by a 5% drop in payers to 9.5 million.

In 2022, Match recruited outgoing CEO Kim from mobile gaming company Zynga.

Incoming CEO Rascoff will work on advancing artificial intelligence and new products outlined in a December presentation to investors, the company said in a news release.

Any fix for Tinder will take time. Development of new features and removal of bad actors on the platform are among the priorities being juggled, all while keeping its existing user base from eroding further.

In December, the company said it expects Tinder's revenue to return to low-single-digit percentage growth in 2027.

That timeline may not work for Starboard Value, Elliott Investment Management and Anson Funds Management, all of which have built stakes in Match. Of the three, Starboard has been the most vocal about Match's struggles and said it should consider going private if it can't fix Tinder and hit on other growth opportunities.

Write to Mark R. Long at mark.long@wsj.com and Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

February 04, 2025 17:58 ET (22:58 GMT)

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