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Tinder Continues to Drive Match Group’s Growth

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Match Group reported better-than-expected numbers

Match Group (MTCH), which owns dating platforms, including Tinder, saw its stock surge 17.3% on August 8. The increase came after the company reported better-than-expected numbers for the second quarter.

It generated revenue of $421 million, an increase of 36% from the second quarter of 2017 and higher than analysts’ estimate of $413.2 million.

Match group generated a net income of $132.5 million, or $0.45 per share, in the second quarter. That compares to $0.17 per share in Q2 2017. It beat analysts’ estimate of $0.32 per share and represents a healthy profit margin of ~31%.

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Tinder’s subscription service has driven Match’s revenue

Tinder, Match Group’s crown jewel, added 299,000 paying subscribers in the second quarter, which was more than Match’s forecast of 200,000–250,000.

The company said that Tinder alone will generate more than $800 million in revenue in 2018. That would be more than twice the $400 million the dating app generated in 2017. That also means Tinder would represent about half of the company’s forecast annual revenue of $1.7 billion.

Tinder generates most of its revenue from its subscription service. Tinder Gold, its premium subscription service that launched in 2017 for $14.99 per month, has been a major growth driver. Tinder has also seen an increase in paying users. The dating app added ~300,000 new subscribers in the second quarter, bringing the total to ~3.8 million subscribers.

Rumors about a Facebook (FB) dating site caused Match Group stock to plunge earlier this year. But Match Group stock has risen 45.6% so far in 2018. It rose 83% in 2017.

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