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Match Group Stock MTCH Rises 17.0% after Earnings

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Match Group (MTCH) just announced its second-quarter earnings results, and MTCH stock gained over 17.0% in after-hours trading today. Match reported sales of $498 million, a rise of 18.0% year-over-year. Taking currency fluctuations into account, we see that sales rose 22.0%. The company’s adjusted earnings per share rose 4.9% to $0.43 in Q2. Match Group reported revenue of $421.2 million and EPS of $0.41 in Q2 2018.

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Analysts expected the company to post sales of $489 million and earnings of $0.40 in the second quarter. As MTCH beat revenue and earnings estimates, its stock price moved significantly higher after-hours today. Match Group is a subsidiary of Interactive Corp. (IAC) and owns a dating business with famous brands such as Tinder, PlentyOfFish, and OkCupid. IAC shares gained over 10.0% in after-hours and are now up 14.0% since we identified the company as undervalued.

What drove MTCH sales in the second quarter

MTCH managed to grow its subscriber base by 18.0% year-over-year to 9.1 million, up from 7.7 million in the prior-year quarter. Subscriber growth was mainly driven by the Tinder app. Tinder subscribers rose 1.5 million year-over-year and over by 500,000 sequentially to 5.2 million in Q2. Meanwhile, average revenue per user or ARPU rose 2.0% to $0.58. Tinder’s direct revenue growth was solid at 46.0%, and Q2 2019 saw the second-highest-ever sequential increase in average subscribers.

MTCH stated that the company has invested in the Egypt-based Harmonica application. This move should help Match gain penetration among the global Muslim population, as Harmonica is available in 33 countries across Asia.

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The company’s OkCupid app is also gaining subscribers fast in India. Indian OkCupid subscribers have risen from 100,000 to 700,000 in the past year. And the app is now the fifth-most-downloaded dating app in the country. International markets continued to drive average subscriber growth for Match.com.

Match Group raises its outlook

Match Group also raised its outlook for 2019. The company estimates revenue between $535 million and $545 million in the third quarter, which is higher than analyst estimates of $521 million. Match Group also expects revenue to grow in the “high teen” percentage, compared to the prior estimate of “mid-teen growth.”

Shares of Match Group have been on an absolute tear in 2019. The stock has gained a whopping 100.0% year-to-date.

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