Tinder-owner Match Group beat analysts' estimates for quarterly revenue and profit on Tuesday as it attracted more subscribers to its dating apps and websites, and said Facebook's plan to create a dating tool will not hurt Tinder. Tinder, where people swipe right or left to signal interest or not in meeting partners, added 368,000 average subscribers in the first quarter from the previous quarter - lifting total users to 3.5 million. Buoyed by the growth, Match Group raised its full-year revenue forecast by $100 million, sending the company's shares up about 3 percent to $37.40 in extended trading.
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The company now expects revenue to range from $1.6 billion to $1.7 billion. Analysts on average were expecting $1.60 billion. In May, Facebook said it was developing a dating feature for its 2.2 billion monthly users, sending Match shares down 22 percent. Facebook's move could be "category expansive", said Match Group Chief Executive Officer Mandy Ginsberg.
"It's possible that given Facebook's reach, they could help chip away at the stigma, especially for users who are older and in international markets. And once people try one product, they'll use more than one," Ginsberg said in a statement. The match is stepping up efforts to wean away Tinder users from using their Facebook accounts to log on to the dating service. The company last year introduced an alternative to Facebook-login and the number of users who signed up through the social network has declined significantly in North America, according to the company's investor presentation.
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"When given this choice, 75 percent of new users opted not to use Facebook," Ginsberg said. Some analysts have said both services could co-exist, despite Facebook's deeper pockets and larger, older user base. "Some users would rather have their online dating app completely separate than their social networking app such as Facebook. So, that helps both of them in the future," Morningstar analyst Ali Mogharabi said, who also covers Facebook.
Net profit attributable to Match shareholders soared nearly five-fold to $99.7 million, or 33 cents per share, in the three months ended March 31, from a year earlier. The latest quarter included excess tax benefits from the settlement and exercise of stock-based awards. Total revenue rose 36.4 percent to $407.4 million, topping estimates of $385 million. The company's adjusted earnings per share of 26 cents beat estimates of 23 cents.
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