2, 2026 CALL PARTICIPANTS Senior Vice President of Investor Relations - Tanny ShelburneChief Executive Officer - Spencer RascoffExecutive Vice President and Chief Financial Officer - Steve Bailey Free Cash Flow -- $832 million generated year-to-date, with $591 million deployed toward share buybacks, dividends, and the net settling of employee equity awards.Cash Dividend -- $0.20 per share, declared by the board of directors for payment on Jan.
21, 2027, to shareholders of record as of Jan.
6, 2027.Diluted Shares Outstanding -- reduced by 4% year over year through Oct.
31, 2026, and by 10% since Jan.
1, 2025, due to aggressive capital return activities.Tinder Daily Active Users -- returned to year-over-year growth in Sept.
2026, representing the first time this metric has grown in 3.5 years.Tinder Monthly Active Users -- improved from a 10% year-over-year decline in recent quarters to a 5.5% decline in Q3 2026.Tinder Direct Revenue -- declined 2% year over year on a foreign-exchange-neutral basis, matching the performance seen in Q2.Tinder Payer Trends -- improved to a 4% year-over-year decline in Q3, compared to a 5% decline in the second quarter.Tinder User Givebacks -- $25 million utilized in 2026, significantly lower than the $60 million initially projected, as product improvements mitigated the need for retention incentives.Hinge Revenue Growth -- 19% year over year in Q3, driven by expansion into international markets and increased payer conversion.Hinge Revenue Target -- $1 billion for the full year 2027, which remains the company's unchanged objective for the brand.Hinge Revenue Per Payer -- $30, approximately double the average revenue per payer generated by Tinder.Hinge Global MAU -- increased 12% year over year, with core markets showing improvement and expansion markets like Europe seeing growth normalization.In-App Purchase Fees (EU) -- increased from the low 20% range to 26% effective Oct.
1, 2026, following policy changes by Apple.In-App Purchase Fee Impact -- $20 million in incremental costs expected in 2027 specifically attributable to the Apple fee increase in the European Union.Google Partnership Expiration -- expected to result in significantly higher Play Store fees starting in Q2 2027 after the current agreement expires in Q1.Adjusted EBITDA Margin Headwind -- 1 percentage point expected in 2027 due to the combined impact of higher in-app purchase fees from Apple and Google.AI Investment Costs -- rose from $5 million to over $10 million in 2026 as the company expanded access to generative AI tools across its workforce.Marketing Spend Deferral -- $8 million in planned Q3 expenditure pushed into Q4 due to campaign timing and ROI assessment.E&E Segment Revenue -- continues to decline due to the Azar app redesign necessitated by a previous App Store ban and weakness in other portfolio brands.Tinder Market Performance -- markets accounting for 70% of DAU and 50% of revenue showed growing or flat DAU trends by the end of October.Female User Engagement -- MAU declines among women narrowed by 8 percentage points year over year, outpacing the rate of improvement for male users.Hinge U.S.
Growth Opportunity -- 1 million additional monthly active users identified as potential growth in secondary cities and among users aged 30 to 40.
Need a quote from a Motley Fool analyst? Email [email protected] Bailey stated, "E&E continues to face headwinds from Azar's app redesign, necessitated by the App Store ban earlier this year," explaining the ongoing revenue pressure in the Evergreen and Emerging segment.Bailey warned that IAP fees would result in a 1 percentage point headwind to Adjusted EBITDA margin in 2027, driven by higher costs from Apple and the expiration of the Google partnership agreement.
Match Group, Inc.
(MTCH +1.59%) reported third quarter results highlighting a return to daily active user growth at Tinder and double-digit revenue expansion at Hinge.
Management reported that the company expects to finish the year slightly above the midpoint of its full-year revenue guidance and meaningfully exceed previous margin and free cash flow targets.
The company stated that its 2027 strategy will focus on sustainable Tinder revenue growth and monetization innovation while managing higher in-app purchase fees through disciplined operational spending.
Management confirmed a commitment to deploying 100% of free cash flow toward shareholder returns over time, supported by a newly declared cash dividend.
CEO Rascoff stated, "In September, global daily active users returned to year-over-year growth for the first time in three and a half years," citing improvements in user outcomes as the primary catalyst.The company is prioritizing the Better with Friends roadmap for Tinder, featuring Events and Groups Hangouts, to drive brand reconsideration among Gen Z users.CFO Bailey noted that the company will utilize its PRISM framework to inform 2027 marketing spend, ensuring a consistent quantitative assessment of effectiveness across all brands.Management reported that Hinge is testing a lower-priced subscription tier to attract price-sensitive users and improve payer conversion among women.The company is implementing shared technology services across its portfolio, including trust and safety tools and an AI prototyping platform, to improve development efficiency.Management confirmed that Hinge's expansion into Japan is planned for 2027, targeting white space between casual dating and matrimony-focused applications.
INDUSTRY GLOSSARY Sparks: The number of users engaging in six-way conversations at a brand level in a given week.Sparks Coverage: The percentage of active users at a brand level who experience a Spark in a given period.PRISM: A standardized marketing measurement framework used by Match Group to assess marketing effectiveness quantitatively.IAP Fees: In-app purchase fees, which are commissions paid to mobile platform providers like Apple and Google for digital transactions.E&E: Evergreen and Emerging, a business segment containing Match Group's portfolio of smaller or legacy dating brands.ALC: A la carte features, referring to individual digital purchases made outside of a recurring subscription.DAU: Daily Active Users, a metric used to track the number of unique users interacting with an application in a single day.MAU: Monthly Active Users, a metric used to track the number of unique users interacting with an application over a 30-day period.
Full Conference Call Transcript Operator: Welcome to the Match Group Third Quarter 2026 Earnings Conference Call.
All participants will be in listen-only mode.
Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
After today's presentation, there will be an opportunity to ask questions.
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Please note, this event is being recorded.
I would now like to turn the conference over to Tanny Shelburne, Senior Vice President of Investor Relations.
Please go ahead.
Tanny Shelburne: Thank you, operator, and good afternoon, everyone.
Today's call will be led by CEO Spencer Rascoff and CFO Steve Bailey.
They will make a few brief remarks, and then we will open it up for Q&A.
Before we start, I need to remind everyone that during this call, we may discuss our outlook and future performance.
These forward-looking statements may be preceded by words such as "we expect," "we believe," "we anticipate," or similar statements.
These statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today.
Some of these risks have been set forth in our earnings release and our periodic reports with the SEC.
Also during this call, we will discuss certain non-GAAP financial measures.
Reconciliations to the most directly comparable GAAP financial measures are provided in the published materials on our ir.mtch.com website.
These non-GAAP measures are not intended to be substitutes for our GAAP results.
With that, I would like to turn the call over to Spencer.
Spencer Rascoff: Thanks, Tanny.
Good afternoon.
Thanks, everyone, for joining us.
We are trying something new this quarter.
We have posted our full prepared remarks to the investor relations website at ir.mtch.com for you to read through, but our plan for today's call is for me and Steve to just spend a few minutes on the key highlights and then devote the majority of our time to answer your questions.
A year ago, the big question you asked us was whether we could turn Tinder around.
We knew we had to start by improving user outcomes, meaning we had to build better experiences that resonate with Gen Z, deliver more relevant recommendations, and improve trust and safety.
If we got those foundations right, then better user trends and ultimately revenue would follow.
Tinder has had multiple consecutive quarters of improvement in the metrics that matter.
This quarter, we had our strongest quarterly year-over-year performance in both Sparks, that is six-way conversations, and Sparks coverage, the percentage of users getting a Spark, since we started tracking those metrics.
In September, global daily active users returned to year-over-year growth for the first time in three and a half years, and we have cut year-over-year declines in monthly active users nearly in half over the last year.
The improvement is broad-based.
It spans women and men, age groups, and geographies.
We are seeing growth again in parts of the business where trends were moving in the wrong direction not that long ago.
In October, markets representing nearly 70% of Tinder's DAU and 50% of its revenue had growing or flat DAU year-over-year, with the U.S.
crossing into positive territory exiting the month.
We now have evidence that those changes are working.
There is still a lot of work ahead, particularly with the youngest Gen Z users.
While we made substantial progress improving the experience for existing users, the next step is reconsideration.
That means giving people a reason to come back or to try Tinder for the first time, and that is what our Better with Friends roadmap is designed to do.
We are giving people more social and lower-pressure ways to meet, often with friends and in real life, because that is what users want.
Events is the feature I am most enthusiastic about, but they are all geared towards creating more opportunities for people to form meaningful connections in real life.
We are building with our mission always in focus, to make Tinder the most fun way to spark something new with someone new.
We live and breathe this daily.
Tinder employees can recite this clearly, and it is what keeps us working hard.
Turning to Hinge, the business continues to deliver strong user growth and double-digit revenue growth year-over-year.
We see clear opportunities ahead too.
Even in core markets where we have operated the longest, Hinge has room to reach more people beyond urban metro markets and grow with older daters.
We are targeting these opportunities deliberately with more relevant marketing.
The early results are strong, as registration trends across all genders and age groups improved as we exited Q3, and we think Q4 U.S.
new registrations will be up year-over-year.
Hinge's 2027 product roadmap is the strongest we have had in the last several years.
The depth of thinking about intentioned daters, from what they need to what helps them get out on great dates, is evident and gives me so much confidence in where Hinge is headed.
At E&E, we put a more focused strategy in place, prioritizing a smaller set of brands and taking learnings from Tinder and Hinge to improve user outcomes.
We are still early in this work, and it will take time to see the impact.
At Match Group, we are approaching 2027 with a stronger foundation built through a lot of hard work and a clearer path to durable growth.
With that, I will turn it to Steve.
Steve Bailey: Thanks, Spencer.
We are happy with the Q3 results and with the momentum in the business as we close out the year and turn our focus to 2027.
We expect to finish the year slightly above the midpoint of our full-year revenue guidance range and meaningfully exceed the full-year Adjusted EBITDA margin target we set back in February.
We also expect to exceed the high end of our free cash flow guidance set back in February, and we remain committed to deploying 100% of free cash flow towards buybacks, dividends, and net settling of employee equity awards over time, recognizing that the pace of capital return may vary from quarter-to-quarter.
Year-to-date, we have generated $832 million in free cash flow and deployed $591 million towards buybacks, dividends, and net settling of employee equity awards.
We have reduced our diluted shares outstanding by 4% year-over-year through October, and by 10% since January of 2025.
Here is how we are thinking about the financial performance and expectations at each of our business units.
At Tinder, we expect to achieve our goal of improving year-over-year MAU and payer trends throughout the year, and we expect further improvement in both of these metrics, as well as an improvement in direct revenue trends in Q4.
That is meaningful progress towards returning Tinder to sustainable growth.
As we said last quarter, we continue to expect Tinder's full year 2026 direct revenue performance to be better than we expected in February, declining at low single-digit rates year-over-year as a result of both smaller-than-expected impact from user experience tests and stronger underlying trends.
As we begin to shift our focus to 2027, while there is still more work to do, we are feeling great about the momentum, and we are confident we can deliver full year 2027 Tinder direct revenue year-over-year growth, along with year-over-year payer growth by Q4, and flat MAU year-over-year by the end of Q4.
At Hinge, performance continues to be strong, and we expect to be within the 2026 full year guidance range we provided in February.
Our expectation for $1 billion in full year revenue in 2027 has not changed.
E&E continues to face headwinds from Azar's app redesign, necessitated by the App Store ban earlier this year, and weakness at other E&E brands, but we expect the strategy changes Spencer just outlined to slow revenue declines over time, with the goal of returning to growth.
This will take time, and we expect E&E year-over-year revenue declines to only modestly improve in 2027 compared to 2026.
Turning to Match Group profitability, we have done a good job this year executing on the Tinder turnaround while staying financially disciplined.
We intend to take that same approach in 2027 as we balance making the right investments in our business to maximize long-term shareholder value with delivering near-term Adjusted EBITDA and free cash flow, which we are giving back to shareholders through buybacks and the dividend.
We will give detailed Adjusted EBITDA guidance and a full year margin target on the call in February, but here is how we are thinking about 2027 profitability sitting here today.
First, we expect to remain very disciplined on headcount and OpEx, including AI costs.
Second, we now expect IAP fees to be a one-point margin headwind in 2027 based on current App Store policies and expiration of our Google partnership agreement, which I will talk more about in a minute.
Third, we are still evaluating the appropriate level and allocation of marketing spend across the portfolio using our PRISM framework.
As a reminder, PRISM is our standardized marketing measurement framework that we recently introduced at Match Group.
It gives us a consistent, rigorous, quantitative assessment of marketing effectiveness that we use to inform investment decisions across the company.
2027 will be the first time we are incorporating it into our annual planning process.
Now let me give you a little more color on IAP fees.
First, an update on Apple.
In the U.S., we continue to pay 0% in IAP fees on alternative payments on iOS, and we do not expect changes to this fee structure until there is a decision in the Epic Games v.
In the E.U., Apple actually raised fees on in-app purchases effective October 1st, and the fees we pay increased from the low 20% to 26%.
At the same time, Apple will begin allowing alternative payments, which we plan to test, but there are a number of restrictions, and the economics are far less favorable than they are in the U.S.
We expect the increased in-app purchase fees to cost us an additional $20 million in 2027.
Now on Google.
In 2024, we entered into a partnership arrangement with Google that provided value exchange across our broad relationship that has effectively offset the additional fees we incurred when we adopted Google's billing options at that time.
As we previously disclosed at the announcement of that deal and in subsequent filings, that partnership is set to expire in the first quarter of 2027, and we expect Play Store fees to meaningfully increase beginning in Q2 of next year.
Our expectation when we entered into the agreement was that legal and regulatory pressure would reduce Google's in-app purchase fees by the time our agreement ended.
However, Google's new global fee structure announced in March provides little benefit to us.
Taking into account both the Apple changes and the Google partnership agreement expiration, and making no assumptions on future fee changes, we expect IAP fees to result in a one-point headwind to Adjusted EBITDA margin in 2027.
While we are looking for ways to mitigate the impact, we also need to ensure we are making the right investments in the business to drive long-term shareholder value.
We will make that determination as part of our annual planning process, and we will give you more details on 2027 revenue and margin expectations next quarter.
With that, let us open it up to Q&A.
Operator: We will now begin the question and answer session.
To ask a question, you may press star, then one on your telephone keypad.
If you are using a speakerphone, please pick up your handset before pressing the keys.
To withdraw your question, please press star, then two.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Robert Coolbrith with Evercore ISI.
Please go ahead.
Robert Coolbrith: Great.
Thank you for the opportunity to ask a question.
Just wondering if you could maybe talk us through the path to positive DAU that you had in the quarter, or had in September.
Maybe if you could sort of disaggregate that across retention improvement, or if there's just been a case of stacking those retention gains that you've had in successful quarters across more cohorts, and then any early indications of improving levels of consideration or reconsideration.
Spencer Rascoff: Yeah.
Thanks, Robert, and thanks for your recent research note.
Look, it was a big milestone this quarter.
Turning DAU positive in September year-over-year for the first time in three and a half years felt great.
There were a lot of high fives and just excitement around achieving that milestone.
Just a couple weeks later, at the end of October, U.S.
DAU turning positive year-over-year was also just felt great.
Those are the DAU trends.
MAU improving from -10% to -5.5% over the last few quarters also speaks to the quality of the improvements in the product, and also improvements in MAU, similar improvements in MAU across our top five revenue markets.
The reason why I'm confident about the sustainability of the turnaround is how broad-based the improvements have been.
So really, any way you cut it, by age, by gender, by geography, we're seeing improvements across really every which way you look at it.
So for example, looking at it by gender, our female MAU is improving at an even faster rate than male MAU in every region and every age group.
Female MAU declines narrowed by eight points year-over-year and two points quarter-over-quarter.
So this is not a turnaround that's just focused on male users.
Quite the contrary, it's actually, we're improving among female users even more quickly.
Looking at it by age, again, this is not a turnaround focused on just adding easier to acquire older users.
Our under 30 MAU trends have improved even more than our over 30 MAU trends, and we're improving across every single age group.
So that's the exciting news about the MAU turnaround.
I think kind of the question behind your question perhaps is, why is DAU growing faster than MAU? The answer to that is, we have made so many product improvements that help the existing experience basically improve our users' current experience, but we still have more work to do to drive reconsideration.
That is where the Better with Friends social roadmap comes into play.
We had a hit in Double Date.
We layered on another hit with Events.
We are in the process of building a third hit with Groups.
When you take those three things together and you do brand studies and ask users about their perception of Tinder, you start to see really good promising results about people changing their perception of what Tinder is.
So we still have work to do.
It is definitely too soon to declare victory, but I really am proud of and impressed by where we are at today.
Steve, anything to add or is that Steve Bailey: No, I think you covered it.
Spencer Rascoff: Okay.
Next question, please.
Operator: The next question is from Shweta Khajuria with Wolfe Research.
Please go ahead.
Shweta Khajuria: Okay.
Thank you for taking my questions.
Spencer, could I please ask a follow-up to what you were just talking about in terms of the delta between DAU growth and MAU growth? There is this idea of perception and bringing people back into the ecosystem, and that is why the delta.
So how long do you think it takes for that lag to narrow? In other words, for that perception to change, bringing those people back, and turning around MAU growth? Then the second question I have is around next year, Steve, you spoke about Tinder expectations.
To the degree that you can speak to other segments, Hinge, E&E, that would be very helpful, or just at a platform level, the puts and takes for both revenue and EBITDA.
Understood, you are not guiding just yet in terms of EBITDA.
Where would the levers be coming from to offset the headwind, and how should we be thinking about overall top line growth? Thanks a lot.
Steve Bailey: Yeah.
We will take this in a couple pieces.
Let me talk a little bit more about the Tinder sort of metrics improvements, and Spencer, jump in as you wish.
The way to think about DAU outpacing MAU, here is kind of where things stand.
Of course, we are very excited that DAU crossed over to positive growth.
We are just as excited about MAU improving.
So we got about one point improvement on MAU from Q2 to Q3, with MAU down 6%, which is better than the 7% it was down the quarter before.
We also saw an improvement in payers, which we are very excited about.
So the payers were down -5% in Q2.
They were down -4% in Q3.
So progress there as well.
Revenue, we like to look at it FX neutral, was down 2%.
That was the same as Q2.
I will just stress that these metrics are not going to move completely in lockstep every quarter, but if you take a step back and look at the revenue FX neutral trends, you have got a diagram in the prepared release, you can see progress over the last few quarters, from down 5% in Q4 last year to down 2% now.
What I think is also encouraging is, we expect all those metrics to improve in Q4.
We expect payers to get better in Q4, we expect MAU to get better in Q4, and we expect that FX neutral direct revenue to get better as well.
We are starting to see it flow through more than just DAU, but to these other core metrics as well.
Did you want to add anything to that, Spencer? Spencer Rascoff: No, that is good.
Steve Bailey: Let us talk about 2027 a bit.
We are not going to give, as you sort of alluded to, full year revenue guidance or EBITDA guidance until February, which is our normal course.
I tried to give some color on how we were thinking about things.
The only things I would add is, if we break it down, you look at Tinder, we are feeling really good, right.
We are making progress.
I just told you we expect further progress in Q4, and we are really setting ourselves up well to meet the goals I laid out in terms of payers, revenue, and MAU improvement next year.
Could it be sooner? Maybe.
It is hard to pinpoint exactly, but I think we are on a really good trajectory at Tinder.
When you look at Hinge, that achieving the $1 billion in revenue, which we still feel very good about, I think about it this way.
Revenue growth was about 19% in Q3.
We expect it to be about the same, maybe a little bit better in Q4, so think of 19%-19.5%.
We have got to keep the growth rate at about that same level next year, and if we do that, we will hit the $1 billion.
So, we think we have got the right roadmap and strategy in place to do it.
That is going to come from improving core trends and expansion.
We talked about expanding into Japan in the prepared remarks too, and so I am feeling good about the trajectory there too.
E&E, what we said was modest improvement from the declines we are seeing this year.
That is really in recognition of, Spencer talked about putting the right strategy in place, but it is going to take some time to get that business back to growth.
We think only modest improvement, but still negative at E&E next year.
In terms of profitability, the way I would think about it is, we have got the one point IAP fee headwind.
We said we would be really controlled in terms of headcount and AI costs.
The really big consideration is really around marketing spend.
What is the right level of marketing spend, particularly at Tinder and Hinge in 2027, to maximize long-term returns and shareholder value.
We need to balance that against hitting short-term margin targets, and that is what we will do, we will think very hard about.
We will do it in a very quantitative way through the PRISM framework, and we will give you a lot more details on all that in February.
Spencer Rascoff: Next question, please, operator.
Operator: The next question is from Jason Helfstein with Oppenheimer.
Please go ahead.
Jason Helfstein: Thanks.
Just some more color on the givebacks.
I think it sounds like the full year givebacks for Tinder are going to come in below expectations.
Why have they not been necessary this year relative to your plan, and any more color there?....
