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Match Group (MTCH) Down 3.7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Match Group (MTCH - Free Report) . Shares have lost about 3.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Match Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Match Group Q2 Earnings Meet Estimates, Revenues Up Y/Y
Match Group reported second-quarter 2024 earnings of 48 cents per share, in line with the Zacks Consensus Estimate. The bottom line remained flat compared to the year-ago quarter’s reported figure.
Revenues of $864.07 million increased 4% year over year and beat the Zacks Consensus Estimate by 0.9%. On an FX-neutral basis, revenues increased 8% from the prior-year quarter to $892 million.
Direct revenues were $848.13 million, up 4% year over year, whereas indirect revenues were $15.93 million, which increased 19% from the year-ago quarter.
Top-line growth was driven by strength in Tinder and Hinge. Also, solid momentum across the Americas and Europe regions was a positive.
Quarter in Detail
In the second quarter, the number of total payers decreased 5% year over year to 14.84 million. The figure beat the Zacks Consensus Estimate by 0.2%.
The number of total payers from the Americas decreased 13% year over year to 6.74 million, while the number of total payers from Europe increased 2% year over year to 4.5 million. Meanwhile, total payers of 3.61 million from Asia Pacific (APAC) witnessed a rise of 3% on a year-over-year basis.
Total revenues per payer (RPP) increased 9% year over year to $19.05. The figure beat the Zacks Consensus Estimate by 1%.
Region-wise, RPP increased 20% year over year in the Americas to $22.30 and 4% to $17.79 in Europe. However, in APAC, it declined 4% year over year to $14.55.
Direct revenues from the Americas were up 5% to $450.55 million. Direct revenues from Europe increased 5% to $240.19 million, and the same from APAC decreased 1% to $157.39 million.
Direct revenues from Tinder were up 1% year over year (4% on a FX-neutral basis) to $479.95 million. The figure beat the Zacks Consensus Estimate by 0.8%.
Tinder RPP rose 10% year over year to $16.61, driven by improved ecosystem health and a series of initiatives to raise the efficacy of Tinder by improving user outcomes.
Payers declined 8% year over year to 9.6 million. Tinder saw an acceleration in subscription revenue growth throughout the quarter.
Hinge revenues surged 48% year over year to $133.57 million, with a 24% year-over-year increase in payers to 1.5 million and a 19% year-over-year increase in RPP to $30. Hinge continued to grow in its English-speaking and Western European markets, with total downloads growing approximately 14% on a year-over-year basis.
Match Group’s Asia Direct revenues declined 4% year over year (up 9% on an FX-neutral basis) to $73.68 million, largely due to the impacts of forex exchange fluctuations. On an FX-neutral basis, Direct revenues at Azar and Pairs increased 14% and 2% year over year, respectively.
Evergreen and Emerging revenues declined 8% year over year to $160.94 million.
Operating Details
Total operating costs and expenses (76% of revenues) increased 7% year over year to $659.54 million in the second quarter.
Adjusted operating income was $306.4 million, up 2% year over year, representing an adjusted operating margin of 35%, which contracted 90 basis points.
Balance Sheet
As of Jun 30, 2024, Match Group had a cash and cash equivalent and short-term investment of $844 million compared with $921 million as of Mar 31, 2024.
As of Jun 30, 2024, MTCH had a long-term debt of $3.9 billion, unchanged sequentially.
During the quarter ended Jun 30, 2024, the company repurchased 6.4 million shares of common stock for $197 million. As of Jul 26, 2024, $528 million in aggregate value of shares of Match Group stock was available under its previously announced share repurchase program.
Guidance
Match Group expects third-quarter 2024 revenues in the range of $895-$905 million, indicating year-over-year growth of 2% to 3% on a reported basis and 4% to 5% on an FX-neutral basis.
Tinder Direct revenues are expected to be in the range of $505-$510 million, roughly flat year over year on a reported basis and up 2.5% year over year on an FX-neutral basis.
Across other brands, Match Group expects Direct revenues to be in the range of $375-$380 million, implying 5% to 6% year-over-year growth on a reported basis and 7% to 8% on an FX-neutral basis, with Hinge Direct revenues anticipated to be approximately $145 million, indicating year-over-year growth of 35%. The company expects Indirect revenues to be approximately $15 million in the quarter.
Adjusted operating income for the third quarter is anticipated in the range of $335-$340 million, with an adjusted operating margin of 37.5%.
For full-year 2024, Match Group expects year-over-year revenue growth of 5% on a reported basis and 7.5% on an FX-neutral basis.
Tinder Direct revenues are expected to witness 3% year-over-year growth on a reported basis and 5.5% on an FX-neutral basis.
Adjusted operating margin is anticipated to be approximately 36%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -17.99% due to these changes.
VGM Scores
At this time, Match Group has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Match Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Match Group (MTCH) Down 3.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Match Group (MTCH - Free Report) . Shares have lost about 3.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Match Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Match Group Q2 Earnings Meet Estimates, Revenues Up Y/Y
Match Group reported second-quarter 2024 earnings of 48 cents per share, in line with the Zacks Consensus Estimate. The bottom line remained flat compared to the year-ago quarter’s reported figure.
Revenues of $864.07 million increased 4% year over year and beat the Zacks Consensus Estimate by 0.9%. On an FX-neutral basis, revenues increased 8% from the prior-year quarter to $892 million.
Direct revenues were $848.13 million, up 4% year over year, whereas indirect revenues were $15.93 million, which increased 19% from the year-ago quarter.
Top-line growth was driven by strength in Tinder and Hinge. Also, solid momentum across the Americas and Europe regions was a positive.
Quarter in Detail
In the second quarter, the number of total payers decreased 5% year over year to 14.84 million. The figure beat the Zacks Consensus Estimate by 0.2%.
The number of total payers from the Americas decreased 13% year over year to 6.74 million, while the number of total payers from Europe increased 2% year over year to 4.5 million. Meanwhile, total payers of 3.61 million from Asia Pacific (APAC) witnessed a rise of 3% on a year-over-year basis.
Total revenues per payer (RPP) increased 9% year over year to $19.05. The figure beat the Zacks Consensus Estimate by 1%.
Region-wise, RPP increased 20% year over year in the Americas to $22.30 and 4% to $17.79 in Europe. However, in APAC, it declined 4% year over year to $14.55.
Direct revenues from the Americas were up 5% to $450.55 million. Direct revenues from Europe increased 5% to $240.19 million, and the same from APAC decreased 1% to $157.39 million.
Direct revenues from Tinder were up 1% year over year (4% on a FX-neutral basis) to $479.95 million. The figure beat the Zacks Consensus Estimate by 0.8%.
Tinder RPP rose 10% year over year to $16.61, driven by improved ecosystem health and a series of initiatives to raise the efficacy of Tinder by improving user outcomes.
Payers declined 8% year over year to 9.6 million. Tinder saw an acceleration in subscription revenue growth throughout the quarter.
Hinge revenues surged 48% year over year to $133.57 million, with a 24% year-over-year increase in payers to 1.5 million and a 19% year-over-year increase in RPP to $30. Hinge continued to grow in its English-speaking and Western European markets, with total downloads growing approximately 14% on a year-over-year basis.
Match Group’s Asia Direct revenues declined 4% year over year (up 9% on an FX-neutral basis) to $73.68 million, largely due to the impacts of forex exchange fluctuations. On an FX-neutral basis, Direct revenues at Azar and Pairs increased 14% and 2% year over year, respectively.
Evergreen and Emerging revenues declined 8% year over year to $160.94 million.
Operating Details
Total operating costs and expenses (76% of revenues) increased 7% year over year to $659.54 million in the second quarter.
Adjusted operating income was $306.4 million, up 2% year over year, representing an adjusted operating margin of 35%, which contracted 90 basis points.
Balance Sheet
As of Jun 30, 2024, Match Group had a cash and cash equivalent and short-term investment of $844 million compared with $921 million as of Mar 31, 2024.
As of Jun 30, 2024, MTCH had a long-term debt of $3.9 billion, unchanged sequentially.
During the quarter ended Jun 30, 2024, the company repurchased 6.4 million shares of common stock for $197 million. As of Jul 26, 2024, $528 million in aggregate value of shares of Match Group stock was available under its previously announced share repurchase program.
Guidance
Match Group expects third-quarter 2024 revenues in the range of $895-$905 million, indicating year-over-year growth of 2% to 3% on a reported basis and 4% to 5% on an FX-neutral basis.
Tinder Direct revenues are expected to be in the range of $505-$510 million, roughly flat year over year on a reported basis and up 2.5% year over year on an FX-neutral basis.
Across other brands, Match Group expects Direct revenues to be in the range of $375-$380 million, implying 5% to 6% year-over-year growth on a reported basis and 7% to 8% on an FX-neutral basis, with Hinge Direct revenues anticipated to be approximately $145 million, indicating year-over-year growth of 35%. The company expects Indirect revenues to be approximately $15 million in the quarter.
Adjusted operating income for the third quarter is anticipated in the range of $335-$340 million, with an adjusted operating margin of 37.5%.
For full-year 2024, Match Group expects year-over-year revenue growth of 5% on a reported basis and 7.5% on an FX-neutral basis.
Tinder Direct revenues are expected to witness 3% year-over-year growth on a reported basis and 5.5% on an FX-neutral basis.
Adjusted operating margin is anticipated to be approximately 36%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -17.99% due to these changes.
VGM Scores
At this time, Match Group has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Match Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.