Match Group (NASDAQ: MTCH) is gaining subscribers at a rapid clip, thanks to the scorching global growth of its popular Tinder dating app. The company's second-quarter results tell the story.
Match Group results: The raw numbers
Earnings per share
Data Source: Match Group Q2 2019 earnings release.
What happened with Match Group this quarter?
Match Group's total revenue rose 18% year over year, to $498 million, and 22% on a constant-currency basis. The gains were fueled by an 18% jump in average subscribers, to 9.1 million.
Nearly all of Match Group's subscriber net additions were driven by the viral growth of Tinder. The app's average subscriber base grew by 39%, to 5.2 million people.
In addition to the subscriber gains, Match is benefiting from an increase in Tinder's average revenue per subscriber (ARPU), which improved by 6% year over year in the second quarter.
"A big priority for us in 2019 was to optimize our existing features to drive revenue growth," CEO Mandy Ginsberg said during a conference call with analysts. "Tinder's performance this year highlights just how impactful these sometimes imperceptible changes can be on a platform of Tinder's scale."
The changes Ginsberg is referring to include improving Tinder's recommendation engine, optimizing pricing, and doing a better job of promoting its premium Tinder Gold subscription package. "As a result of these changes, we've been able to increase subscriber additions and accelerate revenue growth beyond our prior expectations," Ginsberg said.
Match Group's revenue growth is accelerating. Image source: Getty Images.
All told, Match Group's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) -- which excludes stock-based compensation expense and acquisition-related items -- climbed 16%, to $204 million.
Match Group expects third-quarter total revenue of $535 million to $545 million, signifying year-over-year growth of 22% at the midpoint. The company also expects to generate adjusted EBITDA of $200 million to $205 million, representing growth of 23%.
Match Group also boosted its full-year forecast, including:
- 1.6 million Tinder subscriber additions, up from a prior forecast of 1 million
- High teens revenue growth, up from mid-teens growth
- EBITDA of $770 million to $800 million, up from $740 million to $790 million
"Our second-quarter results speak for themselves," Ginsberg said. "Our growth accelerated and our momentum enabled us to increase our full-year outlook while investing in the future."
This article was originally published on Fool.com