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Match Group (MTCH) Q3 Earnings & Revenues Beat, Improve Y/Y

Zacks Equity Research

Match Group MTCH reported third-quarter 2019 adjusted earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate of 47 cents. The bottom line also improved from 39 cents reported in the year-ago quarter.

Revenues of $541 million climbed 22% year over year and beat the Zacks Consensus Estimate of $533 million. Excluding the effect of foreign exchange, the top line was up 24% year over year. The increase was primarily driven by an improvement of 19% and 4% in average subscriber base and Average Revenue per User (ARPU), respectively.

Further, robust Tinder average subscriber growth (up 38% year over year) positively impacted the quarterly results.

Notably, Match Group’s stock has gained 60.9% in a year, against the industry's decline of 1.3%.

Quarter Details

Average subscriber base and ARPU were 9.6 million and 59 cents, respectively, at the end of the reported quarter. North America subscriber base increased 10%, while International advanced 29%. Growth in ARPU was driven primarily by strength in both North America (up 5% year over year) and International (up 3%).

In the third quarter, Tinder average subscribers increased 1.6 million year over year and came in at 5.7 million. Sequentially, the same increased 437,000 ARPU. This primarily came on the back of higher number of Gold subscribers.

Direct revenues from Tinder grew 49% year over year, primarily backed by a 38% increase in average subscriber growth and 9% rise in ARPU.

Adjusted EBITDA was $206.1 million, up 25% year over year. Adjusted EBITDA margins came in at 38%, down 100 bps year over year.

Total cost and expenses as a percentage of revenues decreased 100 bps year over year and came in at 67% in the reported quarter.

Operating income advanced 26% from the year-ago quarter to $176.6 million. Moreover, operating margin expanded 100 bps to 33%.

Balance Sheet

Match Group exited the third quarter with cash and cash equivalent balance of $366.4 million, up from $266.4 million reported in the previous quarter. The company had long-term debt of $1.6 billion flat from the previous quarter.

Cash flow from operations was $472.9 million during nine months ended Sep 30, 2019. Free cash flow came in at $442.8 million for the year-ago comparable period.

During the reported quarter, the company repurchased 1.4 million shares at an average price of $75.91 per share. The company had 9.9 million shares remaining under the previously announced share repurchase program.

Guidance

Match Group anticipates fourth-quarter 2019 revenues between $545 million and $555 million. Tinder remains the key catalyst. The Zacks Consensus Estimate is pegged at $556.9 million.

Adjusted EBITDA is anticipated to be in the range of $205 million to $210 million.

Zacks Rank and Other Stocks to Consider

Match Group currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader technology sector are Universal Display Corporation OLED, Fortinet, Inc. FTNT and Taiwan Semiconductor Manufacturing Company Ltd. TSM. Each of the stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Universal Display, Fortinet and Taiwan Semiconductor is currently pegged at 30%, 14% and 10.4%, respectively.

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Click to get this free report Fortinet, Inc. (FTNT) : Free Stock Analysis Report Match Group, Inc. (MTCH) : Free Stock Analysis Report Universal Display Corporation (OLED) : Free Stock Analysis Report Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research