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Match Group (MTCH) appears to be looking for a stable relationship with the market but has instead been experiencing a roller coaster ride. The company specializes in dating platforms, and its portfolio of brands includes well known platforms such as Tinder, Hinge, OkCupid, Match, and more. Among investors, the Match Group is well known for its successful separation from IAC Inc. (IAC) – especially when compared to other, less successful, IAC spinoffs, such as the video hosting and sharing platform Vimeo (VMEO), which lost over 90% of its value since the spinoff. After the initial enthusiasm wore off, the company has seen its stock price decline by over 50% in the last year.
We’ve discussed the Match Group in the past, mostly in conjunction with another dating platform, Bumble (BMBL), which has also seen a similar decline of 49% in the last year, and a drop of over 75% since the company when public. After Bumble’s IPO and subsequent insider purchases, we wrote the following in a February 2021 Insider Weekends post,
Ms. Herd was an executive at Tinder, which she joined in 2012 when it was still being incubated inside IAC. She left Tinder in 2014 and founded Bumble. Tinder is now a part of Match Group (MTCH), which includes numerous dating related properties including Match, OkCupid, PlentyOfFish, etc.
The meteoric rise of Match Group over the last year and especially after its complete spin-off from IAC generated a lot of interest in Bumble during its IPO. After revising its IPO price upwards, the stock debuted at $43 on February 11th and hit an intraday high of $79.60 before settling down to close at $70.55. The company consists of the Bumble dating app with 12.3 million monthly active users (MAU) and a dating focused social networking platform called Badoo with 24.3 million MAU. Bumble has a “first mover advantage”, where it quite literally allows women on the platform to make the first move to contact a potential date.
Most of the growth is currently coming from the Bumble app which saw paid users grow 49% in 2019 and 30% in the first nine months of 2020. Including the slower growing Badoo, brought down the overall growth rate for 202o to 19%. I was quite surprised by the performance of Match Group during this pandemic when people tended to stay away from family and friends, let alone strangers. While Match Group did not reveal its year-to-date subscriber growth numbers when reporting Q3 results, they grew revenue 18% to $640 million and net income by 14% to $200 million in Q3 2020. Revenue for the nine months ended September 30, 2020 was $1.74 billion for Match Group (16% growth YoY) and $417 million for Bumble.