Dating app company Match (NASDAQ: MTCH) met Wall Street’s revenue expectations in Q1 CY2025, but sales fell by 3.3% year on year to $831.2 million. Its non-GAAP profit of $0.68 per share was 3.7% above analysts’ consensus estimates.

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StockStory’s Take

New CEO Spencer Rascoff opened Match Group’s Q1 call by emphasizing major organizational changes, including a shift toward a unified, product-led structure and a 13% workforce reduction. Management attributed recent performance to a combination of cost-cutting and early signs of product traction at core brands such as Tinder and Hinge. Rascoff highlighted that Tinder is focusing on user experience improvements and product updates aligned with Gen Z’s preferences, while Hinge continues to benefit from global expansion and AI-powered matchmaking. "By leveraging our scale and accelerating innovation, we’re seeing the beginnings of improved engagement," Rascoff said. The quarter also saw increased indirect revenue from advertising, particularly around key holidays.

Looking ahead, management indicated the company’s forward strategy will hinge on continued product innovation, disciplined investment, and international expansion. Rascoff described plans to further develop AI-driven features and roll out new experiences, such as Tinder’s Double Date and the AI-powered daily match, to more markets. CFO Steven Bailey noted that restructuring efforts are expected to yield over $100 million in annualized savings, helping to fund growth initiatives while maintaining margin targets. However, the team signaled caution about potential macroeconomic pressures, especially among younger users. As Rascoff stated, “We’ll continue to prioritize long-term user outcomes over short-term metrics as we execute our turnaround.”

Key Insights from Management’s Remarks

Management traced the latest quarter’s performance to a mix of organizational restructuring, investment in AI-powered features, and targeted cost containment, alongside evolving platform strategies.

• Organization-wide restructuring: Match Group implemented a 13% reduction in workforce and consolidated key functions to operate as a single, product-focused entity. Rascoff described these actions as necessary to streamline decision-making, reduce redundant management layers, and accelerate product delivery cycles.

• Tinder product evolution: Leadership highlighted new features such as Double Date, designed to boost engagement with Gen Z users. The company is also piloting AI-driven daily match recommendations in New Zealand, aiming to fundamentally shift user perception and address declining monthly active users. Early metrics point to increased engagement and new registrations in targeted markets.

• Hinge’s momentum and expansion: Hinge continued to gain traction, with management citing its launch of a new AI-powered recommendation algorithm and strong user growth in both English-speaking and European countries. The brand plans additional market entries in Brazil and Mexico later this year, reinforcing its leadership in the “intentioned dating” segment.

• Advertising revenue spike: The quarter saw record indirect revenue from advertising, especially around Valentine’s Day. However, management cautioned this was not expected to repeat in future quarters, maintaining a flat full-year outlook for advertising.

• Emphasis on trust and safety: Match Group invested in new user verification and safety features, including the integration of World ID and mandatory liveness checks. These initiatives reportedly reduced bad actor reports by over 15% in test markets, a step management views as essential to rebuilding user trust and category reputation.

Drivers of Future Performance

Management expects future performance to depend on the pace of product innovation, international expansion, and the ability to capture operating efficiencies amid uncertain consumer trends.

• AI-driven product innovation: Match Group is prioritizing the rollout of AI-powered features—such as Tinder’s daily match and Hinge’s recommendation engine—to improve user experience and differentiate its platforms. Management believes these efforts will be fundamental to reversing declines in user growth and engagement.

• International market expansion: The company is investing savings from restructuring into global launches for key brands, including Hinge’s entry into Latin America and The League’s expansion into the Middle East and India. Management views these moves as important levers for long-term growth and local network effects.

• Cost efficiencies and macro headwinds: Leadership plans to maintain margin discipline by further optimizing operating expenses and leveraging its scale in marketing and technology. However, they acknowledged risks from macroeconomic pressures, particularly affecting a la carte spending among younger users, and signaled readiness to adjust pricing or merchandising if needed.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace and user adoption of newly launched AI features on Tinder and Hinge, (2) the effectiveness of restructuring in delivering margin improvements and operational agility, and (3) the success of international market entries for core brands. Additional focus will be placed on signs of stabilization in Tinder’s monthly active users and the impact of trust and safety investments on user sentiment.

Match Group currently trades at a forward EV/EBITDA ratio of 6.8×. In the wake of earnings, is it a buy or sell? Find out in our full research report (it’s free).

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