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Match Group Sees Growth for Hinge as Tinder Declines

ByHuey Yee Ong

May 12, 2024
Match Group Sees Growth for Hinge as Tinder Declines

Match Group Sees Growth for Hinge as Tinder Declines

Match Group, the parent company of popular dating apps Tinder and Hinge, reported a contrasting performance between the two platforms in its first-quarter earnings release.

Tinder’s paying user base has continued to decline, marking the sixth consecutive quarter of downturn, while Hinge has experienced significant growth in its paid memberships. This trend highlights a shift in user preferences towards more serious relationships, benefiting Hinge’s market position.

Tinder, once the frontrunner in the dating app market, reported 10 million paying users in the first quarter of 2024, a 9% decrease from the previous year. Meanwhile, Hinge’s paid user base has grown to 1.4 million, a substantial 31% increase year over year. This growth is part of a broader cultural shift among younger users who are increasingly seeking long-term relationships rather than the casual hookups Tinder is known for.

Bernard Kim, CEO of Match Group, emphasized during a conference call that Hinge is on the path to becoming a “$1 billion revenue business.” In the first quarter alone, Hinge’s direct revenue soared to $124 million, marking a 50% increase from the previous year. The app’s annual revenue for 2023 was reported at $396 million.

On the other hand, Tinder faces challenges with its à la carte (ALC) revenue, which includes features like Super Likes and Boosts. These features represent about 20% of Tinder’s direct revenue but have seen a 13% decline in Q1 2024.

CFO Gary Swidler attributed this decline to a decrease in user numbers and lower average purchase volumes, exacerbated by weaker discretionary spending among its younger demographic. Swidler forecasted that the decline in paying users would continue into the second quarter but anticipated potential improvements by the third quarter.

To adapt to the price-sensitive Gen Z market, Tinder has been introducing new, more affordable à la carte features. However, the effectiveness of this strategy remains to be seen, especially as Hinge maintains a simpler offering with only two à la carte features: Boosts and Roses.

Tinder has also been focusing on enhancing the user experience. Initiatives include the introduction of new safety features, such as “Share My Date,” and upcoming requirements for face photos in profiles. Additionally, an AI Photo Selector feature is set to launch, designed to improve profile quality by selecting the best pictures from a user’s camera roll.

Despite efforts to extract more revenue from its shrinking paying user base, including a new $499 per month plan for elite users, Tinder’s revenue growth outlook remains tepid. The company projects that revenue for the coming quarter will be flat or show a slight increase, ranging from $475 million to $480 million.

In summary, as Tinder grapples with declining user engagement and spending, Hinge’s growth trajectory suggests a strategic pivot might be necessary for Match Group to capitalize on evolving market dynamics and user preferences in the online dating industry.

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Featured Image courtesy of The Paris Photographer on Unsplash

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.

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