Q2 2021 Match Group Inc Earnings Call
[music].
Welcome to the match group second quarter 2021 earnings conference call.
All participants will be in listen only mode.
Should you need assistance. Please signal a conference specialist by pressing Star then zero on your telephone keypad.
After todays presentation, there will be and opportunity to ask questions to ask a question you May Press Star then 1 on your telephone keypad to withdraw your question. Please press Star then 2 please note. This event is being recorded.
I would now like to turn the conference over to Bill Archer head of Investor Relations and corporate development. Please go ahead.
Thank you operator, and good morning, everyone.
Today's call will be led by CEO, Surety Bay, and CFO and COO Gary Swindler.
And they'll make a few brief remarks, and then we'll open it up for questions.
And where we start need to remind everyone that during this call we may discuss our outlook and future performance.
These forward looking statements may be preceded by words, such as we expect we believe we anticipate or similar statements. These.
These statements are subject to risks and uncertainties and our actual results could differ materially from the views expressed today.
Some of these risks have been set forth on our earnings release, and our periodic reports filed with the SEC.
With that I'd like to turn the call over to share.
Thank you Bill.
Good morning, and thank you for joining the call today.
Gary and I are once again doing this from our offices here in Dallas.
And while our offices and not fully opened yet we did resume from travel and in person meetings and Q2 as the vast majority of our employees got vaccinated.
And you know this optimism was also reflected and the sentiment of our users, particularly in the U S and parts of Europe.
As a result every 1 of our major brands grew revenue and Q2 collectively delivering 27% year over year of growth.
And we have solid momentum as we enter the second half of the year.
As much as I am ready for Covid to no longer be a topic of discussion. It does appear that we have to live with it for little while longer.
And the end of the day widespread global vaccinations of really the only way out of this pandemic for us.
Which is why our brands have been particularly active these past few months collaborating with the White house and the U S and the government and the U K, France, and Ireland on PSA and vaccine information campaigns and even of summer wrap head about the vaccine.
Turns out Daters are open to and are getting vaccinated at higher rates than the average population, which is certainly a very good thing and vaccine badger's have become.
A very attractive feature of many of our platforms.
In recent weeks, we have been monitoring the surge of the Delta variant and the various restrictions and countries, particularly in Asia. We've learned a lot. These past 16 months about the impact of K surges and restrictions to mobility uncertainty driving new cycles et.
Federer on our metrics on business and various parts of the world.
And our confidence and the continued resilience of our business is based on what we've seen.
People around the globe have continued to turn to our products for conversations locations first video dates real life date.
And for me and 1 of the exciting things about this quarter was tenders product launches, which are part of and App experience transformation journey that quite frankly, we haven't undertaken since it's very early days.
The team there is executing really well carefully testing the building blocks of this transformation road map, it's been super encouraging to see the promising engagement metrics with these new products.
And tinder subscribers slash payer additions in Q2 were among some of the highest we've seen.
And this momentum has continued into July.
In the second quarter, we also closed the hypo connect deal.
And even though travel restrictions have prevented us from meeting in person and our teams have quickly mobilized to collaborate on a number of exciting potential synergies.
Near term our priorities to both our to both help calibrate and collaborate to drive profitable growth for our Hyperconnected Saar and have cooler apps and <unk>.
Lay out the broader strategy and roadmap of our social discovery.
We are also starting the work to rollout Hyperconnected video audio and AI technologies onto our platforms over the next several months.
Longer term there is much about this acquisition that excites us.
We expect Asia Pacific will soon contribute over 20% of our overall revenue and still offers the biggest growth opportunity given where the category awareness and penetration stands today.
And hydrogen and that gives us a strong talented team and footprint and the region.
The more I learned and <unk>, the conversational AI and other technologies their team and incubation lab has been working on the more I am excited about the ability to leverage this on our dating platforms to provide a richer more akin to real life experience online.
Everything from self expression to getting to know each other and can be transformed.
1 of the Holy Grail for Us and online dating has always been to bridge. The disconnect that happens between people chatting online and then meeting someone and person.
And these technologies will eventually allow us to build experiences that will help people determine if they have that much elusive chemistry or not.
And so as I as we said in the letter our ultimate vision here is for people to never have to go on a bad first state again.
Finally, as part of our continuing journey as a fully independent company.
We released our first impact report in Q2.
I have always felt lucky to have spent much of my career at a company with such a fundamental and important social mission of bringing people together and helping them find dates and relationships and love and marriage.
We've always been inspired by the success stories of our members the millions of babies born and loved that has been forged by our platforms.
And in this annual report and addition to the social work that we do we are committed to sharing our performance on ESG metrics and progress on relevant impact areas, including the very important work to develop leading technology and solutions for online safety.
I feel very good about where we are as a company as a business and I look forward to continuing to deliver on our vision and goals.
And while the Delta vary and surge is a reminder, that we arent fully out of the pandemic woods yet we.
We do have more data and understanding to be able to manage through it with agility.
And with that I will hand, it over to Gary to talk more about the quarter.
Thanks Shar.
It's great to be here again in person with you and the team and Dallas today she.
She and colleagues working together and makes me very much look forward to days when the office will be filled with activity once again.
We had a terrific Q2 with 27% year over year total revenue growth the strongest growth. The company has achieved since 2018.
Non tinder brands grew direct revenue, 28% year over year in the quarter, the sixth consecutive quarter, where these brands grew in aggregate.
Hinge path live and our BLK and cheese by apps continued to perform very well.
Hinge grew revenue nearly 150% in the quarter driven by strength and both subscription and Ela cart led by Roses and standouts.
At Tinder.
<unk> pay has improved significantly, which you can see and the Ala carte revenue strength as well as overall payer numbers.
Tinder saw a notable acceleration and year over year direct revenue growth to 26% and Q2 up from 18% year over year growth last quarter, and 13% year over year growth and Q4.2020.
Our direct revenue grew 25% and the Americas, 28%, and Europe, and 31% and APAC and other.
Our U S performance is exceptionally strong and our performance and Europe is trailing slightly behind the U S consistent with the pace of the recovery there.
APAC and other growth also was solid and Q2, but.
But a number of markets there, including important ones for us like Japan are now facing increased COVID-19 restrictions.
Note that we are now disclosing the performance of the business and 3 geographic regions to give investors better insight into our results.
Indirect revenue grew 54% year over year, marking a third consecutive strong quarter.
Advertising market generally and our direct sales specifically, we're very strong.
Also note that we closed the acquisition of Hyperconnected and mid June so our metrics reflect about 2 weeks of contribution.
Net of certain 1 time purchase accounting adjustments hyper connect contributed $4.3 million of revenue in Q2.
We have broken this information out and the shareholder letter. So you can see what match group ex Hyperconnected and what Hyperconnected itself delivered in Q2.
We have also moved to disclosing payors and monthly revenue per per.
In the quarter total payers reached $15 million, which was an increase of 15% from Q2.2020.
Growth was strong and all geographies up 16% year over year, and the Americas, 13%, and Europe, and 17% and APAC and other.
Tinder payers were up 17% year over year and Q2.
For comparison purposes in Q2 average subscribers increased 1.3 million over the prior year to $11.4 million, representing 13% year over year growth.
Tenders average subscribers were up just under $1.1 million or 17% year over year and came in at $7.2 million and total.
This was the best Tinder year over year subscriber growth since the pandemic began and was very strong sequentially as well.
All of their brand average subscribers were up 240000 or 6% year over year.
Revenue per payer increased 10% year over year to $15.46.
It was up 8% and the Americas, 13%, and Europe, and 12% and APAC and other.
<unk> was up 8% year over year of Tinder RP.
And <unk> derived 3 percentage points of growth 53.
From foreign exchange impacts on the quarter.
At Tinder platinum sales and strength and Ala Carte contributed to RVP growth.
Continued strong performance of plenty of efficient live streaming business and hindered Ala Carte features contributed to the strength and RP at the established and emerging brands respectively.
Total company <unk> was up 10% year over year to 65.
Non tinder brands <unk> growth was extremely strong again this quarter up 16% year over year, and Tinder ARPA was up 7% year over year.
Operating income grew 7% and EBITDA grew 15% year over year and Q2 <unk>.
EBITDA margins were 37%.
Net of purchase accounting adjustments Hyperconnected reduced match group EBITDA by $3 million and Q2 from $266 million of $263 million.
Overall expenses, including SBC expense.
Increased to 70% of revenue compared to 65% and Q2 'twenty when we pulled back on spending as the pandemic took hold.
Cost of revenue grew 30% year over year impacted by higher <unk> web hosting cost and fees related to live streaming video of plenty of fish.
Sales and marketing spend was up $38 million or 42% year over year close to what we had anticipated and represented 18% of total revenue in Q2, as many of our brand spend and to reopening.
Product development costs grew 24% year over year as we increased head count at several brands, mainly tinder and hinge.
G&A expense rose, 66% year over year and comprised 16% of revenue.
G&A in Q2 included $4 million of professional fees and $9 million of stock based comp expense both related to the acquisition of hyper connect.
Our gross leverage declined to 3.9 times at the end of Q2, while our net leverage was 3.7 times as we used cash on hand for a portion of the consideration and the Hyperconnected purchase.
We're pleased to see both gross and net leverage below 4 times and we're on track for net leverage below 3 times by the end of 2021.
For Q3, we expect total revenue from match group of $790 million to $805 million, which would represent 23 of 26% year over year growth.
That solid growth of what was a very strong Q3.2020 as data has emerged from the initial wave of Lockdowns in North America, and Europe, and Asia had COVID-19 under control.
We expect EBITDA of $275 million to $280 million and Q3.
This reflects an additional $15 million of costs and the second half of the year versus our prior expectations for government relations and other advocacy related to App store practices and for legal matters, including the former Tinder employee litigation as we prepare for a fall of trial.
We think plaintiffs claims and that case are totally without merit and are fully prepared to defend ourselves vigorously to the and.
We currently expect that the trial will conclude by the end of the year and a meaningful costs, we've incurred related to this lawsuit should not recur beyond 2021.
For the second half of the year, we expect hyper connect to contribute $125 million to $135 million of revenue.
This outlook reflects some pullback primarily due to COVID-19 as well as our decision to focus of hyper connect team on delivering video and other technology that we can implement across the rest of our portfolio.
We expect at least 2 of our brands to make use of hyper connect technology before the end of 2021, and a number of others to implement hyper connect capabilities by year end 2022.
As a result of this focus on building tech that our other brands can use we expect hyper connect to remain roughly breakeven from an EBITDA standpoint in Q3 and Q4.2021.
For the company as a whole we expect full year revenue of just above $3 billion, including hyper connect exceeding the high end of our previously stated range.
This reflects better than expected performance at our dating brands in the first half of 2021 and anticipate second half year over year growth north of 25%.
Approximately 20% of Tinder single digits of the established brands and north of 100% at the emerging brands, including the contribution from hyper connect.
From an EBITDA perspective, we now expect a range for the full year of 1 point of <unk> 5 to 1 point of <unk> 6 billion.
This outlook incorporates google's recent change in policy to enable our brands to opt out of mandatory and app billing until at least March 2022.
It also includes the previously mentioned additional legal costs and higher spend for government relations and advocacy to encourage the app stores to reduce their fees.
And we're increasingly confident that the lawsuits and investigations around the globe related to App store practices will result in changes to those policies and in not too distant future.
We've had an outstanding first half of the year, where we've accomplished a great deal.
<unk> growth has accelerated and the product is evolving in exciting ways that we expect will present, a real revenue opportunities for us over time.
Hinge and our other newer established brand of newer apps continue to exceed our expectations and our more established brands are performing well.
Importantly, our services are now more in demand and ever as people around the world seek social connection online.
Whether in the form of companionship romance or love.
With hyper connect our portfolio is increasingly well positioned to deliver on our mission of connecting people, which we expect will enable us to continue to deliver strong results for our stakeholders.
With that I'll ask the operator to open the line for questions.
We will now begin the question and answer session.
Ask a question you May press Star then 1 on your telephone keypad. If you are using a speakerphone. Please pick up your handset before pressing the keys.
And if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then 2.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Cory Carpenter with Jpmorgan. Please go ahead.
Thanks for the questions I had 1 for Sean and 1 for Gary.
For short on reopening, hoping you could expand a bit on what impact you're seeing to user behavior and markets like the U S with COVID-19.
Flaring up a bit recently and then Gary hoping you could talk about some of the puts and takes driving your expectation for tinder revenue growth of close to 20% and the second half. Thank you.
Good morning Corey.
Yeah about the Delta and K surges. So 1 of the things to note is more than case searches itself, we're actually watching.
Mobility trends and restrictions more closely because they seem to have a larger.
Jack.
As you know as vaccination rates gained steam first and the U S. And then in Europe, we saw and ability inquiries and it reflected and our business trends in Q2.
And in a few and actually of several markets in Asia.
Even today, including Japan, which is our second largest revenue market. There are different degrees of lockdowns and restrictions in place and that certainly impacts mobility and our metrics.
With respect to.
What's going on and the U S with the Delta searches in recent weeks. So far they don't appear to have any impact on mobility and they may not and less real restrictions on put in place and generally we don't see mask mandates as causing.
Mobility restrictions.
<unk> partial and full lockdowns seem too so.
And for instance, and U K.
Where the Delta surged and it has already peaked and it's on its way down.
Because of restrictions will using easing during this period.
Mobility kept increasing and we didn't really see margin back to our metrics here. So that's kind of how we think about what's going on in the market today.
And then Corey as far as our outlook for Tinder.
Revenue in the back half of the year our outlook sitting here today is for just north of 20% topline growth for Tinder and the second half of 2021, which is meaningfully higher than what it was last year if.
And if you break it down further into the quarters I think Q3 growth will probably be just under the 20% Mark because last year. If you remember Q3 was very strong north of North America, and Europe were coming out of the Lockdowns and people got back outside started being active again, the weather was nice and Asia had the.
Buyers under control. So you had really good conditions globally, which led to a strong Q3 last year.
For Q4, this year I am expecting the growth to be comfortably above 20% year over year, but given Q4 is still a quarter away and tinder has broad geographic exposure and the <unk>.
<unk> risks that are still out there necessitate us being a little bit conservative and so thats, what youre seeing as we give our outlook for the back half of the year on Tinder growth.
Great. Thank you.
Okay.
The next question comes from Brent.
No with Jefferies. Please go ahead.
Good morning.
And just talk to what is giving you confidence to raise your full year guidance from high teens to low 20% are you assuming some conservatism in the outlook.
Gary maybe if you can give us a little more color on that and I had a quick follow up thank you.
Sure.
Look we've had extremely strong start to the year and.
And that's enabled us to raise our outlook twice so far this year. So we feel great about how we performed in 2021 in fact, our Q2 was really stellar 27% revenue growth well balanced between tinder and non tinder. So we feel really good about Q2 in particular.
And I think we're very well set up for the rest of the year. So right now sitting here I think we have good visibility into Q3 and that is reflected in our specific guidance for the quarter.
And then we're anticipating really solid sequential revenue growth going into Q4, which would mean that we should see accelerating year over year Q4 growth, but as I, just said to Corey there's still some uncertainty and the environment with Covid and Delta and potentially other variants and everything else that people know much about and.
So we think that a little bit of conservatism is appropriate, especially the further out that we look and so that's all factored into the guidance we've provided.
And Gary just a follow up we wanted to.
Make sure we heard this right, but it sounds like Youre, assuming hinges roughly $250 million and revenue and 21 is that is that somewhere in the ballpark.
So I think Thats a good question actually so when you look at that chart that's in the letter.
Related to the swipe apps and plenty of fish live and hinge and it really is impressive what we've been able to achieve getting those businesses from virtually nothing to 300 or so million dollars. This year in aggregate.
But the letter is a little bit unclear and so I wanted to clarify that each of the group of swipe apps as well as the plenty of fish live streaming business are contributing.
And at least $50 million of revenue to that $300 million. This year, so hinge and the balance of the 300. After the 2 contributions of 50, plus and as we've said before hit is on track to more than double revenue and 2021 after tripled and we gave the performance of hinge also in the second quarter of 150% Rep.
And your growth so the $2.50, I think is high.
But I've given you the components of it should enable you I think to determine kind of where we think and just going to be roughly for the year.
Great. Thanks.
The next question comes from Jason Holstein with Oppenheimer. Please go ahead.
Hey, guys.
On the new product initiatives are on Tinder do you see advertising, playing a bigger role and the medium term or should we mostly focus on virtual currency and Ala carte monetization. Thanks.
Yeah.
I can take that thanks, Jason so.
So we are definitely not looking at advertising as an incremental revenue source, but we do see a la carte is becoming an increasing area of focus in addition to subscriptions.
And with regards to virtual currency. It is something we're testing and a.
Couple of small markets and we test and we started testing it and a couple of small markets and Q2. It is currently very limited and feature set that it covers.
We are encouraged by what we've seen so far and we'll be expanding to additional markets.
And more feature of coverage over the next few quarters.
More broadly, though the tinder experience as I said is evolving to include these new multi dimensional surface areas and the app, where people have new ways to discover and connect and share interest and form communities.
And if you think about most of the ALC features today things like boost and Super like for instance.
They are designed to allow users to stand out on a 1 to 1 experience and.
And we think there are some real interesting revenue opportunities to <unk>.
People stand out and these many to many experiences on the App that we're building.
Thank you that's helpful.
The next question comes from Mario Lu with Barclays. Please go ahead.
Great well sort of taking the questions I have 2 on the new payers metric.
And so specifically at Tinder same site of little over 2 million users.
Only pay a la carte versus $7.2 million average PMC.
And just the right way to think about it and how does the sales payer.
Breakdown of looked at Haynes and just match group overall.
So.
This is a little bit complicated I want to try to run through it to make sure people understand there are 2 reasons why payors are higher than average subscribers.
The first is that payers captures non subscribers ALC payors, but there's another reason, which is the definitions of average subscribers and payers average subscribers represent of daily average over the quarter.
While payers is the number of unique payers in a given month and then it average for the quarter.
And so if you look at match group overall at our payer numbers, what Youll see is that the non subscriber ALC payers are actually a relatively small part of the difference between average subscribers and payers. It's more a function of the way payers are counted that accounts for <unk>.
Here's being higher than average subscribers. So again ALC payors that are non subscribers are a relatively small piece of that disparity.
That being said, we do think that as we expand our ALC monetization efforts and we add virtual currency, especially in Asia Pacific and now we bring on hyper connect which has a lot of non subscribers ALC payers the percentage of non subscriber ALC payors is going.
Increase so you'll start to see that as we move forward into the year.
And I'd encourage you to look at the specific definitions, which we've provided of average subscribers as well as payers and if you have further questions. On this we're happy to try to take this offline and go through some examples because I know.
Intuitively is not that obvious, but but again the definitions are what's accounting for a large part of the of the GAAP.
Okay. Yeah. That's helpful. And then just 1 more on the revenue per payer by Geo.
And so a little bit surprised to see APAC and out of there.
To be relatively in line with Americas, and Europe and absolute level.
So I'm just curious if theres any differences and spending.
By Geo to point out for example of those APAC and other types of spine mostly on on.
Of the car and not non of subscription.
Yes. So it's a good question, we have relatively consistent RPT and.
APAC compared to the Americas, and Europe, which is really a reflection of a couple of things..1 is that pairs in Japan is our highest RVP dating business. So thats definitely helping on the RVP and APAC and then we actually have relative price parity.
Tinder and APAC and our other geographies you don't see much of a disparity and so those 2 things taken together as a result, APAC RPT is pretty similar to the rest of the world as far as kind of what the mix is perez tends to be of subscription business as does tinder and APAC today.
However, as we've talked about we're experimenting with ways to increase of the Ala carte consumption at tinder through virtual currency and other product innovations were early days for all of that but we think we can improve payer penetration by adjusting our monetization strategies and so that's something that you may vary.
Well see over time.
Great. Thank you.
Sure.
Next question. Please a question comes from Dan Salmon with BMO capital markets. Please go ahead.
Hey, good morning, everyone.
I jumped on a little bit late so hopefully this 1 wasn't covered but I just wanted to follow up on 1 of the comments and the letter of where you you spoke about the Hyperx group and hyper connect.
Sounds like a little bit of of a lab.
And I'd love to learn and just a little bit more about some of the products. They are working on currently about the group itself.
And maybe broad strategic goals number of employees and.
Is that the type of thing that you see is new and incremental to match that hyperconnected things as well.
Sure and I.
And can take this.
So generally as we've said hyper connect has a number of technology assets were already planning to deploy on our platforms.
And video audio some AI tools from a moderation of et cetera.
And then within hydro connect Hyperx is a technology incubation lab and some of the tax assets.
Developed.
Deployed on <unk> and <unk>.
And they also incubate new apps and in fact <unk> was of Hyperx incubation.
I am actually really excited about some of the technology elements they've been working on.
On our features self expression tools.
Conversational AI and a number of what we would consider net adverse elements, which have the element to transform the online meeting and getting to know each other process and.
And so the technology areas of innovation and Hyperx is actually a very incremental and additive to match group and we do believe it will have a significant impact.
Both of ads on their apps of Standalone business, but also as a technology enabler for our other platforms and businesses.
That's great. Thank you Sir.
The next question comes from Davita could Julia with Evercore ISI. Please go ahead.
Okay. Thank you.
Could you please help us on.
Sandy guidance for hyperkinetic piece of it.
The time of acquisition.
And we were expecting about 40% to 50% growth and revised guidance and slightly less than that and you call that got pulled back from Covid and additional color is that.
Just COVID-19.
The level of conservatism there and then the follow up to that is how are you expecting to manage costs.
And even for the back half but.
Any additional color on the potential of EBITDA margins for that business would be great. Thank you.
Sure why don't I take that 1 so.
We are there are a few things that are leading to somewhat lower growth at hyperconnected. This year than what we expected back in February the first thing, which you rightly pointed out was they have a large footprint and APAC and as we've talked about and is well documented COVID-19 has hit APAC much more heavily this year.
And it did in 2020 and so there is COVID-19 impact that is being felt and their performance. There is also a much more challenging marketing environment, you've got <unk>, you've got a more crowded marketplace and so as a result of these factors. The hyperconnected. He has been a bit less aggressive and some of their key markets. This year.
And then we were initially anticipating.
On top of that.
Shar has talked about we have become increasingly excited about the opportunities to apply various hyper connect technologies to our other platforms and we see significant synergies and upside from that and so thats become a higher priority for us and for the hyper connect team in the short term and we are encouraged.
Them to focus resources on the tech integration with match group.
So we still expect Hyperconnected performed well this year and post solid revenue growth, but it is going to be a little bit lower than we initially thought.
As far as the costs, we communicated that we thought over time margins of hyper connect could get into the upper Twenty's, 30% range and nothing has really changed our view on that over the longer term, but as I. Just said shorter term we are not focused on margin we.
The company will still operate at a breakeven pace.
But we want to focus on the synergies and so that's what we're focused on certainly for the rest of this year and into next year and then I expect of the margins will gradually start to improve as we make the turn through 2020 and will communicate more about that likely on our next call as we start to get some sense of what we think 2.
<unk> 2020 is going to 2022 I'm sorry, he is going to be for the company.
Okay. Thanks, Gary.
Sure.
The next question comes from Justin Patterson with Keybanc.
Please go ahead.
Great. Thank you 1 on the established brands and if I can 1 of them.
Biggest drivers of growth versus 2019 levels and.
And when you look down the road, where do you see further opportunities.
Continued driving growth from these brands and broaden the audience. Thank you.
Sure Thanks, Justin and I can take this.
So with the established brands there are a few different stories here.
Keep in mind, the established brands used to be desktop first brands and they have all re imagined the product as mobile force experiences.
And some of them like match and May take for instance have shifted that business model from the hard paywall to more premium experiences, which has meaningfully increased engagement and conversion.
And apps like PA have and added new experiences like <unk> live which has created a new revenue stream and.
Okay Cupid continues to expand to new international markets.
And generally they are also sharpen their marketing to become more resonant and relevant to their core audience.
So now as they continue to execute they should be able to expand the category and there of core user base and deliver a modest growth we think.
Thank you.
The next question comes from more on Schenker with Morgan.
Stanley Please.
Please go ahead.
Great. Thanks to you for Gary if I can I think you mentioned the Google apps from if you change. It was originally supposed to come into that on the fourth quarter being pushed up to March of 'twenty..2 I think previously you were embedding some impact from that change and the fourth quarter EBITDA guidance I just wanted to confirm that that upside was sort of flow.
And through and maybe that's a $2 million of incremental legal expenses offsetting that but just wanted to clarify that and then generally how you're feeling about that risk heading into March next year and any potential work around and then secondly, just if you could give us your thoughts on the status of the of the former Tinder employee litigation and how you see that progressing through the course of the year.
Thanks.
Sure so on the on the Google fees in the fourth quarter I think what we've said previously is that where we ended up on our EBITDA range is.
Would be impacted on whether the Google change actually occurred or not and at this point they've now about a few weeks ago. They basically said, they're pushing back the deadline for compliance until March 31 next year. So that cost is obviously not going to hit us in Q4 and.
So now what we've done is we've given a more up to date EBITDA outlook, the rest of the year, which.
Reflects a lot of puts and takes you've got the <unk>.
Legal and <unk> cost that you mentioned and there's more things moving around and there and then Google has not and there anymore and so this is our kind of our latest and greatest with everything we know sitting here today factored in.
And frankly, I don't know for sure of that $15 million of extra legal and <unk> is going to get spent.
But we've embedded it so I think the costs are relatively fully loaded at this point for the rest of the year.
And then in terms of potential workarounds, and we continue to talk to Google. We are of good relationship with them, it's very collaborative and so we'll see how that all evolves.
That being said as you probably know there are many many investigations and lawsuits and regulatory actions around the world and many jurisdictions and many countries related to App store practices generally and so as a result of that.
We're increasingly optimistic that theres going to be a change and app store policies, 1 way or another at some point and not too distant future.
And so we'll see where we are.
As time here progresses and.
And we'll keep everybody updated on our latest thinking on this.
As far as the Tinder former employee litigation goes ultimately, it's an ongoing litigation and so theres not too much that we can really provide in terms of details on that.
What I can say is that we ran a process that involved 2 globally recognized highly regarded investment banks that listen to everything that we've now plaintiffs in this case I had to say about the business went through and exhaustive analysis and those banks ultimately.
Came up with a valuation of tinder at the time that was in line with where wall Street analysts like those who are on the phone thought tinder was valued so it wasn't particularly surprising from that standpoint, and so we're confident in our case and that we think there are cases completely meritless.
And so we're looking forward to getting to the trial later.
Later in the fall and fighting this to the and and so Thats our plan and.
And we remain optimistic.
Great. Thank you.
And the last questioner today will be John Blackledge with Cowen. Please go ahead.
Great. Thanks.
Just curious of changes 'twenty, 1 and topline growth income.
<unk> non English speaking markets or if those markets are still kind of.
Early stage from a monetization perspective, and also how does the runway for growth and <unk>.
And kind of longer term and do you.
Few hinges comp.
Complementary or cannibalistic of our or a bit of both to tinder overtime.
Yeah, I can take that.
Right now hinges only available and a few English speaking markets.
So much of 2021 revenue growth has largely been a combination of user growth concentrated in medium and large cities and these markets as well as the really good work. The team has done on developing monetization and revenue features.
So theres still plenty of room for both user and monetization growth in these limited English speaking markets that currently are in.
Our plan is in 2022 to translate and localize the App and start the journey of expansion into international markets.
So.
On a longer term, it's a combination of further expansion in existing markets.
Increasing footprint and international markets and continued execution on monetization features.
And that will drive strong growth in the coming years.
And we're very excited for what is still to come at hinge it is uniquely.
Uniquely differentiated product that resonates to its audience that is.
Little serious intent and outcome driven.
This is why they're tagline designed to be deleted resonates with this audience said.
We have found very little evidence on cannibalization Tinder is still the number 1 dating app for anybody starting out.
And of dating particularly among the young.
And is a great alternative app and a second app for people, who are looking for a more serious intent dating and so we do think there is a real play for both tinder and hinge and our portfolio.
Yeah.
Thank you Tim sorry.
Sorry, thank you.
And that was our last question.
Thank you again for joining the call.
Have a great 1.
Again the conference call has ended thank you for attending today's presentation you may now disconnect.
Okay.
And.
[music].
And.
Okay.
Yes.
And.