Q3 2025 Match Group Inc Earnings Call
Speaker #1: Good day and welcome to the Match Group, Inc. third quarter 2025 Earnings Call . All participants will be in listen only mode . Should you need assistance , please signal a conference specialist by pressing the star key , followed by zero .
Speaker #1: After today's presentation , there will be an opportunity to ask questions , to ask a question , you may press star , then one on your touchtone phone .
Speaker #1: To withdraw your question , please press star and then two . Please note this event is being recorded . I would now like to turn the conference over to Amy Shelburne , SVP of Investor Relations .
Speaker #1: Please go ahead .
Speaker #2: Thank you . Operator . And good afternoon , everyone . Today's call will be led by CEO Spencer Rascoff and CFO Steven Bailey .
Speaker #2: These forward looking statements may be preceded by words such as we expect . We believe . We anticipate , or similar statements . These statements are subject to risks and uncertainties , and our actual results could differ materially from the views expressed today .
Speaker #2: of these risks have been set forth in our earnings release , and our periodic reports with the SEC . Also during this call , we will discuss certain non-GAAP financial measures , reconciliations to the most directly comparable GAAP financial measures are provided in the published materials on our IR website .
Our new modes navigation, gives you users more choice in how they use Tinder for meeting new people with a friend to connecting with their College Community. Since launching modes in September double date. Adoption is up 30% in the US. While College mode is gaining traction with 1 in 4, elite students, using it and over 8% engaging daily as of October,
Modes makes the fun part of our mission reel. Giving new ways to spark something together and redefining Tinder as a fun, social and low pressure way to meet new people.
We're seeing this momentum reflected in our marketing, the double date Island campaign across Europe. The highest brand consideration lift of the Year boosted downloads, and particularly resonated with Gen Z. It proved that when we connect product Innovation, with authentic social first storytelling, we can reignite excitement and bring new energy back to Tinder.
Fourth, evaluating profiles is becoming more meaningful and holistic.
We've started testing several new features resonating with Gen Z by giving users more information to evaluate and connect with potential matches. Bio information. Now appears on the first photo card and prompts content is integrated into the photo Carousel. These improvements let users learn more about a potential match before deciding to swipe right.
We've also started testing features, like contextual likes and open messaging, and we fully rolled out prompts on photos to let users share. Why they swiped right? Making interactions more intentional and authentic.
Finally app performance is a major focus and a key driver of user experience on Android. Tinder startup times are now 38% faster and crash rates are reduced by more than 32% on IOS app stability, is up more than 57%
We're also removing long-running tests and unused features to make the app leaner.
As we bring load times closer to 1 second on IOS and Android Tinder already feels faster and smoother. Our app performance work on IOS and Android is in service of the fun part of our mission because no 1's a slow buggy app.
You can feel the energy across Tinder during our hack week. Last week teams, brought incredible, Innovation, and creativity building. Some of the most exciting products and prototypes we've seen in years. The company feels Electric
Meanwhile, hinge continues to be 1 of the best and most undiscovered stories in consumer Tech powered by a clear Mission. A motivated team a leading product experience and sustained momentum.
Hinges designed to be deleted. Philosophy, drives. A focus on user outcomes. Specifically helping people go out on great dates. Our Northstar
This Clarity of purpose, has resulted in category, leading growth in both users and Revenue.
Hinges leading the way on AI Innovation and dating with category. First AI features that drive better connections and more real world outcomes. This quarter brought both wins and learnings conversation starters, which offers personalized prompts. For first messages was a clear win driving approximately 10%, more likes with comments and stronger engagement, overall during the test, particularly with women
Updates to our recommendation system, improved matching quality through rigorous testing and provided valuable insights that are already refining our approach.
Warm intros designed to surface compatibility cues didn't resonate, and we won't move forward with it. While understanding. Compatibility remains a key Focus. Hinge continues to prioritize user outcomes over. Simply launching new tools, reflecting our principled approach to innovation,
As we look ahead to the next few quarters, hinge has an exciting slate of category. First features that showcase our leadership and product Innovation and user experience,
This new feature introduces prompts above photos, giving users more ways to express who they are and add depth to their profiles. A similar experience in the standouts section. Earlier this year was well-received and were eager to see how users respond as we continue making hinge more personal and expressive
preferences will also become more meaningful at hinge.
Reimagined preferences will take a new look at how data's Express what they're looking for. Capturing compatibility with greater nuance and intentionality.
This update, addresses key user pain points, helping people share what truly matters and find better matches faster.
These are just a few of the ways that hinge continues to drive innovation, in service of user outcomes.
The next pillar of our strategy is centered on deepening, trust in the category.
So turning now to trust and authenticity and the ways in which it comes the foundation of our ecosystem.
In dating apps. Everything depends on the Integrity of the ecosystem. No matter how many new features we launched, people use our apps to meet other new people. And that only works when they feel safe respected and confident in being themselves.
Building and maintaining that trust is core to our long-term success which is why we're doubling down on trust and safety across our platforms.
Nowhere, is that more evident than it Tinder where we're integrating safety directly into the product experience like never before the center piece of, this effort is face. Check our new facial verification feature. That helps confirm users are real and match their profile photos. It's now required for all new users in California. Columbia Canada, India, Australia, and Southeast Asia and will roll out to additional US states and countries in the coming months.
Face check sets a new standard for authenticity using only a short video selfie. It helps confirm a user is real and matches their profile photos. We built this technology with care, ensuring it delivers, meaningful improvements to trust and safety while keeping the user experience seamless.
Early results are strong and reinforced our confidence in the long-term benefits to the broader ecosystem. We have seen a 60% reduction in user views of profiles later, identified as Bad actors and a 40% decrease in reports of bad actor activity.
Our ongoing optimization efforts have resulted in only low, single digits, impact to monthly active users and revenue in test markets, which lessens over time.
Early, net promoter, score results. Show a clear and sustained Improvement in user trust and satisfaction. In test markets with scores up roughly 10 points for men, and 5 Points for women in key markets, where face check has launched. This is just the beginning, we plan to expand face. Check across the portfolio with testing on hinge beginning in the next few months.
We're also expanding safety Beyond verification into everyday user interactions Tinder. And hinge have introduced new fairer enforcement tools to educate users and promote better Behavior through faster and more consistent moderation.
This approach calibrates responses, based on severity, helping create a safer and more respectful community.
We are also enhancing our. Are you sure feature? Which prompts users to pause before sending potentially offensive or disengaging messages with large language models to make it smarter and more effective at better conversations in real time.
Originally developed at Tinder and later, enhanced by hinge this llm powered version improves accuracy and tone.
Now, Tinder is incorporating those learnings back into its own experience. A great example of how our portfolio of Brands, innovate together, share insights, and make each other stronger.
Within hinge, these principles come together through our product design and user experience.
Beyond moderation, hinge continues to refine the onboarding experience to build confidence and Trust early in the user Journey.
Recent updates include clearer guidance during setup refreshed Community guidelines and help center and the introduction of an AI powered chatbot that quickly. Answers commonly asked questions,
Together, these updates reinforced hinges position as a dating app, grounded in authenticity and safety, where people can show up as their true selves and form, meaningful relationships.
Let's now turn to our financial and operational rigor and how it translates into results.
The same discipline driving product innovation is also reflected in how we execute day-to-day.
We are operating with sharper, focus and accountability across the company hitting deadlines shipping match group wide features such as alternative payments faster and acting like a more Nimble and decisive company.
These improvements are creating operational, momentum and financial optionality as we plan for 2026.
Many of tinder's biggest advancements into a faster safer, and more personal experience.
As part of this work, we're overhauling the recommendations engine to better, align with user outcomes, improving both match quality and overall satisfaction.
We're being thoughtful with our tests, prioritizing user, trust outcomes and long-term impact over quick wins.
We may see some short-term revenue and adjusted Evita impacts from these tests which we've included in our guidance as we trade short-term monetization for a better user experience and improve user outcomes. These tests will help us refine our strategy and further validate that improved. User outcomes will drive more sustainable user and revenue growth over the long term which in turn will drive increased shareholder value.
We'll share more of these results, next quarter.
At Hinge, momentum continues to build as the product delivers meaningful outcomes for users.
Revenue adjusted, Evita and user growth remains. Strong supported by continued, Innovation and disciplined execution.
Hinges. International expansion remains on track with the successful. Mexico launched in September and with Brazil planned for Q4.
The team is actively working on plans for new expansion, markets in 2026 as well.
Pins launched, alternative payments. Testing, ahead of scheduling, Q3 with strong early results. We plan to fully roll out, alternative payments across our major apps, including Tinder, and hinge in the US in Q4.
Strong initial performance at hinge and ongoing optimizations at Tinder and E have increased adoption of web payments and we now expect to generate approximately $14 million of savings in Q4 2025 and approximately 90 million in 2026.
we have seen some impact to gross revenue in some of our tests at Tinder and hinge, which were continuing to optimize for,
We're also seeing early success from our recent acquisition of her, which expands our reach among queer women and gender diverse communities. The team has already delivered strong results with algorithmic improvements and monetization optimizations driving over 20% Revenue, increase in test markets. This success, highlights the opportunities to scale, high potential Brands, across our portfolio and deepen, our presence in key segments of the dating Market.
That same discipline approach to growth is reflected in how we manage the business.
Our financial discipline earlier this year generated, approximately 100 million dollars of annualized savings allowing us to reinvest approximately 50 million to test user first features strengthening marketing and expanding our International footprint.
The early results from our Q3 Investments are instilling confidence in our strategy and we're executing well against our Q4 plans.
The learnings from these Investments and the ongoing benefits of the cost savings efforts will help inform how we prioritize and deploy capital in 2026 together. These steps are setting the foundation for the next phase of the turnaround and the Resurgence that we expect to take hold in 2026 and 2027.
We're entering this next chapter with real progress and a clear path forward at Tinder. Our new measures of success Sparks tracks, 6-way conversations meaning at least 6. Total messages, exchanged between 2 users, this has become 1 of the clearest indicators that a genuine connection is forming, while the total number of Sparks is lower year-over-year, due to a smaller monthly active user base, Sparks coverage or the proportion of users. In the ecosystem, having these deeper conversations continues to improve and is up year-over-year.
That more users are having better experiences on the platform and early, but encouraging sign that our focus on improving product quality and user outcomes is taking hold.
Match group holds a unique position in solving 1 of the most important challenges of our time. Helping people connect in a world that increasingly feels disconnected.
Our focus is on fostering, genuine human connection while ensuring technology strengthens relationships and is the social fabric that brings people together.
And with that, I'll turn it over to Steve to walk through more on the financials.
Thanks Spencer. We're pleased with our Q3 results as match Group. Total revenue was in line with expectations for the quarter and adjusted. Even a meaningfully exceeded. Our expectations excluding a 61 million charge to settle the candelore versus Tinder Inc, case on a classwide basis.
Candelore is a 10 year old case, involving tinder's former age-based. Pricing, the parties are preparing a long form agreement reflecting the settlement terms and will then seek approval of the settlement by the court.
In Q3 match groups total revenue with 914 million up 2% year-over-year up, 1% year-over-year on a foreign exchange neutral basis.
FX was 4 million better than expected. At the time of our last earnings call payers declined, 5% year-over-year to 14.5 million while rppp increased 7% year-over-year to $20.58.
Million was up 8% year-over-year driven primarily by strength in our third-party advertising business?
Moving to Total company profitability in Q3 match groups, adjusted Eva was 301 million down. 12% year-over-year, representing an adjusted ebit and margin of 33%.
Excluding the 61 million settlement charge and 2 million of restructuring costs.
Included in the 25 million of restructuring costs announced in May adjusted. Eva would have been 364 million up 6% year-over-year representing an adjusted? Eva margin of 40%.
senior direct Revenue in Q3 was 491 million down, 3%, year-over-year and down, 4% year-over-year fxn
23 direct Revenue includes an approximately 3 million negative impact from user experience, testing in the quarter.
Payers declined 7% year-over-year to 9.3 million and rppp increased 5% year-over-year to $17.66.
Adjusted. Even in the quarter was 204 million down. 23% year-over-year representing an adjusted. Eva margin of 40%.
excluding the legal settlement charge adjusted, even though I would have been 264 million representing an adjusted ebit of margin of 52%,
Hinge continued. Its strong momentum in Q3 with direct revenue of 185 million up 27% year-over-year and up 26% year-over-year fxn.
Pairs increased 17% year-over-year to 1.9 million, and RPP increased, 9% to 3287 cents.
Adjusted Eva was 63 million up. 22% year-over-year, representing an adjusted. Eva to margin of 34%.
E direct Revenue in, Q3 was 152 million down, 4% year-over-year and down 5% year-over-year. Fxn payers decreased 13% year-over-year to 2.3 million while rppp increased 10% year-over-year to 22.222.
Adjusted EBITDA was $47 million, up 14% year-over-year, representing an adjusted EBITDA margin of 30%.
Match group, Asia delivered direct Revenue in Q3 of 69 million down 4% year-over-year on both, an as reported, and fxm basis.
Excluding the exit of our live streaming businesses match group. Asia direct Revenue in Q3 with flat year-over-year on both an as reported and fxm basis.
As our direct Revenue was flat year over year and up 2% year-over-year fxm
As our direct revenue is negatively impacted by an estimated amount after AAR was blocked in Turkey by Turkish regulators in late August.
We're pursuing all available, legal remedies and working with Turkish Regulators to get Azar unblocked. However, it is unclear at this time when that may happen.
Pairs direct revenue was down 1% year-over-year and down 2% quarter-over-quarter across Match Group. In Asia, payers increased 6% year-over-year to 1.1 million, while RPP declined 10% year-over-year to $20.73, partially due to the exit of Hakuna mid last year.
Adjusted Eva was 15 million down 14% year-over-year representing an adjusted. Eva margin of 22%
Looking at costs including stock-based compensation expense, total expenses were up 1% year-over-year in Q3 cost of Revenue, decreased 2% year-over-year and represented 27% of total revenue. Down. 1 Point year-over-year driven by reduced variable expenses from the shutdown of our live streaming services mid last year, lower web services costs and lower employee compensation, expense, from a restructuring efforts,
selling and marketing costs. Increase 12 million or 8% year-over-year and represented 19% of total revenue up. 1 Point year over year, primarily due to increased marketing, spent at Tinder hinge and match group Asia. Partially offset by lower employee compensation expense from our restructuring efforts.
General administrative costs, increased 42%, year-over-year up, 5 Points year-over-year. As a percentage of total revenue to 16% driven primarily by the legal settlement charge, partially offset by lower employee compensation expense, from a restructuring efforts.
Product development costs, increase 1% year-over-year and were flat year over year as a percentage of total revenue at 11%.
Depreciation and amortization decreased by 44 million. Year-over-year to 24 million due to impairments of intangible assets at and match group Asia in the prior year quarter and lower internally developed capitalized software costs primarily at Tinder and match group Asia.
Turning to the balance sheet, our trailing 12-month gross leverage was 3.4 times, and net leverage was 2.5 times. At the end of Q3, we ended the quarter with $1.1 billion of cash, cash equivalents, and short-term investments on hand in August. We issued $700 million of 6.125% senior notes due in 2033.
Proceeds from these notes will be used to repay all of the exchangeable, senior notes coming, due in 2026 on a perform maturity and for General Corporate purposes.
in September, we repurchased 76 million of the 2026 exchangeable, senior notes at a discount to par
Year to date through Q3 we delivered operating cash flow of 758 million and free cash flow of 716 million.
We repurchased 17.4 million shares at an average price of 32 per share on a trade day basis, for a total of 550 million and paid 141 million in dividends deploying. Nearly 100% of free cash flow for Capital return to shareholders.
In October, we repurchased an additional 3 million shares of our common stock for 100 million on a trade date basis and on an average price of 33 dollars per share.
As of October 31st 2025, we reduced diluted shares outstanding by 8% year-over-year.
We maintain our commitment to target returning 100% of free cash flow to shareholders through buybacks and the dividend.
Now, turning to guidance, we expect Q4 total revenue for match group of 865 million, to 875 million up, 1% to 2% year-over-year. This range assumes a nearly 2 and 1/2 Point year-over-year Tailwind from FX.
Fxn, we expect total revenue to be down 1% to 2% year-over-year.
We expect Match Group adjusted EBITDA of $350 million to $355 million in Q4, representing a year-over-year increase of 9%, and an adjusted EBITDA margin of 41% at the midpoints of the ranges.
Q4 total revenue, guidance reflects continued strong performance at hinge and Tinder performance. That is in line with the expectations. We had at our last earnings in August, including an expected, 14 million negative impact to Tinder, direct revenue from user experience testing
It also reflects weaker than expected performance AT&T and assumes a continuation of azor's block in Turkey.
I saw a weaker Trend in Q3 which we are working quickly to address and we no longer expect emerging Brands, direct Revenue growth to offset Evergreen Brands, declines in 2025.
We expect an estimated 9 million negative impact to match group Asia, direct revenue from Azar's Block in Turkey.
We expect indirect Revenue to be approximately 15 million in the quarter.
Our Q4 adjusted ibida. Guidance includes 4 million dollars of restructuring related costs included in the 25 million of our structure and related costs announced in May and an 8 million positive impact from an expected sale of 1 of our 2 Office Buildings in La that was not fully utilized.
We are increasing our 2025 full-year free cash flow guidance to $1.11 to $1.14 billion, which assumes the candle or settlement will not be paid until Q1 2026.
We now expect our 2025 full year tax rate to be in the High Teens
Now let's open it up to Q&A.
We will now begin the question-and-answer session. To ask a question, you may press star then 1 on a touchtone phone.
If at any time your question has been addressed and you would like to withdraw your question. Please press star and then 2
Our first question comes from Corey Carpenter with JP Morgan. Please go ahead.
Great. Thanks for the question. Spencer, you mentioned in your prepared remarks that the early Investments or the sorry, the early reinvestments are giving you confidence in your strategy. Could you expand a bit on the green shoot? You're seeing across the broader company and then also at Tinder specifically, thank you.
Yeah, thanks Corey. Um let me start with Tinder and then if if we want to expand from there, we will.
At Tinder, we now have a clear mission statement, which we understand. So we know why we're building. What we're building. We have clear consumer personas so we know who we're building them for and now we have a clear metric 6 way conversations or what we call Sparks so that we know how to measure whether we're driving, good user outcomes and it Sparks we think are a good measure of product efficacy.
Globally, they're down in the low, single digit range year-over-year, but they're improving, and and close to flat, and it's actually quite a bit better than Mao, which is kind of stabilized in the 9 10% kind of high single digit year range, um, Sparks coverage, as I said, just a moment ago. Sparks coverage is actually up year-over-year but it's up the most among us gen Z. So all this by way of saying, the product is working better today to help spark something new with someone new than it was a year ago that's encouraging.
Our recommendations tests are bearing fruit. So at any point in time, we have dozens, sometimes hundreds of different hundreds of different recommendation, algorithms in the market,
And um, we have we ended up finding 1 of them. It actually improves women matches by 4% and improved Sparks and improves retention with no Revenue trade-off which is really uncommon. Usually when we have recommendation improvements that improve user outcomes, it comes as some Revenue hit, and in this case, it's not. So we've rolled this out globally.
Uh, our work is not done on Rex, we are always continuing to improve them but I'm encouraged by by where we're headed uh, the second so, so moving from Rex as number 1 number 2. I'll, I'll turn to double date.
So double date continues to resonate really well with our Target users uh as I think I mentioned just a moment ago. Adoption for double date is up quite a bit. The sad. I don't think I shared yet. Is that about 17% of us users aged 18 to 22. Now have a double date pair
And that's a big deal. If you think about that, think about a a gen Z or 18 to 22 year old American user of Tinder almost 1 in 5 of them are now using Tinder with a friend to swipe on pairs of people. So that's changing perception of what Tinder is and how they use it. And that's critical for us to drive reconsideration and ultimately Mao growth.
Um finally I I will just hit on a basket of features at Tinder which in the aggregate help people, assess the whole person rather than just quickly assessing the attractiveness of a photo. These are features like contextual likes which hinge pioneered uh, features like putting biographical information on the first photo and the good news here is those types of features have improved user outcomes, like sparks without impacting Revenue.
So we were prepared to accept this small Revenue, hit for these types of features, but many of them actually, just improve user outcomes and have not impacted Revenue.
Let me sort of pause there. I'm happy to elaborate on the roadmap and kind of where it's going. But that brings you pretty current with what we've shipped on Tinder over the last couple of months and the early positive results that we're seeing on user outcomes.
Next question, please. Great.
And the next question comes from Nathan, feather, with Morgan Stanley, please go ahead.
Hey, thanks for taking the question and really encouraging to see the faster products lost State at Tinder, I guess just anybody to get a sense, if that's also accelerating the curve, as you think of user outcomes in the delaying metrics and you know, connecting to that as you start prioritizing these are outcomes. You mentioned and negative Tinder revenue headwind and for Q, I guess to what extent should we expect that to continue into next year as you continue to make these products approved? Thank you.
Thanks, Nathan. Um, it's probably a little too early for us to know the answer to your question about 2026. What we're in the midst of right now is
evaluating all these tests in in key markets including in Australia where we're kind of throwing the kitchen sink uh in terms of user outcomes and marketing
Uh, efficiencies in order to see what it takes to turn around user outcomes and audience in a couple key markets so that we can decide how we want to run the company in 2026 with respect to profitability. Um, what, you know, what Steve I think highlighted in his preparatory works were a potential $14 million impact on Tinder revenue, which is baked into the guidance for Q4. This comes from features like, um, different recommendation algorithms that we're testing still to try to improve user outcomes even further, rolling out new modes. Um, so of course, today we have college mode and double date mode, but there are several more modes on the way, and those might come at a small cost of revenue, building out open messaging and giving more free user outcomes, like letting users see a couple of free options in "who likes you?" Um, uh, pairs and, um, redesigning certain aspects of Tinder, building out chemistry.
Into the main card stack and rolling that out into more geographies rolling face checkout.
Around Building Product as much as products as we can, to improve user outcomes by that spring 2026 event.
Um, next question, please operator.
And the next question comes from Jason healthstreet with Oppenheimer. Please go ahead.
Uh, thanks. Hey, Spencer, everybody. Um, so just maybe follow up a little bit. I mean, you did elaborate in the letter that you planned to unlock $40 million of payment savings. Um, is the idea that like, you know, if you do decide to lean in more into these, um, I guess kind of cleanup initiatives, um, or however you want to describe them, that $90 million could help potentially offset that revenue headwind next year? Um, and I guess like to that point on Project Aurora and like if you did go kind of fully roll this out, like I guess...
You know should investors assume like you, you know how dramatically would you be willing to let like Revenue come down to kind of end up with like the right place from a user experience standpoint. Thank you.
Why don't I do the first part of that question? Um,
uh, here's what the way I think about the 90 million, the 90 million gives us clear flexibility, right? An optionality. And um, as Spencer just said,
The 14,000, uh, Q4 impact from Tinder user outcome testing is an estimate, right? These are tests. So it's probably premature to, you know, speculate on, you know, whether we'll need the 90 million offset, the revenue uh, declined or whether we'll be there will be Revenue declines at all um until we see how these tests play out. And So the plan is um to continue testing throughout the rest of the quarter um to go through our annual planning process, like we always do and then we'll give uh, clear guidance on 2026 and a lot more detail on um, our investment strategy and the outcome of these tests and all the learnings we've gathered. Uh, at that time, that's the plan.
Um, thanks for the question Jason. Um next question, please operator.
The next question comes from Ben black with Deutsche Bank, please go ahead.
Hi, thanks for taking the question. This is Kunal for been uh a couple on on hinge. Um and right from the beginning hinge was designed to be deleted or meant to be deleted, has the engagement profile of the users kind of changed since since the beginning. And then uh you talked about how uh hinge is expanding into Mexico and Brazil in the coming months.
How does that change the addressable market?
Yeah. Thank you. Can I ask a question? Um, good questions. Uh, yeah. Hinge is really meant to be the last dating app that you'll ever use, and Tinder is meant to be the first dating app that you'll ever use.
So that positioning is clear in terms of of how we think about marketing, the 2 apps. And in terms of the product roadmap and and focus of the of the teams that hinge and Tinder, uh, that positioning for hinge hasn't changed since it since match group purchased it, um, it's been very consistent and I think that consistency is 1 of the reasons for hinges continued success, uh, hinge just launched in Mexico a couple weeks ago. It's off to a faster start in Mexico than when hinge launched in Europe several years ago. So that's extremely encouraging Brazil will launch in the next few weeks.
And when you look at hinges success in the markets that in it, it's in, or even this recent fast start in Mexico. It gives me a lot of optimism that the total addressable market for him. Hinge is massive, that, um, you know, this this customer segmentation or psychographic segmentation between Tinder
Opening a world of possibilities. Uh, if if the, uh, kind of fund spontaneous side of dating and hinge being for more serious and intentional, daters that Duality should be true globally. And I, I don't,
It's hard for me to imagine, there would be a country where there wouldn't be an opportunity for an intentional dating app like hinge to be a category or a leader in that segment.
As we go through the annual planning process, that Steve mentioned over the next couple weeks will be thinking through which markets to expand, hinge to in 2026.
um, we already have integrated certain
Uh, next question, please.
The next question comes from Eric Sheridan, with Goldman Sachs, please go ahead.
Thanks so much for taking the question. I think, based on the early learnings in Australia, how do you think about the philosophically going to Market with a wider array of offerings and changes to Tinder? All at once, relative to looking out towards next year and thinking about, being more strategic, and sort of directed. In the way certain enhancements, Go Global either by country by country or by Gio just curious how you think about that. Thank you.
Yeah, it's a good question, Eric. Um, you know the interesting thing about this category which can easily be forgotten by people that aren't in it day to day, is that the company and the brands build products and then we Market them, but ultimately, we're in the service of introducing strangers to strangers. And so the success of the products really rely on the quality and behavior of those in our community.
so 1 of the reasons that we're doing project Aurora is to try to not just improve the actual feature set but
Increase the marketing, um, focus on trust and safety their kind of turns, that whole market around with, you know, with with Vigor uh in the aggregate. So because the ecosystem hangs together in these products in a way that e-commerce really doesn't have that experience. Uh, so in terms of how, you know, how we roll this out, these types of changes in 2026, I do want to be clear that we're not standing still. So for example, the Rex algorithm that I mentioned that's in Australia. We've also rolled that out in other markets, um, face check, which we've rolled out in Australia. We've also rolled out in the handful of other markets, so we're not waiting for a clean read from a single Market, but uh, it is helpful for us as we decide
What the answer is to, I think it was, it was Jason's question about 2026.
and and profitability for next year we, you know, will benefit from having greater insight into how
How the product Investments and the marketing, hang together to improve the whole ecosystem and that will help us articulate what the plan is for 2026.
Um, operator next question, please.
The next question comes from Eagle Aronian with City. Please go ahead.
Uh hey thanks guys. Um um Spencer you mentioned Maas kind of stabilizing this down 9 10% range. And so we think about um, the initiatives, you're rolling out, you know, all the way from kind of the single stuff in certain markets to the, you know, whole kitchen sink. Like you said project gura. Um, how do you think about the timeline for, you know, you you're seeing some of these kpis and green shoots like what's the timeline to 1? You think and
Can start to turn around and, um, start to move in in, in, in the other direction and then on on the in-app payments um the the upside to the savings that you're seeing now versus what you called out last quarter, um, you can talk about what what's driving that what you've seen that's um you know, driving more savings. Thanks.
Yeah, I'll take the first question. Um, so a number of the product initiatives that we've been doing to improve user outcomes, actually have the effect of hurting monthly active users. Uh, for example, face check hurts monthly active users by a little bit, at least initially, uh, want, you know, a couple percentage points and, uh, the recommendation algorithm also can have the effect of hurting male monthly active users. It improves email retention and the female experience, but uh, but that can have the effect of pulling female attention away from certain male users and then we
Sometimes lose their uh, their visits. And that's okay. So the fact that Mao is hanging in there in the in the high single digit year-over-year, even while we're improving user outcomes is a good sign. Just as uh, the fact that we're able to improve user outcomes at minimal impact to revenue with a couple of the examples. I cited that's also a good sign.
Us. And we extrapolated that out to about a 10-point increase in net revenue, which equates about 65 million, in Savings in 2026,
Now um, you know, as of October actually Tinder hinge, and most of the any apps are now fully rolled out. So we we've rolled these out apps out faster. Uh, then we sort of originally planned, which is good, um, and hinge all really strong results out the gate, better than any and, and Tinder, we're seeing. And, and since, um, August Tinder is also done a really great job as has any in continue to optimize. So, now, with all, uh, you know, with most of our apps, uh, including Tinder, and hinge rolled out 100% in the US, uh, fully optimized, we're seeing a 40 to 60% shift to web, depending on the app, which translates into a 15-point increase in net revenue and 90 million dollars of savings. So, the net of it is strong results that hinge out the gate and continued optimization at Tinder and any has a resulted in more of those payments going to web, which is resulting in, uh, more savings. And the other thing, I'll just mention, I don't know if you caught this but
Google, uh, mid last week, uh, updated its Play Store policy, uh, allowing for web payments, as well, in the U.S. without fees, uh, similar to the, uh, you know, Apple situation. And so, we plan to test there, too. Um, you know, that's a smaller opportunity. We have less Android users in the U.S. than we have Apple users, and, uh, also the fee we pay.
Hey Google uh, for in-app purchases, it's more like 18% versus the 27% we pay Apple. So there's less savings to be had, uh, from shifting to web. But, um, you know, if you sort of pencil it out, our early estimate is about a 10 to 15 million dollar additional savings uh through Google uh on an annualized basis. Um so we're excited about that opportunity too. We'll start testing and and confirm those uh, initial estimates
Uh, next question, please.
In the next question comes from John Blackledge. With TD Cowen. Please go ahead.
Hey there, it's Logan. Wall-E on for John, uh, could you talk about any traction or the traction that you cited, um, from recent marketing efforts? And then kind of maybe how you approach the opportunity with last daters versus those that have never used the app before and then sticking to marketing on the cost side. Maybe how you're thinking about marketing, spend and the traditionally more expensive, uh, for Q advertising season.
Yeah, so I'll take the the very first the very last part of that first which is we do go lighter on advertising in Q4 uh our seasonal Peak tends to be after Christmas, kind of, you know, people make a New Year's resolution about starting to date a new and we benefit from that and we spend into it, but between Thanksgiving and Christmas. The media Market is more expensive.
with um and um because of e-commerce and and other consumables and we tend to pull our marketing spend back uh in terms of
Overall marketing. Um, we just completed Project Prism, which was Match Group's first ever.
Attempt to put marketing, spend on an apples-to-apples basis, across all of our Brands, to create a shared framework to assess the efficacy of marketing spend. So that we'll have a, a point of view now about going into 2026. If we were going to put 5 or 10 million dollars against Brand X, what is the likely number of downloads that it would acquire? What's the user, and gender mix? What's the user retention? What's the uh cost to generate a spark or contact exchange or other kpis that we track across our different brands. So we now have a, a rubric that puts every All Our Brands, on the same footing,
This is something that we worked with an outside, uh, resource on a marketing executive. The person that used to run marketing for me at Zillow group and before that we worked together at Expedia group so she she she has created shared marketing Frameworks in several multi-brand, internet companies before and that project has been really Illuminating in order to inform our 2026 decisions. So if you take all this, all these different things together that we've mentioned
The Tinder user tests, the Tinder testing in Australia. Um, a shared understanding of what marketing efficacy is across all of our Brands. The IAP savings that Steve just talked about. And now you have a little window into what the next couple weeks are going to be for us as we go through business unit by business unit.
Making final decisions about how we're going to operate the company by the end of the year and then communicating it with all of you in early February at earnings. Uh, but it's great to be going into that process with the work done on Project prism. So we understand marketing efficacy by brand and with the work kind of still in flight on the Tinder front in terms of the different testing that we've been doing but much more well-informed than we were even a couple weeks ago. Now, that we've we have a lot of these features in flight, and we're starting to see the impact on user outcomes, as well as revenue and, uh, and expenses.
Operator next question, please. The next question comes from schweda.
Kejora with wolf research, please go ahead.
Okay, thank you for taking my questions.
Um, Spencer you mentioned you
Will send investment opportunities as as you think about how your product and marketing. Um it it is is is trending. I guess my question is, what are what will you be looking at? Is it predominantly the inflection uh in top of the funnel that'll give you more confidence in your product roadmap working and or marketing initiatives working. And if it is
Somewhat slower than expected, is it fair to assume you'll reinvest to the degree that it makes sense? How should we think about that as we consider next year? Thank you.
Yeah. I'm solving for maximizing against what I think will make the stock price higher three years from now.
And um, so you I mean, there are hundreds of puts and takes that go into that.
Uh, from user outcomes to revenue to audience on Tinder.
Market expansion on hinge. I mean there are so many different variables that impact that, but if there's a single North Star to try to,
Explain how I'm bringing it all together and the way the leadership team is bringing it all together. That's, that's the 1.
Um,
you know, I think with, I think the, the big question marks going into 2026, of course, are going to be what level of profitability do we choose to run Tinder at? I mean to date match, group has chosen to run Tinder at a much higher level of profitability than hinge.
um, and uh, you know, the 2 components of that are
how much benefit users get in other words, if we decide to give more more value to users, and what type of cost of acquisition, which is to deploy against Cinder. So those are some of the key questions that we'll face going into planning. And, um, you know, now you you understand how I'm making the decision is, what do I think the
The the stock price will be a couple years from now. Of course, the key components of the stock price are, I mean, you know, there's better than anyone stock prices, that net present value of stream of future cash flows, ultimately divided by the shares outstanding, which of course we've as Steve mentioned, we've bought back 8% of our shares year-over-year, which, uh, is is pretty extraordinary, um, you know, and and uh,
And is worth, uh, is is worth highlighting. So, um, operator next question, please.
And then the next question comes from Yousef, squali with truist, please go ahead.
Awesome. Thank you so much. Hey Spencer, can you please talk about the state of the broader dating market in the U.S.? How is it performing given the macro environment, competitive intensity, and any early read or impacts from Facebook Dating? And then Steve, just quickly, what does the Q4 revenue guide imply in terms of payer growth and RPPP? Thank you.
Yeah, we've always had competitors, I'm sure we'll always continue to have competitors whether they be big tech companies or startups.
I like our brands. I like the network effects that the brands provide. Our biggest challenge as a company is,
Growing category acceptance. I think there was a prior question which I only answered partially about bringing new people into the category. There are 250 million people globally that are single and dating in countries that we serve that are not on dating apps. 250 million.
And only 30 million of those have used dating apps and are not. Not currently using dating apps. 220 million of them have never been in the category. So to the extent that meta and Facebook or any competitor.
We come from a match group such as our face, check initiative, which we think brings new people into the category as we improve trust and safety in the apps, or others such as Meta.
To raise attention and awareness to the power of technology to drive human connection. That's what we're here for.
Uh, Steve, you can see the second part. Yeah, let me, let me touch on. Um, macro first, uh,
The way I would describe it is, we continue to see the same trend that we've seen earlier this year. We've talked about it on the last couple of calls, where there's some, uh, a little bit of weakness—not a lot, but a little bit of weakness—on ALC amongst younger users on Tinder.
That Trend, uh, hasn't gotten any worse, but it also hasn't gotten any better either. Um, so a little bit more of the same. We're not seeing it on any other part of the Tinder business, we're not seeing it on the sub subscription revenue, and we're also not seeing it across any of our other brands, um, or at hinge, so we'll keep looking at it closely. Uh, but that's what we're seeing today and then on pairs in RBP, you know?
We don't, uh, typically guide to pairs in RPP, specifically, uh, you know, we're focused on revenue and user growth, but um, you know, those metrics have been the trend of those metrics. Has been relatively stable, just like Mao Trends have been relatively stable. And, you know, I I expect something similar in in Q4
Next question, please.
The next question comes from Chris, cantaric with UBS. Please go ahead.
Great. Thanks for taking the question. Maybe just 1 on Space. Check you mentioned it being fully rolled out in the US by the end of the year, I just want to clarify. Does that include existing users and if it doesn't, could you just give us a bit of an update on your thinking about rolling out to that cohort of users for tender and then maybe just 1 follow-up. Any early read on the level of inefficient marketing. Spend that you've been able to identify with project prism, thank you.
Yeah. Um,
Face check only applies to newly created accounts because that's the vector that bad actors uh, use to attack us. So spam attacks from Bad actors, create brand new accounts and therefore if we can stop those with face check and, um, that's you know, that's what's that's exactly what's happening. So as I mentioned, 60% reduction in interactions with Spam accounts, and I don't remember if I mentioned, I think I, I mentioned it vaguely, but to give a little more detail on the perceived Improvement in trust and safety. From face, check we survey users and we say, Do you believe the profiles that you see on Tinder are real? And in face, check markets, 5 to 10% more. Folks are saying, yes, they believe that the profiles they see on Tinder are real, so it's not just improving safety. And
Authe, it's actually improving perceived authenticity, which is so critical to driving category reconsideration.
Um,
the market. Oh marketing. Um, yeah. Um, I guess what, what I would say there is, uh,
Unsurprisingly. Um, hinge.
Hinges marketing drives new registrants, new downloads, or Sparks.
At a lower cost per than Tinder does and that makes sense for a couple of reasons. First of all hinges, a a newer brand. Um, uh, hinges product is better at, um, taking users and kind of moving it down the funnel in that way. And more of Tinder spend is focused on brand marketing, then direct response user acquisition.
The reason for that is Tinder, is trying to drive reconsideration and change user perception, whereas hinge, um, has a a pristine user perception. And so there for most of their spend can be focused on user acquisition. And user acquisition spend is always going to be more effective on paper than brand. Spend will be. So that's um, yeah, that's not surprising and as we go into 2026 and we think about the marketing levels that we want to run the company at and the allocations between the brands will have to weigh that. Um, of course. But boy, it feels good to be going to that decision actually having
Um, some levers to look at. And previously, we were kind of flying this plane without an altimeter, and now we actually can see metrics across different brands and start making informed decisions based on that.
Uh, operator, I think we have time for 1 more question, please. And the last question comes from Robert. Cool breath with evercore isi, please go ahead.
Okay, thanks for the caller, on Sparks and mouse, I guess last quarter you noted some encouraging movement at the top of the funnel. Can you provide, you know, an update on that?
Yeah, where thanks for the question, George. Um, we are our Tinder monthly active users. At the top of the funnel is, is basically down high single digits similar to, where it's been for the last, um, couple months. It moves around a little bit based on different tests that we're running. Um, as I already mentioned initiative, like face check and recommendations can improve user outcomes, but can it can and sometimes do hurt monthly active users, um, but it's basically stabilized kind of in that range and it's, you know, it's worth noting, Tinder revenue is down, 3% year-over-year. This quarter and last quarter, it was down 4%, so Revenue also has stabilized. Um, obviously we don't want it to stabilize at down year-over-year, but it's nice to see that, uh, we, you know, we're, we're starting to see some stabilization for some of those metrics and
Of course, as I think I said last call the the first way to the first thing you have to do. If you're trying to turn around and align the slipping down, is you've got to get that line to flat. So it's nice to see um some of those lines starting to flatten.
Um, thank you very much, and we look forward to talking to you next quarter. Thanks, everyone. Have a great day.
This concludes our question and answer session. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.