History of Test Prep: Match Group’s Profit Jumps as More Singles Pay for Online Dating

(The Wall Street Journal)  By Georgia Wells —

Match Group, the owner of online dating apps such as Tinder and Plenty of Fish, reported a profit of $56.4 million, compared with a profit of $35.3 million a year earlier. Analysts had projected profit of $40 million, according to a survey by FactSet.

Dating revenue increased to $287.5 million from $235.1 million a year ago. Overall, revenue rose to $316.4 million from $269.0 million. The analyst forecast called for $318 million in revenue. Nondating revenue declined to $28.9 million from $33.8 million, because the company’s Princeton Review business struggled to attract customers interested in prepping for the new format of the SAT test.

“We are ahead of schedule and in very good shape to at least double Tinder’s paid-member count this year,” Gary Swidler, Match Group’s chief financial officer, said in an interview.

Tinder ended the third quarter with more than 1.5 million paid users, up from 800,000 at the end of 2015. Tuesday’s results show Tinder’s efforts to attract more paying users, which include luring more “older” users and charging more for them, appear to be working.

But Tinder’s paying members pay about half of the approximately $40 a month for Match Group’s subscription-based Match.com. Average revenue per paying user fell 8.5% to 54 cents. Still, Mr. Swidler said Tinder is now generating more revenue per Tinder user than a year ago because the company is selling à-la-carte features on top of Tinder’s monthly subscription fee.

On a per-share basis, Match reported a profit of 21 cents, up slightly from 20 cents a year earlier, after the company issued more shares. Analysts had projected per-share profit of 15 cents, according to FactSet.

Excluding stock-based compensation and other items, Match Group said it would have reported a profit of 23 cents a share. Analysts had expected a profit of 19 cents a share on that basis.