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Tinder-owner Match Group users 'swipe left' on paid accounts
July 26, 2016 / 8:41 PM / a year ago

Tinder-owner Match Group users 'swipe left' on paid accounts

(Reuters) - Match Group Inc’s (MTCH.O) dating services such as Tinder, Match.com and OkCupid attracted fewer-than-expected users for paid services in the second quarter, which hit the company’s revenue forecast for the current quarter.

The dating app Tinder is shown on an Apple iPhone in this photo illustration taken February 10, 2016. REUTERS/Mike Blake/Illustration

The company’s shares fell as much as 5.2 percent to $15.78 in extended trading on Tuesday.

Match Group’s average paid-member count grew 30 percent to 5.3 million in the second quarter, but missed analysts estimates of 5.4 million members, according to FactSet StreetAccount.

The increase in the company’s paid-user count was driven mainly by sign-ups for Tinder, a popular mobile app on which people ‘swipe right’ or ‘swipe left’ to signal their willingness – or not – to meet prospective partners.

Match Group said revenue from its dating business, which accounts for about 90 percent of total revenue, increased 5.7 percent in the second quarter compared with the first quarter.

The company, however, forecast revenue from the business to increase 2-3 percent sequentially in the current quarter, which is below its stated target of 5-7 percent sequential growth in every quarter of 2016.

“I suspect that it’s something to do with the subscriber numbers,” BTIG analyst Brandon Ross said, adding that a bigger-than-expected increase in Match Group’s second-quarter revenue could also be a factor.

The company also lowered its full-year adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) forecast by about $10 million to a range of between $400 million and $415 million, due to increased investment in Tinder.

Last week, the company launched “Tinder Social”, which allows a user to form a group by adding up to three other members and connect with other groups to go anywhere from a concert to a pub crawl.

Match Group’s revenue rose 21 percent to $301.1 million in the second quarter ended June 30. Analysts on average were expecting revenue of $295.1 million, according to Thomson Reuters I/B/E/S.

Revenue from the dating business increased 23.5 percent year-over-year. Revenue from its non-dating business, which includes educational websites Princeton Review and Tutor.com, fell slightly.

Net income attributable to Match Group rose to $34.1 million from $23.3 million, a year earlier. However, on a per share basis, profit fell to 13 cents from 14 cents, due to an increase in the count of the company’s outstanding shares.

Excluding items, it earned 17 cents per share, once cent more than analysts average estimate.

The Dallas-based company’s shares had risen 22.4 percent this year up to Tuesday’s close.

Reporting by Arunima Banerjee and Sai Sachin R in Bengaluru; Editing by Savio D'Souza

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