Investors in Match Group, the owner of Tinder, OkCupid, and many other dating sites, are in love.
Their affection for the company grew after it reported strong fourth-quarter results this week. Match beat expectations for the quarter, with revenue up strongly year over year and a profit of $115 million, versus a loss the previous year. Added to decent quarters earlier in the year, in 2018 Match generated its biggest annual profit since its founding, of nearly $500 million.
But as the company should know all too well, relationships can be fickle.
To diversify its business, Match is buying or building every imaginable way for humans to connect, targeting specific groups by age, ethnicity, political leanings and the like, and not always with romantic relationships in mind (see Tinder U). The company claims that 60% of dates, relationships, and marriages that originated on a dating site or app in the US began on a Match Group product.
Its aspirations are nothing less than building a monopoly on your need for human connection (especially the intimate kind). An internal survey the company conducted suggests that singles use an average of four dating apps simultaneously; Match wants to own all of them.
There are, of course, plenty of other brands to choose from, but betting against Match looks dangerous. Tinder is is the most downloaded and top grossing dating app worldwide, generating almost half of Match’s revenue. The app added 1.2 million users last year, doubled its revenue, and is expanding internationally, including in India, Japan and South Korea. Tinder Gold and Tinder Plus, which offer features such as unlimited likes and better profile visibility for a fee, is minting money.
The group continues to diversify: it introduced Ship last year in an attempt to take on Bumble. It also fully acquired Hinge for the older, “more serious” market (compared to Tinder for the younger, more “vibrant” market). Mandy Ginsberg, Match’s CEO, said on an earnings call that two-thirds of users report back on dates, feeding and improving the company’s matchmaking algorithms.
Perhaps most importantly, the group seems to be willing to play the long game. It has been in Japan for nearly a decade, Ginsberg said, and only now are they starting to see “a massive cultural shift around dating” with an “erosion in the stigma” and uptake in Match’s services.
Stronger growth outside of the US would be well-timed. The company’s fourth-quarter revenue and subscription growth were both down a bit on the year before. The group said its first quarter profit may come in below what analysts were expecting. Still, its shares have been flirting with all-time highs; Nomura estimates the online dating market will be worth $12 billion in 2020, and Match’s moves to capture as much of that as possible are paying off—for now.