Gary Swidler: I just want to make sure I understood your question, Justin. You asked about weekly payers returning to year-over-year growth or payers, more broadly, at Tinder?
Justin Patterson: Yes. Sorry for the confusion there. Payers more broadly, since we have the weekly volatility within there, unless I assume that’s going to normalize sometime next year.
A – Gary Swidler: Okay, understood. Thanks for the question. I just want to maybe set a little bit of context before I dive into the specifics of your question. And if I’m not mistaken, I think this is probably my 32nd earnings call and probably on all 31 that have come before this one, I’ve talked about how the company focuses on revenue growth, not specifically on payer growth or revenue per payer growth. And our goal is to drive sustainable, strong revenue growth through a combination of payer growth and RPP growth. And in some years, the product roadmap tends to be more heavily focused on payer growth. And in some years, the product roadmap tends to be more focused on RPP growth and we’re somewhat agnostic. I understand that, investors prefer to see a better balance between payer growth and RPP growth.
And we want to be able to deliver that. And certainly this year has been outsized on the RPP side versus the payer side. Because of conscious decisions we made, we looked at the level of pricing in the marketplace and we felt that Tinder had not been price optimizing for the last couple of years, which led to a big opportunity this year to price optimize in the U.S. market. And so, we did a big focus on making that happen. And you can see in the RPP numbers and particularly in the RPP increase that we’ve seen in the U.S. that there was significant room to adjust pricing in ’23. And we’ve done that, which has enabled the company to go from zero or essentially flat revenue a couple of quarters ago to 11% revenue growth at Tinder towards the end of this year and deliver the double-digit revenue growth that we wanted to get to one quarter earlier.
So, we feel good that we’ve hit our revenue goals for the year and we’re well positioned on that front. And so, now as we turn our attention to 2024, it’s reasonable to assume a more balanced approach between payer growth and revenue per payer growth as we think about the product roadmap. We’ve been able to see this for a while now. We’ve been planning for it. The Tinder team has been working to deliver a better balance. And I think that what you can expect to see is that over the course of the coming quarters, the year-over-year payer growth will gradually improve. And so, that’s what we’re assuming in our outlook for next year. And we are positioned to deliver marking initiatives to improve top of funnel, which is critical to driving payer growth and product initiatives, which are intended to both drive top of funnel, as well as increase payer conversion.
Now, just to quantify the impact of the pricing initiatives that we did this year, it probably reduced payers in the U.S. by $500,000. So, you can think of it as because the pricing was lower than what was competitively appropriate, the payer account was essentially overstated by that amount. And so, now we’ve made the adjustments on pricing, and that has adjusted the payer number to a lower base that is paying a higher rate, but it’s clearly very RPP and revenue accretive to the business. And so, that is kind of where we’ve gotten to and what the outlook is from a payer perspective. I know that the weekly subscribers have also introduced some volatility on the payer account, but that’s more of a sequential item. And I think that has largely kind of washed out by the end of this year.
