Match Group, Inc. (NASDAQ:MTCH) Q4 2022 Earnings Call Transcript

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And the other thing, and this is very important over the last few months is that we’ve really seen stability in our ALC trends. And so we have not seen further degradation, which was a risk when we spoke last time. I’d also want to add that we haven’t seen any impact on our subscription revenue trends. That’s Tinder and business-wide. I think our subscription trends remain extremely resilient to any economic pressure. But it’s ALC where we’ve been impacted by some of the macro things going on. And I would also say that, as you know, dating has a bit of a peak season that starts at the end of December and runs through Valentine’s Day. And so we watch the peak season, which tends to be a good harbinger of what’s coming in Q1 and for the rest of the year.

And what we’ve seen is really stability in those trends, kind of the typical pop that we see in trends in the peak season, we did see that this year as well, which tells us that the macro trends have not led to worsening consumer demand. They’ve not put incremental pressure on the consumer demand in the ALC. So that’s been particularly encouraging and gives us more confidence in our 2023 outlook than we had last time. So just to summarize, while we see pressure on ALC and in fact, we see ALC revenue down year-over-year at Tinder, in particular, we don’t think those trends are worsening. And so with stable ALC trends and with subscription revenue being resilient, that gives us that confidence in the outlook for 2023 and the fact that we think as the year progresses, we’ll start to see improved momentum as well.

And I would tell you that the peak season trends that we’re seeing are not just a Tinder phenomenon, but we’re seeing good stability of peak season trends across all of our businesses. I would also tell you that we think that the Americas business is pretty strong. It’s a little bit weaker in Europe and certainly was in the fourth quarter, but in general, we think Europe is a little bit weaker than the Americas. In terms of the Tinder reacceleration as the year goes on, as we’ve talked about a few times now, we’re very clear that the problem was largely a product execution one. And we’re really pleased with the strides the team has made over the last six months in improving on product execution. And BK mentioned the Tinder team has a clear and strong product roadmap for 2023, and we see them executing on it.

We see them shipping product and moving forward. The other thing, which BK also alluded to, is that we have more confidence in Tinder achieving its goals in 2023 from a financial perspective and accelerating its momentum to achieve that double-digit growth by Q4 because the roadmap is not dependent on one or two big swing initiative that we have to achieve. Rather, it’s a series and a large number of smaller initiatives that really contribute to the growth. So that really does reduce the risk that we see in achieving the financial objectives for the year. And BK specifically pointed out that 2/3 of the revenue growth for the year for Tinder are coming from optimizations, which we have a high confidence in, strong line of sight to what we’ve done before.

And we think they’re highly achievable now that we’ve got the right team focused on those optimizations. So while there’s a lot of work still left to be done and it’s really early in the year, we don’t want to get ahead of ourselves. I feel like we have a strong line of sight to getting back to that mid-teens growth by Q4.

Operator: The next question comes from Mario Lu with Barclays.

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