Mark Kelley: Great. Thanks very much. I just have one, probably for BK. A lot of AI commentary in the note and in your prepared remarks. I guess, my question is, is the goal to have like a unified AI infrastructure on the back end that will be utilized across the portfolio, or do you think there are unique needs across each individual brand where it makes sense to maybe modify those AI capabilities? And I guess second to that, I know you gave us guidance for the full year in terms of margins, but any cost implications that we should be aware of? Thank you.
Bernard Kim: Thanks, Mark. I was actually hoping that someone ask me about AI. And I want to just share some of my thoughts around AI. I mean, I believe that AI is existential to the future of Match Group and our business. AI will help us create improved user experiences and will truly make our products better. And that puts us in a different category from other companies that are just looking at optimizing through AI and slight improvements. This technology is revolutionary for dating, and we’re bringing it to life across our entire portfolio. I envision AI to be felt through the entire experience, influencing everything from profile creation to matching and connecting for dates, literally everything. Our data as a team and deep understanding of dating and singles is a rich resource for informing our AI dating models internally.
Our two biggest brands, Tinder and Hinge, have their own AI strategies tailored to its unique needs and listening to daters and what they want. Now, we do have this central innovation team working across the entire portfolio on moonshot ideas and incubating new products. And our talented team at Hyperconnect is playing a crucial role in supporting all of these initiatives across the company. I’m really excited about this revolution going across the entire team. Gary mentioned in his comments that we are investing $20 million to $30 million in AI innovation. And I absolutely believe it’s the right thing for us to do to drive enduring strength, better experiences and future growth for our business.
Operator: The next question comes from Ygal Arounian with Citigroup. Please go ahead.
Ygal Arounian: Hey, good morning, guys. Just one follow-up on the AI thought. And obviously, lots of talk around this here. And just trying to understand how much AI contribution is kind of embedded into the expectations for 2024, when you see it having a more meaningful impact. And maybe at least for this year, do you see it as more of a driver for payers or for RPP, or does it — can it contribute to both? Thanks.
Gary Swidler: Why don’t I jump in and take that one? So as BK said, we’ve got a lot of exciting AI initiatives planned for Tinder, for Hinge and for new products as well that we’re going to roll over the course of 2024. So we do have very high expectations for delivery of all these products and features that we think they will enhance the user experience. And so I think it’s logical to think that they would benefit RPP, because it will be a better experience, people should see more value in the product and be willing to pay more. But I would tell you that at this point, given that it’s still very early in the evolution of these various products and features, we haven’t included any notable revenue in our 2024 outlook from the AI efforts.
As BK mentioned, we’ve put in all of the costs, which we’ve estimated at $20 million to $30 million, so we can go hire people, do the work to build out these different products and features and roll them out over the course of the year. But we are waiting on the revenue side. Now you might view that as a conservative assumption, and it very well could be. But I think at this point in time, it’s the right thing to do. And we’ll obviously continue to update what we’re seeing from the AI initiatives as the year progresses.
Operator: The next question comes from Cory Carpenter with JPMorgan. Please go ahead.
Cory Carpenter: Thanks. Anything you would call out or highlight on the Tinder product road map that you think could be particularly impactful in driving that Tinder payer turnaround in second half? And Gary, just to clarify, the $20 million App Store benefit, is that included in the guide, or is that something that would be upside? Thank you.
Bernard Kim: I’ll take the first part of that question, Cory. We feel really good about the progress that we’ve made at Tinder over the past few months, and the results have aligned really well with our expectations. We’ve demonstrated Tinder’s capability to deliver. They’ve achieved double-digit revenue growth for the last two quarters consecutively. And I’m really excited about the continued strong execution velocity and the product and marketing road maps for 2024. Now we acknowledge that Q4 was a large sequential payer decline, but we are optimistic about the future as we see these declines moderating. Looking ahead, we’re confident that in Q3, Tinder payers will turn positive on a sequential basis. This confidence stems from marketing coupled with several product initiatives that are underway.
Our key strategies include enhancing the visibility and value of our paid packages and dynamically showing the right offer to the right user at the right time. Now additionally, our monetization team is working on more market-specific conversion strategies and experimenting with unbundling certain premium features that currently sit behind a paywall.
Gary Swidler: And then on the DMA question, Cory, we’ve got this margin floor in our financial outlook. And so the $15 million, that would probably accrue in 2024, because we’re saying, it’s $20 million annualized. So if you say, it’s three-quarters, let’s call it, $15 million. That obviously helps us achieve our margin target or even gives us an ability to exceed the margin target as the year goes on. And so it’s helpful in that regard to kind of push us maybe at the top end or higher than kind of what people might be expecting. And so it’s definitely a positive from our perspective. Obviously, we’ve got a lot of investment going on, and so we’ll have to think about whether any of that should be reinvested. But ultimately, I do think it’s a $15 million positive for the year.
Operator: The next question comes from Youssef Squali with Truist Securities. Please go ahead.
Youssef Squali: Thank you. Hi, guys. So the company has been talking about steps to reduce duplicative functions and migrate the Evergreen & Emerging Brands onto one technology platform to consolidate the brands onto a single stack. Where are you in that process? What kind of cost savings or margin impact are you baking in, in 2024? And ultimately, how much do you anticipate to be deriving from that over time? Thanks a lot.
Gary Swidler: Sure. We haven’t spent a lot of addressing that. So appreciate the question. What’s been happening, and this is related to our E&E business, both the Emerging businesses and the Evergreen businesses, where we’re trying to be more efficient. What we’ve started to do is centralize teams and reduce redundancies in various aspects of the E&E business. So if you look at the marketing function, you look at the customer care function, other aspects of their operations, we’re reducing duplication. And that’s leading to some savings this year and on an ongoing basis. So that’s kind of the first piece of what’s going on there. But the second and more important piece is that we’ve got a number of brands within that mini portfolio inside the company.
