Match Group

Who is Match Group?

For those of you who may not be fresh on the online dating scene, at least you may know Match.com from the TV commercials. Aside from the TV commercials, Match is not just one online dating site, it’s a group of online dating sites. Headquartered in Dallas, Texas, Match Group is comprised of multiple online dating platforms- OkCupid, PlentyOfFish, Tinder, Match.com, Meetic, and has recently announced a 51% stake in Hinge. As the younger generation continues to stare down at their phones and not communicate with the rest of the world, Match group might really be a future investment opportunity.

Tinder

According to Match Group’s Q2 2018 earnings call, the vast majority of Tinder users are in their 20’s. Kids in their early 20’s are a couple of years into college and might be starting to get sick of trying to meet someone at a party. Tinder is the perfect option. It’s not a full commitment like Match.com is, it is more playful and less serious. Not to mention, Tinder is a global platform available from Paris to Japan.

Match

Match is tailored to slightly older users in their 30’s and 40’s. People who do not mind paying to find more serious relationships. Match is a platform that has withstood the hands of time and remains a solid choice for those even in their late 20’s and early 30’s.

PlentyOfFish & OkCupid 

Another point from the Q2 2018 earnings was that both the PlentyOfFish & OkCupid brands have strong positions, but are not as marketed as the other platforms you just read about. Less marketing has led these platforms to not be as a highlight as Tinder and Match. However, If there is a reason to mention both of these platforms it is because they show how diversified the Match Group is as a whole for online dating.

By the Numbers

The average total subscribers reached over 7.7 million in Q2 2018, up 27% from the prior year. Think about that, the king of dating only has an average total subscriber base of 7.7 million people. How many single people are there in the world? EBITDA margins were up 42% in Q2 2018, up over six points in comparison to Q1 2017. Match group produced solid growth in Q2 of 2018.

Competitors 

Online dating can be a tough market to be in, in general. People still do meet and get married at the bar, it actually happens. Regardless, Match Group, the beast of the online dating scene has advantages by staying focused diversification and continuing to expand their M&A’s. Earlier this year however, Facebook announced they would be expanding into online dating. The stock tumbled on the news (pre Q2 2018 earnings announcement). Facebook would be a challenge to compete with because of the amount of people using the platform across the world. Plus, if you use Tinder, you have to have a Facebook account to do so. That makes you think, would Facebook ever change that agreement with Tinder?

The bottom line is that the Facebook shock was overdone, but it still does present a grey area for the future of Match Group in the long term. The only way that Match Group can continue to stay relevant is continuing to stay focused on their target markets of singles of a certain age. Facebook, the social platform, has the potential to phase out like MySpace did or even tailor to an older generation. If Match Group can continue to keep Tinder relevant for those in their 20’s, it will be a hard platform to compete with based on brand recognition alone.