Match Group Inc's dating services such as Tinder, Match.com and OkCupid attracted fewer-than-expected users for paid services in the second quarter, which hit the company's revenue forecast for the current quarter.
Match Group's average paid-member count grew 30% to 5.3 million in the second quarter, but missed analysts estimates of 5.4 million members, according to FactSet StreetAccount.
The increase in the company's paid-user count was driven mainly by sign-ups for Tinder, a popular mobile app on which people 'swipe right' or 'swipe left' to signal their willingness – or not – to meet prospective partners.
Match Group said revenue from its dating business, which accounts for about 90% of total revenue, increased 5.7% in the second quarter compared with the first quarter.
The company, however, forecast revenue from the business to increase 2% to 3% sequentially in the current quarter, which is below its stated target of 5% to 7% sequential growth in every quarter of 2016.
"I suspect that it's something to do with the subscriber numbers," BTIG analyst Brandon Ross said, adding that a bigger-than-expected increase in Match Group's second-quarter revenue could also be a factor.
The company also lowered its full-year adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) forecast by about US$10mil (RM40.1mil) to a range of between US$400mil (RM1.6bil) and US$415mil (RM1.69bil), due to increased investment in Tinder.
Last week, the company launched Tinder Social, which allows a user to form a group by adding up to three other members and connect with other groups to go anywhere from a concert to a pub crawl.
Match Group's revenue rose 21% to US$301.1mil (RM1.2bil) in the second quarter ended June 30. Analysts on average were expecting revenue of US$295.1mil (RM1.2bil), according to Thomson Reuters I/B/E/S.
Revenue from the dating business increased 23.5% year-over-year. Revenue from its non-dating business, which includes educational websites Princeton Review and Tutor.com, fell slightly.
Net income attributable to Match Group rose to US$34.1mil (RM139.6mil) from US$23.3mil (RM94.8mil), a year earlier. — Reuters
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