FILE PHOTO: The dating app Tinder is shown on a mobile phone in this picture illustration taken September 1, 2020. Picture taken September 1, 2020. REUTERS/Akhtar Soomro/Illustration/File Photo
(Reuters) - Match Group forecast revenue for the third quarter above Wall Street estimates on Tuesday, as the Tinder parent expects stronger marketing to drive user growth, sending its shares up about 11% in extended trading.
The company is benefiting from the launch of more flexible subscription plans. Its cheapest plans for smaller durations have drawn inflation-hit consumers, who are looking to cut discretionary spending. The international expansion of Match's dating app Hinge and the rising adoption of its premium plan are also boosting revenue. The company is also banking on growing advertising revenue from its diverse portfolio of dating apps, as brands move to increase ad expenditure on signs of improving consumer sentiment through the rest of the year.
Tinder said it has turned its attention to an important product refresh in the second half of the year, to better satisfy its core Gen Z audience.
Match said it is also on track to launch Tinder's high-end membership in the early fall, adding that it plans to continue its marketing efforts as it approaches the back-to-school season. The company forecast revenue between $875 million and $885 million for the third quarter. Analysts are expecting $863.8 million, according to Refinitiv IBES data.
It posted adjusted operating income of $301 million in the second quarter, compared with market estimates of $278.5 million.
Match said Tinder's "It Starts with a Swipe" campaign was crucial in lifting new user signups, particularly among young women. It also said there has been strong demand for its weekly subscription packages, which benefited Tinder's revenue. The company posted a revenue of $830 million in the second quarter, compared to analysts' estimate of $811.4 million, according to Refinitiv IBES data.
However, paying users across its dating apps fell 5%, to 15.6 million, in the three months ended June 30.
(Reporting by Akshita Toshniwal and Akash Sriram in Bengaluru; Editing by Pooja Desai)
