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
(Reuters) -Match Group forecast fourth-quarter revenue below analysts' estimates on Tuesday, underscoring ongoing challenges in its turnaround efforts as the Tinder parent struggles to convert casual swipers into loyal, paying users.
The company, which also owns popular dating platforms OkCupid and Plenty of Fish, has invested heavily in rolling out new features and integrating advanced artificial intelligence features designed to revitalize user engagement and bolster security. However, these efforts have yet to produce substantial gains, with user growth falling short of expectations.
The online dating sector itself is grappling with "swiping fatigue," pushing younger consumers to seek more interactive and meaningful ways to connect.
This shift has reshaped the online dating industry, leading to a fragmented market and intensifying competition. Rivals such as Bumble, along with numerous niche apps, are forced to rapidly evolve their offerings to better align with changing user demands.
Match Group's ambitious AI-driven security enhancements, which include facial verification and automated profile authenticity checks aimed at addressing growing concerns over fake profiles and online dating safety, have been widely praised as industry-leading, but so far have not translated into measurable improvements in user engagement or retention.
For the third quarter, the company posted a 5% decrease in its paying users to 14.5 million.
While Hinge, often hailed as Match's rising star, continues to demonstrate robust growth, it remains too small to offset broader struggles at Tinder, the company's flagship app.
The company forecasts fourth-quarter revenue between $865 and $875 million, widely missing analysts' estimates of $882.8 million, according to data compiled by LSEG.
Revenue for the third quarter came in at $914 million, slightly below estimates of $915 million.
(Reporting by Kritika Lamba in Bengaluru; Editing by Alan Barona)
