Match Group stock drops as Omicron pressures online dating landscape
Shares of Match Group Inc. fell 3% in after-hours trading on Tuesday as the online dating giant issued a lower-than-expected forecast, citing pressure from the omicron variant.
The company reported a fourth-quarter GAAP net loss of $168.6 million, or 60 cents per share, after earning $149.0 million, or 50 cents per share, in the third quarter. ‘last year.
revenue fell from $651.4 million to $806.1 million, while analysts tracked by FactSet expected $819.9 million. The company had 16.2 million “payers” during the quarter.
“While we were able to generate strong revenue growth in the fourth quarter, we experienced continued COVID impacts, particularly in certain Asian markets, such as Japan, and more recently due to the emergence of omicron, which reduced mobility in many markets beginning in early December,” the company said in its earnings letter.
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More positively, Match said it saw higher-than-expected adoption among Tinder users of Explore, a new feature that allows daters to find other people with similar interests.
The company also called Hinge “the star” of its “emerging” dating brands. Hinge saw its revenue more than double in 2021 to $197 million and the company saw a “hardware acceleration” in downloads during the fourth quarter.
For 2022, Match expects total revenue growth of 15% to 20% on an annual basis. “This is a slightly more conservative outlook than we previously provided,” the company acknowledged in its earnings letter, given the expected currency and omicron variant pressures.
For the first quarter, Match forecast revenue of $790-800 million, while the FactSet consensus was $835 million.
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“Match was unable to escape the COVID bets as the global ramp-up of omicron again impacted 4Q results, as well as the outlook for 2022 , particularly in 1Q22,” Wedbush analyst Ygal Arounian wrote in a note to clients following the report.
He expects reopening trends to become a “net profit for Match”, but also noted continued headwinds in Asia. Arounian rates the stock neutral with a price target of $170.
Evercore ISI’s Shweta Khajuria said Match’s report and outlook “was a slight disappointment”, but questioned whether Match had delivered a “compensating event quarter”.
Khajuria rates the stock to outperform with a price target of $175.