Match Group Inc. forecast growth through the end of the year that missed analysts’ estimates Tuesday, citing lingering COVID effects in Asia, particularly in its second-biggest market of Japan.
The Dallas-based company said it expects fourth-quarter revenue of $810 million to $820 million. That compares with the average analyst forecast of $838 million, according to data compiled by Bloomberg. Pre-tax earnings will be $285 million to $290 million, according to a statement Tuesday. Analysts had projected $285.5 million.
Match said it expects to see improvement “as mobility restrictions lift, vaccine levels continue to rise, and case counts fall.” Its shares tumbled 5.4% in extended trading.
The dating-app giant, which owns brands including Tinder, OkCupid and Hinge, was forced to pivot during the pandemic as lockdowns early in the COVID-19 outbreak all but eliminated in-person socializing. That led Match to enhance its digital experience and simulate offline encounters with features like video and audio.
Expanding its offerings beyond just swiping through pictures of potential mates has helped Match to remain nimble even as in-person activities have resumed. Match has been incorporating new features to spur users to spend money in the apps, such as a new digital currency in Tinder for people to buy perks meant to increase their chances of meeting someone.
Match has also been branching out beyond romantic relationships to platonic ones, purchasing South Korean video technology company Hyperconnect, which specializes in video and audio and is seen as more of a social media app.
In the third quarter, Hyperconnect added $53 million of revenue, Match said, but didn’t perform as well as expected. Hyperconnect’s main revenue-generating app Azar faced “some unexpected headwinds in 2021, including a worsening of the pandemic” in key Asia Pacific markets, which led to changes in user habits and some delayed product initiatives, Match said.
“Based on the current trends and our strategic direction at Hyperconnect, we have reduced our full-year expectations for Hyperconnect’s revenue contribution by about $20 million,” according to the statement.
Match is also grappling with recent changes to Google and Apple Inc.’s app stores. The company didn’t give a forecast for fiscal year 2022, saying it wanted to see how the app store policies evolve, “in light of the significant ongoing legislative, regulatory and legal activity on this topic in jurisdictions across the globe.”
Google announced last month it was lowering fees on the app store for mobile developers to 15% from 30% …….