Match Group, the owner of popular dating apps such as Tinder and Hinge, unveiled its first-quarter earnings report on Tuesday, revealing contrasting fortunes for its flagship products. Tinder’s subscription user base has shrunk for six consecutive quarters, while Hinge has posted robust growth in its paid membership. Specifically, Tinder recorded 10 million paid users in Q1 2024, marking a 9% decline from the previous year. Conversely, Hinge now boasts 1.4 million paying users, representing a 31% year-over-year increase.
The downturn for Tinder seems to align with evolving dating app trends, where younger users increasingly prefer serious, long-term relationships over casual encounters—the latter being Tinder’s hallmark. Hinge has capitalized on this shift, gaining traction as the go-to app for those seeking meaningful connections.
Addressing investors during a Wednesday morning conference call, Match Group CEO Bernard Kim highlighted Hinge’s remarkable progress, positioning it as a potential “$1 billion revenue business.” Hinge’s Q1 direct revenue surged to $124 million—a 50% jump from the previous year. In 2023 alone, the app generated $396 million.
One of Tinder’s significant challenges lies in its à la carte (ALC) features, which include Super Likes, Boosts, and “See Who Likes You.” These in-app purchases account for roughly 20% of Tinder’s direct revenue. However, ALC revenue fell by 13% in Q1 2024, a steep decline from its peak in 2018.
During the call, Match Group CFO Gary Swidler acknowledged the prolonged downward trend in ALC revenue, noting its exacerbated severity in recent times. This decline, attributed to fewer users and reduced purchase volumes amid sluggish consumer discretionary spending among younger users, has hindered overall performance.
Swidler forecasted that Tinder’s paying user base would continue to decline at similar rates in Q2, although he anticipated some improvement by Q3. To appeal to budget-conscious Gen Z users, Match Group plans to introduce more cost-effective ALC features in future quarters.
Nevertheless, Swidler suggested that Tinder could learn from Hinge, which limits its à la carte offerings to just two features: Boosts and Roses.
Tinder has undertaken various initiatives to enhance the user experience, such as the “Share My Date” feature, allowing users to share date details with friends for safety. Upcoming enhancements include mandatory face photos in all profiles and an AI Photo Selector that curates a user’s best images to boost profile quality.
Despite its efforts to extract more revenue from a shrinking user base, exemplified by its new $499 per month plan for elite users, Tinder’s revenue forecast for the next quarter remains modest, projecting growth to be flat or a slight increase to between $475 million and $480 million.
