Match Group Delivers Q3 Beat, But Guides Lower

Match Group Inc (NASDAQ: MTCH) reported its third-quarter results ahead of expectations, but seems to be headed toward a lighter end to the year, according to Nomura.

The Analyst

Nomura’s Mark Kelley maintained a Buy rating on Match Group with a price target of $88.

The Thesis

Match Group reported 22% year-on-year growth in total revenue for the third quarter, Kelly said in the note.

Revenue grew to $541.5 million, past the Street estimate of $540.7 million. This was driven by around 19% growth in total subscriptions and 4% growth in average revenue per user (ARPU).

North America direct revenue grew 15% year-on-year to $269 million, versus the consensus expectation of $267 million. Its International direct revenue rose 32% to $26 million, in-line with expectations.

The company also delivered an adjusted EBITDA beat at $206 million, versus consensus of $204 million. Tinder net adds came in at 437,000, while direct revenue from this platform grew 49%.

Match Group guided to revenue and adjusted EBITDA of $545-$555 million and $205-$210 million for the fourth quarter. The company’s full-year revenue remains on track for high-teens growth, Kelly mentioned.

He added that the implied adjusted EBITDA for the year is $770-$775 million, which is lower than the previous expectation of $770-$800 million, mainly due to incremental investment and expenses since the beginning of 2019.

Price Action

Shares of Match Group were down 3.85% to $66.96 at the time of publishing on Wednesday.

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