What Happened?

Shares of dating app company Match (NASDAQ:MTCH) fell 18.7% in the afternoon session after the company reported underwhelming third-quarter earnings that has the market questioning its turnaround story. Match provided revenue guidance for the next quarter which missed analysts' expectations, and its revenue growth was quite weak. 

The company stated that "Tinder MAU was down 9% Y/Y in Q3, which was the same rate of decline as in Q2, falling short of our expectations for continued improvement in Y/Y trends. From mid-September through October, we saw more press re on new users (registrations and reactivations) than we expected, which has led to pressure on MAU." 

On the other hand, it was good to see Match Group beat analysts' EBITDA expectations this quarter. Overall, this was a challenging quarter, and the turnaround is frankly not going well.

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What The Market Is Telling Us

Match Group’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for Match Group and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock gained 12.5% on the news that the company reported strong second-quarter earnings results. Although it continued losing payers, its Tinder monthly active users stabilized while its payer declines slowed. This was an encouraging data point for the market as it's laser-focused on Tinder payers. Hinge did the bulk of the heavy lifting during the quarter, with the product achieving +48% y/y growth. Match expects to see a sequential improvement in payers next quarter. However, Q3 sales are expected to reflect the company's exit from live streaming services (estimated at roughly $8 million) and FX-related headwinds. Overall, this was a decent quarter for Match.

Match Group is down 14.9% since the beginning of the year, and at $30.98 per share, it is trading 20.7% below its 52-week high of $39.04 from January 2024. Investors who bought $1,000 worth of Match Group’s shares at the IPO in June 2020 would now be looking at an investment worth $293.18.

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