Match boosts revenue forecast as Tinder lures more paying users

(Reuters) - Dating app Tinder snagged thousands of paying users in the second quarter, helping its parent Match Group Inc beat Wall Street profit targets and raise its yearly revenue forecast on Tuesday.

FILE PHOTO: The dating app Tinder is shown on an Apple iPhone in this photo illustration taken February 10, 2016. REUTERS/Mike Blake/Illustration/File Photo

Match Group, which also plays cupid through its PlentyOfFish, and OkCupid services, has been spending heavily to take its cash cow Tinder to emerging markets as well as promote its other dating services.

The company’s shares jumped 13 percent to $44.04 in after-hours trading after results showed Tinder had signed up nearly 300,000 paying users in the three months ended June 30. Goldman Sachs had last month estimated user additions of about 278,000.

Tinder — where users swipe left or right on their phones to signal interest or not in a person — now has an average 3.8 million users. Overall, the number of Match dating subscribers reached 7.7 million.

Match on Tuesday also unveiled “Tinder U,” a version of Tinder that will be available only to students and launch next month.

Overall marketing efforts will intensify during the back-to-school period, Match said.

The Dallas-based company now expects full-year revenue of between $1.68 billion and $1.72 billion, higher than its previous forecast of $1.6 billion to $1.7 billion.

Match’s stock has more than doubled in the past 12 months but its 23 percent rise in 2018 has been stymied by Facebook’s announcement that it would launch its own dating service.

“We remain of the view that (Tinder’s) fundamentals (will) likely continue to hit or exceed expectations, despite the Facebook-related overhang,” Evercore ISI analyst Anthony DiClemente said last month.

Match’s second-quarter revenue jumped 36 percent to $421 million, topping financial analysts’ average estimate of $412.8 million, according to Thomson Reuters I/B/E/S.

Net profit attributable to Match shareholders surged to $132.5 million from $51.4 million a year earlier. Excluding one-time items, Match earned 41 cents per share, above analysts’ expectations of 35 cents.

Reporting by Pushkala Aripaka in Bengaluru; Editing by Sai Sachin Ravikumar