(Bloomberg) — Match Group Inc. faces lofty expectations for its first investor meeting on Wednesday, as activists and analysts await a concrete plan for reversing persistent subscriber declines at the company’s flagship dating app, Tinder.
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Tinder’s product road map and its mid-term growth outlook will be key, according to analysts interviewed by Bloomberg. The firm has been attempting a turnaround since last year, launching a splashy marketing campaign, refreshing Tinder’s app interface and expanding some safety features to more users. These efforts have so far yielded little improvement in Tinder’s subscriber growth. Last month, the company gave a disappointing outlook after some new features under-delivered, further dampening confidence.
Investors gathering in New York Wednesday morning will hear from executives including Chief Executive Officer Bernard Kim, the chief technology officer and the chief financial officer. Leaders of Match’s four business segments — Tinder, Hinge, evergreen and emerging brands, and Asia — will also give presentations. Tinder, which pioneered the concept of “swiping right” on a would-be match, has pledged to refresh its core product, but it remains unclear what it would mean for the app to refine its signature user experience.
“People need confidence in the Tinder product road map,” said JPMorgan analyst Cory Carpenter, who has an overweight rating on Match’s stock. Evercore ISI analysts led by Robert Coolbrith wrote in a note Tuesday that the company needs to show a “credible strategy” to stabilize Tinder’s user trends in 2025 and beyond.
Activist Pressure
To be sure, the world’s largest dating app company, which owns more than a dozen brands including Hinge and OKCupid, currently has no sell ratings on its stock. Many on Wall Street remain bullish about its leading position in the online dating market, even as Match and its peer Bumble Inc. have acknowledged a need to address a generational shift in how users, especially Gen Z, approach dating.
Yet there has never been more urgency for Match to show investors that the market still has room to grow. One of its activist investors, Starboard Value, has proposed a sale of the firm if a turnaround fails. Frequent management changes since 2016 and a lack of meaningful product innovation at Tinder have culminated in a $41 billion loss in Match’s market capitalization since its 2021 peak. Three activists, including Elliott Investment Management LP and Anson Funds Management LP, have taken stakes in the firm since last year and are united in pushing for growth at Tinder.
Match, which declined to comment before its investor presentations, has said it’s engaged in conversation with the activists, which have shown support for the current leadership. And given still-healthy cash levels, analysts are so far not expecting dramatic developments like a proxy fight or further management changes.
“I would like to think that Tinder or Match will have time to execute on those initiatives, and if they don’t, then you could certainly start to see more pressure on the activist side,” JPMorgan’s Carpenter said.
Shweta Khajuria, senior research analyst at Wolfe Research LLC, also pointed to the timeline of CEO Kim’s term being up for renewal before next May. This, coupled with the possibility of trends and fundamentals not going the way investors are hoping, could create “a situation where the activist investors could get more active and there could be a proxy fight where there’s an effort to bring the company private,” she said.
She is not calling for such a development, though, saying Tinder’s CEO Faye Iosotaluno, who was promoted to the role in January, may “still have another three or four quarters” to prove whether the changes are working in the company’s favor. “Is the worst behind Tinder or not? That’s the question.”
Slow Progress
Constant C-suite turnover in the last few years, where no Tinder CEO stayed longer in the role for more than two years since co-founder Sean Rad stepped down in 2016, has stunted any long-term plans for the app, whose user experience is paramount.
“In dating, you try a bunch of products and some work, some don’t. And you really don’t know which ones are going to work,” Carpenter said. Frequent changes in product priorities from new leaders mean “you end up not shipping much and there are steps forward and steps back.”
Carpenter pointed to the successful launch of the “Likes You” feature more than five years ago in Tinder’s Gold subscription product, which gives users the option of paying to see who liked them first before making swipes. “It worked incredibly well. Payers grew incredibly fast. And there really hasn’t been a hit since then.”
Kim’s team tried in recent months to unbundle the popular feature, among others, from the Gold tier to attract more paying users, but it ended up hurting subscription revenue. “So we’re refining it by testing specific customer segments with new merchandising approaches,” Kim said on a call with analysts in November.
Other Investor Concerns
Outside of Tinder, the bar for progress remains high. There will also be an emphasis on the company’s capital allocation strategy after Starboard urged the firm to buy back shares using at least 75% of its free cash flow.
In addition, analysts are looking for a growth strategy from Hinge, which has posted double-digit growth, making it a standout among other brands that have seen declines. Revenue and free cash flow growth could also come from Asia and other emerging brands, Carpenter said, as long as the number of Tinder payers doesn’t continue to decline.
