(Bloomberg) -- Match Group Inc. lowered its full-year revenue forecast, a disappointment to investors who were expecting a turnaround at the dating app company amid pressure from activists.
Revenue for 2024 is now expected to gain about 4% instead of 5%, Match President and Chief Financial Officer Gary Swidler said on an earnings call with analysts Thursday, citing a slowdown in the addition of new users on Tinder, its largest dating app.
Shares of Match saw their biggest decline on record Thursday, falling 18% to close at $31.11.
Match is under pressure from investors, including activists Elliott Investment Management LP, Anson Funds Management LP and Starboard Value, who want the firm to roll out new products at Tinder that will improve profitability and reverse persistent subscriber declines. The company and its peer Bumble Inc., which also reported results Wednesday, have been contending with a generational shift in dating behavior among younger users as well as inflationary pressures on consumer spending.
“We expect to see tangible markers of improvement as Tinder’s new features roll out over the coming quarters,” the company said in a letter to shareholders on Wednesday.
During the third quarter, Match posted a modest 1.6% boost in revenue from its portfolio of dating apps including Hinge, landing behind Wall Street estimates and at the low end of its own guidance. It also provided a fourth-quarter revenue outlook that fell short of expectations.
In the letter, the company said it earned “modestly lower” revenue per paying Tinder subscriber than it expected, despite adding 311,000 net new paid users from the prior quarter. Tinder monthly active users remained down 9%, according to the statement, and the firm opted to hold “a la carte” app offerings for additional development because they were “impacting subscription revenue more than we had anticipated.”
“It does give us a little bit weaker momentum that we would have preferred going into ‘25,” Swidler said of the user trends on the call.
“It really is more of a product transformation story,” he added. “We need to improve the health of the ecosystem, we need to improve our standing with younger users, with women. And if we can roll out products that accomplish that, that’s really going to drive growth in 2025 and beyond.”
(Updates with record share drop in third paragraph.)
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