(Reuters) – Tinder-owner Match Group Inc (MTCH.O) forecast fourth-quarter revenue below Wall Street estimates on Tuesday as it faces stiff competition from rival online dating services, sending its shares down about 15% in extended trading.
FILE PHOTO: The dating app Tinder is shown on an Apple iPhone in this photo illustration taken February 10, 2016. REUTERS/Mike Blake/Illustration
Shares of parent IAC/InterActiveCorp (IAC.O) also down about 11% after the bell.
Match has been facing increasing competition from a host of rivals including Bumble and Facebook Inc’s (FB.O) dating platform that recently launched in the U.S. in September.
Bumble also stepped up by launching its app in India late last year, a market with a huge potential for dating-related services.
Tinder — which has made “swipe left” and “swipe right” a point of pop culture conversations – added 437,000 average subscribers in the quarter, down from an addition of 503,000 in the previous quarter. The addition brought Tinder subscribers up to 5.7 million in the third quarter.
To fend off competition, Match has boosted its marketing spend on its money-spinner Tinder in emerging markets, including India and Latin America, as well on its other dating services, PlentyOfFish and Hinge.
Match’s total operating expenses rose about 20% to $364.9 million in the quarter.
The owner of OkCupid and PlentyOfFish expects current-quarter total revenue between $545 million and $555 million, below analysts’ estimate of $559.3 million, according to IBES data from Refinitiv.
The forecast overshadowed a better-than-expected quarterly revenue and a 19% growth in average subscribers that rose to 9.6 million from a year ago, including a rise of about 29% subscribers in its international markets.
Last month, parent IAC said it intends to spin off its ownership stake in Match Group resulting in the full separation of the two companies.
Match on Tuesday said it expects spin-off related expense to be about $10 million in fiscal 2020.
The revenue forecast comes at a time when Match is in the middle of a U.S. Federal Trade Commission complaint related to the company’s certain marketing-related claims.
Total revenue rose 22% to $541.5 million in the third quarter, edging past analysts’ estimates of about $540.6 million, according to IBES data from Refinitiv.
The company’s net earnings attributable to Match Group shareholders rose to $151.5 million, or 51 cents per share, for the three months ended Sept. 30, from $130.2 million, or 44 cents per share, a year earlier.
Reporting by Ayanti Bera in Bengaluru; Editing by Shailesh Kuber