Shares of Tinder’s corporate owner slumped after it warned it will miss Wall Street’s revenue forecasts — partly thanks to a move by Apple that makes it easier to cancel subscriptions for the hookup app.
Match Group — which also owns OKCupid and PlentyOfFish — said it expects to see a jump in cancellations of subscriptions to its paid Tinder Gold service because of recent changes in the iPhone App Store that make it far simpler to unsubscribe.
Previously, customer would have to go through numerous pages of menus before getting to their recurring subscriptions.
“There is a little bit of a pull-forward of terminations … on iOS at Tinder and some of our other brands from the changes that Apple made,” chief financial officer Gary Swidler said on a Wednesday call with analysts. “So that is affecting the sub number a little bit in Q4.”
Tinder added 437,000 average subscribers in the quarter, down from an addition of 503,000 in the previous quarter. The latest increase expanded Tinder’s total subscriber base to 5.7 million.
While analysts had been looking for revenue guidance of $559.3 million, Match said it expects to bring in between $545 and $555 million.
Match shares tumbled as much as 5 percent before settling at $67.04, down 2.5 percent. Shares of Match’s majority owner IAC sank 4.6 percent Wednesday afternoon.
Match has been facing increasing competition from a host of rivals including Bumble and Facebook‘s dating platform that recently launched in the US in September.
Match also warned that it expects to incur around $25 million in costs for discretionary long-term investments and legal costs in the quarter.
Last month, an appeals court rejected Match Group’s attempt to dismiss a $2 billion lawsuit by former Tinder executives including co-founder Sean Rad, sending it to a jury trial. Rad and others claim Match executives bamboozled them out of valuable stock options — an allegation Match denies.
“There has been some investor concern about trying to handicap the lawsuit,” Lightshed analyst Brandon Ross told The Post. “But while we’ve read the complaints, we don’t know really what’s going on behind closed doors.”
The weak revenue forecast overshadowed a better-than-expected quarterly revenue and 19-percent growth in average subscribers that rose to 9.6 million from a year ago, including a rise of about 29 percent subscribers in its international markets.
Total revenue rose 22 percent to $541.5 million in the third quarter, edging past analysts’ estimates of about $540.6 million.
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.
With Reuters
