“Despite owning some of the best-known brands in the dating market, Match Group has been struggling with intense competition,” said Russ Mould, investment director at AJ Bell.
“A lack of innovation seems to be a key bugbear and activists are putting pressure on the company to come up with some new ideas to drive up user numbers.”
Some Match Group investors have called, external on the company to improve its performance and deliver more value for shareholders – for whom the company’s stock price has been trading down at more than 60% on its 2021 peak.
Match Group told shareholders in its letter, external that Tinder’s growth had previously been driven by its “engaging and fun user experience” – key to which has been the convenience of swiping left or right on potential matches.
But it said that what users want from dating apps has since changed.
“Sentiment has shifted as users seek a lower-pressure experience with greater authenticity that more easily delivers desired connections,” it said.
“We expect Tinder to begin testing new lower pressure forms of discovery in the coming quarters, including more ways for users to use Tinder with friends.”
Tinder has recently rolled out new ways for people to meet people on the app – including letting friends and family members play matchmaker – and artificial intelligence (AI) features helping users pick the best images to use on their profiles.
Meanwhile, Mr Mould added that Tinder’s slowed decline in paying users, along with the growth of Hinge, presented a “glimmer of hope” for its parent company.
The number of people paying for the app – which Match says is “designed to be deleted” – has increased sharply, with the revenues it generates rising by 48% compared to the same period in 2023.
Tinder, comparatively, saw its direct revenue grow by just 1% across the same period.
Match Group’s share price rose by nearly 10% in after-hours trading on Tuesday after reporting its results.
