(Bloomberg) -- Tinder, Match Group Inc.’s largest dating brand, said that it plans to prioritize improving its user experience over monetization, a bet that it can eventually reverse subscriber declines if it ditches its reputation as a “hookup app.”
In the meantime, Tinder warned of declining to flat direct revenue through 2026 before returning to low-single digit growth in 2027, Chief Executive Officer Faye Iosotaluno said at Match’s first investor day on Wednesday. Match also lowered two of its fourth-quarter revenue forecasts, the parent company said in a statement before the presentations started.
Tinder is testing new features that include requiring face photos in profiles, as well as double-date matches and AI-powered curated recommendations, Iosotaluno told investors at the event. Changes designed to rid the platform of bad actors will help earn trust from users, which in turn can strengthen the business over the long run, she said.
Iosotaluno acknowledged these efforts would shrink Tinder’s user base in the short term, continuing a streak of losses over the past six quarters. “We’re adjusting our focus to be on product innovation beyond monetization, making sure our drumbeat of features meets and delivers for the changing needs, expectations and behaviors of daters today,” she said.
“None of this is easy or fast, but it is what must be done to return Tinder to growth,” she added.
Shares of Match fell as much as 6.9% in New York while the event was underway.
The latest product strategy and financial estimates may come as a disappointment for investors who have been looking for more immediate signs of a turnaround at the dating app company. Yet, 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.
One of Match’s 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.
Tinder expects 2025 revenue to decline at mid-single digits and be flat in 2026. Both of these forecasts fall short of Wall Street’s expectations, according to Bloomberg-compiled estimates. Tinder also said it sees 2027 revenue growing at low-single digits, roughly in line with the average 2.8% that analysts have been expecting.
Match, which also owns dating apps including Hinge and OKCupid, expects fourth-quarter total revenue and Tinder direct revenue to land below its previous forecast, it said in the statement, citing foreign currency headwinds. The company said the results would have been in the expected range, if not for the currency impacts.
On a compounded annual basis through 2027, Match expects total revenue growth of 4% to 6%. The increases will be concentrated in 2026 and 2027 as the company anticipates 2025 gains to be flat, falling short of estimates.
Bright Spots
Hinge remains a bright spot across Match’s portfolio of apps, with CEO Justin McLeod projecting mid-to-high-20% growth in direct revenue in 2025. He expects that metric to reach $1 billion by 2027, exceeding Bloomberg’s average analyst estimate. That will be come from AI enhancements including providing feedback on how to start conversations, profile-writing prompts and suggested places to go on dates.
Hinge also plans to expand to new international markets, including Mexico and Brazil in 2025, and additional Latin American and Asian countries in 2026.
Over the longer term, Match’s financial leadership anticipates the company can improve cash flow and margins by trimming duplicative expenses across its brand portfolio, including marketing spending.
Overall, the company plans to return at least 100% of free cash flow to its shareholders over the next three years through a combination of quarterly dividends and share purchases. Incoming Chief Financial Officer Steven Bailey expects cumulative free cash flow in 2025 to 2027 to top $3 billion — in line with analyst estimates — and is setting an adjusted operating income margin target of 39% for 2027.
Match said in the earlier statement it will pay a cash dividend of 19 cents a share next month and has authorized $1.5 billion in new share buybacks. The company expects to declare a dividend of a similar amount on a quarterly basis going forward and said that it has the capacity to increase the size in the future. Match also intends to resume share buybacks after it releases its fourth-quarter financial results.
The capital return plan answers a demand from Starboard, which asked the company to return at least 75% in free cash flow using buybacks.
(Updates with additional details starting in the 11th paragraph.)
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