The announcement of disappointing second-quarter earnings on Tuesday was followed by a series of changes to the management team of the dating site. Renate will be leaving the company after less than a year at the helm. Match Group is against new technology like virtual currency and metaverse-based dating.
Match Group CEO Bernard Kim expressed frustration with the current performance of the popular dating app, noting that it has not been able to realize its typical monetization success over the past few quarters.
Kim said that there were problems with execution on several new product initiatives, but that they could still be fixed.
There will be a reorganization of the management team following the departure of Nyborg.
Kim said he will keep an eye on the team.
There was a hint that the younger generation of users may have lost their appetite for dating apps, a culture shift which can't just be attributed to the effects of the Pandemic. According to the letter, people have moved past COVID lockdowns and re-enter a more normal way of life, but their willingness to try online dating apps for the first time hasn't returned to pre-pandemic levels.
Match Group says that it's highest engagement is from existing users.
Thedating metaverse ambitions have been scaled back as a result of the redesign. Match Group had planned to use its Hyperconnect acquisition to create a new form of online dating in a virtual environment, but those plans are on hold as the company addresses broader issues.
Kim told the Hyperconnect team to not invest a lot in metaverse at this time because of uncertainty about the final shape of the metaverse. When we have more clarity on the overall opportunity and feel we have a service that is well-positioned to succeed, we will consider moving forward.
Match Group was experimenting with virtual currency as a way to raise money. The virtual currency's role in the metaverse plans suggested that it could be part of Match Group's long-term plan.
Kim said that they decided to take a step back and re-examine the initiative after seeing mixed results from the test. He said that they intend to do more thinking about virtual goods to make them a real driver of growth.
Kim admitted on an investor call that the product was not launched in a logical way as a company would first create demand for virtual goods and collectibles before releasing a currency. The decision to pause the efforts with the app was important in order to get things right. A new short-term subscription will be launched in the fall.
A subscription-based package that will providecurated recommendations as well as features designed to get friends involved in introductions are some of the features that will be developed by the company. New features, like livestreaming video, will be looked at across other products.
Match's Q2 revenue was up 12% year-over-year, but below Wall Street estimates. It had a loss of $11.86 million, or 11 cents per share, compared to 46 cents a year ago. Earnings were expected to be 57 cents per share Match said it lost $10 million due to a write-down of intangibles related to lower financial outlooks for its apps.
Match Group paid users were up 10% from a year ago. The direct revenue of the dating app grew from the previous quarter.
The image is from the match group.
Match Group predicted flat Q3 growth to $790 million to $800 million in revenue, below estimates of $883 million. Revenue is expected to grow in the single digits.
The news caused shares to plummet in after-hours trading.
There was no formal announcement of the integrations for the virtual currency of the dating app. A comment from the investor call was made on August 3.
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