The Match Group

Tinder Hits 1.9m Paid Subscribers In Q1, As Match Group Talks ‘Big Investment’ In AI

The Match Group

International growth has driven another good quarter for Match Group, CEO Greg Blatt calling the company’s Q1 results a “solid start” for the dating leader.

Total revenue for Q1 was $299m, a 15% increase from the year before, and a $5m increase from the previous quarter.

This growth was pushed by a 30% increase in international direct revenue, compared to an 8% increase in revenue from North America.

Match Group Q1 2017

The same international strength was seen with Match Group’s average paid member count, which increased by 33% for international markets, and 7% in North America.

Taken together, this created a 16% increase in paid members, Match Group’s total reaching 5.9m.

This European growth was led by Tinder, as well as Meetic posting its fifth consecutive quarter of YoY growth, and another quarter of “strong growth” from Japanese product Pairs – which CEO Greg Blatt said has turned out to be “one of our smarter acquisitions in a long, long time.”

Match Group Q1 2017

Regarding Tinder, the dating app added 227,000 paid members from Q4 2016, taking its total to 1.86m.

According to App Annie, Tinder now sits second on its list of Top Apps for Q1 2017, for combined iOS and Google Play revenue, up two places, and just behind Netflix.

Despite this success, it’s worth noting that Tinder’s quarterly subscriber increases are slowing – from 265,000 to 245,000 and 227,000 over the past three quarters.

Tinder Q1 2017

The app is also expanding its “a la carte” options, making the Super Like feature available as a one-off purchase for those not subscribed to Tinder Plus, like its Boost feature.

In terms of the future of Tinder, CEO Greg Blatt said Match Group is making a “big investment” in AI technology, which would be informing future updates.

Blatt said the technology will drive “amazing enhancements to recommendation engines”, not only by figuring out what users want and who they are interested in, but also “where you should go on a date”.

The dating leader is also playing around with augmented reality, developing technology “that sort of allows with facial gestures and other forms of nonverbal communication to pick up signals and send visuals back and forth”, Blatt said.

Tinder’s implementation of Facebook’s Audience Network also began testing in April, which the app will use to “sell excess inventory beyond our direct efforts”, but the Q1 results do not yet show the benefit of this partnership.

In terms of other news around Tinder, Blatt said that following the release of its desktop version – which is being tested in Brazil, Mexico, Argentina, Colombia, Sweden, Italy, Indonesia, and the Philippines – the company plans to launch online payments sometime in Q3.

Blatt said that while the company will “never get the same sort of mix with payments online” that it has with other products, it does expect to be able to “move a portion of our users to pay us outside the App Store.”

Regarding Tinder Social, when asked a question on the social product during the earnings call, Blatt admitted it had not been “hugely impactful”, saying that while Tinder’s goal is still about engaging people “beyond 1:1”, and it would continue to run the service, the product itself was not impactful.

In its Investor Presentation for Q1, Match Group also spoke about the performance of its other key brands, such as Match.com.

Having launched Happn-aping feature Missed Connections in January, 60% of its DAUs are now using the feature, and these users are consuming 50% more profiles, compared to non-users.

Match.com missed connections

With regards to Match.com, Match Group’s strategy for the rest of 2017 is to launch a “cool, distinctive new feature” every quarter, and follow each release with an aggressive marketing campaign.

Blatt said: “Match has never done anything like this before. Frankly, I’ve been doing this a long time, I can’t think of a single product owned by us or anyone else that would have released a series of significant consumer features in such rapid succession.

“And we’re going to back each of those rollouts with the most significant marketing spend in the entire category. We really think by the end of the year, we’re going to make major changes on how people think about Match, and our ability to grow our user base in that most attractive of all user segments.”

Other interesting titbits from the presentation include that PlentyOfFish sees nearly 2x the conversations per user compared to other brands, and its conversations are up 14% from the year before.

Following the release of its chatbot Lara, Meetic is also prepping the launch of a new product in Q2, which Blatt described as “more than a little app that we throw out there and see what happens.”

Interestingly, the Match Group CEO also said that the post-election season was “weird”, the company seeing a “muted” period across-the-board after November.

Summing up, the CEO of Match Group said: “Over the next 12 months, we expect to go deep on location-based technology, deep on video, deep on game dynamics, deep on artificial intelligence, ranging across our products, each one making different [backs] to leverage common successes while reestablishing their unique individuality.

“At the end of the day, we’re trying to deliver cool products to our users to help them make meaningful connections in their lives in fun and engaging ways, and the pipeline has never been as packed as it is right now. All these new features roll out over the coming months, the marketing starts to get behind it, and I’m confident we’re going to see our top of the funnel for these brands start to grow just like conversion did a year ago.”

Read more about the results here.