match group 經常接受聯邦、州、地方及外國當局在所得稅方面的審計。這些審計包括對收入和扣除的時機和金額，以及這些收入和扣除在各個稅務管轄區之間的分配進行審核。公司在2019年12月31日之後的稅務年度開放接受美國聯邦審計，而在其他各種管轄區提交的報稅表在2014年開始的稅務年度也開放接受審查。雖然我們相信我們已對此類不確定的稅務事項做出了充分的準備，但這些問題的最終稅務結果可能與我們的估計有很大差異。
在2024年第三季度，因我們決定終止在我們的約會應用程序中提供的直播概念服務，包括Plenty of Fish，並逐步停止我們的Hakuna應用程序，該應用程序主要在亞洲提供直播概念，我們確認了資產減值費用$30.6百萬，涉及match group 亞洲和Evergreen & Emerging部門中無形資產的無限期和確定期限分類。對於某些沒有剩餘現金流的資產，公司對其進行了全額減值。對於具有剩餘現金流的資產，公司進行了折現現金流估值。公司還將一項賬面價值爲$47.2百萬的無限期無形資產重新分類爲確定期限無形資產類別，因爲該資產不再被視爲具有無限期的使用壽命。
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
applicable margin based on MG Holdings II’s consolidated net leverage ratio. If MG Holdings II borrows under the Credit Facility, it will be required to maintain a consolidated net leverage ratio of not more than 5.0 to 1.0.
The 5.00% Senior Notes were issued on December 4, 2017. These notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
The 4.625% Senior Notes were issued on May 19, 2020. These notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
The 5.625% Senior Notes were issued on February 15, 2019. These notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
The 4.125% Senior Notes were issued on February 11, 2020. At any time prior to May 1, 2025, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
The 3.625% Senior Notes were issued on October 4, 2021. At any time prior to October 1, 2026, these notes may be redeemed at a redemption price equal to the sum of the principal amount, plus accrued and unpaid interest and a make-whole premium set forth in the indenture governing the notes. Thereafter, these notes may be redeemed at redemption prices set forth in the indenture governing the notes, together with accrued and unpaid interest to the applicable redemption date.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
The Senior Notes all rank equally in right of payment.
Exchangeable Notes
During 2019, Match Group FinanceCo 2, Inc. and Match Group FinanceCo 3, Inc., direct, wholly-owned subsidiaries of the Company, issued $575.0 million aggregate principal amount of its 2026 Exchangeable Notes and $575.0 million aggregate principal amount of its 2030 Exchangeable Notes, respectively.
The 2026 and 2030 Exchangeable Notes (collectively the “Exchangeable Notes”) are guaranteed by the Company but are not guaranteed by MG Holdings II or any of its subsidiaries.
The following table presents details of the exchangeable features:
Number of shares of the Company’s Common Stock into which each $1,000 of Principal of the Exchangeable Notes is Exchangeable(a)
Approximate Equivalent Exchange Price per Share(a)
Exchangeable Date
2026 Exchangeable Notes
11.4259
$
87.52
March 15, 2026
2030 Exchangeable Notes
11.8739
$
84.22
October 15, 2029
______________________
(a)Subject to adjustment upon the occurrence of specified events.
As more specifically set forth in the applicable indentures, the Exchangeable Notes are exchangeable under the following circumstances:
The Exchangeable Notes Hedges are expected to reduce the potential dilutive effect on the Company’s common stock upon any exchange of Exchangeable Notes and/or offset any cash payment Match Group
FinanceCo 2, Inc. 或 Match Group FinanceCo 3, Inc. 需要支付超過所交換票據的本金金額。可交換票據的 warrants 對公司的普通股有稀釋影響，前提是公司普通股的市場價格超過它們各自的行權價格。
以下表格列出了截至2024年9月30日的可交換票據對沖和warrants的詳細信息：
股份數量(a)
每股近似等值交易價格(a)
（單位：百萬股）
2026可兌換票據對沖
6.6
$
87.52
2030可兌換票據對沖
6.8
$
84.22
股份數量(a)
每股加權平均執行價(a)
（單位：百萬股）
2026年可交換票據warrants
6.6
$
134.76
2030年可交換票據warrants
6.8
$
134.82
______________________
(a)Subject to adjustment upon the occurrence of specified events.
NOTE 5—ACCUMULATED OTHER COMPREHENSIVE LOSS
The following table presents the components of accumulated other comprehensive loss. For the three and nine months ended September 30, 2024 and 2023, the Company’s accumulated other comprehensive loss relates to foreign currency translation adjustments.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
The Chief Operating Decision Maker does not review disaggregated assets on a segment basis; therefore, such information is not presented. Interest income and other income, net are not allocated to individual segments as these are managed on a consolidated basis. The accounting policies for segment reporting are the same as for our consolidated financial statements.
As a result of the change to our operating segments, we reassessed our reporting units and determined that the four operating segments are also our reporting units for the purpose of evaluating goodwill for impairment. The Company has re-allocated goodwill to each of the four reporting units based on their relative fair values as of September 30, 2024. This change in reporting units is considered a triggering event that requires a goodwill impairment assessment to be performed immediately before and after the change. These goodwill impairment tests were performed by comparing the estimated fair value of each reporting unit to its carrying value and no impairments were identified. Goodwill was allocated to each of the four reporting units as follows: Tinder $1.5 billion; Hinge $0.5 billion; MG Asia $0.1 billion; and Evergreen & Emerging $0.2 billion.
NOTE 8—CONSOLIDATED FINANCIAL STATEMENT DETAILS
Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheet to the total amounts shown in the consolidated statement of cash flows:
September 30, 2024
December 31, 2023
September 30, 2023
December 31, 2022
(In thousands)
Cash and cash equivalents
$
855,532
$
862,440
$
706,881
$
572,395
Restricted cash included in other current assets
—
—
121
121
Total cash, cash equivalents, and restricted cash as shown on the consolidated statement of cash flows
$
855,532
$
862,440
$
707,002
$
572,516
NOTE 9—CONTINGENCIES
In the ordinary course of business, the Company is a party to various lawsuits. The Company establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. Management has also identified certain other legal matters where we believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against us, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of the Company, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. See “Note 2—Income Taxes” for additional information related to income tax contingencies.
FTC Lawsuit Against Match Group
On September 25, 2019, the United States Federal Trade Commission (the “FTC”) filed a lawsuit in federal district court in Texas against the company formerly known as Match Group, Inc. See FTC v. Match Group, Inc., No. 3:19:cv-02281-K (Northern District of Texas). The complaint alleges that, prior to mid-2018, for marketing purposes Match.com notified non-paying users that other users were attempting to communicate with them, even though Match.com had identified those subscriber accounts as potentially fraudulent, thereby inducing non-paying users to subscribe and exposing them to the risk of fraud should they subscribe. The complaint also challenges the adequacy of Match.com’s disclosure of the terms of its six-month guarantee, the efficacy of its cancellation process, and its handling of chargeback disputes. The complaint seeks among other things permanent injunctive relief, civil penalties, restitution, disgorgement, and costs of suit. On March 24, 2022, the
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
court granted our motion to dismiss with prejudice on Claims I and II of the complaint relating to communication notifications and granted our motion to dismiss with respect to all requests for monetary damages on Claims III and IV relating to the guarantee offer and chargeback policy. On July 19, 2022, the FTC filed an amended complaint adding Match Group, LLC as a defendant. On September 11, 2023, both parties filed motions for summary judgment. The case is set for trial in June 2025. Our consolidated financial statements do not reflect any provision for a loss with respect to this matter, as we do not believe there is a probable likelihood of an unfavorable outcome. Further, we do not believe that there is a reasonable possibility of an exposure to loss that would be material to our business. We believe we have strong defenses to the FTC’s claims regarding Match.com’s practices, policies, and procedures and will continue to defend vigorously against them.
Irish Data Protection Commission Inquiry Regarding Tinder’s Practices
On February 3, 2020, we received a letter from the Irish Data Protection Commission (the “DPC”) notifying us that the DPC had commenced an inquiry examining Tinder’s compliance with the EU’s General Data Protection Regulation (“GDPR”), focusing on Tinder’s processes for handling access and deletion requests and Tinder’s user data retention policies. On January 8, 2024, the DPC provided us with a preliminary draft decision alleging that certain of Tinder’s access and retention policies, largely relating to protecting the safety and privacy of Tinder’s users, violate GDPR requirements. We filed our response to the preliminary draft decision on March 15, 2024. Our consolidated financial statements do not reflect any provision for a loss with respect to this matter, as we do not believe there is a probable likelihood of an unfavorable outcome. However, based on the preliminary draft decision and giving due consideration to the uncertainties inherent in this process, there is at least a reasonable possibility of an exposure to loss, which could be anywhere between a nominal amount and $60 million, which we do not believe would be material to our business. We believe we have strong defenses to these claims and will defend vigorously against them.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Beginning with this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, Match Group will present our business units as four operating segments consisting of Tinder, Hinge, Match Group Asia, and Evergreen & Emerging. We believe providing additional information about these business units will provide investors more insight into how we manage our portfolio of brands to drive value at the Match Group level. Additionally, we will include a “Corporate and unallocated costs” category for expenses, the components of which are defined below. As a result of these changes, we will no longer report revenue by geography as we believe it is less insightful following the shift to multiple business units.
Key Terms:
Operating and financial metrics:
•Tinder consists of the world-wide activity of the brand Tinder®.
•Hinge consists of the world-wide activity of the brand Hinge®.
•Match Group Asia (“MG Asia”) consists of the world-wide activity of the brands primarily focused on Asia and the Middle East, including Pairs™ and Azar®.
•Evergreen & Emerging (“E&E”) consists of the world-wide activity primarily of the brands Match®, Meetic®, OkCupid®, Plenty Of Fish®, and a number of demographically focused brands.
•Corporate and unallocated costs includes 1) corporate expenses (such as executive management, investor relations, corporate development, and board of directors and public company listing fees), 2) portions of corporate services (such as legal, human resources, accounting, and tax), and 3) certain centrally managed services and technology that have not been allocated to the individual business segments (such as central trust and safety operations and certain shared software).
•Direct Revenue is revenue that is received directly from end users of our services and includes both subscription and à la carte revenue.
•Indirect Revenue is revenue that is not received directly from an end user of our services, substantially all of which is advertising revenue.
•Payers are unique users at a brand level in a given month from whom we earned Direct Revenue. When presented as a quarter-to-date or year-to-date value, Payers represents the average of the monthly values for the respective period presented. At a consolidated level and a business unit level to the extent a business unit consists of multiple brands, duplicate Payers may exist when we earn revenue from the same individual at multiple brands in a given month, as we are unable to identify unique individuals across brands in the Match Group portfolio.
•Revenue Per Payer (“RPP”) is the average monthly revenue earned from a Payer and is Direct Revenue for a period divided by the Payers in the period, further divided by the number of months in the period.
Operating costs and expenses:
•Cost of revenue - consists primarily of the amortization of in-app purchase fees, hosting fees, compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in data center and customer care functions, live video costs, credit card processing fees, and data center rent, energy, and bandwidth costs. In-app purchase fees are monies paid to Apple and Google in connection with the processing of in-app purchases of subscriptions and service features through the in-app payment systems provided by Apple and Google.
•Selling and marketing expense - consists primarily of advertising expenditures and compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in selling and marketing, and sales support functions. Advertising expenditures include online marketing, including fees paid to search engines and social media sites, offline marketing, and production of advertising content.
•General and administrative expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs for personnel engaged in executive management, finance, legal, tax, and human resources, fees for professional services (including transaction-related costs for acquisitions), and facilities costs.
•Product development expense - consists primarily of compensation expense (including stock-based compensation expense) and other employee-related costs that are not capitalized for personnel engaged in the design, development, testing, and enhancement of product offerings and related technology.
Long-term debt:
•Credit Facility - The revolving credit facility under the credit agreement of MG Holdings II. On March 20, 2024, we entered into an amendment to reduce the borrowing availability under the Credit Facility from $750 million to $500 million and extend the maturity date of the Credit Facility. As of September 30, 2024, there was $0.6 million outstanding in letters of credit and $499.4 million of availability under the Credit Facility. As of December 31, 2023, there was $0.4 million outstanding in letters of credit and $749.6 million of availability under the Credit Facility.
•Term Loan - The term loan facility under the credit agreement of MG Holdings II. At December 31, 2023, the Term Loan bore interest at a term secured overnight financing rate plus an applicable adjustment (“Adjusted Term SOFR”) plus 1.75% and the then applicable rate was 7.27%. As of September 30, 2024, the applicable rate was 6.71% and $425 million was outstanding.
•5.00% Senior Notes - MG Holdings II’s 5.00% Senior Notes due December 15, 2027, with interest payable each June 15 and December 15, which were issued on December 4, 2017. As of September 30, 2024, $450 million aggregate principal amount was outstanding.
•4.625% Senior Notes - MG Holdings II’s 4.625% Senior Notes due June 1, 2028, with interest payable each June 1 and December 1, which were issued on May 19, 2020. As of September 30, 2024, $500 million aggregate principal amount was outstanding.
•5.625% Senior Notes - MG Holdings II’s 5.625% Senior Notes due February 15, 2029, with interest payable each February 15 and August 15, which were issued on February 15, 2019. As of September 30, 2024, $350 million aggregate principal amount was outstanding.
•4.125% Senior Notes - MG Holdings II’s 4.125% Senior Notes due August 1, 2030, with interest payable each February 1 and August 1, which were issued on February 11, 2020. As of September 30, 2024, $500 million aggregate principal amount was outstanding.
•3.625% Senior Notes - MG Holdings II’s 3.625% Senior Notes due October 1, 2031, with interest payable each April 1 and October 1, which were issued on October 4, 2021. As of September 30, 2024, $500 million aggregate principal amount was outstanding.
•2026年可交換票據 - 截至2024年9月30日，Match Group FinanceCo 2, Inc.的子公司發行的到期日爲2026年6月15日的0.875%可轉股高級票據，可轉換爲公司普通股。利息每年6月15日和12月15日支付。截至2024年9月30日，尚有總額爲57500萬美元的未償本金。
•2030年可交換票據 - 由Match Group FinanceCo 3, Inc.（公司的子公司）發行的2023年1月15日到期的2.00%可交換高級票據，可交換爲公司普通股的股票。利息於每年的1月15日和7月15日支付。截至2024年9月30日，未償還的總本金金額爲57500萬美元。
Match Group, Inc.通過其旗下公司，是一家領先的提供旨在幫助人們建立有意義聯繫的數字技術的供應商。我們包括Tinder在內的全球貨幣品牌組合®、Hinge®、Match®、Meetic®，OkCupid®，Pairs™，海鮮相親®，Azar®, BLK®等，每個品牌都旨在提高我們用戶與他人連接的可能性。通過我們信任的品牌，我們提供量身定製的服務，以滿足用戶的不同偏好。我們的服務支持超過40種語言，面向全球所有板塊的用戶。
As used herein, “Match Group,” the “Company,” “we,” “our,” “us,” and similar terms refer to Match Group, Inc. and its subsidiaries, unless the context indicates otherwise.
For a more detailed description of the Company’s operating businesses, see “Item 1. Business” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Company Updates
In July 2024, we announced our decision to terminate live streaming services in our dating applications, including Plenty of Fish, and to sunset our Hakuna application, which provided live streaming primarily in Asia. At the beginning of 2024, our live streaming services and Hakuna application collectively were projected to have 2024 annual total revenue of approximately $60 million. We incurred expenses of approximately $2.1 million in severance and other costs related to the closure of these services in the three months ended September 30, 2024. Additionally, we recognized impairments of $30.6 million of intangible assets and write-offs of $4.6 million of internally developed software assets associated with these live streaming services in the three months ended September 30, 2024.
Additional Information
Investors and others should note that we announce material financial and operational information to our investors using our investor relations website at https://ir.mtch.com, our newsroom website at https://mtch.com/news, Tinder’s newsroom website at www.tinderpressroom.com, Hinge’s newsroom website at https://hinge.co/press, Securities and Exchange Commission (“SEC”) filings, press releases, and public conference calls. We use these channels as well as social media to communicate with our users and the public about our company, our services, and other issues. It is possible that the information we post on social media could be deemed to be material information. Accordingly, investors, the media, and others interested in our company should monitor the websites listed above and the social media channels listed on our investor relations website in addition to following our SEC filings, press releases, and public conference calls. Neither the information on our website, nor the information on the website of any Match Group business, is incorporated by reference into this report, or into any other filings with, or into any other information furnished or submitted to, the SEC.
Results of Operations for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023
Revenue
Three Months Ended September 30,
Nine Months Ended September 30,
2024
$ Change
% Change
2023
2024
$ Change
% Change
2023
(In thousands, except RPP)
Direct Revenue:
Tinder
$
503,217
$
(5,304)
(1)%
$
508,521
$
1,464,649
$
40,236
3%
$
1,424,413
Hinge
145,425
38,160
36%
107,265
402,747
122,398
44%
280,349
MG Asia
72,164
(4,601)
(6)%
76,765
217,307
(11,724)
(5)%
229,031
Evergreen & Emerging
158,390
(15,859)
(9)%
174,249
487,925
(35,656)
(7)%
523,581
Total Direct Revenue
879,196
12,396
1%
866,800
2,572,628
115,254
5%
2,457,374
Indirect Revenue
16,288
1,488
10%
14,800
46,569
5,667
14%
40,902
Total Revenue
$
895,484
$
13,884
2%
$
881,600
$
2,619,197
$
120,921
5%
$
2,498,276
Payers:
Tinder
9,945
(467)
(4)%
10,412
9,764
(747)
(7)%
10,511
Hinge
1,602
275
21%
1,327
1,503
301
25%
1,202
MG Asia
1,046
129
14%
917
1,002
100
11%
902
Evergreen & Emerging
2,621
(435)
(14)%
3,056
2,726
(400)
(13)%
3,126
Total
15,214
(498)
(3)%
15,712
14,995
(746)
(5)%
15,741
(Change calculated using non-rounded numbers)
RPP:
Tinder
$
16.87
$
0.59
4%
$
16.28
$
16.67
$
1.61
11%
$
15.06
Hinge
$
30.26
$
3.31
12%
$
26.95
$
29.77
$
3.85
15%
$
25.92
MG Asia
$
23.00
$
(4.92)
(18)%
$
27.92
$
24.11
$
(4.17)
(15)%
$
28.28
Evergreen & Emerging
$
20.14
$
1.13
6%
$
19.01
$
19.89
$
1.28
7%
$
18.61
Total
$
19.26
$
0.87
5%
$
18.39
$
19.06
$
1.71
10%
$
17.35
For the three months ended September 30, 2024 compared to the three months ended September 30, 2023
Tinder Direct Revenue declined 1% in 2024 versus 2023, driven by a 4% decrease in both Payers and à la carte revenue, partially offset by growth in subscription revenue primarily due to the trailing effects of pricing optimizations.
Hinge Direct Revenue grew 36% in 2024 versus 2023, driven by 21% growth in Payers as Hinge continues to expand in the U.S. and European markets, and 12% growth in RPP.
MG Asia Direct Revenue declined 6% over the prior year quarter, primarily driven by the strengthening of the U.S. dollar compared to the Turkish Lira and Japanese Yen. Excluding these foreign exchange impacts, MG Asia Direct Revenue decreased 1% over the prior year quarter primarily related to Payer declines at the Pairs brand, partially offset by Payer growth at Azar.
E&E Direct Revenue declined 9% over the prior year quarter, as our Evergreen brands collectively declined 14%, which was partially offset by a collective increase at our Emerging brands of 14%.
Indirect Revenue increased due to a higher price per impression received and higher ad impressions.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Tinder Direct Revenue grew 3% in 2024 versus 2023, driven by 11%growth in RPP due to pricing optimizations in the U.S. market and weekly subscription offerings that were initially introduced late in the first quarter of 2023, partially offset by a 7%decrease in Payers due to the pricing optimizations and a decrease in users.
Hinge Direct Revenue grew 44% in 2024 versus 2023, driven by 25% growth in Payers and 15% growth in RPP due to user growth, pricing optimizations, and weekly subscription offerings at Hinge that started in the second quarter of 2023.
MG Asia Direct Revenue declined 5% in 2024 versus 2023, primarily driven by the factors described above in the three-month discussion. Excluding foreign exchange impacts, MG Asia Direct Revenue increased 5%over the prior year quarter primarily due to Payer growth at Azar.
E&E Direct Revenue declined 7% in 2024 versus 2023, driven by a collective decline at our Evergreen brands of 12% partially offset by collective growth at our Emerging brands of 18%.
Indirect Revenue increased due to the factors described above in the three-month discussion.
Cost of revenue (exclusive of depreciation)
For the three months ended September 30, 2024 compared to the three months ended September 30, 2023
Three Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Cost of revenue
$
253,129
$
(2,469)
(1)%
$
255,598
Percentage of revenue
28%
29%
Cost of revenue decreased 1% primarily due to a decrease in live streaming costs of $7.8 million, a decrease in credit card fees of $2.1 million, and a decrease in in-app purchase fees of $1.1 million, which was primarily due to the Google litigation settlement implementation this year and escrow payments related to the litigation in the prior year. Partially offsetting these decreases was an increase in web hosting fees of $4.4 million.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Nine Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Cost of revenue
$
754,859
$
8,957
1%
$
745,902
Percentage of revenue
29%
30%
Cost of revenue increased 1% primarily due to an increase in web hosting fees of $14.0 million and an increase in in-app purchase fees of $12.5 million, which was partially offset by the Google litigation settlement implementation this year and escrow payments related to the litigation in the prior year. These increases were partially offset by a decrease in live streaming costs of $11.9 million and a decrease in credit card fees of $5.1 million.
For the three months ended September 30, 2024 compared to the three months ended September 30, 2023
Three Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Selling and marketing expense
$
156,656
$
3,248
2%
$
153,408
Percentage of revenue
17%
17%
Selling and marketing expense increased primarily due to higher marketing spend at Hinge, Tinder, and certain Emerging brands.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Nine Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Selling and marketing expense
$
476,585
$
49,221
12%
$
427,364
Percentage of revenue
18%
17%
Selling and marketing expense increased primarily due to the factors described above in the three-month discussion.
General and administrative expense
For the three months ended September 30, 2024 compared to the three months ended September 30, 2023
Three Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
General and administrative expense
$
103,923
$
(3,172)
(3)%
$
107,095
Percentage of revenue
12%
12%
General and administrative expense decreased primarily due to a decrease in legal and other professional fees of $5.8 million, partially offset by an increase in employee compensation.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Nine Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
General and administrative expense
$
324,468
$
19,064
6%
$
305,404
Percentage of revenue
12%
12%
General and administrative expense increased primarily due to an increase in employee compensation of $15.1 million, which includes a stock-based compensation increase of $6.8 million as a result of new stock-based awards granted in the current year and lower forfeitures of stock-based awards in 2024 as compared to 2023, and an increase in taxes of $8.3 million due to Canada’s implementation of a digital sales tax in June 2024 retroactive to 2022.
For the three months ended September 30, 2024 compared to the three months ended September 30, 2023
Three Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Product development expense
$
103,724
$
9,583
10%
$
94,141
Percentage of revenue
12%
11%
Product development expense increased primarily due to an increase in compensation expense of $8.0 million related to higher headcount at Tinder and lower capitalized labor costs at Tinder and higher software and hardware costs.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Nine Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Product development expense
$
333,037
$
46,423
16%
$
286,614
Percentage of revenue
13%
11%
Product development expense increased primarily due to the factors described above in the three-month discussion.
Depreciation
For the three months ended September 30, 2024 compared to the three months ended September 30, 2023
Three Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Depreciation
$
25,302
$
7,992
46%
$
17,310
Percentage of revenue
3%
2%
Depreciation was higher in 2024 compared to 2023 primarily due the write off of internally developed software associated with our live streaming services of $4.6 million, and an increase in internally developed software placed in service.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Nine Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Depreciation
$
66,915
$
24,488
58%
$
42,427
Percentage of revenue
3%
2%
Depreciation was higher in 2024 compared to 2023 primarily due to the factors described above in the three-month discussion.
For the three months ended September 30, 2024 compared to the three months ended September 30, 2023
Three Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Impairments and amortization of intangibles
$
42,090
$
31,601
301%
$
10,489
Percentage of revenue
5%
1%
Impairments and amortization of intangibles increased primarily due to impairments of intangible assets of $30.6 million at E&E and MG Asia as a result of the termination of our live streaming services and Hakuna brand in 2024.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Nine Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Impairments and amortization of intangibles
$
63,409
$
29,488
87%
$
33,921
Percentage of revenue
2%
1%
Amortization of intangibles increased primarily due to the factors described above in the three-month discussion.
For a reconciliation of operating income to Adjusted Operating Income, see “Non-GAAP Financial Measures.”
For the three months ended September 30, 2024 compared to the three months ended September 30, 2023
Operating income decreased 14% and Adjusted Operating Income increased 3%. Operating income and Adjusted Operating Income each benefited from the increase in revenue of $13.9 million which was driven by growth at Hinge, and a decrease in cost of revenue due to lower live streaming costs related to the termination of live streaming services in 2024. These benefits were partially offset by an increase in product development expenses related to employee compensation due to increases in headcount at Tinder and an increase in selling and marketing expense, primarily at Tinder and Hinge. Operating income was further impacted by (i) impairments of intangible assets at E&E and MG Asia in 2024 as a result of the termination of our live streaming services and Hakuna brand, (ii) increased depreciation expense due to increases in internally developed software placed in service, and (iii) increases in stock-based compensation expense, primarily as result of new stock-based awards granted in the current year.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Operating income decreased 9% and Adjusted Operating Income increased 4%, primarily due to the factors described above in the three-month discussion. Operating income and Adjusted Operating Income were further impacted by increases in cost of revenue related to increases in web hosting fees and in-app purchase fees, and increases in general and administrative expense mainly due to increases in employee compensation and increases in digital sales taxes.
At September 30, 2024, there was $400.1 million of unrecognized compensation cost, net of estimated forfeitures, related to stock-based awards, which is expected to be recognized over a weighted average period of approximately 1.9 years.
For the three months ended September 30, 2024 compared to the three months ended September 30, 2023
Three Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Income tax provision
$
41,159
$
(6,169)
(13)%
$
47,328
Effective income tax rate
23%
22%
In 2024 and 2023, the effective tax rates of 23% and 22%, respectively, were higher than the statutory rate primarily due to the effects of nondeductible stock-based compensation, state income taxes, and foreign income taxed at higher rates. These effects were partially offset by a lower tax rate on U.S. income derived from foreign sources and research credits.
For the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023
Nine Months Ended September 30,
2024
$ Change
% Change
2023
(Dollars in thousands)
Income tax provision
$
113,477
$
(16,631)
(13)%
$
130,108
Effective income tax rate
22%
24%
In 2024 and 2023, the effective tax rates of 22% and 24%, respectively, were higher than the statutory rate primarily due to the factors described above in the three-month discussion. The 2024 period also includes a tax benefit realized upon the conclusion of certain state income tax audits.
A number of countries have enacted or are actively drafting legislation to implement the Organization for Economic Cooperation and Development's ("OECD") international tax framework, including the Pillar II minimum tax regime. The Company analyzed the impact of enacted legislation and determined it does not have a material impact to the income tax provision. The Company is continuing to monitor future developments.
For further details of income tax matters see “Note 2—Income Taxes” to the consolidated financial statements included in “Item 1—Consolidated Financial Statements.”
Match Group reports Adjusted Operating Income and Revenue excluding foreign exchange effects, both of which are supplemental measures to U.S. generally accepted accounting principles (“GAAP”). Adjusted Operating Income is among the primary metrics by which we evaluate the performance of our business, on which our internal budget is based, and by which management is compensated. Revenue excluding foreign exchange effects provides a comparable framework for assessing how our business performed without the effect of exchange rate differences when compared to prior periods. We believe that investors should have access to the same set of tools that we use in analyzing our results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. Match Group endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measures with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measures. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures, which we discuss below.
Adjusted Operating Income
Adjusted Operating Income is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of (i) amortization of intangible assets and impairments of goodwill and intangible assets, if applicable, and (ii) gains and losses recognized on changes in the fair value of contingent consideration arrangements, as applicable. We believe this measure is useful to analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. The above items are excluded from our Adjusted Operating Income measure because they are non-cash in nature. Adjusted Operating Income has certain limitations because it excludes the impact of certain expenses.
Non-Cash Expenses That Are Excluded From Adjusted Operating Income
Stock-based compensation expense consists principally of expense associated with the grants of stock options, restricted stock units (“RSUs”), performance-based RSUs and market-based awards. These expenses are not paid in cash, and we include the related shares in our fully diluted shares outstanding using the treasury stock method; however, performance-based RSUs and market-based awards are included only to the extent the applicable performance or market condition(s) have been met (assuming the end of the reporting period is the end of the contingency period). To the extent stock-based awards are settled on a net basis, we remit the required tax-withholding amounts from current funds.
Depreciation is a non-cash expense relating to our property and equipment and is computed using the straight-line method to allocate the cost of depreciable assets to operations over their estimated useful lives, or, in the case of leasehold improvements, the lease term, if shorter.
Amortization of intangible assets and impairments of goodwill and intangible assets are non-cash expenses related primarily to acquisitions. At the time of an acquisition, the identifiable definite-lived intangible assets of the acquired company, such as customer lists, trade names, and technology, are valued and amortized over their estimated lives. Value is also assigned to (i) acquired indefinite-lived intangible assets, which consist of trade names and trademarks, and (ii) goodwill, which are not subject to amortization. An impairment is recorded when the carrying value of an intangible asset or goodwill exceeds its fair value. We believe that intangible assets represent costs incurred by the acquired company to build value prior to acquisition and the related amortization and impairment charges of intangible assets or goodwill, if applicable, are not ongoing costs of doing business.
The following tables reconcile operating income (loss) to Adjusted Operating Income (Loss) for the Company’s reportable segments and at a consolidated level:
Effects of Changes in Foreign Exchange Rates on Revenue
The impact of foreign exchange rates on the Company, due to its global reach, may be an important factor in understanding period over period comparisons if movement in exchange rates is significant. Since our results are reported in U.S. dollars, international revenue is favorably impacted as the U.S. dollar weakens relative to other currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other currencies. We believe the presentation of revenue excluding the effects from foreign exchange, in addition to reported revenue, helps improve investors’ ability to understand the Company’s performance because it excludes the impact of foreign currency volatility that is not indicative of Match Group’s core operating results.
Revenue excluding foreign exchange effects compares results between periods as if exchange rates had remained constant period over period. Revenue excluding foreign exchange effects is calculated by translating current period revenue using prior period exchange rates. The percentage change in revenue excluding foreign exchange effects is calculated by determining the change in current period revenue over prior period revenue where current period revenue is translated using prior period exchange rates.
The following tables present the impact of foreign exchange effects on total revenue and Direct Revenue by business unit, and RPP on a total basis, for the three and nine months ended September 30, 2024, compared to the three and nine months ended September 30, 2023:
Three Months Ended September 30,
Nine Months Ended September 30,
2024
$ Change
% Change
2023
2024
$ Change
% Change
2023
(Dollars in thousands)
Total Revenue, as reported
$
895,484
$
13,884
2%
$
881,600
$
2,619,197
$
120,921
5%
$
2,498,276
Foreign exchange effects
11,028
58,920
Total Revenue excluding foreign exchange effects
$
906,512
$
24,912
3%
$
881,600
$
2,678,117
$
179,841
7%
$
2,498,276
Tinder Direct Revenue, as reported
$
503,217
$
(5,304)
(1)%
$
508,521
$
1,464,649
$
40,236
3%
$
1,424,413
Foreign exchange effects
7,922
34,582
Tinder Direct Revenue, excluding foreign exchange effects
$
511,139
$
2,618
1%
$
508,521
$
1,499,231
$
74,818
5%
$
1,424,413
Hinge Direct Revenue, as reported
$
145,425
$
38,160
36%
$
107,265
$
402,747
$
122,398
44%
$
280,349
Foreign exchange effects
(563)
(301)
Hinge Direct Revenue, excluding foreign exchange effects
$
144,862
$
37,597
35%
$
107,265
$
402,446
$
122,097
44%
$
280,349
MG Asia Direct Revenue, as reported
$
72,164
$
(4,601)
(6)%
$
76,765
$
217,307
$
(11,724)
(5)%
$
229,031
Foreign exchange effects
3,679
22,877
MG Asia Direct Revenue, excluding foreign exchange effects
$
75,843
$
(922)
(1)%
$
76,765
$
240,184
$
11,153
5%
$
229,031
E&E Direct Revenue, as reported
$
158,390
$
(15,859)
(9)%
$
174,249
$
487,925
$
(35,656)
(7)%
$
523,581
Foreign exchange effects
(203)
1,121
E&E Direct Revenue, excluding foreign exchange effects
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Financial Position
September 30, 2024
December 31, 2023
(In thousands)
Cash and cash equivalents:
United States
$
589,118
$
647,177
All other countries
266,414
215,263
Total cash and cash equivalents
855,532
862,440
Short-term investments
5,323
6,200
Total cash and cash equivalents and short-term investments
$
860,855
$
868,640
Long-term debt:
Credit Facility due March 20, 2029(a)
$
—
$
—
Term Loan due February 13, 2027
425,000
425,000
5.00% Senior Notes due December 15, 2027
450,000
450,000
4.625% Senior Notes due June 1, 2028
500,000
500,000
5.625% Senior Notes due February 15, 2029
350,000
350,000
4.125% Senior Notes due August 1, 2030
500,000
500,000
3.625% Senior Notes due October 1, 2031
500,000
500,000
2026 Exchangeable Notes due June 15, 2026
575,000
575,000
2030 Exchangeable Notes due January 15, 2030
575,000
575,000
Total long-term debt
3,875,000
3,875,000
Less: Unamortized original issue discount
2,789
3,479
Less: Unamortized debt issuance costs
24,939
29,279
Total long-term debt, net
$
3,847,272
$
3,842,242
______________________
(a)The maturity date of the Credit Facility is the earlier of (x) March 20, 2029 and (y) the date that is 91 days prior to the maturity date of the Term Loan or the existing senior notes due 2027, 2028, or 2029, or any new indebtedness used to refinance the Term Loan or such senior notes that matures prior to the date that is 91 days after March 20, 2029, in each case if and only if at least $250 million in aggregate principal amount of such debt is outstanding on such date.
Long-term Debt
For a detailed description of long-term debt, see “Note 4—Long-term Debt, net” to the consolidated financial statements included in “Item 1—Consolidated Financial Statements.”
In summary, the Company’s cash flows are as follows:
Nine Months Ended September 30,
2024
2023
(In thousands)
Net cash provided by operating activities
$
678,009
$
620,672
Net cash used in investing activities
(51,072)
(47,576)
Net cash used in financing activities
(636,126)
(436,506)
2024
Net cash provided by operating activities in 2024 includes adjustments to earnings of $198.2 million of stock-based compensation expense, $66.9 million of depreciation, and $63.4 million of impairments and amortization of intangibles. The decrease in cash from changes in working capital primarily consists of an increase in accounts receivable of $41.4 million primarily related to the timing of cash receipts and a decrease in deferred revenue of $29.6 million, partially offset by an increase in taxes payable and receivable of $11.4 million due to the timing of tax payments.
Net cash used in investing activities in 2024 consists primarily of capital expenditures of $43.0 million primarily related to internal development of software and purchases of computer hardware.
Net cash used in financing activities in 2024 is primarily due to purchases of treasury stock of $630.6 million and payments of $11.4 million of withholding taxes paid on behalf of employees for net-settled stock-based awards. These uses of cash were partially offset by $9.4 million of proceeds from the issuance of common stock pursuant to stock-based awards.
2023
Net cash provided by operating activities in 2023 includes adjustments to earnings of $163.9 million of stock-based compensation expense, $42.4 million of depreciation, $33.9 million of amortization of intangibles, and deferred income taxes of $44.8 million. The decrease in cash from changes in working capital primarily consists of an increase in accounts receivable of $100.1 million primarily related to the timing of cash receipts, and a decrease in deferred revenue of $23.7 million. These changes were partially offset by an increase in accounts payable and other liabilities of $15.7 million due to the timing of payments and an increase to working capital from taxes payable and receivable of $7.8 million primarily related to the timing of tax payments and receipt of tax refunds.
Net cash used in investing activities in 2023 consists primarily of capital expenditures of $50.0 million primarily related to internal development of software and purchases of computer hardware.
Net cash used in financing activities in 2023 is primarily due to purchases of treasury stock of $445.1 million, payments of $5.9 million of withholding taxes paid on behalf of employees for net-settled stock-based awards, and purchases of non-controlling interests for $1.9 million. These uses of cash were partially offset by $16.4 million of proceeds from the issuance of common stock pursuant to stock-based awards.
Liquidity and Capital Resources
The Company’s principal sources of liquidity are its cash and cash equivalents as well as cash flows generated from operations. As of September 30, 2024, $499.4 million was available under the Credit Facility.
The Company has various obligations related to long-term debt instruments and operating leases. For additional information on long-term debt, including maturity dates and interest rates, see “Note 4—Long-term Debt, net” to the consolidated financial statements included in “Item 1—Consolidated Financial Statements.” For additional information on operating lease payments, including a schedule of obligations by year, see “Note 13—Leases” to the consolidated financial statements included in “Item 8—Consolidated Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The Company believes it has sufficient cash flows from operations to satisfy these future obligations.
The Company anticipates that it will need to make capital and other expenditures in connection with the development and expansion of its operations. The Company expects that 2024 cash capital expenditures will be between $50 million and $55 million, relatively flat to 2023 cash capital expenditures.
We have entered into various purchase commitments, primarily consisting of web hosting services. Our obligations under these various purchase commitments are $105.6 million for 2025, and $14.2 million for 2026.
At September 30, 2024, we do not have any off-balance sheet arrangements, other than as described above.
On January 30, 2024, the Board of Directors of the Company approved a share repurchase program for the repurchase of up to $1.0 billion in aggregate value of shares of Match Group stock. Under the share repurchase program, shares of our common stock may be purchased on a discretionary basis from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means, including through Rule 10b5-1 trading plans. The share repurchase program may be commenced, suspended or discontinued at any time. During the nine months ended September 30, 2024, we repurchased 19.1 million shares for $635.6 million on a trade date basis under the share repurchase program. Between October 1 and November 1, 2024, we repurchased 3.0 million shares for $112.1 million. As of November 1, 2024, $252.3 million in aggregate value of shares of Match Group stock remains available under the share repurchase program.
As of September 30, 2024, all of the Company’s international cash can be repatriated without significant tax consequences.
Our indebtedness could limit our ability to: (i) obtain additional financing to fund working capital needs, acquisitions, capital expenditures, debt service, or other requirements; and (ii) use operating cash flow to pursue acquisitions or invest in other areas, such as developing properties and exploiting business opportunities. The Company may need to raise additional capital through future debt or equity financing to make additional acquisitions and investments or to provide for greater financial flexibility. Additional financing may not be available on terms favorable to the Company or at all.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management of the Company is required to make certain estimates, judgments and assumptions during the preparation of its consolidated financial statements in accordance with U.S. GAAP. These estimates, judgments and assumptions impact the reported amount of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates.
During the nine months ended September 30, 2024, there were no material changes to the Company’s critical accounting policies and estimates since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
During the nine months ended September 30, 2024, there were no material changes to the Company’s instruments or positions that are sensitive to market risk since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 4. Controls and Procedures
The Company monitors and evaluates on an ongoing basis its disclosure controls and procedures and internal control over financial reporting in order to improve their overall effectiveness. In the course of these evaluations, the Company modifies and refines its internal processes as conditions warrant.
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Match Group management, including our principal executive and principal financial officers, evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined by Rule 13a-15(e) under the Exchange Act. Based on this evaluation, management has concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report in providing reasonable assurance that information we are required to disclose in our filings with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms, and includes controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
There were no changes to the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We are, and from time to time may become, involved in various legal proceedings arising in the normal course of our business activities, such as trademark and patent infringement claims, trademark oppositions, and consumer or advertising complaints, as well as stockholder derivative actions, class action lawsuits, mass arbitrations, and other matters. The amounts that may be recovered in such matters may be subject to insurance coverage. The litigation matters described below involve issues or claims that may be of particular interest to our stockholders, regardless of whether any of these matters may be material to our financial position or operations based upon the standard set forth in the SEC’s rules.
Pursuant to the Transaction Agreement, entered into in connection with our separation from IAC/InterActiveCorp, now known as IAC Inc. (“IAC”), we have agreed to indemnify IAC for matters relating to any business of Former Match Group, including indemnifying IAC for costs related to the matters described below other than the matter described under the heading “Newman Derivative and Stockholder Class Action Regarding Separation Transaction”.
The official names of legal proceedings in the descriptions below (shown in italics) reflect the original names of the parties when the proceedings were filed as opposed to the current names of the parties following the separation of Match Group and IAC.
Consumer Class Action Litigation Challenging Tinder’s Age-Tiered Pricing
On May 28, 2015, a putative state-wide class action was filed against Tinder in state court in California. See Allan Candelore v. Tinder, Inc., No. BC583162 (Superior Court of California, County of Los Angeles). The complaint principally alleges that Tinder violated California’s Unruh Civil Rights Act by offering and charging users over a certain age a higher price than younger users for subscriptions to its premium Tinder Plus service. On July 15, 2024, the court granted Plaintiff’s motion to certify a class based upon California Tinder Plus and Tinder Gold subscribers age 29 and over. We believe that we have strong defenses to the allegations in the Candelore lawsuit and will continue to defend vigorously against it.
FTC Lawsuit Against Former Match Group
On September 25, 2019, the United States Federal Trade Commission (the “FTC”) filed a lawsuit in federal district court in Texas against the company formerly known as Match Group (“Former Match Group”). See FTC v. Match Group, Inc., No. 3:19:cv-02281-K (Northern District of Texas). The complaint alleges that, prior to mid-2018, for marketing purposes Match.com notified non-paying users that other users were attempting to communicate with them, even though Match.com had identified those subscriber accounts as potentially fraudulent, thereby inducing non-paying users to subscribe and exposing them to the risk of fraud should they subscribe. The complaint also challenges the adequacy of Match.com’s disclosure of the terms of its six-month guarantee, the efficacy of its cancellation process, and its handling of chargeback disputes. The complaint seeks among other things permanent injunctive relief, civil penalties, restitution, disgorgement, and costs of suit. On March 24, 2022, the court granted our motion to dismiss with prejudice on Claims I and II of the complaint relating to communication notifications and granted our motion to dismiss with respect to all requests for monetary damages on Claims III and IV relating to the guarantee offer and chargeback policy. On July 19, 2022, the FTC filed an amended complaint adding Match Group, LLC as a defendant. On September 11, 2023, both parties filed motions for summary judgment. The case is set for trial in June 2025. We believe we have strong defenses to the FTC’s claims regarding Match.com’s practices, policies, and procedures and will continue to defend vigorously against them.
Irish Data Protection Commission Inquiry Regarding Tinder’s Practices
On February 3, 2020, we received a letter from the Irish Data Protection Commission (the “DPC”) notifying us that the DPC had commenced an inquiry examining Tinder’s compliance with the EU’s General Data Protection Regulation (“GDPR”), focusing on Tinder’s processes for handling access and deletion requests and Tinder’s user data retention policies. On January 8, 2024, the DPC provided us with a preliminary draft decision
alleging that certain of Tinder’s access and retention policies, largely relating to protecting the safety and privacy of Tinder’s users, violate GDPR requirements. We filed our response to the preliminary draft decision on March 15, 2024. We believe we have strong defenses to these claims and will defend vigorously against them.
Newman Derivative and Stockholder Class Action Regarding Separation Transaction
On June 24, 2020, a Former Match Group shareholder filed a complaint in the Delaware Court of Chancery against Former Match Group and its board of directors, as well as Match Group, IAC Holdings, Inc., and Barry Diller seeking to recover unspecified monetary damages on behalf of the Company and directly as a result of his ownership of Former Match Group stock in relation to the separation of Former Match Group from its former majority shareholder, Match Group. See David Newman et al. v. IAC/Interactive Corp. et al., C.A. No. 2020-0505-MTZ (Delaware Court of Chancery). The complaint alleges that that the special committee established by Former Match Group’s board of directors to negotiate with Match Group regarding the separation transaction was not sufficiently independent of control from Match Group and Mr. Diller and that Former Match Group board members failed to adequately protect Former Match Group’s interest in negotiating the separation transaction, which resulted in a transaction that was unfair to Former Match Group and its shareholders. On January 21, 2021, the case was consolidated with other shareholder actions, and an amended complaint was filed on April 14, 2021. See In Re Match Group, Inc. Derivative Litigation, Consolidated C.A. No. 2020-0505-MTZ (Delaware Court of Chancery). On September 1, 2022, the court granted defendants’ motion to dismiss with prejudice. On October 3, 2022, plaintiffs filed an amended notice of appeal with the Delaware Supreme Court, and on April 4, 2024, the Delaware Supreme Court reversed and remanded the Chancery Court’s dismissal, except for the Chancery Court’s dismissal of derivative claims, which the Supreme Court affirmed. We believe we have strong defenses to the allegations in this lawsuit and the appeal and will defend vigorously against them.
FTC Investigation of Certain Subsidiary Data Privacy Representations
On March 19, 2020, the FTC issued an initial Civil Investigative Demand (“CID”) to the Company requiring us to produce certain documents and information regarding the allegedly wrongful conduct of OkCupid in 2014 and our public statements in 2019 regarding such conduct and whether such conduct and statements were unfair or deceptive under the FTC Act. On May 26, 2022, the FTC filed a Petition to Enforce Match Civil Investigative Demand. See FTC v. Match Group, Inc., No. 1:22-mc-00054 (District of Columbia). We believe we have strong defenses to the FTC's investigation and petition to enforce and will defend vigorously against them.
Bardaji Securities Class Action
On March 6, 2023, a Match Group shareholder filed a complaint in federal district court in Delaware against Match Group, Inc., its Chief Executive Officer, its former Chief Executive Officer, and its President and Chief Financial Officer seeking to recover unspecified monetary damages on behalf of a class of acquirers of Match Group securities between November 3, 2021 and January 31, 2023. See Leopold Riola Bardaji v. Match Group, Inc. et al, No. 1:23-cv-00245-UNA (District of Delaware). The complaint alleges that Match Group, Inc. misrepresented and/or failed to disclose that its Tinder business was not effectively executing on its new product initiatives; as a result, Tinder was not on track to deliver its planned product initiatives in 2022; and therefore, Match Group, Inc.’s statements about its Tinder’s business, product initiatives, operations, and prospects lacked a reasonable basis. On July 24, 2023, lead plaintiff Northern California Pipe Trades Trust Funds filed an amended complaint. The amended complaint added allegations regarding misrepresentations relating to Match Group's acquisition of Hyperconnect and the business' subsequent integration and performance. On September 20, 2023, defendants filed a motion to dismiss. On July 12, 2024, the court granted defendants’ motion to dismiss without prejudice. We believe that we have strong defenses to the allegations in this lawsuit and will defend vigorously against them.
Oksayan Class Action
On February 14, 2024, a putative class action lawsuit was filed against Match Group, Inc. in the Northern District of California by six plaintiffs from California, New York, Georgia, and Florida. Among other things, Plaintiffs allege that the Tinder, Hinge, and The League apps are designed to be "addictive" in violation of various consumer protection, product liability, negligence, and other laws. Plaintiffs claim that these services’ business models and features addict unsuspecting users, leading to increased depression, loneliness, among other things. Plaintiffs further allege that Tinder, Hinge, and The League failed to warn them of the risks of addiction and that the apps are engaging in fraudulent business practices by marketing their apps in a misleading way. Plaintiffs
seek monetary damages, as well as injunctive relief (implementing warnings, discontinuing certain marketing campaigns, providing resources). On June 10, 2024, plaintiffs filed an amended complaint, and on July 22, 2024, we filed a motion to compel plaintiffs’ claims to arbitration. Plaintiffs filed a second amended complaint on August 12, 2024, and we filed a motion to dismiss on September 18, 2024. We believe that we have strong defenses to the allegations in this lawsuit and will defend vigorously against them.
Item 1A. Risk Factors
This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that are not historical facts are “forward-looking statements.” The use of words such as “anticipates,” “estimates,” “expects,” “plans,” and “believes,” among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: Match Group’s future financial performance, Match Group’s business prospects and strategy, anticipated trends and prospects in the industries in which Match Group’s businesses operate, and other similar matters. These forward-looking statements are based on Match Group management’s current expectations and assumptions about future events as of the date of this quarterly report, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among others: our ability to maintain or grow the size of our user base, competition, the limited operating history of some of our brands, our ability to attract users to our services through cost-effective marketing and related efforts, our ability to distribute our services through third parties and offset related fees, risks related to our use of artificial intelligence, foreign currency exchange rate fluctuations, the integrity and scalability of our systems and infrastructure (and those of third parties) and our ability to adapt ours to changes in a timely and cost-effective manner, our ability to protect our systems from cyberattacks and to protect personal and confidential user information, risks relating to certain of our international operations and acquisitions, damage to our brands' reputations as a result of inappropriate actions by users of our services, uncertainties related to the tax treatment of our separation from IAC, uncertainties related to the acquisition of Hyperconnect, including, among other things, the expected benefits of the transaction and the impact of the transaction on the businesses of Match Group, and macroeconomic conditions.
Certain of these and other risks and uncertainties are discussed in Match Group’s filings with the Securities and Exchange Commission, including in Part I “Item 1A. Risk Factors” of our annual report on Form 10-K for the fiscal year ended December 31, 2023. Other unknown or unpredictable factors that could also adversely affect Match Group’s business, financial condition, and results of operations may arise from time to time. In light of these risks and uncertainties, these forward-looking statements discussed in this quarterly report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of Match Group management as of the date of this quarterly report. Match Group does not undertake to update these forward-looking statements.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
The Company did not issue or sell any shares of its common stock or any other equity securities pursuant to unregistered transactions during the quarter ended September 30, 2024.
The following table sets forth purchases by the Company of its common stock during the quarter ended September 30, 2024:
Period
(a) Total Number of Shares Purchased
(b) Average Price Paid Per Share
(c)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)
(d)
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Plans or Programs(2)
July 2024
2,530,365
$
30.59
2,530,365
$
527,720,469
August 2024
1,933,412
$
35.55
1,933,412
458,980,892
September 2024
2,601,946
$
36.36
2,601,946
364,376,857
Total
7,065,723
$
34.07
7,065,723
$
364,376,857
______________________
(1)Reflects repurchases made pursuant to the $1.0 billion share repurchase program authorized in January 2024.
(2)Represents the aggregate value of shares of common stock that remained available for repurchase pursuant to the Company’s repurchase program. The timing and actual number of any shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. The Company is not obligated to purchase any shares under the repurchase program, and repurchases may be commenced, suspended or discontinued from time to time without prior notice.
Item 5. Other Information
Insider Trading Arrangements
During the three months ended September 30, 2024, no director or officer (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
The documents set forth below, numbered in accordance with Item 601 of Regulation S-K, are filed herewith, incorporated by reference herein by reference to the location indicated or furnished herewith.
Incorporated by Reference
Filed (†) or Furnished (‡) Herewith (as indicated)
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
