Match Group, the parent company of several dating apps including Tinder and Hinge, unveiled its first-quarter earnings report on Tuesday, revealing a decline in Tinder’s paying user base for the sixth consecutive quarter. In contrast, Hinge has experienced growth in its member base willing to pay for the app. Tinder saw a decrease to 10 million paying users in Q1 2024, marking a 9% drop from the previous year, while Hinge’s paying user count rose to 1.4 million, representing a 31% increase year over year.
The decline in Tinder’s user base reflects a broader shift in dating app culture toward more serious, long-term relationships, a trend that Hinge has capitalized on by offering a platform geared toward meaningful connections.
During a conference call with investors on Wednesday morning, Hinge CEO Bernard Kim projected the app’s trajectory toward becoming a “$1 billion revenue business.” Hinge has witnessed substantial revenue growth over the past six years, with direct revenue reaching $124 million in Q1, a notable 50% surge from the previous year. In 2023 alone, Hinge generated $396 million in revenue.
Meanwhile, Tinder is grappling with challenges in convincing members to invest in its “à la carte” (ALC) features or in-app purchases, such as Super Likes, Boosts, and “See Who Likes You.” ALC revenue, which contributes about 20% to Tinder’s direct revenue, saw a 13% decline in Q1 2024 compared to the previous period of high à la carte purchases in 2018.
Match Group CFO Gary Swidler acknowledged during the call that the weakening growth in à la carte revenue has been a persistent trend, particularly affecting performance recently. The company attributes this decline to factors including user decreases, lower average purchase volumes, and weakened consumer discretionary spending, particularly among younger users. Swidler indicated expectations for similar declines in Tinder payers in the second quarter, with signs of improvement anticipated in Q3.
The implementation of à la carte offerings aimed to cater to price-conscious Gen Z users, but Match intends to continue introducing new features at affordable price points in future quarters to address evolving user needs, according to Swidler.
In contrast to Tinder’s varied à la carte options, Hinge offers only Boosts and Roses. As Tinder focuses on enhancing its product experience with features like “Share My Date” for safety and an AI Photo Selector, Hinge’s more streamlined approach may offer lessons for its sister app’s strategy moving forward.
Despite efforts to increase revenue through innovative pricing models and product enhancements, Tinder’s forecast for the coming quarter suggests stagnant growth or minimal increase, projected at $475 million to $480 million.
