Match Group’s revenue saw solid growth in the first quarter thanks to an increase in Tinder subscribers. The company, whose portfolio of dating apps also includes Match .com, PlentyOfFish, OkCupid and Hinge, among others, said in its earnings report today that total quarterly revenue grew 14% year over year to $465 million. If the effects of foreign exchange aren’t included, growth would have been 18%.
Net earnings attributable to shareholders grew 23% to $123 million, or 42 cents per share, from $99.7 million, or 33 cents in the same period a year ago. Operating income increased 6% to $119 million from $112 million. During the first quarter of 2019 and 2018, Match Group recorded an income tax benefit of $28 million and $12 million, respectively, related to the exercise of vesting of stock-based awards.
During the first quarter, Tinder average subscribers were 4.7 million, up from 384,000 in the previous quarter and 1.3 million year over year. In total, Match Group’s average subscribers increased 16% to 8.6 million, up from 7.4 million a year ago. Match Group said the growth in subscribers and increase in average revenue per user (ARPU) at Tinder boosted its revenue, but it was partially offset by foreign exchange effects. ARPU was flat year-over-year, but without foreign exchange effects, it would have increased by 4% to 60 cents.
The company said its adjusted EBITDA (earnings before interest, tax, depreciation and amortization) growth was impacted by the higher cost of generating revenue, specifically in-app purchase fees because revenue increasingly comes through mobile app stores, and higher legal costs, but offset by lower selling and marketing expenses. Adjusted EBITDA grew 13% to $155 million from $138 million.
During the first quarter, Match Group restructured its executive team, appointing three new general managers to oversee regions in Asia in order to gain more users there and focus on international growth. Its first-quarter earnings presentation highlighted opportunities in India, where Tinder is the highest-grossing Android app according to App Annie; Japan, where Match Group now owns two of the top five dating apps (Pairs is number one in Japan, while Tinder ranks fourth); and Southeast Asia, where Tinder is now within the top 10 grossing apps in six countries.
The company did not break down earnings by country, but during the first quarter, it had a total of 8,613,000 average subscribers, with 4,361,000 in North America and 4,252,000 internationally. Total ARPU was 58 cents: 60 cents in North America and 56 cents internationally. Total revenue was $ $464.6 million, and of that, $454 million was direct revenue, split between $237.8 million from North America and $216.2 million from international (indirect revenue is revenue that does not come directly from Match Group’s end users, and most of that is advertising revenue).