Match Group, Inc. (NASDAQ:MTCH) Q3 2023 Earnings Call Transcript

We think it’s critically important that we make the proper level of investments in innovation to drive more users into the brands and to increase the value of our products to the users. We think that AI is really providing us with a once-in-a-decade opportunity to do that. And we want to make sure that we harness that opportunity and make the right level of investments in AI. We’re still trying to calibrate what that means in terms of hiring, in terms of adding capabilities. We want to do this in a disciplined way, and we’re cognizant that we’re still very early on in AI and what it requires and what the opportunity is. So, we want to calibrate this properly, and it’s something that we’re carefully doing, and we’ll have more on that as well as we make some final determinations and provide a more detailed outlook, in February, for 2024.

But I would say the marketing investments, the AI investments are the two biggest “Swing factors” on margins that I would point to for ’24. So, I hope that’s helpful and I answered your question with a little more detail.

John Blackledge: Thank you. Thanks, Gary.

Operator: The next question comes from Shweta Khajuria of Evercore ISI. Please go ahead.

Shweta Khajuria: Okay. Thank you for taking my question. Could you please provide a high-level overview of the top-of-mind product and feature investment areas for Tinder that you think will have maximum impact on payer growth next year? Thanks a lot.

Bernard Kim: Thanks, Shweta, for that question. I can take that one. There’s a lot going on with our Tinder team. And this is our daily grind, but we continue to evolve the product experience that resonates with our users. And we’re continually listening to what Gen Z says and wants out of our product. And we have to, daily, continue to improve our experience and surprise and delight our daters. When it comes to payer penetration, in ’23, we reset the RPP levels. So, we have to be continually mindful of new ways to drive monetization and payer penetration at the same time. And maybe I can give a couple of examples. I see two key areas of potential new revenue opportunities at Tinder. Today, our merchandizing is very Western-centric.

We believe that there are real opportunities in international markets to tweak our monetization approach to drive more payer penetration by offers and servicing built specifically for those markets and cultures. Additionally, like I mentioned earlier, I believe à la carte is another area of focus for us. Our two primary ALC products were launched over seven years ago. So, I think now is the perfect time to revisit those and add to the portfolio of ALC products. We’ve also seen great success with weekly package [offerings] (ph) with our younger users. We believe this can actually — these learnings can translate well into our ALC offerings, especially with our current economy. As I mentioned earlier, only 15% of our à la carte users are non-subscribers.

So, I think there is actually a big opportunity for us to drive new payers into our paying ecosystem. Like Gary mentioned, we are in the middle of our 2024 planning, and we plan to share more, as we typically do, in early 2024. Thanks for the question.

Shweta Khajuria: Thanks, BK.

Operator: The next question comes from Justin Patterson of KeyBanc. Please go ahead.

Justin Patterson: Great, thank you very much, and good morning. I was hoping you could comment on when you think weekly payers can get back to more normal growth? You alluded to less sequential volatility within the letter, but curious if you have a more [clear view] (ph) there. And then related, as we’re a few more months into this now, I would love to hear you comment on just your learnings on accretion and lifetime value from these weekly plans? Thank you.