Match Group posts revenue above estimates as it looks to lure Gen Z with AI push

By Kritika Lamba

Aug 5 (Reuters) - Tinder-parent Match Group's MTCH.O second-quarter revenue surpassed Wall Street expectations on Tuesday, buoyed by strong performance at Hinge and a renewed strategic focus under new CEO Spencer Rascoff.

Shares of the company rose about 10% in extended trading.

The company credited its revenue beat to the ongoing overhaul, which places greater emphasis on enhancing user experience, including the integration of an "AI-powered core discovery algorithm," to attract and retain users.

"We're starting to see some of the early benefits from Match Group's AI initiatives. And improvements in recommendations and other aspects of user interaction," said M Science analyst Chandler Willison.

Despite the topline growth, Match Group reported a 5% decline in paying users to 14.1 million, reflecting broader headwinds in the online dating sector.

Industry peers, including Bumble BMBL.O, have also faced sluggish demand as persistent inflation and a perceived lack of innovation have prompted some consumers to step back from app-based dating.

In response, Match and Bumble have been focusing on user experience over numbers by introducing artificial intelligence features such as AI-enabled discovery to make it easier for users to improve their dating outcomes.

The company is seeking to revamp its brand image, with a stated goal to "transform Tinder into a low-pressure, serendipitous experience designed for Gen Z."

Match, which also owns Hinge and OkCupid, has rolled out new features such as its AI-enabled interactive matching product to cater to the Gen Z audience.

The company further said it plans to reinvest approximately $50 million in the second half of 2025 into strategic initiatives, including product testing at Tinder and geographic expansion for Hinge, Azar and The League.

For the second quarter, the company posted revenue of $864 million, above analysts' expectations of $853.6 million, according to data compiled by LSEG. This excludes a one-time charge of $14 million.

The company sees third-quarter revenue between $910 million and $920 million, above estimates of $890.3 million.