Match Group Q3 2026 Earnings Call Transcript

Match Group (NASDAQ:MTCH) reported third-quarter financial results on Monday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Match Group reported strong improvements in key metrics for Tinder, including positive year-over-year growth in daily active users (DAU) for the first time in three and a half years and improvements in monthly active users (MAU) across various demographics.

Hinge continues to deliver strong user and revenue growth, with plans to reach $1 billion in revenue by 2027, supported by expansion efforts and product roadmap improvements.

The company expects to exceed its full-year adjusted EBITDA margin target and high-end free cash flow guidance, with plans to continue allocating 100% of free cash flow to buybacks, dividends, and equity awards.

Strategic initiatives include enhancing Tinder’s user experience with features like the ‘Better With Friends’ roadmap and launching new subscription tiers for Hinge to target price-sensitive users.

Management is focused on mitigating the impact of increased IP fees from Apple and Google while maintaining investment in long-term growth and marketing strategies.

Full Transcript

OPERATOR

Welcome to the Match Group third quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded.

I would now like to turn the conference over to Tani Shelburne, Senior Vice President of Investor Relations. Please go ahead.

Tani Shelburne (Senior Vice President of Investor Relations)

Thank you, operator, and good afternoon, everyone. Today’s call will be led by CEO Spencer Rascoff and CFO Steve Bailey. They’ll make a few brief remarks and then we’ll open it up for Q&A. Before we start, I need to remind everyone that during this call we may discuss our outlook and future performance. These forward-looking statements may be preceded by words such as we expect, we believe, we anticipate, or similar statements. These statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today. Some of these risks have been set forth in our earnings release and our periodic reports with the SEC.

Also during this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the published materials on our IR website. These non-GAAP measures are not intended to be substitutes for our GAAP results. With that, I’d like to turn the call over to Spencer.

Spencer Rascoff (Chief Executive Officer)

Thanks, Tani. Good afternoon. Thanks, everyone, for joining us. We’re trying something new this quarter. We’ve posted our full prepared remarks to the investor relations website at ir.mtch for you to read through. But our plan for today’s call is for me and Steve to just spend a few minutes on the key highlights and then devote the majority of our time to answer your questions. A year ago, the big question you asked us was whether we could turn Tinder around. We knew we had to start by improving user outcomes, meaning we had to build better experiences that resonate with Gen Z, deliver more relevant recommendations, and improve trust and safety. And that if we got those foundations right, then better user trends and ultimately revenue would follow. Tinder has had multiple consecutive quarters of improvement in the metrics that matter.

This quarter we had our strongest quarterly year-over-year performance in both Sparks, that’s six-way conversations, and Sparks coverage, the percentage of users getting a spark, since we started tracking those metrics. In September, global daily active users returned to year-over-year growth for the first time in three and a half years, and we’ve cut year-over-year declines in monthly active users nearly in half over the last year. The improvement is broad-based, it spans women and men, age groups and geographies.

We’re seeing growth again in parts of the business where trends were moving in the wrong direction not that long ago. In October, markets representing nearly 70% of Tinder’s DAU and 50% of its revenue had growing or flat DAU year over year, with the U.S. crossing into positive territory exiting the month. So we now have evidence that those changes are working. There’s still a lot of work ahead, particularly with the youngest Gen Z users. While we’ve made substantial progress improving the experience for existing users, the next step is reconsideration. That means giving people a reason to come back or to try Tinder for the first time, and that’s what our Better With Friends roadmap is designed to do. We’re giving people more social and lower-pressure ways to meet, often with friends and in real life, because that’s what users want.

Events is the feature I’m most enthusiastic about, but they’re all geared towards creating more opportunities for people to form meaningful connections in real life. We’re building, with our mission always in focus, to make Tinder the most fun way to spark something new with someone new. We live and breathe this daily. Tinder employees can recite this clearly and it’s what keeps us working hard. Turning to Hinge, the business continues to deliver strong user growth and double-digit revenue growth year over year. We see clear opportunities ahead too, even in core markets where we’ve operated the longest. Hinge has room to reach more people beyond urban metro markets and grow with older daters. We’re targeting these opportunities deliberately with more relevant marketing. The early results are strong as registration trends across all genders and age groups improved as we exited Q3, and we think Q4 U.S. new registrations will be up year over year.

Hinge’s 2027 product roadmap is the strongest we’ve had in the last several years. The depth of thinking about intentioned daters—from what they need to what helps them get out on great dates—is evident and gives me so much confidence in where Hinge is headed. At E&E, we put a more focused strategy in place, prioritizing a smaller set of brands and taking learnings from Tinder and Hinge to improve user outcomes. We are still early in this work and it will take time to see the impact. At Match Group, we’re approaching 2027 with a stronger foundation built through a lot of hard work and a clearer path to durable growth. With that, I’ll turn it to Steve.

Steven Bailey (Chief Financial Officer)

Thanks, Spencer. We’re happy with the Q3 results and with the momentum in the business as we close out the year and turn our focus to 2027. We expect to finish the year slightly above the midpoint of our full-year revenue guidance range and meaningfully exceed the full-year adjusted EBITDA margin target we set back in February. We also expect to exceed the high end of our free cash flow guidance set back in February. And we remain committed to deploying 100% of free cash flow towards buybacks, dividends, and net settling of employee equity awards over time, recognizing that the pace of capital return may vary from quarter to quarter.

Year to date we’ve generated $832 million in free cash flow and deployed $591 million towards buybacks, dividends, and net settling of employee equity awards. And we’ve reduced our diluted shares outstanding by 4% year over year through October and by 10% since January of 2025. Here’s how we’re thinking about the financial performance and expectations at each of our business units. At Tinder, we expect to achieve our goal of improving year-over-year MAU and payer trends throughout the year, and we expect further improvement in both of these metrics as well as an improvement in direct revenue trends in Q4. That’s meaningful progress towards returning Tinder to sustainable growth.

As we said last quarter, we continue to expect Tinder’s full-year 2026 direct revenue performance to be better than we expected in February, declining at low single-digit rates year over year as a result of both smaller than expected impact from user experience tests and stronger underlying trends. As we begin to shift our focus to 2027, while there’s still more work to do, we’re feeling great about the momentum and we’re confident we can deliver full-year 2027 Tinder direct revenue year-over-year growth along with year-over-year payer growth by Q4 and flat MAU year over year by the end of Q4.

At Hinge, performance continues to be strong and we expect to be within the 2026 full-year guidance range we provided in February. Our expectation for $1 billion in full-year revenue in 2027 hasn’t changed. E&E continues to face headwinds from Azar’s app redesign necessitated by the App Store ban earlier this year and weakness at other E&E brands. But we expect the strategy changes Spencer just outlined to slow revenue declines over time with the goal of returning to growth, but this will take time and we expect E&E year-over-year revenue declines to only modestly improve in 2027 compared to 2026.

Turning to Match Group profitability, we’ve done a good job this year executing on the Tinder turnaround while staying financially disciplined. We intend to take that same approach in 2027 as we balance making the right investments in our business to maximize long-term shareholder value with delivering near-term adjusted EBITDA and free cash flow, which we’re giving back to shareholders through buybacks and the dividend. We’ll give detailed adjusted EBITDA guidance and a full-year margin target on the call in February.

But here’s how we’re thinking about 2027 profitability sitting here today. First, we expect to remain very disciplined on headcount and opex, including AI costs. Second, we now expect IP fees to be a 1-point margin headwind in 2027 based on current App Store policies and expiration of our Google partnership agreement, which I’ll talk more about in a minute. And third, we’re still evaluating the appropriate level and allocation of marketing spend across the portfolio using our PRISM framework.

As a reminder, PRISM is our standardized marketing measurement framework that we recently introduced at Match Group. It gives us a consistent, rigorous quantitative assessment of marketing effectiveness that we use to inform investment decisions across the company. 2027 will be the first time we’re incorporating it into our annual planning process. Now let me give you a little more color on IP fees. First, an update on Apple. In the U.S., we continue to pay 0% in IP fees on alternative payments on iOS, and we don’t expect changes to this fee structure until there’s a decision in the Epic vs. Apple case. In the EU, Apple actually raised fees on in-app purchases effective October 1st, and the fees we pay increase from the low 20% to 26%. At the same time, Apple will begin allowing alternative payments, which we plan to test, but there are a number of restrictions and the economics are far less favorable than they are in the U.S. We expect the increased in-app purchase fees to cost us an additional $20 million in 2027.

Now on Google. In 2024, we entered into a partnership arrangement with Google that provided value exchange across our broad relationship that has effectively offset the additional fees we incurred when we adopted Google’s billing options at that time. As we previously disclosed at the announcement of that deal and in subsequent filings, that partnership is set to expire in the first quarter of 2027, and we expect Play Store fees to meaningfully increase beginning in Q2 of next year.

Our expectation when we entered into the agreement was that legal and regulatory pressure would reduce Google’s in-app purchase fees by the time the agreement ended. However, Google’s new global fee structure, announced in March, provides little benefit to us. Taking into account both the Apple changes and the Google partnership agreement expiration, and making no assumptions on future fee changes, we expect IP fees to result in a 1-point headwind to adjusted EBITDA margin in 2027.

While we’re looking for ways to mitigate the impact, we also need to ensure we’re making the right investments in the business to drive long-term shareholder value. We’ll make that determination as part of our annual planning process, and we’ll give you more details on 2027 revenue and margin expectations next quarter. With that, let’s open it up to Q&A.

OPERATOR

We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Robert Koolbrith with Evercore ISI. Please go ahead.

Robert Koolbrith (Analyst)

Great. Thank you for the opportunity to ask a question. Just wondering if you can maybe talk us through the path to positive DAU that you had in the quarter, where it hit in September. Maybe if you could bucket that across retention improvement, or if it’s just been a case of stacking those retention gains that you’ve had in successful quarters across more cohorts. And then any early indications of improving levels of consideration or reconsideration?

Spencer Rascoff (Chief Executive Officer)

Yeah, thanks, Robert. And thanks for your recent research note. Look, it was a big milestone this quarter: turning DAU positive in September year over year for the first time in three and a half years. Felt great. There were a lot of high fives and just excitement around achieving that milestone. And then just a couple weeks later at the end of October, U.S. DAU turning positive year over year also just felt great. Those are the DAU trends. MAU improving from negative 10 to negative 5.5 over the last few quarters also speaks to the quality of the improvements in the product and also improvements in MAU. Similar improvements in MAU across our top five revenue markets. The reason why I’m confident about the sustainability of the turnaround is how broad-based the improvements have been. So really any way you cut it—by age, by gender, by geography—we’re seeing improvements across every which way you look at it.

So for example, looking at it by gender, our female MAU is improving at an even faster rate than male MAU. In every region and every age group, female MAU declines narrowed by eight points year over year and two points quarter over quarter. So this is not a turnaround that’s just focused on male users. Quite the contrary—it’s actually we’re improving among female users even more quickly. Looking at it by age, again, this is not a turnaround focused on just adding easier-to-acquire older users. Our under-30 MAU trends have improved even more than our over-30 MAU trends. And we’re improving across every single age group. So that’s the exciting news about the MAU turnaround.

I think the question behind your question, perhaps, is why is DAU growing faster than MAU? And the answer to that is we have made so many product improvements that help the existing experience—basically improve our users’ current experience. But we still have more work to do to drive reconsideration, and that’s where the Better with Friends social roadmap comes into play. We had a hit in Double Date. We layered on another hit with Events. We’re in the process of building a third hit with Groups.

And when you take those three things together and you do brand studies and ask users about their perception of Tinder, you start to see really good, promising results about people changing their perception of what Tinder is. So we still have work to do. It’s definitely too soon to declare victory, but I really am proud of and impressed by where we’re at today. Steve, anything to add, or no?

Steven Bailey (Chief Financial Officer)

I think you covered it.

OPERATOR

Okay, next question please. The next question is from Shweta Khajuria with Wolfe Research. Please go ahead.

Shweta Khajuria (Analyst at Wolfe Research)

Okay, thank you for taking my questions. Spencer, could I please ask a follow-up to what you were just talking about in terms of the delta between DAU growth and MAU growth? So there is this idea of perception and bringing people back into the ecosystem, and that’s why the delta. So how long do you think that lag—how long do you think it takes for that lag to narrow? In other words, for that perception to change, bringing those people back and turning around MAU growth?

And then the second question I have is around next year. Steve, you spoke about Tinder expectations. To the degree that you can speak to other segments—Hinge and E&E—that would be very helpful, or just at a platform level, the puts and takes for both revenue and EBITDA. Understood you’re not guiding just yet. In terms of EBITDA, where would the levers be coming from to offset the headwind, and how should we be thinking about overall top-line growth?

Thanks a lot.

Steven Bailey (Chief Financial Officer)

Yeah, let me take—we’ll take this in a couple of pieces. Let me talk a little bit more about the Tinder sort of metrics improvements, and Spencer, jump in as you wish. The way to think about DAU outpacing MAU, here’s kind of where things stand. Of course we’re very excited that DAU crossed over to positive growth. We’re just as excited about MAU improving. So we got about one point improvement on MAU from Q2 to Q3, with MAU down 6%, which is better than the 7% it was down the quarter before.

We also saw an improvement in payers, which we’re very excited about. So payers were down negative 5% in Q2; they were down negative 4% in Q3, so progress there as well. Revenue, we like to look at it FX-neutral, was down 2%. That was the same as Q2. And I’ll just stress that these metrics aren’t going to move completely in lockstep every quarter. But if you take a step back and look at the revenue FX-neutral trends—you’ve got a diagram in the prepared release—you can see progress over the last few quarters from down 5% in Q4 last year to down 2% now. And then what I think is also encouraging is, you know, we expect all those metrics to improve in Q4.

So we expect payers to get better in Q4, we expect MAU to get better in Q4, and we expect that FX-neutral direct revenue to get better as well. So we are starting to see it flow through more than just DAU, but to these other core metrics as well. Did you want to add anything to that?

Spencer Rascoff (Chief Executive Officer)

No. That’s good.

Steven Bailey (Chief Financial Officer)

And then let’s talk about 2027 a bit. We’re not going to give, as you sort of alluded to, full-year revenue guidance or even guidance until February, which is our normal course. I tried to give some color on how we were thinking about things. The only things I would add is, yeah, if we break it down, you look at Tinder, we’re feeling really good. We’re making progress; I just told you we expect further progress in Q4, and we’re really setting ourselves up well to meet the goals I laid out in terms of payers, revenue, and MAU improvement next year.

Could it be sooner? Maybe. It’s hard to pinpoint exactly, but I think we’re on a really good trajectory at Tinder. When you look at Hinge achieving the billion dollars in revenue—which we still feel very good about—I think about it this way: revenue growth was about 19% in Q3. We expect it to be about the same, maybe a little bit better in Q4. So think of 19–19.5%. And then we’ve got to keep the growth rate at about that same level next year, and if we do that, we’ll hit the billion dollars. So we think we’ve got the right roadmap and strategy in place to do it.

That’s going to come from improving core trends and expansion. We talked about expanding into Japan in the prepared remarks, too, and so I’m feeling good about the trajectory there, too. And then E&E—what we said was modest improvement from the declines we’re seeing this year. That’s really in recognition of, you know, Spencer talked about putting the right strategy in place, but it’s going to take some time to get that business back to growth. So we think only modest improvement, but still negative at E&E next year.

In terms of profitability, the way I would think about it is we’ve got the one point IP fee headwind. We said we’d be really controlled in terms of headcount and AI costs. The really big consideration is around marketing spend—what is the right level of marketing spend, particularly at Tinder and Hinge in 2027, to maximize long-term returns and shareholder value. And so we need to balance that against hitting short-term margin targets. And that’s what we’ll do.

We’ll think very hard about it, we’ll do it in a very quantitative way through the PRISM framework, and we’ll give you a lot more details on all that in February. Next question please, Operator.

OPERATOR

The next question is from Jason Helfstein with Oppenheimer. Please go ahead.

Jason Helfstein (Analyst)

Thanks. Just some more color on the givebacks. I think it sounds like the full-year givebacks for Tinder are going to come in below expectations. Why have they not been necessary this year relative to your plan? And any more color there? Thanks.

Spencer Rascoff (Chief Executive Officer)

Yeah, hi Jason, thanks for the question. You know, we’ve been fortunate to discover that when we launch improvements to the user experience, the accompanying MAU retention mitigates revenue loss. For example, we changed our recommendation algorithms to maximize user outcomes, and we nervously wondered if it would hurt revenue. And what we found was that the benefits of improving user retention outweighed the detriment of prioritizing user outcomes over revenue.

That might not always be the case, but that’s what we mostly saw in 2026.

Steven Bailey (Chief Financial Officer)

Yeah, let me just add a finer point to that, too. That’s all exactly right. And what it means financially is that, you know, we thought at the beginning of the year we would need $60 million in user givebacks in ’26. What we’re now saying is that we only ended up using $25 million. If you do the math, that’s about two points of revenue at Tinder, and that’s what’s driving about two points of that improvement versus expectations we had set back in February.

There’s about another point of improvement in there in terms of what we think we’ll actually finish the year at for Tinder full-year revenue relative to what we said in February. That other point is improving trends. So I want to be really clear about that. Really what we’re seeing at Tinder is two things: the need for less user givebacks and also improving trends. So that sets us up really well for continued improvement in ’27.

OPERATOR

Next question please. The next question is from Brian Smilek with J.P. Morgan. Please go ahead.

Brian Smilek (Analyst at J.P. Morgan)

Great. Thanks for taking the question. Spencer, as you enter Tinder’s resurgence phase, can you just help us think about the allocation of marketing spend by channel to reignite the consideration set? I think in the prepared remarks you had mentioned Gen Z marketing around creator and social content and event partners. So just curious, anything that you can share on the LTV curves of those channels? Thank you.

Spencer Rascoff (Chief Executive Officer)

Sure. So thanks, Brian. We made a lot of changes to how we allocate and how we invest our marketing in 2026. Firstly, we shifted a lot of our spend towards down-funnel user acquisition instead of up-funnel brand building. Secondly, we pointed much more of our marketing spend towards actual features rather than sort of high-level positioning about Tinder or the category. And we saw both of those changes drive really improved results in ’26. The second one I think is particularly important and reminds us how product and marketing work hand in hand. So for example, when we market on Instagram that Tinder has Events in your city, and we look at the cost per registration or cost per reactivation for those types of marketing creatives and compare it with a year or two ago when we were buying the same channel but promoting “use Tinder because Tinder is a dating app,” it’s really night and day in terms of the lift that we get and, in most cases, the efficacy of how far the dollar goes when we’re focusing on product innovation rather than not.

As Steve alluded to, we also now have a framework where, for really the first time ever going into an annual planning process, we have a cross-brand rubric and analytic framework to decide what the right marketing spend and right marketing allocation should be between business units and brands within business units. And so we’re deep in the midst of that right now as we finalize our 2027 plans. So don’t have any more detail to report, but we’re just in a much smarter place here as we speak to you in fall of 2026 than we were in fall of 2025, coming off the heels of a really effective ’26 for marketing and also the development of these new frameworks to assess marketing efficacy. Operator, next question please.

OPERATOR

The next question is from Nathan Feather with Morgan Stanley. Please go ahead.

Nathan Feather (Analyst at Morgan Stanley)

Hey everyone, thanks for the question. I guess as you think about DAUs turning positive, the focus on MAUs, what are the kind of one to two key gating factors to returning to flat MAU growth from here? How do you think about the main levers you can pull to really drive that reconsideration of the brand as you continue to push the product side?

Spencer Rascoff (Chief Executive Officer)

Yeah, thanks, Nathan. You know, the biggest lever is convincing people who are not already on Tinder or who maybe used Tinder two, four, five, ten years ago to give it another shot. And this Better with Friends roadmap is the best idea that we have to execute on that. So as I said, Double Date is a winner. We’ve delivered 30 million matches on Double Date so far, which just speaks to the scale and product-market fit that Double Date has. We just launched Groups in the US and a couple weeks earlier in a couple other countries. Just to give you some insight into Groups, women are twice as likely to like a group profile as they are to like a single male profile. Again, that speaks to the product-market fit that we think Groups will have within our product. Fifteen percent of our users in Norway ages 18 to 22 are already in a group. The reason I mentioned Norway is that was the first country that we launched in, so it’s been up for a couple extra weeks.

So we think Groups has the potential to be another hit and to change the way people perceive Tinder. And then finally Events, which we’ve been very vocal about the potential that we think Events has. Events has absolutely started to change perception of Tinder when we look at our measures of brand health—questions that we ask users like, does Tinder have people that you want to meet on it, is Tinder an app with your kind of people, is Tinder just for hookups or for things more than that. All those measures of brand health have improved over the summer and into the fall as we’ve rolled out Events into more and more markets.

So I’m happy to talk more about Events if there are other questions about it, but those are the types of initiatives that we’re focused on in order to drive reconsideration, which is what will take us these last couple points, from negative 5.5% MAU to eventual MAU growth. Next question, please.

OPERATOR

The next question is from James Heaney with Jefferies. Please go ahead.

James Heaney (Analyst at Jefferies)

Great, thank you. You mentioned in the letter an increased focus on Tinder revenue initiatives in 2027. Curious what kinds of options you’d be looking to explore and how you think you can improve monetization without disrupting the user engagement momentum that you have. Thank you.

Spencer Rascoff (Chief Executive Officer)

Yeah, thanks. Good question. When I took over Tinder, I started by focusing on the user experience. We had this theory, which has proven to be true, that if you improve the user experience, then the audience metrics will improve and then other good things will flow from that. We moved very quickly. We changed a lot of the user experience, and today Tinder works better than it did before. We’re now turning our attention towards revenue, and we’re really looking at everything. We understand what we have currently and what we can learn from other brands, and we’re approaching it from pretty much a blank slate. In terms of a starting point, it’s a bit early to say where that will go, but I can assure you we’re bringing the same level of focus, energy, vigor, urgency, innovation to monetization in ’27 that we brought to the user experience in ’26.

We have a lot of ideas that we’re not ready to talk about yet, but I’m optimistic that ’27 will be a year of a lot of monetization innovation. Next question, please.

OPERATOR

The next question is from Yousef Scully with Truist Securities. Please go ahead.

Yousef Scully (Analyst at Truist Securities)

Great. Thank you so much. Maybe a quick question for Steve. Can you just quantify the marketing spend that was pushed into Q4 for Q3, the reasons for it, and would you have been able to grow a little faster had you actually met that marketing spend in the quarter? Thanks.

Steven Bailey (Chief Financial Officer)

Yeah. In terms of quantity, we pushed about $8 million or so of marketing spend from Q3 to Q4. I think we came in about $12 million better than we expected, but $8 million of that was marketing spend. It’s a couple reasons. One is just timing of campaigns, and two is we’re going to stay financially disciplined. In any given quarter, if we’re not seeing the returns that we expect on marketing spend, we’re not going to go spend those dollars just to fill the budget.

I like to see us underspend for those reasons because it means we can deploy them in a different quarter at higher ROI. How much revenue we would have generated had we not done that—that’s a little bit of a hypothetical that I’m not going to do at the moment. But what I would say is, and I’ll repeat it again, which I think is an important fact: we’re going out and saying we expect MAU, payers, and direct revenue to improve. So while direct revenue didn’t improve in Q3, we do expect it to improve in Q4 from a year-over-year growth perspective relative to Q3. With the marketing spend in Q4 and everything else we have going, we expect to see improvement across all those metrics next quarter.

OPERATOR

Next question, please. The next question is from Benjamin Black with Deutsche Bank. Please go ahead.

Benjamin Black (Analyst at Deutsche Bank)

Great. Thanks for taking my question. So the recommendation system looks to be at least a big part of the foundation of Tinder’s turnaround. So how much better can matching outcomes become as the system moves towards more real-time personalization? And what advantages does Tinder’s scale really have in the data that you guys have? How much of an advantage is that for you guys? And then secondly, I’d be interested in hearing the learning from Missed Connections. I think in November you mentioned a four times improvement in likes from women. It seems a bit of a game changer to me. So what are some of the hurdles to broadening out Missed Connections? Thank you.

Spencer Rascoff (Chief Executive Officer)

Yeah, thanks, Benjamin. Q Unification and our recs improvements have been really critical to our improving business results in 2026. We just rolled out Q Unification to other user types—I think we just rolled it out to women seeking men and women seeking anyone, and other different LGBTQ audiences—but we still have more to go. Real-time recs we’ve said we intend to launch by the end of the year. We’re very confident in the potential that that will bring, but it’s also unproven.

I think that event that we did, the CEO connection event where I spoke with Vinay and Mark, our CTO and head of product at Tinder, about recs—I think Vinay said something like he thinks it’s the second or third inning, or maybe he said the third or fourth inning in terms of recs, to try to size the amount of potential improvements that still lay ahead. I think that’s probably about right. So, already huge improvements, but more to come. On Missed Connections, this is a feature that we’re testing in Canada right now. If you have location services turned on, then once a week we give you specific drops that say, here’s somebody that you’ve crossed paths with in the week in a given neighborhood or in a given coffee shop, et cetera. And users love it. The serendipity and kind of excitement is really meaningful, especially for Gen Z users—the nostalgia, the sense of a meet-cute, which is what our users are really looking for.

And the digital bridge between an app and an IRL experience is really powerful. We are now working to improve it. We’ll be assessing when and whether to roll it out more broadly. There’s still a lot of work to do to improve the product, but so far, so good in what we’ve launched so far. Operator, next question, please.

OPERATOR

The next question comes from Alec Brondolo with Wells Fargo. Please go ahead.

Alec Brondolo (Analyst at Wells Fargo)

Yeah, hey, thanks so much. Maybe two from me. First, how did you choose the new focus brands for E&E? And does refocusing on a smaller number of brands create an incremental headwind to that business beyond Azar in ’27? And then secondly, on Hinge, the new subscription tier launching in the fourth quarter, giving users more choice and control— is there any incremental detail you could provide around the value proposition? What is the opportunity here on paid conversion?

Spencer Rascoff (Chief Executive Officer)

Yeah, I’ll take the E&E question and then Steve, you can answer the Hinge question. So in deciding which brands to prioritize with E&E, we looked at the white space that the different brands are going after and also the size in order to prioritize. So, for example, Upward and BLK and her all are going after white space in their respective user segments where we think there’s a real right to win, a reason to exist, a category white space that is not fully won by a Hinge or a Match or a Tinder or any standalone competitor.

And then brands like Match, which are kind of more general population—we think there’s a reason for them to exist in the 50-plus age segment, and just the brand awareness and brand power of the term Match and the size and scale of that really represents something that is worthy of prioritization. The other non-focused brands like an OkCupid, like a Plenty of Fish, like Salams—these are brands that are still being worked on, but only synergistically across the portfolio. So, for example, we have a dedicated team that is improving profile creation and a dedicated team that is improving photo selection and a team that’s building chat and a team that’s building the recommendations algorithm. When each of those teams launches a set of features, it goes out across the whole portfolio.

So something like OkCupid is not left to its own devices; it’s still being improved upon by these shared teams that are building E&E-wide technologies. So that’s how we prioritize the different brands. And Steve, you want to take the Hinge question?

Steven Bailey (Chief Financial Officer)

Yeah, I think, look, we’re pretty excited about the lower-price subscription tier in test right now. It’s designed for women in particular, but also for price-sensitive users. Remember that Hinge is one of the highest-priced products we have. The revenue per payer, for example, at Hinge is almost twice that of Tinder, around 30 bucks. It also has one of the lower payer penetrations. Its payer penetration is only slightly more than half that of Tinder.

So we think it makes sense to offer a lower-priced offering in what is otherwise a higher-priced product to get more payer conversion from more price-sensitive users. In terms of what it includes, think of it—I’m not going to get into every specific feature—but the broad brushstrokes are additional filters and custom location boundaries, features that women find valuable. And what we’ve seen in tests is it has improved conversion for both men and women, but women’s conversion has been up more than men. And the other interesting thing here is that remember Hinge’s gender balance between men and women is far better than most other apps, and women pay at far lower rates.

That’s true for Hinge and that’s true for everybody. And so if we can get this feature right and a feature set that really resonates with women, that will be really potentially powerful from a monetization perspective for Hinge in particular, with a large women user base and really good gender balance. So we’re going to keep testing and tweaking, but the early reads are good, and we expect to roll it out more in Q4. So stay tuned. Next question.

OPERATOR

The next question is from James Michael with Citi. Please go ahead.

Steven Bailey (Chief Financial Officer)

Yeah. On the Tinder payer penetration, you’re right, payer penetration was up again. That’s something we’ve consistently seen is that the improvement in MAU is flowing through to improvement in payers, which is great. In terms of how much more room to go, while payer penetration at Tinder is higher than Hinge, which I just mentioned, it’s still relatively low. It’s in the low 20%. So we are always looking to optimize not only for the payer experience, but the free experience too.

In terms of the ability to drive further incremental payer conversion, I think there’s lots of room. I think as we look ahead, what we’re doing is we’re not optimizing around short-term revenue growth. We’re really taking a look — Spencer got into this earlier — at finding ways to add value to the experience both for free and paid users. And if we can add value, then I see no reason why we can’t increase monetization and payer conversion at Tinder going forward.

Spencer Rascoff (Chief Executive Officer)

And I’ll take the Hinge MAU and TAM question. So in the U.S., Hinge is most highly penetrated on the coasts and in the 20- to 30-age group. If you look at smaller cities outside of the coasts and age 30 to 40, there’s ample room for Hinge to grow. We think at least another million monthly active users in the U.S. as we focus more on those other user segments and geographies. We’ve already started implementing that playbook with different marketing tactics and messages in order to focus on those secondary cities and slightly older-age users. And we think that that playbook also is extendable to other core markets outside the U.S. like the UK, Australia, and Canada.

Operator, next question, please.

OPERATOR

The next question is from Eric Sheridan with Goldman Sachs. Please go ahead.

Eric Sheridan (Analyst at Goldman Sachs)

Thanks so much for taking the question. I mean, first one would be following up on, I think, Benjamin asked earlier about the broader AI strategy. The flip side of that coin would be how are you thinking about managing token costs or input costs within your broader cost structure as you continue to move from testing to scaling some of your AI initiatives? That would be one. And in the shareholder letter you also talked about finding ways to drive tech platform efficiencies through elements of shared technology platforms or cross-pollinating. So the second part would be, how should we be thinking about some of the efficiency dynamics that could be gained through some of those initiatives as we move out of ’26 and into ’27? Thanks so much.

Steven Bailey (Chief Financial Officer)

Yeah, let me take the AI token costs. I think we’ve done a really good job here. The costs are definitely going up, but let me give you some more details around how we’re managing it. We started probably with a budget this year of about $5 million for AI costs, but we had pretty low usage. We basically had engineers using AI and nobody else, and it was spotty at that. Early in the year, May timeframe, we really wanted to push AI adoption and become a truly AI-native company. We thought it was important for the overall long-term success of the business. And so we gave all our employees tools like Claude, tools like OpenAI, enterprise search, tools like Glean, and gave them the training, gave them the tokens to go use these tools. And our cost probably went from $5 million to about $10 million, a little more than $10 million.

So it was an unplanned doubling of costs, but we think worthwhile. We’re getting really good efficiency gains out of it. The way we offset those costs was by controlling headcount — not reducing the employee base, but hiring less, slowing headcount growth, and saying let’s do more with less through the use of AI. And that’s been really effective. Right now I would say we’re maturing as a company in terms of AI token usage and we’re really in that sort of efficiency phase. We’ve got an AI gateway that controls what models we’re defaulting to and what models engineers can use.

We’re doing all sorts of things like making the most expensive models only available by request. We have speed bumps or soft caps. Engineers get about $1,000 a month and non-engineers get about $250. Once you hit that cap, that doesn’t mean you have to stop your work. It means you have to go to your manager and say, look at the work I’m producing, and if it makes sense, you can keep going. And so we’ve given all the managers really great visualization into the spend within their departments — basically real-time token spending.

And I think we’ve done an incredible job as a company overall in this regard. We do expect costs to go up a little again next year. But the hope is through these efficiency gains — we’re now starting to look at open-weight models — we’ll be able to keep them under control. And then in terms of in the product and in the features themselves — and feel free to jump in, Spencer — there are more features that are using AI tokens and AI costs. Do you want to cover how we’re thinking about that?

Spencer Rascoff (Chief Executive Officer)

Yeah. Well, let me answer it from a shared tech platform standpoint and efficiencies across the company. I’ll give you four quick examples. We’ve integrated our trust and safety tooling so that features like Face Check are now built centrally across all brands. Another example of a shared service is Tinder’s Events product — the module tab on Tinder where you can see who’s going to an event and you can see the different types of events. And this whole product roadmap around Events now powers not just Tinder, but also BLK and, likely in the future, other Match Group brands.

So those are two examples of things that we’re building centrally across multiple brands. Then two other potential examples that we’re working towards: Tinder has built an AI prototyping tool where any employee at Tinder can enter a prompt to visualize a new feature to Tinder, and it’ll instantly build a prototype of it and also build code for that prototyped new feature. That’s something that has really changed the software development lifecycle at Tinder — made us more design-forward and brought a higher pace of innovation — and that’s something that we’re looking to extend to some of our other brands, including E and E. And then a fourth example is Tinder has a homegrown customer relationship management platform that manages all of Tinder’s push notifications, text messages, and emails. It’s really best in class — better than what companies pay millions or tens of millions of dollars a year to SaaS providers for that type of technology — and we’re considering extending that to some of our other brands.

So those are just a couple examples, Eric, of how we’re building centralized technology and extending it across the whole company. Operator, next question, please.

OPERATOR

The next question is from John Blackledge with TD Cowen, please go ahead.

John Blackledge (Analyst at TD Cowen)

Great, thanks. For Hinge’s newer markets outside of the U.S., is user growth and payer conversion following similar growth curves to Hinge’s more mature markets? And then just another one on Hinge on the RPP — should we expect that trend that we saw in 3Q to continue as you roll out the new lower-priced sub tier? Thank you.

Steven Bailey (Chief Financial Officer)

Yeah, let me start, and feel free to jump in, Spencer, on the MAU growth. Yeah, it’s an important point to make. Global MAU growth came in at around 12%. What we saw sort of under the covers is actually core MAU improved a bit, which is great to see — Spencer talked a little bit about that — and growth in Europe slowed a little bit. Still phenomenally high growth. But to your point, there’s a growth curve. As these countries scale, we expect their growth to slow over time.

And so that’s really what you saw in the headline number — core getting a little bit better, Europe slowing down a bit — and us netting out to about 12% growth. That’s right around what we expected. Puts us right on track not only for MAU, but also for revenue for the full year 2026. So we feel good about the way those curves are playing out. It’s just what we expected. We’re entering LATAM — that’s growing faster but still small — and we’ve relaunched in India where we have a pretty big MAU base today. And then what we’re doing is we’re laying the foundation for expansion into Japan in ’27. I wouldn’t expect a lot of revenue from Japan in ’27 or users, but it’s an important — first of all, it’s probably a top-five largest market from a TAM perspective, from a revenue perspective in the category — so an important one for Hinge to enter.

And we think there’s a nice white space for it between Pairs, which is a little bit more marriage-focused, and Tinder, which is more casual. All our research says it should do very well there, and I think it’ll be a growth driver for 2028 and beyond. What was the second part of the question? What was your second question? Sorry,

John Blackledge (Analyst at TD Cowen)

The RPP was down a little bit in 3Q. Going forward?

Steven Bailey (Chief Financial Officer)

Yeah, yeah. Yeah, thanks for pointing that out. So, what you’re seeing is we saw an acceleration in payers, and we saw RPP down a little bit year over year in Q3. That is price optimizations — a new model we rolled out at Hinge — that was playing the biggest effect. To a lesser effect is the new lower-price tier that can have a bigger effect down the road. And then normally, sort of underneath all that, we naturally get some RPP pressure because the growth in these expansion markets is still so much higher than the core markets, and the RPP on average is lower there than in a market like the U.S. On the price optimization models, let me just give you a little bit more detail there. What that is is a propensity-to-subscribe model. Most brands have it — it’s something Tinder has been doing for years. I’d say most brands in the category do this. Hinge is just maturing in its monetization capabilities and so is now rolling this out, where what it’s doing is it’s looking for those that haven’t subscribed after a certain number of days and are unlikely to subscribe ever again.

Hinge is a high-priced product — we talked about that — and giving a targeted lower price to those users and driving payer conversion. That’s driving up — that’s accelerating — payer growth and being offset by some RPP degradation. I’d expect that to actually increase a bit in Q4 just because this pricing model was rolled out sort of middle Q3 and will be a full quarter in Q4. But it’s generating net positive revenue. It’s another lever for offering a paid experience to more price-sensitive users. And third, and I think this is overlooked sometimes, payers help the ecosystem too. So there’s indirect benefits of higher paid conversion — payers retain longer, they respond to likes better, they are more likely to buy ALC features.

So there’s a lot of reasons why having a little bit higher payer penetration at Hinge — still won’t be even close to the levels of Tinder — makes a lot of sense. But that’s what’s causing a little noise in those metrics and I’d expect that to continue in Q4. Operator, next question, please.

OPERATOR

The last question will be from Andrew Marrock with Raymond James. Please go ahead.

Andrew Marok (Analyst)

Hi, thanks for taking my question and maybe one more on that Hinge in the international business. So you called out in the shareholder letter and I think you answered a bit of this in the last question about the momentum in Europe and the newly launched LatAm markets. So I guess what kind of common threads are you seeing between these disparate geos and, on Japan specifically, what is giving you the confidence that there is a space in the market, which has been a tricky market for everyone in the past?

Spencer Rascoff (Chief Executive Officer)

Yeah, thanks, Andrew. You know, what we’re seeing as the common thread in the different markets is that Hinge’s slow and steady approach of customizing the product, customizing the marketing for the individual geography is working. So, for example, in India having a slightly different set of features like screenshot banning, waitlist for men, and a couple of other unique trust and safety features like ID verification and others are particularly useful.

So we’re taking a deliberate approach to Japan, learning from, gosh, probably 10 years of Pairs’ success in the matrimony space. We’ve done a huge amount of original research in Japan to identify that there is white space between the matrimony apps and the more casual apps like Tinder. So we think there’s an opportunity for Hinge to succeed without cannibalizing Pairs and Tinder. And we’re going to customize the Hinge product and marketing in order to achieve product-market fit there, just as we have in Brazil and Mexico and India over the last year or so, I think.

Operator, are there any other questions or is that the last question?

OPERATOR

That was the last question, sir.

Spencer Rascoff (Chief Executive Officer)

Okay. All right, so I’ll just wrap up here. You know, as a reminder for anyone who joined late, we posted the full prepared remarks to the investor relations website for you to read through, so you can find the full script there. Hopefully you liked this new, more efficient approach. I just want to close by taking stock of my first seven quarters as CEO here. When I joined 21 months ago, Tinder users and revenue were declining and there was skepticism that Tinder could be saved at all. Today we’ve put points on the board and mostly put that question to rest. Several quarters of improving user trends at Tinder top to bottom. From Sparks to Spark coverage to DAU to MAU, and improvement in payers and revenue when adjusting for FX.

So we’ve demonstrated that this turnaround is real and sustainable. We also took Hinge from 150ish million in quarterly revenue back in Q1 2025 when I started to over 220 million in quarterly revenue in Q2 of ’26. We purchased HER. We purchased about half of Sniffies. We significantly improved employee engagement. We drove massive productivity improvements from AI. So we got a lot done in a pretty short period of time. Meanwhile, we bought back $1.2 billion of stock and paid $369 million of dividends and reduced diluted share count by 10% year over year as of yesterday.

I’m very proud of what we’ve accomplished in these last 21 months, and I’m even more optimistic about where we’ll be 21 months from now. We’ll talk to you in early February at Q4 earnings, and I hope to see many of you at our second Tinder Sparks event on February 23rd in New York. Until then, thanks everybody. Bye-bye.

OPERATOR

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.

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