Feb 6 (Reuters) - Dating services provider Match Group Inc forecast first-quarter revenue and profit below Wall Street estimates on Wednesday, hurt by higher marketing expenses at its Tinder, Hinge and other apps.
Online dating market is expected to grow to $12 billion by 2020, according to Nomura analysts, and Match has been investing heavily to grab a bigger slice of the pie.
The company has boosted its marketing spend on its money-spinner Tinder in emerging markets, including India and Latin America, while ramping up its other services, PlentyOfFish and Hinge.
Match faces stiff competition from a host of rivals including Bumble, which recently launched its app in India, a market with huge potential for dating-related services.
Match’s total operating expenses rose about 22 percent to $306.34 million in the fourth quarter.
Higher spending, however, helped boost subscriber growth at Match’s apps. Tinder — which has made “swipe left” and “swipe right” a point of pop culture conversations - added 233,000 average subscribers in the quarter bringing its total average subscriber count to 4.3 million.
Overall subscribers at Match rose to 8.2 million.
The company forecast first-quarter revenue of $455 million to $465 million, while analysts on average were expecting $469.7 million, according to IBES data from Refinitiv. The company said a strong dollar weighed on its forecast.
Match said it also expects first-quarter adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $150 million to $155 million, below estimates of $155.28 million.
Total revenue rose 20.7 percent to $457.34 million in the quarter, beating analysts’ estimates of about $448.5 million.
Net earnings attributable to Match Group shareholders was $115.5 million, or 39 cents per share, for the three months ended Dec 31, compared with a loss of $9 million, or 3 cents per share.
(click here tmsnrt.rs/2TBLVt8 for an interactive on Match subscriber growth)
Reporting by Arjun Panchadar and Pushkala Aripaka in Bengaluru